3.17.243 Miscellaneous Accounting

Manual Transmittal

August 31, 2017

Purpose

(1) This transmits revised IRM 3.17.243, Accounting and Data Control, Miscellaneous Accounting.

Material Changes

(1) Various editorial changes (punctuation, spelling, and spacing) throughout the IRM.

(2) Numerous subsection titles were updated to spell out the acronym within the title and to add the form name to the title(s).

(3) Numerous IRM references were updated throughout the IRM.

(4) 3.17.243.1 updated to provide background information on the IRM.

(5) 3.17.243.1.3 updated to add the acronym USDC.

(6) 3.17.243.3.1 updated to add the names to referenced form numbers.

(7) 3.17.243.4(1) updated to revise the language related to the TC 848/TC 849 process.

(8) 3.17.243.7.3 updated to correct the POC information for the AM contact.

(9) 3.17.243.8.2 updated to correct the POC information for Austin.

(10) 3.17.243.9.2 updated to correct the POC information for Austin and Fresno.

(11) 3.17.243.9.2(16) was added to provide instruction regarding NMF Form 4340.

(12) 3.17.243.10.8(4) updated to add instructions regarding refunding money from the GL 4975.

(13) 3.17.243.10.9(4) updated to correct instructions regarding assessing pre-law cases.

(14) 3.17.243.10.9.10 is now located at 3.17.243.10.9.1.

(15) 3.17.243.10.9.2(17) updated to include instructions to notify CSCO when money will remain in GL 6400.

(16) 3.17.243.10.9.8 added information to assist in identifying RBA cases.

(17) 3.17.243.10.9.8.1(1) added information that needs to be included in emails going to CSCO regarding NMF cases.

(18) 3.17.243.10.9.9 new subsection added to provide procedures for refunding payments.

(19) 3.17.243.15 updated to include information on the Taxpayer Bill of Rights in regards to TAS cases.

(20) IPU 17U0991 issued 06-09-2017 Changed title of IRM 3.17.243.1 to Program Scope and Objectives subsection in accordance with Heightened Awareness, Sensitivity, and Understanding of Internal Controls.

(21) IPU 17U0596 issued 03-31-2017 IRM 3.17.243.2 inserted a new subsection to add instructions for TAS cases.

(22) IPU 17U1013 issued 06-15-2017 Inserted IRM 3.17.243.3.1(6) to provide instruction related to RBA cases.

(23) IPU 17U0320 issued 02-16-2017 IRM 3.17.243.4 Editorial Change for Form 12857 adding TC 848 and TC 849 for credit transfers.

(24) IPU 17U0991 issued 06-09-2017 Removed IRM 3.17.243.4, Requests for Account Adjustments, and placed the instructions into IRM 3.17.21.9.

(25) IPU 17U0223 issued 02-02-2017 IRM 3.17.243.5.2 Added Processing the NMF Receipts (Cincinnati Only).

(26) IPU 17U0122 issued 01-19-2017 IRM 3.17.243.5.2(3) updated exhibit link from 3.17.243-17 to Exhibit 3.17.243-11.

(27) IPU 16U1422 issued 09-23-2016 IRM 3.17.243.8.2 update to Austin refund litigation campus contacts.

(28) IPU 16U1658 issued 11-09-2016 IRM 3.17.243.8.2 correction to a Phone Number for Kansas City Refund Litigation POC.

(29) IPU 16U1629 issued 11-03-2016 IRM 3.17.243.8.2 updated to correct the phone numbers for Kansas City contacts.

(30) IPU 16U1749 issued 12-15-2016 IRM 3.17.243.8.2 and IRM 3.17.243.7.3 updated to correct the point of contact information for refund litigation requests.

(31) IPU 17U0027 issued 01-04-2017 IRM 3.17.243.8.2 updated to correct the point of contact information for Cincinnati.

(32) IPU 17U0456 issued 03-08-2017 IRM 3.17.243.8.2 updated to correct the fax number for Fresno.

(33) IPU 17U0027 issued 01-04-2017 IRM 3.17.243.8.3 updated to correct the point of contact information for Austin.

(34) IPU 17U1043 issued 06-22-2017 IRM 3.17.243.8.2(1) updated to correct POC name for Austin.

(35) IPU 17U0320 issued 02-16-2017 IRM 3.17.243.8.3(4) Updated Special Search POC for Austin.

(36) IPU 16U1422 issued 09-23-2016 IRM 3.17.243.9.2 update to Austin certified document requests contacts.

(37) IPU 16U1749 issued 12-15-2016 IRM 3.17.243.9.2 updated to correct the state assignments for processing the certified transcripts.

(38) IPU 17U0456 issued 03-08-2017 IRM 3.17.243.9.2 updated to remove references to the CERTS user guide.

(39) IPU 17U1043 issued 06-22-2017 IRM 3.17.243.9.2(2) updated to correct POC name for Austin.

(40) IPU 17U0456 issued 03-08-2017 IRM 3.17.243.9.2(1) updated to correct the fax number for Fresno.

(41) IPU 17U0223 issued 02-02-2017 IRM 3.17.243.9.2(3) Added Note to distinguish between IRM and Form 4338 instructions.

(42) IPU 16U1749 issued 12-15-2016 IRM 3.17.243.9.2(3) c updated to remove the note regarding preparation of the Form 2866.

(43) IPU 17U0456 issued 03-08-2017 IRM 3.17.243.9.2(5) a was inserted to instruct the use of an inventory log.

(44) IPU 16U1749 issued 12-15-2016 IRM 3.17.243.9.2(11) updated to clarify instructions related to copies of fulfilled requests.

(45) IPU 16U1506 issued 10-07-2016 IRM 3.17.243.9.3 inserted to provide instructions on the preparation of Form 2866.

(46) IPU 17U0720 issued 04-21-2017 IRM 3.17.243.9.3 was updated to change the POC information for Ogden.

(47) IPU 17U0837 issued 05-11-2017 IRM 3.17.243.9.3(5) inserted to provide instruction regarding the need for Form 4338 for refund litigation cases.

(48) IPU 17U0596 issued 03-31-2017 IRM 3.17.243.9.1 updated to add instructions in relation to Form 3050.

(49) IPU 17U0837 issued 05-11-2017 IRM 3.17.243.9.2(1) updated to add Submission Processing employees to those authorized to request certified transcripts.

(50) IPU 17U0837 issued 05-11-2017 IRM 3.17.243.9.2(1) chart update to correct the POC name for Austin.

(51) IPU 17U0596 issued 03-31-2017 IRM 3.17.243.9.2(2) updated to include instruction to log receipts into an inventory log.

(52) IPU 17U0596 issued 03-31-2017 IRM 3.17.243.9.2(5) updated to state all rejected request must be documented.

(53) IPU 17U0596 issued 03-31-2017 IRM 3.17.243.9.3 updated to state when the Form 2866 should be prepared.

(54) IPU 17U0720 issued 04-21-2017 IRM 3.17.243.9.3.3 was updated to specify a timeframe for maintaining the file copy.

(55) IPU 17U0991 issued 06-09-2017 IRM 3.17.243.10.2 updated to correct IRM reference.

(56) IPU 17U0807 issued 05-04-2017 IRM 3.17.243.10.9.1(10) inserted to provide instructions for Pre-Law payments.

(57) IPU 17U0907 issued 05-25-2017 IRM 3.17.243.10.9.5 inserted to provide instructions for joint and several cases.

(58) IPU 17U0926 issued 05-26-2017 IRM 3.17.243.10.9.5(5) updated to clarify the posting of received payments.

(59) IPU 17U0991 issued 06-09-2017 Exhibit 3.17.243-1, Terms, was removed and incorporated in IRM 3.17.243.1.3.

Effect on Other Documents

IIRM 3.17.243 dated September 09, 2016 (effective October 1, 2016) is superseded. This IRM also incorporates the following IRM Procedural Updates (IPU), issued between September 23, 2016 through June 15, 2017- 16U1422, 16U1506, 16U1629, 16U1658, 16U1749, 17U0027, 17U0122, 17U0223, 17U0320, 17U0456, 17U0596, 17U0720, 17U0807, 17U0837, 17U0907, 17U0926, 17U0991, 17U1013.

Audience

Wage and Investment Submission Processing Campuses

Effective Date

(10-01-2017)

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

Program Scope and Objectives

  1. This IRM covers numerous programs such as Identity theft Unpostables, Form 12857 processing; Business Master File Identity Theft case processing; Refund Litigation case processing, Certified Document requests; and Department of Labor case processing. The stakeholders that are impacted are the employees within the Submission Processing campuses and employees throughout the service who have submitted requests for processing. The goal is to timely process all requests received to ensure the various operations are able to complete their tasks in a timely manner.

  2. Purpose: This IRM provides instructions for the processing of various processes that are handled in the Accounting Functions.

  3. Audience: Unless otherwise stated, these procedures apply to the Accounting Functions in the Submission Processing campuses.

  4. Policy Owner: Director of Submission Processing

  5. Program Owner: Submission Processing Accounting Control Section

Responsibilities

  1. Employees within the Accounting operation have the responsibility of utilizing the procedures outline in the IRM to accomplish completion of assigned tasks associated with processing the requests received.

  2. Throughout this section, references are made to other IRMs in relation to instructions necessary to properly perform tasks in this IRM 3.17.243, Miscellaneous Accounting. Management shall be responsible for having at least one copy of each of the referenced IRMs in the work area’s library. However, at management’s discretion, it may be deemed worth-while for each employee to possess a copy of a particular manual. In either case, management shall be required to inform the appropriate personnel that the area must be part of the IRM distribution pattern.

  3. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2., Internal Management Documents System - Internal Revenue Manual (IRM) Process, IRM Standards, and elevated through appropriate channels for executive approval.

Record Retention

  1. As there are various programs outlined in this IRM, the retention period for the records will vary. Document 12990, Records Control Schedules, should be referenced for further clarification on retention periods.

Acronyms and Terms

  1. The following table list commonly used acronyms that are throughout the IRM.

    Acronym Definition
    ALC Agency Location Code
    ANMF Automated Non Master File
    BMF Business Master File
    CSED Collection Statute Expiration Date
    DLN Document Locator Number - An eleven or thirteen digit number assigned to every document going through processing.
    DOC ID Document Identification Number
    DOJ Department of Justice
    GL General Ledger
    IDRS Integrated Data Retrieval System
    IDT Identity Theft
    IMF Individual Master File
    IPAC Intergovernmental Payment and Collection
    IRC Internal Revenue Code
    ISRP Integrated Submission and Remittance Processing
    NC Name Control - No more than four characters which represents the taxpayers’ last name.
    NMF Non Master File
    MF Master File
    POC Point of Contact
    RBA Restitution Based Assessment
    RLC Refund Litigation Clerk
    RRACS Redesign Revenue Account Control System
    SPC Submission Processing Center
    TIN Tax Identification Number - A nine digit number (EIN or SSN) assigned to a specific taxpayer. All documents being processed must have a TIN.
    UPC Unpostable Code
    USDA United States Department of Agriculture
    USDC United States District Court
    XREF Cross Reference

Related Resources

  1. The following IRMs provide additional information for completing assigned tasks within this IRM.

    • IRM 2.3, IDRS Terminal Response

    • IRM 2.4, IDRS Terminal Input

    • IRM 3.10.72, Receiving, Extracting, and Sorting

    • IRM 3.11.10, Revenue Receipts

    • IRM 3.17.46, Automated Non Master File

    • IRM 3.17.64, Accounting Control General Ledger Policies and Procedures

    • IRM 11.3.6, Seals and Certifications

    • IRM 25.6.1, Statute of limitations Processes and Procedures

Taxpayer Advocate Service

  1. The Submission Processing (SP) sites are responsible for working with the Taxpayer Advocate Service (TAS) to resolve taxpayer issues.

  2. Cases are sent to SP via Form 12412, Operations Assistance Requests (OAR). TAS’s goal is to provide high quality account resolution and to ensure consistent application and enforcement of standards for taxpayers.

  3. The responsibility of the Accounting Operation is to:

    • Monitor and control all TAS case files referred to Accounting.

    • Verify the accuracy and timeliness of the request.

    • Assign the TAS case to the appropriate team.

    • Quarterly, the designated employee will submit a report of all open and aged TAS cases to management.

Reversal of Erroneous Abatements

  1. General - This section provides instructions for overriding Master File (MF) computer programming that prevents the reversal of abatement transactions after the statute of limitations for assessment has expired.

  2. Erroneous abatements can be reversed only in limited circumstances. They are:

    1. See IRM 25.6.1.10.2.1.1.1, Clerical Errors.

    2. See IRM 25.6.1.10.2.1.1.2, Unauthorized Abatements Made After Referral to the Department of Justice.

    3. See IRM 25.6.1.10.2.1.1.3, Abatements Due to Bankruptcy Discharge.

    Note:

    Any penalties and interest that were erroneously abated can be assessed as if the erroneous abatement never occurred. Penalties and interest should also continue to accrue as if the erroneous abatement had not occurred.

    Note:

    Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  3. Processing - Receive requests for Reversal of Erroneous Abatement from the Statute Team, under cover of Form 12810, Account Transfer Request Checklist.

Reversal of Erroneous Abatements Checklist

  1. Form 12810, Account Transfer Request Checklist, containing the following information:

    1. Complete entity information of the account being transferred from the Master File (MF).

    2. If the reversal request involves a MF account, a current MFTRA or account transcript showing the account balance as either a debit or zero should be included.

      Note:

      If the reversal request is for a Non-Master File (NMF) account, a current NMF transcript must be attached.


    3. Reversal request listing the 23C date of the assessment being reinstated.

    4. Transaction codes (TC) and amounts being reversed.

  2. Completed Form 3465, Adjustment Request, with TC 860, the reinstated 23C date and entity information of the taxpayer whose account will be established on non-masterfile (NMF). The information may not be the same as the MF account being transferred. If the reversal is for a NMF account, no account transfer is necessary.

    1. Indication of either "Notice to Taxpayer" or "No Notice to Taxpayer" .

    2. If a credit is available, indicate where the credit is located.

  3. A memorandum (2 way memo) will be signed by the Campus Compliance Official of the responsible team, addressed to the Accounting Official. This memorandum will set forth the conditions surrounding the erroneous abatement, the amount of tax considered still due, the type of tax, the tax period and taxpayer identification information. In addition, information should be included on how the reinstated liability will be handled, i.e., a credit is available for application and/or a notice will be issued to the taxpayer. Upon approval of the Statute Control Team and acceptance by the Accounting Official, this memorandum serves as authorization to process the requested action.

  4. If the original assessment documents cannot be obtained, a dummy document should be prepared and approved by the manager of the initiator, or at least 2 attempts to obtain the document should be provided (Form 4251 - Return Charge Out).

  5. A letter to the taxpayer explaining the action and the amount of tax, penalty, and/or interest being reversed will be included if a notice to the taxpayer is required. A 510C letter (Refund in Error; Return Check) is not appropriate for the TC 860 action. The letter to the taxpayer will accompany the first notice (Form 6335, NMF First Notice) to the taxpayer. The letter must be signed by the originating function's operation manager. The taxpayer should also be advised of their right to seek assistance from Taxpayer Advocate Service.

    1. If taxpayer is not going to be billed, credit must be available in Excess Collections to full pay the account.

      Note:

      If the credit is located in another Campus, contact the requestor for Form 2158, Credit Transfer Voucher.


    2. Form 8765 (IDRS Control File Credit Application), must be included with the accounting package.

    3. This credit must be posted before the reversal request can be sent through Statute to NMF.

    4. Once the account is loaded, the credit can be applied to Automated Non-Master File (ANMF) using Form 8765.

  6. RBA Cases:

    • RBA cases will come to Accounting when a credit (TC 291) has been posted to the account erroneously.

    • The 2-Way memo will have the subject line that reads, Reversal of Previously Posted RBA Credit.

    • 2-Way memos received from the RBA teams are to be worked without having been reviewed by the Statute function.

Processing the Reversal of Erroneous Abatement Package

  1. The reversal of erroneous abatement package, as described in (IRM 3.17.243.1.1, Reversal of Erroneous Abatements Checklist), will be forwarded to the Accounting Operation from the Statute Operation only. At the option of the Operation Manager, a preview of the package may be made to ensure all necessary documents are received. If items are missing, the request should be rejected back to the requestor through the Statute Function (See IRM 25.6.1.10.2.2.3, Correction of Erroneous Abatement cases by the Originating Function).

    1. The review may also include an analysis of the integrity of the request to ensure proper administration of the Internal Revenue Code and Regulations.

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

      Exception:

      If the taxpayer has submitted payment, the reversal must be processed.

    3. The Accounting Operation Manager must sign approval on the memorandum indicated in (3) above when the request is accepted.

  2. The Account Transfer Team will input the TC 400 to the Master File (MF).

    1. Individual Master File (IMF) accounts - Input TC 971 Action Code (AC) 045 using REQ77.

    2. Business Master File (BMF) accounts - Prepare Form 514-B, Credit Transfer Voucher and Form 813, Document Register. (See IRM 3.17.243.2, Reversal of Erroneous Abatements for detailed instructions).

    Note:

    A TC 400 will not post to a MF account that has a credit balance. Prepare credit transfer document(s) for available credit(s), if appropriate.

  3. The TC 400 will generate CP 96 (IMF) or CP 296 (BMF).

  4. The Account Transfer Team will edit CP 96, CP 296, or CP 396 and prepare the Reversal of Erroneous Abatement package for NMF processing.

  5. The Account Transfer Team will forward the Form 12810, original Form 3465, Operation Manager's approved memorandum, and the original letter for the taxpayer (when a notice is required) to the appropriate function.

    Note:

    For additional instructions on processing Reversal of Erroneous Abatements see IRM 3.17.46.2.9, Reversing Erroneous Abatements.

Form 12857 Receipts

  1. General Explanation of Form 12857, Refund Transfer Posting Voucher, is as follows:

    Note:

    Effective January 14, 2013, a TC 848 and TC 849 can be input on CC ADD48 to move a refund from one individual tax account to another, instead of using Form 12857. As a result, there should be a significant decrease in the volume of Form(s) 12857 received.

    • Form 12857 is used to transfer an erroneously posted refund to the correct tax module on IDRS.

    • There are two parts to the form.

    • Part A will list the information relative to the account the refund needs to be posted “To”.

    • Part B will have the information relative to the account where the TC 840 or TC 846 is currently posted and being transferred “From”.

  2. Review the Form 12857 to ensure it is completed correctly. The following actions are to be taken when the Form 12857 is received.

    • Access IDRS command code IMFOL or BMFOL to verify that the account on Part B does in fact have a TC 840 or TC 846 posted.

      Note:

      Requests that are received related to ID theft cases should include IDRS prints showing the posted refund and the "to" account.


    • Verify that the amount and transaction date are correct. There may be instances where the TC 841 being input differs from the posted TC 840 or TC 846. See the table below.

      If And Then
      the TC 841 is less than the TC 840/846 a TC 720 is present for the difference reject the Form 12857
      the TC 841 is less than the TC 840/846 a TC 898 is present for the difference process the Form 12857
      the TC 841 is more than the TC 840/846 reject the Form 12857
    • Verify that boxes 11, 12, and 16 of Part A have the requested information. These fields are must enter boxes and missing data will cause the document to error out. If the information is missing, contact the originator to obtain.

    • If the Form 12857 doesn't show a split refund code, verify that one doesn't exist. If IDRS shows a SPL-REF-CD, annotate it in box 9, Part B, on the Form 12857.

    • Verify that the SSN in Part A has an account established for the applicable tax year.

    • Once the Form 12857 has been reviewed and a decision to process has been made, the receiving campus MUST acknowledge receipt of the form. The Form 3210, Document Transmittal, MUST be signed and returned to the originator within two (2) business days. This can be completed via fax or inter-office mail.

    • Assign a DLN to the form and prepare a Form 813, Document Register.

    • Forward the form to the RACS unit for journalization.

    • Input a history item on IDRS for both accounts/modules – 12857RELSD.

    • After the journalization is completed, the form will be sent for processing, through ISRP.

  3. All Form 12857 received must be processed within 5 business days.

    Note:

    Any Form(s) 12857 that are received and identified as ID theft must be given priority handling and must be forwarded to Batching under cover of Form 3210. The Form 3210 must be annotated, "ID theft, please Expedite" .

BMF Identity Theft (IDT) Erroneous Refunds, Forms 3809

  1. This subsection describes the steps that are to be taken by the Accounting Operations on Forms 3809, Miscellaneous Adjustment Vouchers, that are received related to BMF identity theft erroneous refunds.

  2. Effective February 01, 2014, originators will no longer submit the Form 3809 to Accounting for the Individual Master File (IMF) ID theft erroneous refunds. They will complete the credit transfer using IDRS command codes IDT48 or IDT58.

  3. The IMF systemic processing will produce a daily automated Batch Journal 171 to RRACS which will debit account 1545 and credit account 4220. The EOD 1640 will produce the summary (amounts and volumes) of the transactions and a new report EOD 1622, which lists the detailed information (taxpayer identification) of each transaction, will also be available on Control D. See IRM 3.17.64.17.10, Monthly Balancing Procedures, for procedures used to balance the GL1545.

Processing the Business Master File (BMF)Receipts

  1. When BMF identity theft is identified, a Form 3809 will be prepared to credit the tax account and debit the GL 1545.

  2. The designated team in Accounting will number the Form(s) 3809 using doc code 48 with blocking series 945-949 for TC 841 and/or using doc code 58 with blocking series 745 - 749 for a TC 700.

  3. Once the forms are numbered prepare a Form 813 and forward to the RACS team for journalization.

  4. RACS will receive identity theft erroneous refund Form(s) 3809 from on a daily basis for journalization.

  5. Each pack will consist of four copies of Form 813 and the Form(s) 3809. There will be no more than 75 items per Form 813.

    1. The Form 3809 with a TC 841 will have a blocking series 945-949 with Doc. code 48. The tax class will be determined by the form number.

    2. The Form 3809 with a TC 700 will have a blocking series 745-749 with Doc. code 58. The tax class will be determined by the form number.

  6. Within 24 hours of receipt, the RACS Team will prepare a Form 8166, Revenue Accounting Controls System (RACS) Input Reconciliation Sheet, using the DOC ID and item count, listing each money amount separately from the Form 3809. The total amount listed on the Form 8166 must equal the Form 813 total. See Exhibit 3.17.243-15 for an example of the Form 8166.

  7. The DOC ID input to RACS will be 15 digits as follows: DOC ID = DLN of 813 (without sequence number) plus two digit year plus total volume on Form 813. e.g., 892482619451275

  8. The RACS Team will:

    • Journal the TOTAL amount of each Form 813 listed on the Form 8166, using a 480 window to debit the 1545 account and credit master file (4120). For the prepare date on RRACS, use the date of the journal.

    • Stamp or write the 480 journal number on Form(s) 3809 and/or Form(s) 813.

    • Send the file copy of Form 3809 and copy of Form 813 to the Erroneous Refund Team to be maintained until the five year statute period has expired.

    • Maintain debit side of Form 3809 and copy of Form 813 in 1545 account file for use in balancing.

    • Hand carry, under cover of a document transmittal, a copy of Form 813 to Data Conversion so that the DLN can be set up on SCCF. To prevent SCF, Block Out Of Balance (BOB) items, release the Form 813 to Data Conversion the day prior to releasing the work to Batching.

    • Hand carry the credit side of Form 3809 and one copy of Form 813 to Batching, under cover of Form 3210 so that the Form 3809 can be batched and sent to ISRP for transcription.

    Note:

    At the site's discretion, the DLN can be set up on SCF by the Data Control unit.

Processing the Non Master File (NMF)Receipts

  1. When NMF identity theft is identified, a Form 3809 will be prepared to credit the tax account and debit the GL 1545. The designated team in Accounting will number the Form(s) 3809.

    1. The Form 3809 with a TC 841 will have a blocking series 945-949 with Doc Code 48. The tax class will be “6”.

    2. The Form 3809 with a TC 700 will have a blocking series 745-749 with Doc Code 58. The tax class will be “6”.

  2. Once the forms are numbered, prepare a Form 813 and forward to the RACS Team for journalization.

  3. RACS will receive identity theft erroneous refund Form(s) 3809 and three Form 813.

  4. Within 24 hours of receipt, the RACS Team will prepare a Form 8166 using Doc ID and item count, listing each money amount separately from the Form 3809. The total amount listed on the Form 8166 must equal the Form 813 total. The DOC ID input to RACS will be 15 digits as follows: DOC ID = DLN of Form 813 (without sequence number) plus two digit year plus two digit year plus total volume on Form 813. e.g., 896482619451775.

  5. The RACS Team will:

    1. Journal the TOTAL amount of the Form 813 listed on the Form 8166, using the 480 window to debit 1545 account and credit non-master file 4420 account. For the prepare date on RRACS, use the date of the journal.

    2. Stamp or write the 480 journal number on Form(s) 3809 and /or Form(s) 813.

    3. Send the Debit copy of Form 3809 and copy of Form 813 to the area that maintains the 1545 account. Form(s) 3809 will be maintained until the five year statute period has expired.

    4. input the Form 813 information for the credit side into ANMF using the Form 813 Block Control screen and route to the NMF function for input to the ANMF system. A copy of Form 813 will be provided to Data Control to establish the credit on SCCF.

Maintaining the Receipts

  1. After the RACS Team has journalized the Form(s) 3809 and forwarded them for processing, the general ledger (GL 1545) side of the Form 3809 will be forwarded to the Erroneous Refund Team. The Erroneous Refund Team will:

    • Maintain the Form(s) 3809 in a suspense file by month and statute date.

  2. Once the 5 year erroneous refund statute expiration date (ERSED) has passed, the cases will be identified via an extract listing. When the extract is received, prepare a write off memo.

    Note:

    Identify theft Erroneous Refunds have a five (5) year erroneous refund statute expiration date (ERSED) and cannot be written off to the GL 6905 until the five years have passed.

  3. Forward the write off cover memo to the Accounting Operation manager for signature. An example of the write-off cover memo has been added as Exhibit 3.17.243-11.

  4. Forward the signed memo and listing to RACS for journalization, using a 490 window, to credit 1545 and debit 6905 using the same DOC ID as when the case was opened.

Inventory Control

  1. On a daily basis the RACS Team will drop a UPC for the total of Form(s) 3809 received that day (receipts) and a total of Form(s) 3809 released to Batching that day (production) using OFP 710-01047.

Monthly Balancing Procedures

  1. Use the DOC ID and total amount of the Form 813 on the monthly trial balance spreadsheet to balance to Redesign Revenue Accounting Control System (RRACS).

  2. The RRACS report 0155 will not show a true case volume. Therefore, to get the true case volume to report on the Form 3997:

    1. Add the number of DOC IDs that were previously input to 1545 account (e.g.,– ITER2012090014).

    2. For the manual case ID numbers- e.g., 892482619451275, take the last two digits of the DOC ID and add them all together. In this example, the volume would be 75.

    3. For systemic, use the EOD 1622 total volume for each day.

    4. Add the totals from a and b, and c above to get the grand total.

Return Preparer Misconduct Erroneous Refunds, Cincinnati Campus Only

  1. The following procedures were applicable to cases that were received through June 30, 2015 and are being left in the IRM for historical purpose only. This process became systemic effective July 1, 2015 and IRM 3.17.64 contains the procedures that should be followed.

  2. The service has identified situations where unscrupulous return preparers may alter taxpayer tax data or misdirect a portion or all of the taxpayers' refund. Taxpayers who claim to be a victim of return preparer misconduct, and that claim is substantiated, will need to have a credit posted to their accounts.

  3. This section describes the steps that are to be taken by the Accounting Operation on Forms 3809 that are received related to the return preparer misconduct erroneous refunds.

Processing the Receipts

  1. The Erroneous Refund team will receive Return Preparer Misconduct Erroneous Refund Forms 3809 from the functions working these cases on a daily basis for journalization.

  2. Each pack will consist of Forms 3809 and an IDRS print stapled to the credit side of 3809 under cover of Form 3210. The Erroneous Refund teams need to review the Forms 3809 and the Form 3210 and acknowledge receipt ensuring date of receipt is annotated.

    Note:

    While reviewing the Form 3809, ensure that the remarks section includes the statement "RPM erroneous refund" and the debit portion of the Form 3809 states RPM - 1545 Account. If not, return to the originator for correction.

  3. The Forms 3809 should be numbered and the Form 813 prepared as:

    • TC 841, use Doc Code 48 and blocking 930-939.

    • TC 700, use Doc Code 58 and blocking 930-939.

      Note:

      There will be no more than 75 items per Form 813.

  4. The numbering of the Forms 3809 and the acknowledgement must be completed within twenty-four hours.

  5. After the forms have been reviewed and numbered, forward to the RACS unit for the necessary journal action.

  6. Within 24 hours of receipt, the RACS team will prepare a Form 8166, using the DOC ID and item count, listing each money amount separately from the 3809. The total amount listed on the Form 8166 must equal the Form 813 total.

  7. The DOC ID input to RRACS will be 15 digits as follows: DOC ID = DLN of 813 (without sequence number) plus two digit year plus total volume on Form 813. e.g., 172482619301475

  8. The RACS team will:

    • Journal the TOTAL amount of each Form 813 listed on the Form 8166, using a 480 window to debit the 1545 account and credit master file (4120/4220). For the prepare date on RRACS, use the date of the journal.

    • Stamp or write the 480 journal number on Form 3809 and/or Form 813

    • Send the debit side of Form 3809 and copy of 813 to the Erroneous Refund technician to monitor the TC 841 posting.

    • Maintain third copy of Form 3809 and 813 in 1545 account file for use in balancing.

    • Hand carry, under cover of a document transmittal, a copy of Form 813 to Data Conversion so that the DLN can be set up on SCCF. To prevent SCF, Block Out Of Balance (BOB) items, release the 813 to Data Conversion the day prior to releasing the work to Batching.

    • Hand carry the credit side of Form 3809 and one copy of Form 813 to Batching, under cover of Form 3210 so that the 3809 can be batched and sent to ISRP for transcription.

    Note:

    At the site's discretion, the DLN can be set up on SCF by the Data Control unit.

Maintaining the Receipts

  1. After the RACS team has journalized the Form 3809 and forwarded them for processing, the general ledger (GL 1545) side of the Form 3809 will be forwarded to the Erroneous Refund Team. The Erroneous Refund team will:

    • Maintain the Form 3809 in a suspense file by Form 813 DLN.

      Note:

      While this money is being journalized to GL 1545, the RPM Form 3809 needs to be kept in a separate file.

  2. The write off process will be completed on the RPM cases after the items are moved over to the new GL 1547 account.

Inventory Control

  1. On a daily basis (by COB everyday) the RACS team will drop a UPC for the total of Form 3809 receipts that day from Manual Deposit (receipts) and a total of Forms 3809 released to Batching that day (production) using OFP 710-01047.

Monthly Balancing Procedures

  1. Run paper Forms 3809 as usual, using the Doc Id and the total money amount on the trial balance.

  2. Run EOD 1622 total for each day on the trial balance for systemically journaled cases.

    Note:

    It is important to ensure if a reversal or write-off was done, to use the adjusted dollar amount and adjusted volume.

  3. Balance trial to RRACS Monthly GL 1545 account and RRACS report 0155.

Resolving Unpostable Identity Theft (IDT) Cases

  1. Following are procedures that are to be followed for resolving the Unpostable codes (UPC) 138 cases.

  2. All tasks completed in relation to an IDT case must be reported under OFP 710-01047.

Resolving Unpostable Identity Theft Cases Processed as Erroneous Refunds

  1. The following procedures apply to the stolen identity theft cases processed as an erroneous refund. The Unpostable TC 720 or TC 740 will be for accounts that have a TC 841 or a TC 700 posted.

    Note:

    Every effort should be made to resolve Unpostable conditions within 4 weeks of assignment.

  2. The Unpostables function will assign a control on IDRS (CC TXMOD) to the Accounting Erroneous Refund Team’s generic IDRS number for UPC 138-0 which cannot be resolved in Unpostables.

    Note:

    These items will remain in the Unpostable inventory for four cycles/weeks while Accounting works the document. Any inventory not worked within the specified timeframe will be 1 coded to Accounting.

  3. The Erroneous Refund Team will receive a Case Control Activity (CCA) Report showing the unpostable documents. These Unpostables will have the category RTCK (returned check).

  4. If there is an existing open control base by another area, notify the other area of the actions being taken.

  5. The CCA report and any supporting documentation should be maintained for a three (3) month period.

Resolving Cases with TC 841 Posted
  1. The Erroneous Refund Team will verify TC 841 on taxpayer's account.

  2. The Erroneous Refund Team will prepare a Form 3245 for a TC 843 to debit the taxpayer's account. A DLN needs to be assigned using Doc code 45 and a 540-549 blocking to the debit portion. Prepare Form 813.

  3. A Form 3809 will be prepared for the credit side to the RRACS GL Account, include the taxpayer's TIN, money and transaction date and in explanation field include Doc-ID. Prepare Form 813 and forward to RACS.

    Note:

    Research will need to be done to determine which GL account the TC 841 money is journaled to (1545, 6905, 9998).

    • Debit the taxpayer (4120/4220) account using from Form 3245.

    • Credit either the 9998, 6905, or 1545 accounts using the Form 3809.

    • RACS will journal using a 400 window for the 9998 or 6905 account and a 480 window for the 1545 account.

  4. Stamp or write the 400/480 journal number on Form(s) 3425 and Form(s) 3809 and Form(s) 813.

  5. RACS will hand carry Form 3245 and Form 813 to Batching under cover of Form 3210 so that the Form 3245 can be batched and sent to ISRP for transcription.

  6. RACS will give the Form 3809 credit side to the area maintaining the General Ledger account on the credit side of the document.

  7. The Erroneous Refund Team will Monitor weekly, on Friday, to look for the TC 843 posting to the taxpayer's account and ensure TC 470 or STAUP actions are taken to stop an incorrect notice.

  8. Once the TC 843 has posted, notify the Unpostables Team, using CC UPDIS, that they can post the Unpostable TC 720 or TC 740 to process the refund cancellation. Close the control base.

Resolving Unpostables on Identity Theft Cases Processed by Another Site
  1. There may be cases where the TC 841 was posted by one site and the subsequent input of a TC 720, TC 740 or a TC 841 input by another site is going Unpostable. The following scenario and procedures explains the actions needed to resolve this Unpostable.

    • Site A had a TC 841 input and journaled to their 1545 Account.

      Note:

      Research will need to be done to determine which GL account the TC 841 money is journaled to (1545, 6905, 9998) as it may have been moved from the GL 1545.

    • Site B has input a transaction (TC 720, TC 740 or TC 841) as the money has been returned from the bank or BFS. The input transaction goes Unpostable.

    • The Unpostable is assigned to Site B's Accounting function.

    • Site B will advise Site A that the original action has to be reversed. This can be accomplished by Site B calling or sending an email to the appropriate contact in Site A. If a phone call is made, supporting documentation should be faxed following the phone call.

    • Site A will need to immediately prepare the necessary documentation to input a TC 843 to reverse the TC 841 and they will also need to reverse the journal action in their 1545 account.

      Note:

      A History item is to be input on IDRS when the form to post the TC 843 has been released for transcription.

      Note:

      These items must be worked expeditiously. All sites need to prepare and release the TC 843 documentation to ensure posting within two (2) weeks.

    • Site B will monitor the account for posting of the TC 843 and Site B will advise the Unpostable Team to go ahead and post the transaction.

Resolving Cases with a TC 700 Posted
  1. The Erroneous Refund Team will verify the TC 700 is posted on the taxpayers' account.

  2. The Erroneous Refund Team will prepare a Form 3809, using a Doc Code 58 and blocking series 790-799 to post a TC 702 (debit) to the taxpayers' account and credit the applicable general ledger account. Prepare a Form 813 and forward to RACS.

    Note:

    Research will need to be done to determine which GL account the TC 700 money is journaled to (1545, 6905, 9998).

    • Debit the taxpayer (4120/4220) account using from Form 3809.

    • Credit either the 9998, 6905, or 1545 accounts using the Form 3809.

    • RACS will journal using a 400 window for the 9998 or 6905 account and a 480 window for the 1545 account.

  3. Stamp or write the 400/480 journal number on Form 3809 and Form 813.

  4. RACS will hand carry Form 3809 and Form 813 to Batching under cover of Form 3210 so that the Form 3809 can be batched and sent to ISRP for transcription.

  5. RACS will give the Form 3809 credit side to the area maintaining the General Ledger account on the credit side of the document.

  6. The Erroneous Refund Team will Monitor daily for TC 702 posting to taxpayer's account and ensure TC 470 or STAUP actions are taken to stop an incorrect notice.

  7. Once TC 702 has posted, contact the Unpostable Team and tell them to process request to post TC 720 or TC 740, Unpostable (code 138 0) to process refund repayment. Close the control base.

Resolving Unpostable Identity Theft Where the TC 840/849 Has Been Transferred to Another SSN or an IRSN

  1. The Unpostables function will assign a control on IDRS (CC TXMOD) to the Accounting Erroneous Refund Team’s generic IDRS number for UPC 138-0 which cannot be resolved in Unpostables.

    Note:

    These items will remain in the Unpostable inventory while Accounting works the document.

  2. The Erroneous Refund Team will receive a Case Control Activity (CCA) Report showing the unpostable documents.

  3. If there is an existing open control base by another area, notify the other area of the actions being taken.

  4. The Erroneous Refund Team will verify TC 841/848 and that there is no TC 971 AC 663 present.

  5. The Erroneous Refund Team will review IDRS to locate a TC 971 showing the XREF-TIN.

  6. If present, prepare a Form 12857 to debit (TC 840) the true taxpayers’ account and credit (TC 841) the cross reference TIN. In most cases, this will be an IRSN.

    • Assign a DLN, Prepare Form(s) 813 and forward to the RACS Team for journal action. Journal using RRACS Window 400.

    • RACS will hand carry both sides of Form 12857 to Batching.

  7. If the XREF-TIN is not present, prepare Form 2275 to request the original Form 12857 from files, using the DLN of the posted TC 841. This will give you the XREF-TIN.

  8. Ensure TC 470 or STAUP actions are taken to stop issuance of incorrect notices and monitor daily for TC 840 to post to the taxpayers’ account stop an incorrect notice.

  9. Once TC 840 has posted, contact the Unpostable Team and tell them to process the request to post TC 720 or TC 740, Unpostable (code 138-0). Close your control base.

Resolving Unpostable Identity Theft Where There is Duplicate TC 841

  1. The Unpostable operation will 8 code the duplicate TC 841 to the Rejects operation.

  2. Rejects will immediately work these cases. The Rejects function will perform a Reject 630 (4–0) and prepare a Form 4028 (0–2) for the duplicate TC 841, so that this item can be deleted from SCF. Rejects will route the case and Form 4028 under cover of a Form 3210 Accounting.

  3. The Accounting operation will:

    • Data Control will input the SCF adjustment to delete the item from SCF.

    • For cases where the TC 841 was posted using the manual process, you will pull the Forms 3809 (2) out the packs of work. This will include the copy that is in the Erroneous Refund Team and in the team that is/was performing the balancing.

      Note:

      The Form 3809 must be voided to ensure it is not reprocessed.


    • The Form 813 will be modified to show the case(s) that were pulled. The item count and the money amounts must be adjusted on the Form 813. The campus has the option of using an alternative method, such as a spreadsheet, to document the adjustments that are made to the money and item count for each block. If an alternative method is used in lieu of documenting the Form 813, you must ensure that all pertinent information is maintained and it must be attached to the Form 813.

    • The RACS Team will reverse the original journal action. Journal the total amount of each unpostable document using a 480 window to debit either 4120 (BMF) or 4220 (IMF) and credit the 1545 account. The same document number used in the original 480 journal to open the case MUST be used to reverse the unpostable items.

    • A copy of the journal must be given to the team that is performing the balancing for association with the original package.

    • The rejected (reversed) items will be listed on a transmittal that will be sent back to the originating employee, for all functions except AM or RICS/IVO (AMTAP).

    • All of the items that have been reversed for AM or RICS/IVO because of the duplicate TC 841, should be listed on a transmittal that is to be sent to the point of contact listed below for each site.

    Receipts From: Return Rejects To: Phone Number Fax Number
    All AM Contact Ed Bauer 978-783-8245 978-783-8502
    RICS-IVO Contacts
    Andover RICS-IVO Michelle Heman 978-247-9341 978-691-6603
    Atlanta RICS-IVO Victoria Bryant 470-769-2374 855-848-2098
    Austin RICS-IVO Steve Burtzel 512-693-5704 512-693-5398
    Fresno RICS-IVO Deborah L Carter 559-453-2620 855-851-8444
    Kansas City RICS-IVO Sandra Crowl 816-499-4242 855-851-8445
    Ogden RICS-IVO Sheila Bailey 801-620-4506 801-620-4399

Duplicate Identity Theft (IDT) TC 841 or TC 700 Posting Identified by Originators

  1. When Non-Accounting Operations identify duplicate posting of a TC 841 or TC 700.

    Note:

    These items will be forwarded to Accounting for corrective actions.

  2. Non-Accounting Operations will:

    • For duplicate TC 841:

    • Prepare a Form 3245 with a TC 843 as a debit.

    • Also, prepare a Form 3809 credit to RRACS General Ledger (GL) account with taxpayer's TIN, money, transaction date and Doc ID in the explanation field.

    • For duplicate TC 700:

    • Prepare a Form 3809 debit with a TC 702 to the taxpayer's account with the duplicate TC 700. Credit the RRACS GL account with taxpayer's TIN, money, transaction date and the Doc Id in the explanation field.

      Note:

      Research will need to be done to determine which GL account the TC 841 or TC 700 money is journaled to (1545, 6905, 9998).

      Note:

      A copy of the TXMOD with the duplicate transaction should accompany the Form 3809/3245, if not these items may be rejected back to the preparer.

      Note:

      The Form 3245 with a TC 843 will have a blocking series 540–549 with Doc. code 45.

      Note:

      The Form 3809 with a TC 702 will have a blocking series 790–799 with a Doc. code 58.

  3. The Erroneous Refund Team will:

    • Review documents for required information.

    • Verify copy of TXMOD with duplicate transaction is attached to corrective Form 3809.

    • Assign ID theft DLNs to the Form 3809 and Form 3245 for pipeline processing and RRACS journals.

Duplicate Identity Theft (IDT) TC 700 Posting Identified by Accounting

  1. Due to systemic programming, duplicate TC 700 transactions will post to the taxpayers' module and may result in an erroneous refund. If the Accounting operation identifies cases where there is a duplicate TC 700, they will take the following actions.

  2. If the TC 700 has posted on the account and a credit balance remains:

    • Input a TC 570 to freeze the account.

    • Pull the Form 3809 for the second transaction from the suspense file.

    • Contact the originator and advise them that the transaction appears to be a duplicate. Request that the originator submit the necessary documents, which are stated above, to reverse this transaction.

    • Once the documents are received, assign the DLN(s), have the necessary RRACS journal actions completed, and submit the form for pipeline processing.

  3. If the TC 700 has posted on the account and a refund has been issued:

    • Pull the Form 3809 for the second TC 700.

    • Contact the originator to advise them that there appears to be an erroneous refund on the tax module.

    • Advise the originator that the duplicate Form 3809 will be returned and inform them that they must initiate erroneous refund procedures.

    • All duplicates that are being returned to the originators should be returned under cover of a Form 3210.

Identity Theft Erroneous Refund Write-Off Procedures

  1. An extract will be pulled from the Custodial Detail Database (CDDB) identifying accounts that have been identified as meeting the five (5) year statute expiration date. The extract will identify cases by campus using the DLN associated with the corresponding campus.

  2. There will be one extract each month that will include both the TC 841 and the TC 700 t transactions.

  3. Each campus will receive their extracts on a monthly basis. SPHQ will email the extracts on approximately the 8th work day of the month to the Erroneous Refund campus group mailbox. Each extract will cover a period of one month. The journalization each month MUST be completed by end of month processing.

Actions to be Taken by the Erroneous Refund Team
  1. Once extracts are received, pull Form(s) 3809 for the corresponding cases identified on the extracts.

    Note:

    In the event an item has an expired statute expiration date but is not captured in the extract (e.g. new case), add it to the extract and update the volume and amount.

  2. Verify volume and totals of cases listed on extracts with the Form(s) 3809.

  3. Verify 5 year statute expiration date has expired, which is determined by the transaction date.

  4. Add a column for the Doc ID on each extract.

  5. Update the extract with the Doc ID for each case, ensuring the Doc ID format is input correctly so that cases are grouped correctly.

  6. Sort extract by Doc ID. This sorting process will ensure all Form(s) 3809 from the same Doc ID will be captured and grouped together on the spreadsheet

  7. Prepare and submit the memorandum along with the extract for ID theft cases for approval and signature from the Accounting Operation Manager.

    • Accounting Operation Manager will sign the memorandum only and return to ERRF.

    • The ERRF Team will forward the signed memorandum, extracts and Form(s) 3809 to the RACS Team for journaling.

    Note:

    These losses do not impact Director’s Accountability or cause an irregularity in the accounts of the Campus Field Director’s. Submission to the HQ Losses and Shortages Analyst is not required.

Actions to be Taken by the RACS Team
  1. Receive signed memorandum and extracts with corresponding Form(s) 3809. Once the journal actions are completed, RACS will forward a copy of the memorandum, extracts and Form(s) 3809 to the function maintaining the documents, if not RACS, for balancing and GAO audit file as a closed case.

Refund Litigation Cases

  1. This subsection describes the requirements for receiving, processing, controlling and releasing Refund Litigation case requests.

Background

  1. A taxpayer initiates a complaint or petition in a suit for recovery of taxes. This is forwarded to the appropriate Submission Processing Center (SPC) by a United States Attorney in district court cases, or by the Tax Division of the Department of Justice in Court of Claims cases.

  2. To assist the Service in expediting retrieval of the necessary files, telephone contact (follow up via memorandum) is made by the offices indicated above. These calls provide pertinent information on the taxpayer and the tax liability.

  3. Facsimiles (fax) and memorandums are received from both the District Counsel and Chief Counsel.

  4. Instructions in this subsection referring to “Counsel” means either District Counsel or Chief Counsel.

    Note:

    All communications must come through Chief Counsel; it should not come from the Department of Justice.

  5. The telephone call and a copy of the complaint or petition should be received prior to the facsimiles or memo from Counsel requesting the files. Send the requested information to the requesting office (either District Counsel or Chief Counsel) using either certified or registered mail.

Refund Litigation Campus Contacts

  1. The following contacts should be contacted when there are questions related to cases that have been sent to the campus.

    Campus Contact Phone Number Fax/EFax Number(s) Manager Mailing Address
    Austin Cheryl Homesley
    Ramonna Camacho
    737-800-5076
    737-800-5075
    /855-254-0574 Maria Madrigal at 737-800-4180 3651 S IH 35
    Stop 6271 AUSC
    Austin, TX 78741
    Cincinnati Virginia (Ginny) True
    Vera Wells
    859-594-6119
    859-594-6105
    859-594-6278 Lucinda Martineck 201 Rivercenter Blvd
    Stop 2800F
    Covington, KY 41011
    Fresno Karla S Wenzel 559-456-5759 855-275-7805 or 855-275-6711 Jessica Garcia (Mgr.) 559-454-6312 or Bonnie Houck (Lead) 559-454-6354 5045 E. Butler Ave
    Fresno, CA 93727
    DCF Unit Stop 37104
    Kansas City Amelia Chanslor
    Jenifer Loesing
    816-499-5435
    816-499-5923
    866-830-1371 Ann Thomas (Mgr) 816-499-5430 or Joanna Oropeza (Lead) 816-499-5955 333 W. Pershing Rd.
    Mail Stop P6-6250
    Kansas City, MO 64108
    Ogden Shane Odd
    Martina Simpson
    801-620-6427
    801-620-6444
    855-293-8503 Jennifer Thomas 801-620-7276 1973 N Rulon White Blvd.
    MS 6262
    Ogden UT 84201

Processing Requests

  1. Maintain a daily/monthly log, showing all new case requests processed during the month and the dates on which the telephone call, initial complaint and the e-fax/memo was received.

  2. Take the following action immediately upon receipt of the taxpayer’s complaint, telephone call or e-fax/memo:

    1. Use command code ACTON to establish an open control base for all affected tax modules using category REFUNDLIT or COURTCASE.

    2. Identify each tax period involved in a Refund Litigation case with a TC 520 freeze with closing code (CC) 73. If a TC 520 with CC 73 is not present, it should only be input if requested by Counsel.

    3. If the account has been moved to the retention register, use applicable procedures to reestablish the account. Input of IDRS command codes IMFOL or BMFOL with definer code B is used to bring an account out of retention.

    Note:

    If additional information is needed regarding accounts that have been placed in retention, please see IRM 3.17.21.6.2, Review of Transfer Requests.

  3. Research and secure the requested document(s) using expedite procedures.

    • Use IDRS research capabilities to help locate needed returns.

    • When documents are charged-out, contact the appropriate function to immediately obtain the required documents.

      Note:

      Take this action regardless of where the documents are charged-out.

    Exception:

    If the document is charged-out to the Examination Function for a Frivolous Filer Case, secure a photocopy to forward to the requesting Counsel. The Examination Function will forward the tax return as soon as their case is resolved.

  4. If the documents are located at a campus other than where the case is being worked, send the Form 2275 to the Special Search function at the applicable campus. The campus contacts are listed below. A phone call to the POC below should be placed prior to sending the fax.

    Campus Contact Name Contact Phone/Fax
    Austin Martha A. Carreon
    Jessica Flores, Manager
    737-800-7993

    EFax 877-821-4731
    Cincinnati Special Search Desk
    Timothy Jahnke, Manager
    Tiffany Massman, Lead
    859-594-6143
    859-594-6189
    859-594-6188
    Fax 855-265-5803
    Fresno Patricia Sandoval
    Polly Wray, Manager
    559-500-7018
    559-500-7013
    Fax 559-500-7092
    Kansas City Melidy Prater
    Laura Dunn, Manager
    Janice E Edgerson, Lead
    816-499-5823
    816-499-5815
    816-499-5811
    EFax 877-929-1595
    Ogden Wendy Morse
    Gina Zamora, Manager
    Stephanie Vallejo, Lead
    801-620-7928
    801-620-7933
    801-620-7930
    EFax 855-312-0550
  5. If the memo is requesting a certified transcript in addition to returns, a Form 4338 is needed. If the originator has not submitted this form it should be prepared by the refund litigation coordinator at the campus. A copy of the memo must be attached to the Form 4338 as supporting documentation.

Controlling Cases

  1. If a facsimile/memo is not received within ten (10) calendar days from the receipt of the copy of the taxpayer’s complaint or the initial call from Counsel (whichever came first), the Refund Litigation Coordinator (RLC) must telephone the respective Counsel in the area office to request it.

    Note:

    Take this action whether all, some or none of the requested documents have been secured. The purpose is to alert Counsel that no fax/ memo has been received. Request fax/memo from Counsel or secure the date it was mailed.

  2. Associate all documents received with the related complaint (petition) and hold for receipt of the facsimile/memo from Counsel’s office.

    • Review the case file for any indication that a statutory notice of claim disallowance has been sent to the taxpayer.

    • If a statutory notice is needed by counsel they will notify us. In order to obtain the notice you will use the certified mailing number and date the notice was mailed to obtain the certified mailing documents from the mail room.

    • Associate these documents with the case file.

  3. When the facsimile/memo is received from Counsel, associate and compare the fax/memo with the copy of the complaint (petition) to determine if the documents requested and those secured are in agreement.

    1. Resolve any discrepancies.

    2. If any needed Revenue Agent Reports (RARs), appellate reports, etc., are attached to other returns, amend the facsimile/memo to include those returns and note the additions on the transmittal.

    3. This comparison excludes any supplemental fax/memo from Counsel.

    4. Perform the actions requested in the facsimile/memo.

    5. The copy of the complaint (petition) can be made a part of any retained control file.

  4. When the facsimile/memo is received and all documents for the case have NOT been secured, the RLC must immediately contact District Counsel and give the status of the case. Counsel will advise whether to send what has been compiled or to hold until the entire case file has been secured.

  5. When all documents for a case are not located and the tax module is not present, notify Counsel.

Releasing Cases

  1. When the facsimile/memo has been received, prior to forwarding the assembled case file to Counsel, photocopy the file.

    1. Do not delay transmitting the case file. Do not exceed 75 pages for the duplicate file

    2. Copy priority items in this order: Transcripts, Claims for Refund, Revenue Agents Reports, Tax Returns, and Appellate Reports

    3. If the requested administrative files are voluminous, call the District Counsel for permission to omit the duplicate file procedure.

  2. Send the copy to: Assistant Attorney General, Tax Division, Department of Justice, Washington, DC 20530 via certified or registered mail. Note the title of the case and court in which the case is pending and attach a copy of the facsimile/memo.

  3. Use a copy of the original facsimile/memo to set up a case file to control the receipt of each document or information received for the case.

  4. Ninety days (90) after receipt of the original facsimile/memo, forward a copy of the control file listing documents not secured. Include an explanation of the research that has been performed and indicate controls have been terminated.

Closing Returned Cases

  1. Take the following actions when the completed Refund Litigation case is returned to the SPC:

    1. Check the case file to verify that all returns shown on the Form 3011-A, Transmittal Memorandum, are enclosed.

    2. Indicate on Form 3011-A if returns or related materials are missing before returning the form to Chief Counsel.

    3. Examine the file to locate the Notice of Adjustment. Associate the Notice of Adjustment with the specific return and place the work papers with the current refile numbered return.

    4. If the Form 3011-A indicates a settlement is to be paid by the Government or other adjustment is required but no evidence that adjustment has been input, route the file to the Examination Function.

    5. Refile “Closed” case returns and work papers by the current refile (control) DLN. If more than one period is involved in the completed Return Litigation case, refile work papers with the most current tax period refile DLN.

  2. After Form 3011-A is received and verified, remove the TC 520 freeze by inputting a TC 521. Input a TC 521 for each module that contains a TC 520 with CC73. Close all open control bases.

Emergency Refund Litigation Case Requests

  1. Refund Litigation Cases already in progress sometimes need expeditious handling of requests for additional information from District Counsel. Requests are via telephone.

    • District Counsel must furnish in writing the full name of the person(s) making the telephone request as soon as possible after the request.

    • This information should also be included in the facsimile/memo.

      Note:

      It is not necessary to wait until receipt of a fax or memo before processing the request as long as District Counsel provides the necessary information.

  2. Immediately upon receipt of the telephone request, begin securing the requested documents and/or information.

    • Photocopy upon securing information

    • Hold Department of Justice photocopy until written memo or facsimile is received.

  3. If a facsimile/memo is not received within five (5) days from the receipt of the telephone request, telephone Counsel in the appropriate office to request it.

  4. Maintain a daily/monthly log, exclusive of the log required in IRM 3.5.61.4.2.2, Processing Request, showing all emergency telephone requests during the month and dates received.

Collections on Judgements in Tax Cases

  1. These cases were previously known as Refund Suits and Collection Suits in which a judgement is rendered to collect taxes.

    1. Collection on these judgements requires Department of Justice to secure the current year returns. Requests for these returns come directly from the Department of Justice.

    2. These requests will be via telephone and followed by a two-part memo; one part to be stamped “received” and returned to the Department of Justice immediately.

  2. Immediately upon receipt of the telephone request, begin securing the requested documents and/or information.

  3. If the memo has not been received within five (5) days from the receipt of the telephone request, telephone the requester to request it.

Transcript Generated Due to Unpostable

  1. If the transcript generates because of an unpostable condition, resolve the unpostable.

Diagnostic Transcript Type Q (Diag Q Transcripts)

  1. Diagnostic (DIAG) Transcripts identify unresolved IDRS conditions. They may also identify operational problems in other functional areas.

  2. The Campus Collection activity routes DIAG Q transcripts to the Refund Litigation Coordinator when:

    1. There is an unreversed TC 520 or unpostable TC 521, or

    2. No TC 520 but a -V or -W freeze and the closing code is 71 or 73 for all MFT’s except 13 or 55.

  3. These transcripts generate when the above condition has been present for at least one year, or the CSED (Collection Statute Expiration Date) has expired.

  4. The type of DIAG-Q transcript is indicated in the upper-right hand corner of the transcript. The codes and meanings are:

    1. "DIAG-Q TYPE 1" Indicates one year since freeze was established. This number can be from 1 to 9. If the number “9” is present, check the transaction date to determine the number of years of inactivity.

    2. "DIAG-Q TYPE C" -Indicates that the CSED has expired.

  5. Upon receipt of the DIAG-Q transcript, screen the transcript to ensure that it has not been misrouted.

    • If the transcript is mis-routed, contact the Service Center Collection Branch (SCCB).

    • It the transcript was routed properly, complete research to resolve the condition.

Transcripts Generated Due to Expired CSED or Inactivity

  1. When the transcript generates because of an expired CSED or inactivity, check the case control card to determine the current status of the case, and take one of the following actions:

    If The case is: Then
    Closed and the module balance is "0" Reverse the TC 520
    Closed and the module balance is NOT "0" Pull the case to determine if Form 3011-A has been received. It may be necessary to contact a technical unit to ensure that any necessary adjustment actions have been taken. After these steps have been taken, reverse the TC 520.
    Active (not closed)
    1. Order a hardcopy ENMOD of the TIN

    2. Highlight the name and address information

    3. Prepare a routing slip to the area where the case is charged out (usually District Counsel or Chief Counsel, Litigation Division). Provide the information in (2) below.

    4. Send the DIAG-Q and ENMOD to the appropriate Counsel.

  2. When it's necessary to send notification to Counsel, notate the following information: "Attached is a DIAG-Q transcript and hardcopy of an ENMOD. The DIAG-Q indicates that the CSED has expired, or the TC 520 has been on the case for years and there has been no activity" .
    "Please take the appropriate actions on this case. If the case is closed and the TC 520 should be reversed, please provide us with a copy of the Form 3011-A (or a new Form 3011-A if the original Form 3011-A is not available). Send the Form 3011-A to the address shown below" . Provide your office's street address.

  3. If there is no record of the case, contact Chief Counsel to verify the status of the case.

    If the case is: Then:
    Open Counsel will inform you what area office controls the case
    Closed or counsel has no record of the taxpayer, and the module balance is "0" Reverse the TC 520
    Closed or Counsel has no record of the taxpayer, and the module balance is NOT "0" Route the DIAG-Q to Special Procedures Function (SPF). Indicate to SPF what action has been taken (e.g., research, contact with Counsel).

Certified Documents

  1. The procedures in the following subsections are to be followed to complete processing of requests for certified documents

Certification of IRS Records

  1. Use OFP XXX-37700 when processing certified documents or transcripts.

  2. Use Form 4340, Certificate of Assessments, Payments, Other Specified Matters, to certify extracts from the taxpayer’s account for legal purposes and court cases.

  3. Use Form 4338, Information or Certified Transcript Request, for BMF and IMF certification of official records signed under seal.

  4. Use Form 3050, Certificate of Lack of Record when requested to certify that the service has no record of the transcript being requested.

    Note:

    The Form 3050 is generally prepared when requested by the originator. This form may also be prepared when a certified transcript is requested and the Form 4340 states no record. In this instance, the preparation of the Form 3050 is not required.

  5. Use Form 2866, Certificate of Official Record as a cover sheet for all requests for certified documents, with the exception of FOIA requests.

Form 4340, Certificate of Assessments, Payments, Other Specified Matters

  1. IRS employees in Criminal Investigation, Compliance, Advisory, Insolvency, Appeals, Disclosure, Counsel, as well as Treasury Department employees in the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Office of the Treasury Inspector General for Tax Administration (TIGTA) are authorized to request preparation of Form 4340, Certificate of Assessments, Payments, Other Specified Matters. Employees within Submission Processing with responsibility of processing refund litigation cases may also submit requests for certified transcripts.

  2. These requests are made on a Form 4338, Information or Certified Transcript Request, and sent to the appropriate campus as shown below.

    Note:

    All requests are needed two weeks in advance. Only one Form 4338 is to be used for each EIN/SSN. However, EINs/SSNs with multiple years can be on the same form.

    IMF Certified Transcripts, Form 4338 Requests
    If you are in this state: Send your request to: Procedures for the campus:
    Alabama, Kentucky, Louisiana, Mississippi, Tennessee, International, Minnesota, Texas, or Washington Austin Submission Processing Campus Telephone Contacts: Nelda Villarreal (737) 800-5004, or Sylvia Bairrington (737) 800-5020 EFax to Renita Craney at (855) 254-0580. Please do not email requests.
    Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Wisconsin, Wyoming Fresno Submission Processing Campus Telephone Contacts: Bonnie Houck (559) 454-6354, or Jessica Garcia (559) 454-6312. Fax to Jessica Garcia or Bonnie Houck at (855) 275-7805 or (855) 275-6711. Please do not email requests.
    Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York City, New York State, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington, D.C., West Virginia Kansas City Submission Processing Campus Telephone Contacts: Amelia Chanslor (816) 499-5435, or Jenifer Loesing (816) 499-5923 E-Fax to Amelia Chanslor or Jenifer Loesing at (866) 830-1371, or email the request to *W&I KC Certified Transcripts
    BMF Certified Transcripts, Form 4338 Requests
    If you are in this state: Send your request to: Procedures for the campus:
    Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New Hampshire, New York (City), New York (State), Mississippi, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, D.C, West Virginia, Wisconsin Cincinnati Submission Processing Campus Telephone Contacts: Gerald (Jerry) Hatfield (859) 669-2257, or Mary Clark (859) 669-5494. Fax to Gerald (Jerry) Hatfield or Mary Clark at (855) 256-0929.
    Mailing address: 201 West Rivercenter Blvd., Covington, KY 41011, Stop 21, Team 205
    Alaska, Arizona, California, Colorado, Hawaii, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Washington, Wyoming, Utah Ogden Submission Processing Campus Telephone Contacts: Jessica Jones (801)620-6379, or Kari Huston (801) 620-7009 Fax to Jessica Jones or Kari Huston at (801) 620-6434, or (801) 620-6856
    Mailing address: IRS 1973 N. Rulon White Blvd., Ogden, UT 84404, Attn: Shanale Sides/Kari Huston
  3. When it’s been determined that the Form 4338 can be processed, it should log into an inventory log for tracking purposes.

  4. Preparation of Form 4340 is limited to a few authorized campus employees only. At present, these employees are generally in the Compliance and Accounting Branch functions.

  5. The following information is required on Form 4338 to initiate a request for Form 4340:

    1. Complete TIN information, including a validity indicator or NMF indicator (if applicable).

    2. Complete name and address information (if applicable).

    3. The Description for your type of request must be indicated.

      Note:

      If Form 4340 is needed for other legal purposes, mark the "Certified" box.

    4. The date the Form 4340 is needed (date should encompass two weeks preparation time). A request marked "ASAP" will be available in 30 days or less.

    5. The reason for the request.

    6. The type of transcript needed (usually "Specific" ). If "Complete" is marked, specify the earliest tax period needed.

    7. The MFT.

    8. The period ending. Multiple periods can be on the same form. Add additional periods in the area above the Requester at the bottom of the page on Form 4338.

    9. Any additional information that may assist in locating the account if the taxpayer's EIN, SSN, or complete name is not known.

    10. The complete name and address of the requestor. If this is an expedited request, include a street address.

    11. The title of the requestor.

    12. The current date.

    13. The complete telephone number of the requestor, including area code. If the telephone number is omitted or incomplete, Form 4338 may be returned to the requestor.

      Note:

      When discrepancies that may exist between Form 4338 and IRM 3.17.243, IRM 3.17.243 will be your main source guidance and supersedes the Form 4338 instructions.

  6. If an incomplete Form 4338 is received, contact the requestor for the missing information. If unable to contact the requestor, return Form 4338 to the requestor with instructions to resubmit Form 4338, including the missing information. All requests being rejected must be documented either through use of a transmittal or via email.

  7. Processing instructions for Form 4338 follows:

    1. All receipts that are being processed should be logged into an inventory control log.

    2. If the taxpayer's account and tax period are located on Master File, input command code MFTRA with Request Type "J" , EIN/SSN, MFT, and tax period. The terminal response with this definer should be the same as the other MFTRA command code definers. See IRM 2.3,, IDRS Terminal Responses.

    3. The day following the input request (if the input is before the campus cutoff time), Master File will generate a routing page for sorting and routing the transcript, a cover sheet to be associated with MFTRAJ Transcript, a report identifying all transaction codes that were on the Master File but were not included on the MFTRAJ Transcript, and hard copy literal transcript entitled Form 4340, Certificate of Assessments, Payments, Other Specified Matters. This transcript will contain entity and tax module data from the Master File associated with the input SSN/EIN.

      Note:

      If review of the report identifies a transaction that was not included on the MFTRA-J Transcript, and Form 4338 indicated transactions must be included on the transcript, use the NSA to produce Form 4340.

  8. If review of the information provided on Form 4338 indicated an automated Form 4340 could not be produced, e.g., Non-Master File Account, account on retention, additional steps will need to be taken.

  9. When transcripts are received, verify the information on Form 4338 and compare to the transcript received. If discrepancies are identified which cannot be resolved through research or contact with the requestor, return Form 4338 to the originator with a brief explanation of the problem.

  10. The following Command Codes can be used to verify the transcript information:

    • INOLES—Verify name and TIN as shown on Form 4338

    • ENMOD—Verify name and TIN as shown on Form 4338

    • IMFOL/BMFOL—Display summary of tax periods on Master File

    • SUMRY—Display summary of all available tax periods on active IDRS

    • TXMOD—Display summary of specific tax periods on active IDRS

    • IMFOLV/BMFOLV—Display tax periods on Retention File

  11. If the response to an IMF transcript request indicates the module was retired in cycle 199501 or later, and the request is not an expedited request, input command code IMFOLB to activate the register. After seven days, MFTRA-J or MFTRA Specific can be requested.

  12. If the response to a BMF transcript request indicates the module was retired in cycle 199501 or later, and the request is not an expedited request, input command code BMFOLB to activate the register. After seven days, MFTRA-J or MFTRA Specific can be requested.

  13. Obtain appropriate signatures on Form 4340 and/or Form 3050, Certification of Lack of Record, and Form 2866, refer to Delegation Order 11-5 as contained in IRM 1.2.49.6, Delegation Order 11-5. After signatures are obtained, prepare a complete photocopy of all documents to be maintained at your site. Forward the original document to the requestor.

  14. Form 2866 is present, attach to the corresponding Form 4340.

  15. Prepare a separate Form 4340 for each type of tax requested and each tax period.

  16. Requests for NMF Form 4340 - A Form 4340 (NMF), Certificate of Assessment, Payments, and Other Specified Matters, Certified Transcript can be requested via ANMF in place of the Form 4340 that was generated from the CERTS application.

    • The Form 4340 (NMF) reflects an assessment and any subsequent transactions to the assessment and may not represent the entire liability for a particular tax period.

    • The ANMF system should be researched for all accounts that pertain to the requested tax period.

Preparation of Original Form 2866, Certificate of Official Record

  1. This subsection contains procedures for preparing the original Form 2866.

    Note:

    These procedures were pulled from IRM 11.3.6, Seals and Certifications.

  2. The Form 2866 should be prepared for all requests excluding Freedom of Information Act (FOIA) requests.

Routine or Non-Blue Ribbon Certifications
  1. For documents where "blue ribbon" certification is not requested, the Form 2866 is prepared as follows.

  2. Immediately after the phrase "I certify that the annexed" insert a statement similar to the following:

    • Is the original... or

    • Is a true copy of... or

    • Is an exact transcript of... or

    • Is an exact transcript of an electronically filed return (without signature document)

  3. Immediately after the statement shown above, insert the identification of the record, which may include items such as:

    • The form number and title of the record

    • The name of the taxpayer

    • The date of the record

    • The name of the signer of the record

    • The type of tax and tax year involved and/or

    • Any other feature by which the record would normally be identified

    Note:

    Electronically filed returns may consist of the electronic record as well as a paper form containing the signature (e.g., Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-fileReturn). In such cases, the complete return cannot be certified without including all pertinent parts of the return. However, should it be impossible to locate the Form 8453 or its equivalent, it is permissible to certify the electronic transcript (TRPRT) alone as long as it is correctly described as in (2) above. Since the transcript alone cannot be certified as the return, the following language is to be used in certifying an electronic return with Form 8453:
    ......is a true copy of an electronically filed Form 1040, U.S. Individual Income Tax Return, with Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-fileReturn.

    Note:

    Paper substitutes for returns submitted as dummy returns used to establish an assessment on the taxpayer's module are not returns, but rather constitute return information. The certification of an SFR should state something to the effect that it is A Substitute For Return package prepared by IRS. The substitute for return may not be a traditional tax return, but may consist of one or more documents that together support the assessment of tax. In these cases, it will be especially important to appropriately identify the document(s) being certified on the Form 2866. See (5) and (6) below. In contrast, returns prepared by the IRS under the authority of IRC § 6020(b) are considered returns. The distinction between an SFR and an IRC § 6020(b) return is that the Form 1040 used for the SFR includes only the taxpayer's identifying information, while an IRC § 6020(b) return is prepared by the IRS with additional information such as income, deductions and tax liability that constitutes a valid tax return. IRC § 6020(b) returns should be certified as returns, although language should be included in the certification indicating that IRS prepared the return pursuant to authority granted by IRC § 6020(b).

  4. Material requested with respect to documents submitted as a return but which do not constitute a valid return should be identified as being a true copy of a document purported to be an income tax return, or submitted to the IRS, or similar wording.

  5. Identifications should generally be brief and include only those details necessary to identify the record. They should not attempt to characterize or comment upon the record.

  6. Any attachments should be similarly identified. The identification should end with the phrase . . . consisting of . . . pages.

  7. There should be no punctuation after the last word of the identification (usually pages). Instead, a line should be drawn from the last word to the right margin (generally about one inch from the edge of the paper) and then diagonally to a point just above the first u in the phrase under the custody of this office.

  8. The name and title of the certifying officer is placed beneath the phrase By direction of the Secretary of the Treasury, leaving sufficient space for the signature.

  9. Separate certifications are made for each type of document.

    Example:

    An administrative file must be certified separately from the tax return.

    Note:

    Make separate certifications for each taxable year involved unless the document pertains to multiple years.

  10. Records that are associated, such as schedules and attachments, are certified together.

  11. Original and amended returns for the same tax year are certified together.

  12. After signature, the dates are inserted. A gummed or self-sticking notarial seal is placed in the lower left corner of Form 2866. For all certifications used in IRS tax (Title 26) cases, i.e., cases involving enforcement of the IRC alone or in combination with other chapters of the United States Code, the seal cannot be pre-embossed and placed on the Form 2866. It must be raised through the Form 2866. For certifications that will be used in non-tax cases, i.e., cases that do not involve the enforcement of the IRC, a pre-embossed seal may be used as long as the consumer has agreed to accept the pre-embossed seal. The stamp of the office of the certifying official is the stamp to be used for the embossing.

  13. Records being certified are stapled behind the Form 2866, along the upper left corner, taking care not to obliterate any portions of the record.

  14. If the individual requesting certified documents and the court where they may be introduced both agree, ink stamped certifications may be provided.

Preparation of Blue Ribbon Certifications
  1. Prepare a "blue ribbon certification" , Certificate of Official Record, for the government’s submission of certified documents in court only if this format is specially requested.

  2. Follow the normal processing steps. See IRM 11.3.6.4.1.(2) through (12).

  3. Place Form 2866 as the top sheet of the document with the official record (e.g., Form 4340, Certificate of Assessments, Payments, and Other Specified Matters , or equivalent) as the remaining pages of the document.

  4. In the upper left hand corner, press an eyelet (a type of grommet) through all pages of the document (using, e.g., Bates M-40 Eyeleter, UPC #14132 and Bates ELTSIC Eyelet, brass, short for up to 18 pages, UPC #00702), taking care not to obliterate any portion of the record.

  5. Run a blue ribbon through the eyelet and tie the ribbon. Place a blank gummed or self-sticking notarial seal over both ends of the ribbon in the lower left corner of Form 2866.

  6. Send the document to the authorized official or his or her delegate in a "Confidential Information" envelope.

  7. The authorized officer will date and sign the Form 2866 as well as the official record (e.g., Form 4340 or equivalent), when relevant, and the authorized officer will emboss the appropriate seal (see Treasury Regulation Section 301.7514-1) through the blank notarial seal and the Form 2866. See IRM 11.3.6.1.(2).

Preparation of Copies of Certifications
  1. Each office issuing certifications must retain a file copy of the certification, together with any appropriate background information.

  2. The file copy must be maintained for a minimum of one year.

  3. The copy of the certification must show all entries that appear on the original, except the seal of office.

  4. The background file should identify the intended recipient (taxpayer or agency) for whom the certification was prepared. This information may be entered on the copies of the certification or in a history sheet, or it may be documented by including relevant correspondence in the file.

  5. The background file should identify by name and title the employee responsible for requesting the certification, preparing the package and retrieving the records.

  6. The information required by (3) and (4) above must be readily available to the official signing the certification and must be easily obtainable in the event of some future inquiry. As this information will appear only on the IRS retained copies or background files, it can be typed, handwritten or rubber stamped.

  7. Requests for certification may arise in connection with various activities where files are maintained. The copy of the certification and any background information would generally be incorporated with the existing files. A separate file of certifications does not need to be maintained.

  8. A copy of the Form 2866 may be provided to another office or another function having an interest in the case.

    Note:

    See IRM 11.3.6.5, Standards for Certifications, for additional information regarding certifications.

Department of Justice (DOJ)

  1. On March 1, 1984, the Atlanta Campus began receiving monies collected through the Department of Justice (DOJ) as a result of court actions and IRS referrals to DOJ for collection. Effective in June 2010, these monies are now be received and processed at the Kansas City Campus.

Monies Collected by the Department of Justice

  1. There are situations which require the aid of the courts to collect or recover taxes. The U.S. Department of Justice (DOJ), Tax Division, represents the IRS in both civil and criminal litigation filed in federal district courts. U.S. Attorneys’ Offices may also represent the IRS in litigation.

  2. Monies collected through the Department of Justice (DOJ) in civil cases are electronically transferred to IRS via Intra-Governmental Payment and Collection (IPAC). See IRM 3.17.243.10.2, DOJ Payments Transferred via IPAC, for more information.

    Note:

    The IRS is statutorily required to release Notices of Federal Tax Lien within 30 days from the date that the liability for the amount assessed has been fully satisfied or has become legally unenforceable. Expeditious handling of monies collected is, therefore, imperative.

  3. Payments known as "Debt Management Payments" will also be received from DOJ. These payments are handled differently because they are not payments of tax liabilities. See IRM 3.17.243.9.6, Processing Debt Management Payments, for more information

  4. Monies may also be paid to the IRS as the result of a criminal case where the court orders the defendant to pay restitution. Criminal restitution payments may or may not be applied to taxpayers’ accounts, depending upon whether civil tax assessments have been made. See IRM 3.17.243.9.2, DOJ Payments Transferred via IPAC, for more information regarding criminal restitution payments.

DOJ Payments Transferred via IPAC

  1. Intra-Governmental Payment and Collection (IPAC) provides a standardized interagency fund transfer mechanism for federal program agencies. Monies received by DOJ as a result of civil litigation are transferred to the IRS via an IPAC 1081, Voucher and Schedule of Withdrawals and Credits. A detailed listing to support transfer of funds is mailed to IRS by DOJ along with the individual payments comprising the total amount transferred via IPAC 1081.

  2. Payments on the IPAC support listing may be from three different sources within the Department of Justice (Tax Division, US Attorneys and the Debt Management Section), each of which should be researched and processed differently.

  3. The support listing shows the following information:

    • Section 1, Debtor Payment Information, reflects the total amount of each payment collected by DOJ; and

    • Section 4, Administrative Adjustments, lists those payments on which three percent has been withheld by DOJ and reflects the amount withheld on each payment.

  4. Payments from Tax Division have the legend "TAX DIVISION" and a telephone number in the far right-hand column. Those from the Debt management Section show "Debt Accounting Operations group" along with a phone number.

  5. Procedures for the journalization of DOJ IPAC receipts are found in IRM 3.17.63.26.2, Lock Box Deposit of Collections From Civil Judgments. DOJ (IPAC) receipts are journalized to Account 4975, Liability DOJ Receipts, per IRM 3.17.50.10.11.1, IPAC Receipts.

  6. The following instructions are to be used by the Accounting Technicians or Tax Examiners working DOJ IPAC to research IDRS and apply credits to the proper tax modules. Every effort should be made to utilize in-house (IRS campus) resources and these instructions before calling other offices and agencies for assistance.

  7. By statute, DOJ may withhold three percent of all amounts collected pursuant to civil debt collection activities. Therefore, if a civil payment is received through IPAC for $100.00, DOJ will "hold-back" $3.00 and transfer the remaining $97.00 to the IRS.

    1. Section 4, Administrative Adjustments; of the Detail Listing to Support Transfer of Funds shows the payments on which the three percent has been withheld by DOJ. The amount of each payment withheld by DOJ is provided.

    2. A comparison must be made in order to determine the payments on which the three percent was withheld and to compute the actual amount transferred to IRS in those cases where the hold-back occurred. Taxpayers must, however, be given full credit for the total amount received by DOJ (see below, IRM 3.17.243.10.6, Processing Debt Management Payments, guidelines for processing civil payments on which three percent has been withheld by DOJ).

      Note:

      For Criminal Restitution there is NO three percent charge

    Figure 3.17.243-1

    This is an Image: 33916125.gif

    Please click here for the text description of the image.

  8. The order of processing payments received through IPAC should be:

    • U.S. Attorney payment

    • Tax Division payments

    • Debt Management payments

US Attorney and Tax Division Payments

  1. Four determinations must be made for all U.S. Attorney and Tax Division payments:

    • Liability assess-ability

    • Taxpayer identification

    • Module(s) to which payment is applied

    • Assessment status.

      Note:

      IPAC receipts must be journalized within two (2) days.

Liability Assess-Ability
  1. The first determination to be made is whether the payment relates to an assessed tax liability. Payments relating to assessed tax liabilities will be applied to the appropriate taxpayer accounts. See IRM 3.17.243.10.3.3, Applying Payments to Modules, below. If the payments relate to liabilities that are not assessable, they are applied as described in paragraph (5), below.

  2. Refer to Cause of Action column of DOJ listing.

  3. Unassessable erroneous refunds, refund schemes, Debtor Master File (DMF) accounts, attorneys’ fees and payments for other agencies are unassessable as taxes. No attempt should be made to post payments determined to be unassessable to a taxpayer’s account.

  4. If Attorney’s fees, DMF accounts and payments for other agencies are erroneously received, they must be transferred back to DOJ. Contact the DOJ collection officer, using the following instructions for the specific source of payment. No further determinations need be made for these payments.

  5. Follow instructions in IRM 3.17.63.26.2, Lock Box Deposit of Collections From Civil Judgments (Kansas City Only), for transferring unassessable payments other than attorney fees and payments for other agencies from Account 4975, (Liability DOJ Receipts) to the correct general ledger accounts. No further determinations need be made for these payments.

  6. Continue making the remaining three determinations for assessable payments and for those payments for which assess-ability cannot yet be determined. If, at any time during subsequent research, a payment is determined to be unassessable, refer back to paragraph 5, abandoning efforts to apply the credit to a specific taxpayer’s account.

Taxpayer Identification
  1. ) If the taxpayer's TIN is included on the IPAC support listing verify that this is the correct taxpayer by researching IDRS under this identifying number. Freeze conditions on the account such as TC130 or TC 520 help to positively identify the taxpayer.

  2. If the taxpayer's TIN is not shown on the IPAC support listing, research in-house record systems such as IDRS for the entity shown as the debtor on the IPAC support listing. Freeze conditions on the account such as TC 130 or TC 520 help to positively identify the debtor as the taxpayer.

    Note:

    Prior to posting a payment, research IDRS for freeze codes which may cause the payment to unpost. See IRM 21.5.6, Freeze Codes, and Document 6209, IRS Processing Codes and Information, for an explanation of specific freeze codes. Coordination must be done with the appropriate contact to resolve the freeze code condition in order to prevent the payment from becoming an Unpostable transaction.

Applying Payments to Modules
  1. ) After determining the correct taxpayer, request Enterprise Computing Center-Martinsburg (ECC-MTB) transcripts for all debit balance modules, only if payments need to be transferred to Non-Master File.

  2. Ideally, Debit(s) equaling the amount of the payment will be found in the transcripts. Determination of the assessment status need not be made in such cases.

  3. If a debit balance module is not found in the transcripts:

    • the module may be Non-Master File (NMF),

    • an assessable liability may not yet have been assessed, or

    • the credit may represent the collection of an unassessable liability

  4. See procedures for un-assessed assessable credits (below).

  5. IDRS transcripts are needed for all NMF cases in Tax Delinquent Account (TDA) status. Access to NMF accounts is required. Input an OL5081 request for ANMF-TCC-RESEARCH-GROUP ORACLE for access to NMF. If assistance is needed contact Cincinnati Service Center at (859)669-2328 to have NMF records researched.

  6. Copies of Automated Non-Master File (ANMF) transcripts are needed for all other open NMF accounts.

Assessment Status
  1. The tax has been assessed in the following:

    1. Trust Fund Recovery Penalty refund litigation;

    2. 28 USC 2410 cases (e.g., foreclosure, quiet title, interpleader);

    3. Foreclosure of tax lien;

    4. Reduction of tax to judgment (shows on account even if in zero balance because the collection statute expired without a TC 520 cc 80 being input to the module);

    5. Bankruptcy litigation;

    6. Probate cases;

    7. Assessments made against IRS employees under IRC 7804C in litigation cases involving embezzlement. See IRM 3.0.167.5.6, Losses and Shortages for more information.

  2. Collection Advisory Groups (formerly known as the Technical Services Function) have responsibility for the litigation cases listed above with the exception of bankruptcy cases. The Centralized Insolvency Operation and Field Insolvency have responsibility for bankruptcy cases. See IRM 5.9.1.4, The Role of Insolvency.

  3. The tax has not been assessed in the following because it is unassessable:

    • Unassessable erroneous refunds;

    • Refund schemes;

    • Debtor Master File accounts

    Note:

    QRP/RPP cases are not assessable. These cases are identifiable on IDRS with a TC 91X/Z freeze. Documentation in IDRS will be noted as "restitution". The money associated with these cases will not be applied to the taxpayer's account because the cases are erroneous refund court ordered restitution money.

  4. The tax has not yet been assessed although it is assessable: e.g., IRS employee embezzlement cases (where IRC 7804 assessment has not been made).

Researching U.S. Attorney Payments

  1. The persons supplying this data on the listing attached to the SF 1081 are scattered throughout the United States. Information, particularly the "cause of action" , received from U.S. Attorneys may be less standardized than from the other sources. Only U.S. Attorneys are involved in criminal cases.

  2. No supplemental worksheet will be received from DOJ for US Attorney payments.

  3. Taxpayer identification and verification - Contact the U.S. Attorney at the number shown on the IPAC support listing to verify the taxpayer found during research or to identify the taxpayer should the research be unsuccessful.

  4. Area office identification - From the case file, the U.S. Attorney can also tell the area office from which the case was referred. If prior research indicates the case is NMF, call the Cincinnati campus’ NMF function for help in taxpayer and module identification. Secure IDRS transcripts for all NMF cases in Tax Delinquent Account (TDA) status and ANMF transcripts for all other open NMF accounts.

  5. Case type - See Exhibit 3.17.243-7 for a list of U.S. Attorney case types. While restitution payments in criminal tax cases should be disbursed by the clerk of court offices, such payments may be included on IPAC from a U.S. Attorney’s Office. If it appears that a criminal restitution payment is being transferred via IPAC, follow the procedures set in IRM 3.17.243.10.8.

  6. Module verification - Depending upon the case type, and whether or not the liability has been assessed, contact the appropriate area office for verification of the module to which the payment should be posted (or assessed and posted). For bankruptcy cases, contact the appropriate Insolvency Field Office. For correct contact information, see the SERP Who/Where website at http://mysbse.web.irs.gov/collection/aiqorg/contacts/19176.aspx. For criminal restitution cases, contact the appropriate Advisory Probation Liaison, or the appropriate Special Agent in Criminal Investigation. See IRM 3.17.243.10.9, DOJ IPAC Payment Processing Procedures, below, for more information regarding criminal restitution payments. For all other cases, contact the appropriate Collection Advisory Group. See Pub. 4235 for Collection Advisory Group contact information.

Researching Tax Division Payments

  1. Delay processing Tax Division payments for no longer than one week to allow supplemental log sheets prepared by Tax Division paralegal employees to arrive. These worksheets contain the TIN and type of liability involved in each case. If minimal IDRS research performed during this week reveals the taxpayer, ECC-MTB transcripts may be requested while awaiting the worksheets. If further assistance is needed, contact William Thompson at 202-514-6075, the DOJ collection paralegal responsible for the case or the area office.

  2. See Exhibit 3.17.243.-6 for a list of judicial [case management] districts.

  3. Most states have more than one judicial district. With the exception of seven states, all judicial districts within the state are in the same IRS area. Exceptions (most likely IRS area listed first where there is a choice):

    1. California - Northern: San Jose, Sacramento, San Francisco; Central: Los Angeles or San Jose; Eastern: San Jose or Sacramento; Southern: Laguna Niguel or Los Angeles.

    2. Illinois - Northern: Chicago; Central and Southern: Springfield.

    3. Florida - Northern: Jacksonville; Middle: Jacksonville or Ft. Lauderdale; Southern: Ft. Lauderdale.

    4. New York - Northern: Albany or Buffalo; Eastern: Brooklyn; Southern: Manhattan or Albany; Western: Buffalo.

    5. Ohio - Northern: Cleveland or Cincinnati; Southern: Cincinnati.

    6. Pennsylvania - Eastern or Middle: Philadelphia; Western: Pittsburgh

    7. Texas - Northern: Dallas; Southern: Austin or Houston; Eastern: Dallas or Houston; Western: Dallas or Austin

  4. When processing NMF cases, all of the judicial districts are serviced by the Cincinnati campus.

  5. For DOJ collection paralegal contacts, see Exhibit 3.17.243-6.

  6. The case type or cause of action is shown on the supplemental worksheet under the column labeled "Type of Case/Attorney Assigned."

  7. See Exhibit 3.17.243-78 for a list of Tax Division civil case types giving rise to the litigation.

  8. Common NMF case types are:

    1. 3204-Frivolous Return Penalty (IRC 6701 and IRC 6702)

    2. 3205-Return Preparer Penalty (IRC 6694 and IRC 6695)

    3. 3206-Abusive Tax Shelter Penalty (IRC 6700)

    4. 3207-Windfall Profits Tax

  9. Case types not shown on the list in Exhibit 3.17.243-7 are criminal causes of action involving the U.S. Attorney. Payments received in criminal cases are restitution payments. Generally, criminal restitution payments made to the IRS are not included in IPAC, but are made through the clerk of court office. See IRM 3.17.243.10.9, Court Ordered Criminal Restitution Payments, below.

  10. Exhibit 3.17.243-10 shows common phrases used by the Department of Justice on IPAC 1081 when describing the cause of action. Narrative descriptions of each phrase are provided.

  11. Module verification - depending upon the type of case and whether or not the liability has been assessed, contact the appropriate area office function (Collection Advisory or Insolvency) for verification of the module to which the payment should be posted (or assessed and posted).

Processing Debt Management Payments

  1. No attempt should be made to post Debt Management payments to taxpayers' accounts as they are not payments of tax liabilities. Payments intended for other agencies should be returned to DOJ via IPAC. Only the actual amount received by Kansas City Submission Processing Campus (KCSPC) should be returned to DOJ. If DOJ withheld three percent of a payment, it will be necessary to compute the amount to be returned to DOJ. This is done by subtracting the amount withheld by DOJ as shown in Part IV, Administrative Adjustments, of the IPAC support listing from the amount of the payment as shown in Section 1, Debtor Payment Information, of the IPAC support listing.

  2. All DOJ IPAC payments made to the IRS, along with the Detail Support List, should be sent to the Kansas City Submission Processing Center (KCSPC) using Agency Location Code (ALC) 20-09-0900 and address:

    IRS Special Services
    333 W. Pershing Avenue
    Kansas City, MO 64108
    Attn: Mail Stop 6262, DOJ IPAC.

  3. If there are Inquiries regarding receipt and application for a specific DOJ IPAC payment, contact must be made with Kansas City SPC Special Services team at 816-499-5940 or at the secure email address *W&I DOJ-IPAC.

  4. Taxpayers must be given full credit for their payments in civil cases where DOJ has withheld three percent. In order to post the full amount to the taxpayers' accounts, the following steps must be taken.

    1. Account 6950, DOJ Civil Debt Collection Hold-back, will be used to "offset" the amount of monies withheld by the Department of Justice on civil cases.

  5. Prepare Form 3809, Miscellaneous Adjustment Voucher, to:

    • debit Account 6950 for the three percent withheld by DOJ, less any credits transferred to IRS in error;

    • credit Account 4975 (liability, DOJ Receipts) for the same amount.

    Note:

    The total amount withheld by DOJ is shown on the last page of Section IV, Administrative Adjustments of the IPAC support listing.

  6. Prepare Form 2424, Account Adjustment Voucher, to transfer the credit to the Master File or appropriate general ledger account:

    • Debit Account 4975 for the full amount paid by the taxpayer as shown in Section I, Debtor Payment Information, of the IPAC support listing.

    • Credit the Master File or general ledger account for the same amount using a Designated Payment Code as appropriate.

      Note:

      All Bankruptcy cases are to be input using DPC 03.

    • In the explanation block on Form 2424 notate" Lockbox DOJ"

    Note:

    All Form 2424 that are prepared by the employees in the Accounting operation must be reviewed and approved by the manager, or their designee, prior to being sent through for processing. This responsibility may not be delegated below the level of the Lead.

  7. Follow internal procedures for routing documents to RACS for journalization.

Other Actions

  1. In any case in which DOJ has secured a judgment, either at IRS' request or by counter-claim, the collection statute of limitations must be suspended for all affected modules. The office that is controlling the case, usually Collection or Exam, is responsible for requesting input of the proper controls. See IRM 25.3.6.6, Litigation and Judgments for actions to be taken by Collection Advisors, when assessments are reduced to judgment.

    Note:

    If appropriate case controls are not input to suspend the collection statute when a judgment is secured, any module will go to zero balance upon expiration of the normal statute for collection. Thereafter, any payment collected on the judgment has the potential to create a credit balance which could erroneously refund to the taxpayer.

  2. As each item is identified for the specific taxpayer account or reversal to DOJ, the document indicating the action should be annotated in the "Remarks" area that it is to be journalized from Account 4975.

  3. If the account to which the payment is to be posted is a Non-Master File assessment, prepare Form 2158, Credit Transfer Voucher, to transfer the credit to Cincinnati Submission Processing Campus (CSPC). The full amount of the payment received by DOJ as shown in Section 1, Debtor Payment Information, of the IPAC support listing must be transferred to CSPC. Attach sufficient documentation to Form 2158 to identify the credit and support the transfer.

  4. When all possible research has been performed and the unresolved item in Account 4975 is more than two years old, associate the documentation supporting the unresolved item with a Form 8758, Excess Collections File Addition, to add the amount to Account 6800, Excess Collections File (XSF). See IRM 3.17.220, Excess Collections File, for completion and routing of Form 8758. Figure 3.17.243-2 is an example of a completed Form 8758.

    Figure 3.17.243-2

    This is an Image: 33916126.gif

    Please click here for the text description of the image.

  5. Payments which are relatively small and in even dollar amounts may represent installment payments on liabilities, as a result of a DOJ action.

DOJ IPAC Payment Processing Procedures

  1. Upon receipt, the IPAC transaction sheet is journalized by the RACS Team into the 4975 Liability DOJ receipt Account and forwarded to a DOJ-IPAC Accounting Technician.

  2. The DOJ-IPAC Technician will:

    1. Log the IPAC data in the inventory control book.

    2. Log the IPAC receipt document reference number (to monitor processing time).

    3. Create a file folder for IPAC. Label the folder indicating the IPAC number.

    Note:

    "All payments associated with the IPAC listing must be processed at this time."

  3. Use all available resource tools, i.e., IDRS, DOJ ACCESS Application, history sheets, and if appropriate, initiate phone calls to determine the following;

    1. Taxpayer’s identity

    2. Where the payment should be applied?

  4. Civil payments can be applied using three different methods:

    1. Apply to Taxpayer account: prepare Form 2424 to debit 4975, DOJ Liability account and credit taxpayer’s account 4220 (IMF), 4120 (BMF), or 4420 (NMF) as appropriate.

    2. Apply to 6800, Excess Collection: prepare Form 2424 to debit 4975 DOJ Liability Account and credit 6800 Excess Collection. Prepare Form 8758 and Form 813 to add payment to the Excess Collection File. Make 2 copies of each.

    3. Leave credit in 4975 DOJ Liability account: prepare Form 2424 to credit 4975 DOJ Liability account.

    Note:

    The Form 2424 must contain the manager, or their designee's, initials to show that it has been reviewed and approved.

    Note:

    If it appears the liability is satisfied the payment should be left in the GL 4975 account and held for at least one year prior to refunding to ensure no additional assessments are made on the related modules.

  5. Prior to forwarding the payment posting documents to RACS for numbering;

    1. Sort by MFT, date, and both current and prior fiscal year (PFY).

    2. Prepare Form 1725 (Routing Slip) referencing the IPAC number and volume.

    3. Forward Form 1725 with documents to RACS for numbering. At this point, a Document Locator Number (DLN) will be assigned and a Form 813 prepared.

    Note:

    All documents should be together (each MFT group and PFY/current status) with a calculator tape attached.

  6. RACS will return all posting documents to the DOJ Technician with the assigned DLN and Form 813.

  7. Verify to ensure the posting documents balance to the Form 813 total.

  8. Verify to ensure all Form 813 and other forms prepared balance back to the IPAC document.

  9. On the IPAC listing, label each 3 percent amount with the appropriate Tax Class (TC) for the classification of the payment. Ex: MFT 01 = TC 1, MFT 30 = TC 2, etc. Exceptions include; documents that are 4975 and 6800 Accounts, the account number will be used instead of a Tax Class.

    1. Capture the 3 percent amount for each Tax Class (TC).

    2. Run tape to ensure total of all Tax Class 3 percent amounts equal the IPAC 3 percent fee total.

    3. Verify that the 3 percent amount is correct by multiplying each Form 813 for that MFT by 3 percent; this should balance back to the 3 percent indicated for that TC on the IPAC listing.

    4. Prepare Form 3809: debit 6950, DOJ Civil Debt Collection Hold-back and credit 4975, DOJ Liability account.

    5. Photocopy all pages of the IPAC listing that indicates 3 percent fee.

  10. Prepare Form 3210 (Document Transmittal), listing the DLN and volume for each Form 813 on the IPAC.

  11. Make a copy of the credit document for 4975. Attach the copy to the original as the 3rd copy. For 6800 Account items, make 2 copies of the Form 2424.

  12. Prepare package to be released for journalization.

    1. Form 3210 – 2 copies

    2. Form 1725 with all Form 813

    3. Form 2424 – 4220 (IMF), 4120 (BMF), 4975 posting documents, 4420 posting documents, 6800 posting documents (Form 8758 and Form 813)

    4. Form 3809 – 3 percent posting document

      Note:

      Ensure package is in balance before releasing for journalization.

  13. Forward the DOJ IPAC package to RACS for journalization.

  14. Record all payments on the DOJ ACCESS Application and file IPAC folder in the closed file.

Court Ordered Criminal Restitution Payments

  1. Restitution is a legal remedy that can be ordered by the court, in a criminal case. A restitution order requires the criminal defendant to pay money or render services to victims in order to redress the loss the defendant has inflicted. Normally imposed during sentencing, it can be agreed to by the parties in a plea agreement or imposed as a condition of probation or supervised release.

  2. In a criminal tax case, the offense generally results in the loss of government property, i.e., the money to which the government was entitled under the tax laws but which the defendant did not pay. Through a restitution order, a court can require a defendant to pay money to the IRS in order to redress the losses he or she inflicted on the federal treasury.

  3. In most criminal tax cases involving restitution, the amount of the tax loss is calculated from evidence admitted at trial or from information contained in the plea agreement and presented to the district court at sentencing.

  4. The August 16, 2010, law change allows the IRS to assess and collect restitution ordered in a tax case in the same way as if it were a tax.

  5. Restitution should not be confused with civil tax liability.

    • The amount of the loss a defendant can be ordered to pay as restitution must result from the defendant’s criminal activity and that amount generally does not include civil tax penalties.

    • A restitution order does not bar the IRS from determining civil tax liability in an amount greater than the amount ordered payable to the IRS as restitution.

    • A restitution order also does not prevent a taxpayer from challenging the IRS’s determination that the civil liability exceeds the amount of the restitution order.

  6. Judgment and Commitment Orders (J & Cs) normally specify that defendants are to submit restitution payments to the office of the clerk of court in the district in which the defendant was sentenced. This will generally include restitution payments required to be paid to the IRS.

  7. The clerk of court has the responsibility for receiving, processing, and recording restitution payments made by defendants. The clerk of court will forward the money (Treasury checks, personal checks, and/or money order) to the victim(s) listed in the restitution order, which may include the IRS. Criminal restitution payments made to the IRS should be mailed to the address below.

  8. The clerk of court offices will disburse criminal restitution payments to the IRS by issuing Treasury checks to the IRS. Effective October 1, 2009, all criminal restitution payments to the IRS are being processed by Submission Processing at the Kansas City Campus, only. The clerk of court offices have been requested to send all criminal restitution payments to the following address:

    • IRS-RACS

    • Attn: Mail Stop 6261, Restitution

    • 333 W Pershing Ave

    • Kansas City, MO 64108

      Exception:

      If criminal restitution payments are routed to an IRS office or campus other than Kansas City, they must be transshipped via overnight traceable method per IRM 3.8.45.6.26, Department of Justice/Criminal Restitution Program Payments (KCSPC Only).

  9. The Special Agent has the responsibility of completing Form 14104 (Notification of Criminal Restitution or Court ordered payments payable to the IRS) and forwarding the completed form to the secure email account: "*W&I Criminal Restitution"

    Note:

    If the form is requested and not received, send a follow-up email after two weeks have passed. If the form still isn’t received within a week of the second request, elevate the issue to HQ.

  10. Inquiries received at other sites regarding court ordered restitution payments should be forwarded to the Kansas City SPC Technical Advisor, 816-499-5949 for receipt and reconciliation of criminal restitution payments.

  11. Personal checks and/or money orders received directly from the taxpayer and not through the ‘clerk of court' are still considered restitution payments if the payments are being made pursuant to a federal court order in a criminal case.

    Note:

    If payments are received from the taxpayer, prepare the Letter 5526 to advise the clerk of court.

  12. Two other forms of credit that may be applied to decrease a restitution balance results from:

    • IDRS generating an offset of refund credits to decrease the Restitution Based Assessment (RBA) MFT 31 debit balances. Refer to 3.17.243.10.9.6(6) for procedures pertaining to these credits.

    • Posting of TC 766 which is a cross- referenced credit from a linked account.

Processing the Accounting Package
  1. The Accounting package is picked up from the Deposit area and journalized by the assigned Accounting Technician. After journal, the documents are filed in the 6400 account Restitution folder in RACS. Data Control utilizes the folder to balance the reports.

Restitution Payment Processing
  1. Criminal restitution checks are received daily in the Receipt and Control Function; sorted and placed in bins/baskets labeled "Criminal Restitution" . The checks should not be separated from any cover letter or other document that contains information relating to the check.

    Note:

    All checks must remain in a secure area therefore, by "Local Agreement" or "Memo of Understanding" (MOU); these checks will be researched and prepared for manual deposit by an Accounting Technician.

  2. Accounting Technicians are responsible for collecting and applying criminal restitution payments received through the clerk of court offices. Payments are applied based on information received from the clerk of court office, Criminal Investigation, Collection Advisory, IDRS research or the DOJ ACCESS Application.

  3. All criminal restitution payments received are recorded on the DOJ ACCESS Application along with information received from the clerk of court offices and Criminal Investigation. The DOJ ACCESS Application is also used as a research tool for proper application of restitution payments. The DOJ ACCESS Application is housed on the Kansas City shared drive. Access to this program is currently restricted to the Accounting staff.

  4. An Accounting Technician will report to Receipt and Control function daily to retrieve the restitution related checks and/or money orders. Generally, DOJ criminal restitution payments are received with information or related correspondence from the clerk of court office with taxpayer identifying information and payment disposition.

  5. Research IDRS when payments have been received to determine if a MFT 31 account has been established. If so, then apply these payments to the corresponding MFT 31 module on the master file. If the MFT 31 is established but the assessment (TC 290) hasn’t been input, you will need to input a TC 570 to hold the credit. These payments should be prepared for posting within 24 hours of receipt.

  6. If initial research indicates payment can be applied, as indicated, prepare Form 3244 and route to Deposit for processing. There may be cases where no civil tax assessments have been made even though the court ordered the criminal defendant/taxpayer to pay restitution to the IRS. In these instances, a TC 570 should be included on the Form 3244.

  7. If no information is received from the clerk of court office, the check is reviewed for any indication of the taxpayer name. Research is performed on IDRS, the DOJ ACCESS Application for taxpayer identification and appropriate tax modules for posting, the Public Access to Court Electronic Records (PACER) system, and contact with the court when necessary.

    Note:

    Any payments received via check or money order that cannot be applied or resolved will be input to Treasury Symbol 20-3220, Account 2355 (Federal Court Ordered Restitution), a sub account of 6400 (Miscellaneous Revenue Collection.)Account.

  8. Interest on the RBA will accrue from the due date of the return on which the RBA was based until the account is paid in full therefore payments should be posted to the accounts in an expeditious manner.

    Note:

    If the defendant pays Title 18 interest to the sentencing court and the court forwards such payments to the service, the service applies the payments against the assessed amount. See IRM 5.1.5.14.5, Field Collecting Procedures, Balancing Civil and Criminal Cases, Interest on Restitution-Bases Assessments, for additional information.

  9. When research does not provide the information needed to apply payments to assessed modules or the tax liability has not been assessed, prepare Form 3244 and journal to the 6400 Account, (the 6400 account is used to record Federal Court Ordered Restitution for Costs and Penalties) awaiting further action or research. When posting instructions are received, a Form 2424 is prepared for processing, debiting 6400 Account and crediting the taxpayer.

  10. When research is completed and it’s been determined that the payment belongs to a “Pre Law” defendant, SBSE needs to be notified.

    • The payment will be applied to the GL 6400 account

    • An email will be sent to SBSE at *SBSE Ogden RBA

    • The subject line of the email should be Pre-Law Payment

    • The defendant’s name, TIN, total amount of the payment, payment date and docket number, if applicable, should be included in the email.

  11. Follow up research should be performed periodically to ensure assessments are made on the account so that payments are applied to relevant tax years. Payments applied to the 6400 account as "Unknown name/SSN" will require contact with the clerk of court office forwarding the check for additional taxpayer identifying information. Assistance regarding the correct application of a payment to a taxpayer’s tax liabilities should be obtained from the appropriate Criminal Investigation Special Agent or Collection Advisor.

  12. Pre-trial payments received by the Special Services team prior to sentencing, will generally be applied to the 6400 account. Follow-up will be completed to acquire court documentation from PACER if available.

  13. Form 14104 – Notification of Criminal Restitution or Court Ordered Payments Payable to the IRS - will be completed by the Special Agent assigned to each case and forwarded via secured e-mail to "*W&I Criminal Restitution."

  14. The Notification form will include:

    • Name of CI Special Agent

    • Name of taxpayer/defendant

    • Whether joint and several liability with others

    • Criminal Docket Number, identity/location of court

    • Amount ordered payable to IRS

    • Tax period(s) and amounts for each tax period included in calculation of restitution

    • Where to apply the payment and type of tax

  15. If additional information is needed to process the payments received, contact the Special Agent whose name and telephone number are listed on the Form 14104. File a copy of this form in the defendant’s case file.

  16. When posting instructions are received or a tax module has been assessed, a Form 2424 is prepared for processing to debit the 6400 account and credit the taxpayer account. Follow the Accounting research processing procedures below.

  17. Criminal restitution payments are not always applied to master file (MF). If no assessment is made, the payment will remain in the 6400 General Ledger Account. If this situation arises, notify the CSCO RBA Unit in Ogden via email at *SBSE Ogden RBA.

Accounting Deposit Procedures
  1. Collect criminal restitution checks and correspondence from designated area in Receipt and Control Function (R&C) (Do Not leave restricted area with checks).

  2. Sort checks by check number, and retain a copy of the envelope with IRS received date and any other correspondence.

  3. Make copies of the check and attach to the copy of the envelope along with any correspondence.

  4. If check and/or correspondence have the defendant’s (taxpayer) name, perform the following:

    1. Research the DOJ ACCESS database, IDRS, and Assessment List.

    2. If name is found on DOJ Access, prepare Form 3244.

    3. If the name is not listed on the DOJ Access page, add to the DOJ ACCESS database and prepare Form 3244.

  5. If check and/or correspondence have SSN/EIN only:

    1. Research IDRS Command Code INOLES to locate name.

    2. When name is located, research the DOJ ACCESS database.

    3. If name is found on the database, prepare Form 3244.

    4. If the name is not listed on the database, add to the DOJ ACCESS database.

  6. If check and/or correspondence have the docket number only:

    1. Research the DOJ Access database.

    2. If name is found on database, prepare Form 3244.

    3. If the name is not listed on the database, add to the DOJ ACCESS database.

    4. Research the PACER system for court documentation.

  7. If check and/or correspondence do not have the name, SSN/EIN, or docket number:

    1. Update the DOJ Access database and add the record as "unknown, and prepare Form 3244."

      Note:

      All of the unknown Forms 3244 will be researched later

  8. Preparation for Manual deposit

    Generate three electronic Forms 3244:

    1. Copy 1 - Green rocker the payment amount and underline the name control.

    2. Copy 2 - Retain with check for placement in the case folder.

    3. Copy 3 - Used only if the check is being deposited into the 6400 account. It should be distributed to RACS team to journal.

    Generate electronic Form 2221 (Schedule of Collections) in Access database.

    Compare Form 2221 with Form 3244 and checks to ensure dollar amount and check numbers match.

    Print, copy, and sign the Forms 2221 and 3244. Submit one copy of these forms with the checks to Manual Deposit area in Receipt & Control.

  9. Preparation for IDRS/MF deposit

    1. Generate two electronic Forms 3244.

    2. Generate Form 2221 in Access database for MF checks.

    3. Compare Form 2221 with 3244 and checks.

    4. Submit checks with Form 3244 to Payment Perfection Unit.

      Note:

      Do not turn in Form 2221 with these payments.

Accounting Research and Processing Procedures
  1. After submitting the completed forms for deposit in the Receipt and Control (R&C) area, the Accounting Technician will hand carry one copy of Form 3244, Form 2221, copy of check, and correspondence back to the Accounting area and place in a designated area.

    1. The clerk or Technician will retrieve the Form 3244 and Form 2221 from the designated location and file the documents in the taxpayer folder.

    2. History sheets will be updated and annotated with actions taken.

  2. Additional research is needed if check and/or correspondence do not have the name, SSN/EIN, or docket number:

    1. Access DOJ Access Application; add to the application as "unknown."

    2. Contact the Clerk of Court office that prepared the check to obtain information. Once the information is obtained, update DOJ Access Application with correct information.

    3. Request that future checks include the full name of the defendant and the court docket number.

      Note:

      For Disclosure reasons, the clerk of court offices have been instructed to exclude all SSN/EIN on restitution checks.

  3. If information identifying the taxpayer cannot be obtained from the Clerk of Court’s office, contact the Special Agent whose name and number appear on Form 14104 received via e-mail *W&I Criminal Restitution.

    1. Note:

      The SP HQ DOJ analyst will request, on a quarterly basis, an updated listing for the Administrative Office of the U.S. Courts. This combined listing will be sent out to the Kansas City Submission Processing Center Accounting Operation. This list will be used to obtain any missing PII associated with restitution checks that cannot be traced to a specific defendant so that the payments can be credited to the defendant's tax account.

State Court Ordered Restitution
  1. State courts may order defendants to pay restitution to the IRS. The following are particular types of situations, but not limited to, which may involve state court ordered restitution:

    • Refund schemes not involving ID theft - may have return preparer involvement. May or may not result in civil assessments on the taxpayers and preparer(s) involved by IRS. These should go to the 6400 account unless IRS has civil assessments on the tax and periods involved.

    • Refund schemes involving ID theft - there will not be civil assessments as false pretenses were used to gain the refunds. Generally these should go to the 6400 account.

    • Civil assessments have been made by IRS - apply monies to tax modules if they are included in the basis of the restitution.

      Example:

      Taxpayer owes federal taxes on Form 1040 for 2010. If the restitution monies are because we had a loss for a refund scheme involving the 2010 tax year, then we apply them to the civil assessment. If the restitution monies are because we had a loss for a refund scheme involving the 2009 tax year, we apply them to the 6400 account.

      Note:

      State court ordered restitution means all courts within a state, including local counties and judicial districts.

    State courts will forward these payments to the Kansas City Criminal Restitution address. When a payment is received Kansas City will create a case file and maintain separately. Advisory will be contacted when state court judgement documentation is not received with payments. These payments will be added to the DOJ database with an indicator for "Non Federal case." Case files will be maintained separate from criminal restitution cases received from federal courts. No restitution-based assessments will be made on these cases under IRC 6201(a)(4).

  2. If a payment for restitution to IRS is received from a state court, due to the tax loss to the IRS, and no case is found;

    1. Process the payment into the 6400 account, add to the database, and create a case file.

    2. Maintain court judgement documentation and history sheet with payment in the case file.

    3. If no court judgement documentation is received, contact the Advisory Probation Liaison (APL) for the state/geographical area from which the payment was received.

      Note:

      The listing of Advisory contacts can be found at the SBSE website http://mysbse.web.irs.gov/Collection/aiqorg/contacts/19176.aspx

    4. Advisory will contact the state court and request judgement documentation for the case. They will send to Kansas City via E-mail/FAX. Follow up with Advisory if the documentation has not been received.

Joint and Several Cases
  1. Restitution is ordered as a joint and several liability when the determination is made that more than one individual caused the underlying tax loss. The amount collected from all defendants will not exceed the tax loss.

  2. The clerk of the court typically sends a combined check on joint and several cases. Accounting technicians will need to perform research before applying checks on these cases to ensure the correct defendant is receiving credit for their payment.

  3. Technicians should contact the clerk of the court to request a breakdown of the check by defendant. If the clerk of the court is unable to provide a breakdown by defendant, then the technician should request a case inquiry report to breakdown the check by defendant using the payment and distribution information.

  4. If the clerk of the court will not provide the breakdown by defendant or a case inquiry report, then the technician should request a payment and distribution report from the U.S. Attorney’s Office Financial Litigation Unit (FLU).

  5. If no information is provided by DOJ employees to breakdown the check by defendants after requests are made, then the payment will be applied to the tax module for lead defendant that is listed on the reference line of the check. If the payment is larger than what is owed by the defendant, it should be placed into 6400.

  6. The technician should put the split check information into the DOJ ACCESS application. A photocopy of the original Form 3244 and check is filed in all folders of defendants who had payments included in that check. History notes are written in each folder to document the split information of the check detailing how much each individual paid and where the technician determined this information (i.e., case inquiry).

  7. The following steps must be taken to apply the split payments:

    • If the check is from a prior fiscal year, then research to ensure all remaining funds are moved from the 9998 account into the 6400 account only once. History notes are written in each folder to document this transfer to prevent duplication.

    • A copy of the Form 2424 will be placed in all related folders to provide an audit trail for that payment.

    • A copy of the original Form 3244 is submitted to RRACS with each transfer (9998 to 6400, 6400 to 4220, etc.) to provide a clean audit trail of the payment.

    • Each defendant’s portion of the check is applied to their assessment or left in the 6400 holding account based on information provided on the Form 14104.

    • The Form 2424(s) will be submitted for processing to apply each defendant’s funds from the 6400 holding account to masterfile.

MFT 31 Case Procedures
  1. These procedures will be used only for criminal restitution cases where the J&C date is after August 16, 2010. Form 14104, Notification of Court Ordered Restitution payable to the IRS will be sent by Criminal Investigation Division(CI) to SBSE Examination Technical Services (TS), SBSE Collection Advisory, and KCSC Accounting. Accounting will establish the case file and add it to their database. TS will create the required MFT 31 account(s) on Master File via Form 3177 with a TC 971, AC 102. When the Form 3177 is submitted by TS for processing they will inform KCSC Special Services Team of the submission of the Form 3177 via secured DOJ mailbox at *W&I Criminal Restitution. Upon receipt of this information, Accounting will research their 6400 Account for related payments and prepare the necessary documentation for the transfer of discovered payments from the 6400 account to the pending new MFT 31 account(s).

    Note:

    When the payment posting to the MFT 31 account is verified, if the assessment is not present/pending on the module, or the Form 3870 is not reflected as received in the history section of TXMOD by Centralized Case Processing (CCP), Accounting will notify TS via mailbox *SBSE TECH Svs Criminal Restitution.

  2. If payments are found Accounting will:

    • Submit the completed documentation to transfer the payments to the MFT 31 account.

    • Follow up with research to verify the payments post to the MFT 31 account.

  3. If Accounting has no record of restitution for a case (no Form 14104), they should contact Technical Services for a copy as it is possible that CI failed to send the package to Accounting.

  4. All payments received for restitution ordered after August 16, 2010 should be given a DPC (designated payment code) of 026. (Restitution ordered prior to this date should have a DPC of 008.)

    Note:

    Accounting should check for these MFT 31 accounts to apply payments directly to during their daily research in the Deposit area. For cases three months or older based on the date of Form 14104, if no MFT 31 has been established, contact TS to research.

  5. The accounting technician should follow up to ensure payments directed to MFT 31 accounts post correctly, and take corrective action if needed.

  6. During the research to ensure proper posting of payments, the technician should check for IDRS generated refund credits, cross-referenced TC 766 credits, or direct payments that were made on the module. If a cross-referenced or refund credit is found the technician should:

    • Add the credit information to the Criminal Restitution database as a payment.

    • When a refund credit has been offset (TC 706), contact the clerk of the court via letter 5526”.

      Note:

      The Letter 5526 does not get sent for the TC 766 transactions.

    • Create a history item, including the date the offset was discovered and input to the database.

    Note:

    If a refund credit applied to the MFT 31 module is reversed, it will need to be removed from the database and the Clerk of the Court contacted with the information.

Restitution Based Assessment (RBA) Non Master File (NMF) Accounts
  1. IDRS Master File is not able to accept an unlimited number of transactions on any given account module. When a master file account contains too many lines and the module has moved into overflow status, a TC 400 with BS 99 (9th and 10th digit of DLN) will systemically post to transfer the account module to Automated Non Master File (ANMF). Once the TC 400 has posted to the module, no transactions can be input. Restitution Based Assessment (RBA) accounts are identified by the presence of the TC 971 AC 102.

Posting Payments to RBA NMF Account(s)
  1. When a restitution payment is received and the module has been transferred to NMF.

    • Prepare the Form 2424 and attach the ANMF transcript to apply the payment to NMF.

    • Notify the CSCO RBA Unit in Ogden via email at *SBSE Ogden RBA.

    • The email SUBJECT line will state “Restitution Payment posted to NMF”.

    • The body of the message will include the taxpayer’s name, TIN, tax period where the payment was posted, the date of the payment, and the amount of the payment.

    • Create history item to indicate the account is on NMF.

    Note:

    This will allow the CSCO RBA unit in Ogden to complete the cross reference needed between the MF and NMF accounts in accordance with IRM 5.19.23.3, Liability Collection, Restitution Based Assessment Processing, Payment Application.

Refunding Criminal Restitution Payments
  1. There must be documentation indicating the funds do not belong to the Internal Revenue Service (e.g., judgments or statements from the United States District Court (USDC) indicating the money needs to be refunded).Funds can only be returned to the USDC. We will not send it to another victim.

  2. We need an e-mail showing the exact address to return the money being refunded. The IRS is unable to insert items into the check envelope and we don’t have a reference line for additional information. The address must be limited to four lines as follows:

    • 1st line is the pay to the order line and is limited to 32 alpha/numeric characters (no special characters). Examples: US District Court of Utah or Clerk US District Court.

    • 2nd line is our attention line and is limited to 32 alpha/numeric characters (no special characters). This is where we would place items like Finance and the docket number.

    • 3rd line is the Street Address of the courthouse.

    • 4th line is the city, state and zip code of the courthouse.

  3. Forms 2424 are prepared to move the funds from the GL 6400 account into the GL 6800 account. The same rules apply as if you were preparing regular Forms 2424. If the money is in 9998, then additional Forms 2424 are needed to move the funds over to GL 6400. Money should never go directly from 9998 to 6800.

  4. Complete Form 8758. You need copies of the following items as backup for the 8758: copy of 2424, your history notes, e-mail from USDC showing where to return the money, copy of the check, and anything else you have indicating that this is not IRS’s money (example: J&C restitution victim page showing victim other than IRS).

  5. Complete Form 8765. You need copies of the following items as backup for the 8765: completed Form 8758, Form 2424, your history notes, e-mail from USDC showing where to return the money, copy of the check, and anything else you have indicating this is not IRS’s money (example: J&C restitution victim page showing victim other than IRS).

  6. Take the following steps after completing the forms.

    • Send Forms 2424, Form(s) 8758, and Form(s) 8765 to quality and when Work Leader gets it back they will return the forms to you for you to hold.

    • Monitor for the Forms 2424 to be returned from RACS.

    • The Work Leader will need the Form 8758 packet submitted for processing no later than the day after we get the journaled Form 2424 back from RACS to prevent an out of balance situation.

    • Photocopy the journalized Form 2424 showing the movement from GL 6400 to GL 6800 and include with 8758 packet.

    • Notate on history sheet when 8758 given to Work Leader.

    Note:

    The Form(s) 2424 and Form 8758 must be processed in the same month or the 6800 account becomes out of balance.

  7. You should get a copy of the 8758 back from excess collections. If you don't get a copy within a few days ask Work Leader to look into it for you.

  8. The DLN can be written onto the Form 8765 once you have the processed Form 8758. Check with Work Leader at that time to see when she wants you to give her the 8765 packet. Notate on the history sheet when Form 8765 is given to Work Leader.

  9. Notify USDC contact and ask that they watch for the check. Follow up with USDC to verify the check is received by DOJ.

  10. Keep copies of the Form(s) 8758 and Form(s) 8765 in the folder on the left side for future reference. The journalized Form(s) 2424 is filed in the folder per normal procedures. A negative entry should be input in the Criminal Restitution database to reflect funds being sent back.

Maintaining the Criminal Restitution Case File

  1. In cases where additional personal identifiable information (PII) is needed when the restitution check can't be associated with a specific defendant, it will be necessary to contact the U.S. Courts. The Accounting technician should utilize the updated quarterly listing that is provided to SP HQ analyst from the Administrative Office of the U.S. Courts.

  2. A monthly reconciliation report will be completed by KCSPC Accounting Operation, and submitted to SP HQ analyst. This report will reflect all unresolved, unidentifiable restitution payments in the GL account where taxpayer payment information could not be identified. SP HQ analyst will work with KCSPC Accounting Operation and the Administrative Office of U.S. Courts for resolution.

  3. The W&I Criminal Restitution secure email should be used for all confirmations.

  4. Immediately post the restitution amount to the taxpayer’s account after confirmation has been received

  5. The Department of Justice (DOJ) criminal restitution case files are to be maintained in alphabetical order. The case files should be organized in the following manner

  6. The left side of the case file should contain:

    • The Restitution Information Sheet (RIS) or the Form 14104.

    • Miscellaneous items such as E-mails and all correspondence.

    • Complete and up to date history sheets.

      Note:

      History sheets must be prepared from receipt of the case and are to include documentation of all actions taken, any pending actions, and any communication/contacts that have been conducted. The most recent history entries should be on top.

  7. The right side of the case file should contain:

    • IDRS print, preferably IMFOLI, when setting up the case.

      Note:

      Replace with IDRS print identifying assessment information when available.

    • All payment supporting documentation (Form 3244, Form 2424, copies of checks, etc.).

    • The DOJ Summary Report. This should be printed and placed in the file.

    Note:

    Be sure to update the case history sheet and the database - case closed/date/initials, when the case has been closed.

  8. The Kansas City Submission Processing Center Operation will perform a review of the restitution General Ledger(GL) account every quarter to identify discrepancies in account activity. A report of the results will be provided to SP HQ analyst for review and to resolve any discrepancies identified as a result of the quarterly review.

Closing a Criminal Restitution Case

  1. To close a criminal restitution case one of the following must be met:

    1. Court ordered restitution is satisfied

    2. Deceased taxpayer.

Internal Revenue Code (IRC) 7804(c)

  1. Criminal restitution in IRS employee embezzlement cases (6400 Account) – For posting assistance with unassessed cases, the accounting technician may call Fraud Detection Center or Examination as indicated by case type in the correct area office. Both case type and area office identification instructions are in the procedures for the specific source of payment.

  2. The liability in any case of embezzlement by an IRS employee should be assessed as provided for in the IRC 7804(c) rather than treating it as a Judgment Receivable. Research may indicate that the assessment needs correction to agree with the court decision. These cases are transferred to the 7610 Account at the appropriate campus.

    Note:

    Criminal restitution payments received in a criminal tax case should not be confused with court ordered restitution in an employee embezzlement case.

  3. When there is a court ordered restitution on an employee embezzlement case (7610 Account), a memorandum is sent to the Kansas City Loss/Shortage Coordinator. The memorandum provides the name and social security number (SSN) of all persons ordered to make restitution, amount of restitution payments and the case number.

  4. Employee embezzlement cases are monitored monthly by the Loss/Shortage Coordinator to insure that payments are made:

    • If payments are not received, contact the Treasury Inspector General for Tax Administration (TIGTA) Special Agent in Charge (SAC)

    • If payments are made and not transferred from the Kansas City Loss/Shortage Coordinator, secure the payment information from the probation officer (use the TIGTA SAC) and contact the Kansas City Loss/Shortage Coordinator at 816-499-5949.

  5. Court ordered restitution payments received in Kansas City for employee embezzlement cases (7610 account) will be transferred to the appropriate campus, within two (2) days of receipt, via Form 2158.

    Note:

    For additional information and procedures for Assessments Under IRC 7804(c), refer to IRM 3.17.46.5.1, Assessments Under IRC 7804(c) and IRM 3.0.167 Losses and Shortages.

Internal Management Controls for Criminal Restitution Payments

  1. In accordance with Management Accountability Reviews regulations, managers are responsible for ensuring that internal controls are effective and efficient in day-to-day operations and safeguard against waste, fraud and abuse. This is accomplished by conducting operational or management control reviews to identify weaknesses and mitigate known risks within the managers’ realm of responsibility.

  2. Managers must perform program or "spot" reviews for accuracy and completeness. Problems identified should be discussed with the appropriate functional area for corrective action.

  3. The first line manager of the area working the criminal restitution cases will conduct periodic reviews of cases throughout the month.

  4. The reviews are to be documented and maintained for a one year period.

  5. Review to ensure:

    • Checks received from the clerk of courts with all required identifying information are processed timely.

    • Notification Form 14104 are being received (via e-mail "W&I Criminal Restitution" ) from the Special Agents assigned to the case and placed in the appropriate case file.

    • Case folders are being prepared, as required by the IRM for each defendant.

    • Ensure all actions taken on a case are documented and payments are correctly associated with an active case.

    • Money received is being recorded in the DOJ ACCESS Application.

    • All appropriate journal actions are being completed timely.

    • Inquiries regarding the receipt and application of payments are being handled on a timely basis.

    • History sheets should be signed by the Technician working the case, as well as anyone reviewing the case file (the initial reviewer, manager, reports analyst, etc.).

  6. At least one program review must be performed each quarter by the Reports Analyst. A copy of this report should be forwarded to the front line manager and the HQ Analyst with program responsibility.

  7. Quarterly reports are due Dec. 31, Mar 31, June 30, and Sep 30. The quarterly reports are required to capture:

    1. Timely application of incoming checks.

    2. Timely transfer of credits from the 6400 GL account to the MFT 31, Restitution Based Assessment (RBA) modules.

    3. Case folders are complete with all required documentation.

    4. Criminal Restitution database is updated with payments, case information, and other RBA information.

    5. History sheets in the case files are completed and initialed.

      Note:

      Corrective action taken for discrepancies should be indicated on the report.

United States Department of Agriculture (USDA) Discrimination Settlement Program

  1. Background: The U.S. Department of Agriculture (USDA) paid a cash settlement and granted loan cancellation to 20,000 farmers and their relatives/decedents. The settlement resulted from a discrimination suit brought against the USDA by the farmers. For 99 percent of the claimants, the settlement amounts fell into three categories:

    • $50,000 cash payment from USDA

    • Forgiveness of the principal and interest on certain debts; these amounts varied by claimant

    • A payment toward tax equal to 25% of the total of the $50,000 payment and the forgiveness of the debt principal, but not the interest

    Most taxpayers received these payments over a period of two years (the cash payment and the debt forgiveness occurred in one year) and the tax payment was remitted to the IRS in the following year. The cash payment and the tax payment (the 25% amount) are taxable income. The forgiveness of debt principal is generally taxable income but may be excludable under certain circumstances. Part of the settlement agreement allows a $12,500 tax credit to offset the tax for the cash payment.

  2. Epiq Systems, Inc. (EPIQ) forwards two lists of cases to the Internal Revenue Service Submission Processing Planning and Analysis (P&A) contact (See Exhibit 3.17.243-9 for a list of USDA Contacts). One list, the 25% "Payee list" is generally issued on 12/15/20XX. The second list, the "Debt Relief Claimant list" is sent one to two months after the Payee list.

    Note:

    "Exception Amounts: " Cancellation of Debt may be a larger settlement amount in which USDA pays taxes equal to 25% of the settlement amount. Some claimants may receive a taxable amount less than $50,000 which will be notated on the listing, along with the amount of decreased tax credit.

  3. This program is worked in the Kansas City IRS Center only.

United States Department of Agriculture (USDA) Claims - Submission Processing Procedures
Entity

  1. The following procedures apply only to payments that were received prior to January 2013.

  2. Submission Processing P&A will review and then forward the listing of the taxpayers that are eligible for payment to the Entity function. Entity will validate the social security numbers (SSNs) and names on the listing of USDA Settlement Accounts. Entity will "000" all the MFT 30 accounts if a correct TIN is present. Entity will also research for cross reference TINs including EINs for estates or farms and spouse's SSNs. Entity will then notate the cross referenced TIN(s) on the spreadsheet so the payment is applied to the correct account. Any incorrect SSNs with no viable cross references will be notated on the lists. After Entity has completed the review and included notations about questionable entity cases, they will send the lists back to the Submission Processing P&A contact. Entity will set up Form 1041 Estates in certain situations. The P&A contact will return the lists to Epiq, with a copy sent to Accounts Management P&A. The Submission Processing P&A contact will return a list of questionable entity cases and request further information on the claimant account. (estimated work time - seven (7) days)

    Submission Processing P&A

  3. The Submission Processing P&A contact will forward the list of all cases to the Department of Justice (DOJ) requesting the total dollar amount present on the listing and provide the Agency Location Code (ALC) to transfer the funds (See Exhibit 3.17.243-13 for a list of USDA Contacts). The Submission Processing P&A contact will request that DOJ include an expedite request when requesting the funds to be transferred to the Internal Revenue Service (estimated time 24 -48 hours).

  4. The Submission Processing P&A contact will also inform the Accounting RACS Team that an IPAC has been ordered and provide the amount of the IPAC.

    Note:

    The DOJ forwards the request for funds to Bureau of Fiscal Services (BFS) for payment from USDA. BFS processes the request from DOJ and expedites the IPAC funds to Kansas City Submission Processing Campus Accounting function.

    Accounting

  5. Accounting RACS Team will alert the Submission Processing P&A contact, and the contact in the team that's processing the cases, when the funds arrive via IPAC. (Estimated time 24–48 hours after BFS sends the payment).

  6. When IPAC transmission is received, the RRACS DBA prepares Form 3244 if current year transactions or Form 8758 if prior year transactions and hand carries to URF/XSF to be cleared. The RRACS DBA prepares Form 8166 and inputs to RRACS. A copy of Form 8166 together with Form 3244 or Form 8758 is hand carried to the team processing the cases for input of the credit to XSF. When the IPAC funds have been received and placed in the appropriate account (URF/XSF), there should be no delay in processing the credits to the claimant's account(s). Credits are applied to the accounts with a TC 670 and a TC 570 to hold (freeze) the credit. AM P&A Staff monitors the accounts and releases the freeze, if necessary.

    Note:

    Kansas City Accounts Management (KCAM) P&A analyst monitors the listings received from EPIQ Systems Inc. Accounts Management (AM) function places a notice hold on taxpayer’s accounts to stop issuance of balance due notices when appropriate. AM also responds to taxpayer questions/issues and releases frozen refunds when appropriate.

    Note:

    Taxpayers should be advised of their right to seek assistance from Taxpayer Advocate Service to avoid undue taxpayer burden or violation of taxpayer's rights.

    Note:

    EPIQ Systems Inc. is not permitted to receive any additional taxpayer or tax account information other than requests to obtain better taxpayer entity information ( i.e., SSNs/EINs, Names, etc.). Due to disclosure requirements they will only be informed that the TIN or name they provided does not match IRS records. If they are unable to provide a better TIN at a later time, for the cases that are originally received, IRS (Submission Processing Entity) will verify the information and, if verifiable, a request (by Submission Processing P&A) will be forwarded to DOJ to request additional funds for the claimants on the updated verified listing.

  7. The USDA Project is reported under program code 85390 with appropriate function, i.e., 390, 710, etc.

Federal Tax Deposit (FTD) Point of Contacts

  1. The Department of the Treasury's Bureau of Fiscal Services (BFS) and the Internal Revenue Service (IRS) are leading an effort to modernize the Federal Tax Deposit (FTD) system. The Electronic Federal Tax Payment System (EFTPS) provides an electronic system for reporting and paying FTDs. EFTPS has replaced the paper-based FTD system. EFTPS benefits both taxpayers and the Federal Government by providing greater reporting efficiencies and expediting the availability of funds and investment decision-making information for the Treasury.

  2. Before EFTPS replaced the paper-based FTD system, taxpayers paid their FTD payments with Form 8109, Federal Tax Deposit Coupon. Their financial institution forwarded the funds, Form 8109, and Advice of Credit (AOC) to the Federal Reserve Bank (FRB),who would forward the Form 8109 and AOC to the IRS.

  3. There is a FTD Point of Contact (POC) located at the following Submission Processing Campuses: Austin, Cincinnati, Kansas City, and Ogden. If a FTD payment made with Form 8109 prior to 1/1/2011 cannot be located, a referral should be issued to the FTD POC.

Numbering Forms and Documents in Accounting

  1. The intended purpose of this section is to provide instruction to properly number assessment documents and/or forms received for processing in the Accounting Function.

  2. Key duties and responsibilities in authorizing, processing, recording, and reviewing transactions are separated among individuals. Duties need to be divided or segregated among different people to reduce the risk of error or fraud. No one individual should control all key aspects of a transaction or event. Separation of duties is necessary to maintain the integrity of the Accounting function.

  3. Unless otherwise stated, these procedures apply to the Accounting Functions in the Submission Processing Campuses.

Assigning a Document Locator Number (DLN)

  1. A DLN is a controlled number assigned to every return or document.

  2. Documents to be numbered are received directly from other operational areas within a campus or transferred in.

  3. Each document will be numbered with an 11 or 13 digit DLN.

Description of a DLN

  1. File Location Code - first and second digits

    1. Indiana - 35

    2. Michigan - 38

    3. All other states, provinces or countries - 31

  2. Tax Class - third digit

    1. NMF - always "6"

    2. MF - MFT determines the tax class

  3. Document Code - fourth and fifth digits. All forms have a specific doc code (see chart for forms and doc codes listed).

  4. Julian Date - sixth, seventh, and eighth digits (3-digit number).

  5. Blocking series - ninth, tenth, and eleventh digits (3-digit number). See Exhibit 3.17.243-2

  6. Item number - twelfth and thirteenth digits. The first document in a blocking series will always be "00" .

  7. List Year

    1. NMF - double digits (example: 08)

    2. MF - single digit (example: 8)

Service Center Control File (SCCF)

  1. Each document is assigned a DLN.

    1. The DLN is established on the SCCF when the document is being processed and remains on the SCCF until either accountability is transferred to Enterprise Computing Center or the document is deleted.

    2. RACS sends Form 813 to the Data Conversion function Unit to establish the DLN on SCCF.

    3. When the document posts the Form 813 is sent to Data Control for balancing to SCCF on the SCF 11-42 CRL.

  2. For additional procedures, refer to IRM 3.17.30.1.2, SCCF Control Concepts.

Helpful Hints

  1. 11 numbers in DLN on Form 813.

  2. 13 numbers in DLN on document.

  3. Do not mix MFTs when numbering.

  4. Do not mix accounts when numbering (e.g., 6550 and 6560).

  5. When preparing Form 813, debit amount goes on left side and credit amount goes on right side.

  6. Cross reference the DLNs on debit and credit side of the document.

  7. On Form 3210 to RACS, accounts cannot be mixed (e.g., 4620 cannot be placed on the same Form 3210 as 6550).

  8. On Form 3210 to RACS, Form 2424 and Form 3809 cannot be listed on the same Form 3210.

  9. 4430 Account cannot be mixed with anything.

  10. 4430, 6550, and 6560 Accounts do not get DLNs.

  11. Tapes must be attached to each Form 813 before work is accepted by the RACS Team.

  12. Tapes should be run from the document, not from the Form 813.

  13. Do not cross out information on Form 813. If a mistake is made, the entire Form 813 must be redone.

  14. Double check your work. Make sure you attach the correct Form 813 to the matching DLN.

  15. Never change money or post partial amount from any document (Form 2424, Form 2158, Form 3809, etc.).

Taxpayer Advocate Case Procedures, National Service Level Agreement (SLA)

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business/Self-Employed (SB/SE) Division, Tax Exempt/Government Entities (TE/GE) Division, Criminal Investigation (CI), Appeals, and Large Business and International (LB&I) Division, that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions rest outside of TAS. These agreements are known as service level agreements (SLAs).

  2. The SLAs are located at: http://tas.web.irs.gov under the heading "Policy/Procedures/Guidance" .

  3. Per the Taxpayer Bill of Rights (TBOR), 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.

  4. 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. For additional information on the Taxpayer Bill of Rights, visit http://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights

  5. Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria as described in IRM 13.1.7, TAS Case Criteria and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. See IRM 13.1, Taxpayer Advocate Case Procedures for additional clarification.

Tables for Blocking Series

Document Codes 48 and 58 (Form 3809)
BMF and IMF
000-299 Doc Code 58 Transferring to NMF
300-399 Doc Code 58 Transferring to Account 4620
400-499 Doc Code 58 Transferring to Account 6800
930-939 Doc Code 58 with inflated Julian date Return Preparer Misconduct credit posted from GL 1547
940-999 Doc Code 58 with inflated Julian date Identity Theft credit posted from GL 1545
500-699 Doc Code 48 Transferring to NMF
700-799 Doc Code 48 Transferring to Account 4620
800-898 Doc Code 48 Transferring to Account 6800
899 Doc Code 48 Reclamation Period Date Expiration
900-999 Doc Code 48 Erroneous Refunds
940-999 Doc Code 48 with inflated Julian date Identity Theft credit posted from GL 1545
900-999 Doc Code 58 Child Support Offsets
Document Codes 24 and 38
NMF Only
100-199 True Tax Class 1 Withholding and FICA
200-299- True Tax Class 2 Individual Income
300-399 True Tax Class 3 Corporation
400-499 True Tax Class 4 Excise
500-549 True Tax Class 5 Estate
550-599 True Tax Class 6 Gift
700-799 True Tax Class 7 Railroad Retirement
800-899 True Tax Class 8 FUTA

Blocking Series Chart For Doc Code 45 and 48

Blocking Series Chart for Document Code "45/48" For Miscellaneous Processing (i.e., SF 1098, 1081, ID-Theft Processing
AO/SC Code Blocking Series Description Document Code 45 Trans Code Freeze Code Processed By
SC 220-299 Repayment of Erroneous IMF/BMF Form 3245 720 - Receipt & Control
SC 500–899 IMF Form 12857 - DC 48 841 Accounting
ULC 500-519 IMF/BMF SF 1098
Form 3245
841/740 - Accounting
ULC 520-529 ANMF SF 1098
Form 3245
841/740 - Accounting
ULC 530-539 IMF-IRAF SF 1098
Form 3245
841/740 - Accounting
ULC 540-549 IMF/BMF/ANMF TFS 3813
Form 3245
843/742 - Accounting
ULC 550-554 IMF/BMF SF 1081 Debit/POC TRACS
Form 3245
843 - Accounting
ULC 550-553 IMF/BMF SF 1081 Debit Settlement Authorized Form 3245 840 Accounting
ULC 555 Intercepted Checks Manually Processed 1098 Listing SF 1098/Form 3245 841 P- Accounting
ULC 666 IMF/BMF/ANMF Limited Payability Cancellation Credit/TRACS Form 3245 740 S- Accounting
SC 745–749 IMF External Leads/Refund Repayment - Form 3809 (DC 48) 700 Accounting
ULC 800 Repayment of Erroneous Refunds ANMF Form 3245 720 - Receipt & Control
ULC 888 IMF/BMF/ANMF SF 1081 Credit/RC/UCC TRACS Form 3245 841 - Accounting
ULC 889 Use for MFT 06/08 Only SF 1081 Credit/RC/UCC TRACS Form 3245 841 - Accounting
SC 920–929 IMF Form 12857 -DC 45 840 Accounting
SC 945–949 IMF IDT Credit - Form 3809 (DC 48) 841 Accounting
ULC 55555 Intercepted Checks Master File Tape Processing 841 P- Computer Generated
ULC 66666 Limited Payability Master File Tape Processing 740 S- Computer Generated
SC 77777 Undelivered ELF (Electronic Filed Return) Master File Tape Processing 841 - Computer Generated
SC 88888 Recertified Credit Master File Tape Processing 841 - Computer Generated
SC 88899 Returned Credit (Due to CHKCL) Master File Tape Processing 841 P- Computer Generated
SC 99999 Undelivered Check Master File Tape Processing 740 S- Computer Generated
SC 99999 Returned Checks Master File Tape Processing 841 P- Computer Generated

Campus Codes

Campus Code
Andover 08
Atlanta 07
Austin 18
Brookhaven 19
Cincinnati 17
Fresno 89
Kansas City 09
Memphis 49
Ogden 29
Philadelphia 28

List of U.S. Attorney Case Types

U.S. Attorney Case Types
Bankruptcy—Chapter 7
Bankruptcy—Chapter 11
Bankruptcy—Chapter 12
Bankruptcy—Chapter 13
Bankruptcy—Other
Commercial Litigation
Tax Lien/Foreclosure (28 USC 2410)
Probate
Recovery of Overpayments Made by Government
Government Contract
Miller Act
Judgment for Restitution Following Criminal Conviction
Quiet Title
Collection (from Taxpayer)
Refund (to Taxpayer)
Wrongful Levy
Criminal Restitution to a Federal Party

Case Management System District Codes

DJ# District DJ# District
5–1 N.D. Alabama (Ala) 5–46 Nevada (Nev)
5–2 M.D. Alabama 5–47 New Hampshire (N.H.)
5–3 S.D. Alabama 5–48 New Jersey (N.J.)
5–6 Alaska 5–49 New Mexico (N Mex)
5–8 Arizona (Ariz) 5–50 N.D. New York (N.Y.)
5–9 E.D. Arkansas (Ark) 5–51 S.D. New York
5–10 W.D. Arkansas 5–52 E.D. New York
5–11 N.D. California (Cal) 5–53 W.D. New York
5–11E E.D. California 5–54 E.D. North Carolina (NC)
5–12 S.D. California 5–54M M.D. North Carolina
5–12C C.D. California 5–55 W.D. North Carolina
5–13 Colorado (Colo) 5–56 North Dakota (N.D.)
5–14 Connecticut (Conn) 5–57 N.D. Ohio (Oh)
5–15 Delaware (Del) 5–58 S.D. Ohio
5–16 Dist. of Columbia (D.C.) 5–59 E.D. Oklahoma (Okla)
5–17 N.D. Florida (Fla) 5–59N N.D. Oklahoma
5–17M M.D. Florida 5–60 W.D. Oklahoma
5–18 S.D. Florida 5–61 Oregon (Ore)
5–19 N.D. Georgia (Ga) 5–62 E.D. Pennsylvania (Pa)
5–19M M.D. Georgia 5–63 M.D. Pennsylvania
5–20 S.D. Georgia 5–64 W.D. Pennsylvania
5–21 Hawaii (Ha) 5–65 Puerto Rico (P Rico)
5–22 Idaho (Id) 5–66 Rhode Island (R.I.)
5–23 N.D. Illinois (Ill) 5–67 South Carolina (S.C.)
5–24 C.D. Illinois 5–69 South Dakota (S.D.)
5–25 S.D. Illinois 5–70 E.D. Tennessee (Tenn)
5–26 N.D. Indiana (Ind) 5–71 M.D. Tennessee
5–26S S.D. Indiana 5–72 W.D. Tennessee
5–27 N.D. Iowa 5–73 N.D. Texas (Tex)
5–28 S.D. Iowa 5–74 S.D. Texas
5–29 Kansas (Kan) 5–75 E.D. Texas
5–30 E.D. Kentucky (Ky) 5–76 W.D. Texas
5–31 W.D. Kentucky 5–77 Utah
5–32 E.D. Louisiana (La) 5–78 Vermont (Vt)
5–32M M.D. Louisiana 5–79 E.D. Virginia (Va)
5–33 W.D. Louisiana 5–80 W.D. Virginia
5–34 Maine (Me) 5–81 E.D. Washington (Wash)
5–35 Maryland (Md) 5–82 W.D. Washington
5–36 Massachusetts (Mass) 5–83 N.D. West Virginia (W. Va.)
5–37 E.D. Michigan (Mich) 5–84 S.D. West Virginia
5–38 W.D. Michigan 5–85 E.D. Wisconsin (Wisc)
5–39 Minnesota 5–86 W.D. Wisconsin
5–40 N.D. Mississippi (Miss) 5–87 Wyoming (Wyo)
5–41 S.D. Mississippi 5–88 Canal Zone (Cn. Sn.)
5–42 E.D. Missouri (Mo) 5–90 Virgin Islands (Vir. Is.)
5–43 W.D. Missouri 5–91 Guam
5–44 Montana (Mont) 5–94 American Samoa
5–45 Nebraska (Neb)

DOJ Collection Paralegal Contacts for Tax Division Cases

Region Districts #
Northern Connecticut 5–14
N.D. Illinois 5–23
C.D. Illinois 5.24
S.D. Illinois 5.25
N.D. Indiana 5–26
S.D. Indiana 5–26S
Maine 5–34
Massachusetts 5–36
E.D. Michigan 5–37
W.D. Michigan 5–38
New Hampshire 5–47
N.D. New York 5–50
S.D. New York 5–51
E.D. New York 5–52
W.D. New York 5–53
N.D. Ohio 5–57
S.D. Ohio 5–58
Rhode Island 5–66
Vermont 5–78
Southern N.D. Alabama 5–1
M.D. Alabama 5–2
S.D. Alabama 5–3
E.D Arkansas 5–9
W.D. Arkansas 5–10
N.D. Florida 5–17
M.D. Florida 5–17M
S.D. Florida 5–18
N.D. Georgia 5–19
M.D. Georgia 5–19M
S.D. Georgia 5–20
E.D. Louisiana 5–32
M.D. Louisiana 5–32M
N.D. Mississippi 5–40
S.D. Mississippi 5–41
South Carolina 5–67
Western Alaska 5–6
Arizona 5–8
N.D. California 5–11
E.D. California 5–11E
S.D. California 5–12
C.D. California 5–12C
Colorado 5–13
Hawaii 5–21
Idaho 5–22
Montana 5–44
Nevada 5–46
Oregon 5–61
Utah 5–77
E.D. Washington 5–81
W.D Washington 5–82
E.D. Wisconsin 5–85
W.D, Wisconsin 5–86
Wyoming 5–87
American Samoa 5–94
Guam 5–91
Eastern Delaware 5–15
District of Columbia 5–16
E.D. Kentucky 5–30
W.D. Kentucky 5–31
Maryland 5–35
New Jersey 5-48
E.D. North Carolina 5–54
M.D. North Carolina 5–54M
N.D. North Carolina 5–55
E.D. Pennsylvania 5–62
M.D. Pennsylvania 5–63
W.D. Pennsylvania 5–64
E.D. Tennessee 5–70
M.D. Tennessee 5–71
W.D. Tennessee 5–72
E.D. Virginia 5–79
W.D. Virginia 5–80
N.D. West Virginia 5–83
S.D. West Virginia 5–84
Canal Zone 5–88
Puerto Rico 5–65
Virgin Islands 5–90
Central N.D. Iowa 5–27
S.D. Iowa 5–28
Kansas 5–29
Minnesota 5–39
E.D. Missouri 5–42
W.D. Missouri 5–43
Nebraska 5–45
North Dakota 5–56
South Dakota 5–69
E.D. Oklahoma 5–59
N.D. Oklahoma 5–59N
W.D. Oklahoma 5–60
Southwest New Mexico 5–49
N.D. Texas 5–73
S.D. Texas 5–74
E.D. Texas 5–75
W.D. Texas 5–76

List of Tax Division Case Types

Case
Type
Description
3201 Taxpayer Refund Suit/Original Tax
3202 Taxpayer Refund Suit/Additional Tax
3203 Refund Suit with Government Counterclaim
3204 Frivolous Return Penalties (IRC 6702 and IRC 6703)
3205 Tax Return Preparer Penalties (IRC 6694 and IRC 6695)
3206 Abusive Tax Shelter Penalty (IRC 6700)
3207 Windfall Profits Tax Case
3208 Partnership Adjustments Pursuant to IRC 6226 or IRC 6228
3211 Injunction Suit to Prevent Enforcement or Making of an Assessment, Lien or Levy
3212 Other Injunction Suit in Defense of a Monetary Claim
3213 Declaratory Relief Suit (other than IRC 7428)
3214 Suppression Suit
3215 Mandamus Suit
3221 Tort Suit v. IRS Personnel and/or the U.S.
3222 Tort Actions under IRC 7217 Seeking Civil Damages for Alleged Unauthorized Disclosure of Tax Info.
3230 Action to Review Jeopardy and/or Termination Assessment to IRC 7429
3240 Proceedings to Perpetuate Testimony
3250 Wrongful Levy Action
3290 Other Action Against the U.S. Involving the Defense of a Monetary Claim
4296 Miscellaneous Bankruptcy Cases Received Prior to April 1, 1983
4297 Bankruptcy—Motion for Order to File Returns or Submit Books for Examination re: Pre-Petition Tax
4298 Bankruptcy—Miscellaneous Matters Involving No or Little Legal Activity (Including Notice of 1st Meeting of Creditors)
4299 Bankruptcy—Complaint Requesting Turnover of Property of the Estate or Alleging a Preference
4300 Bankruptcy—Proceedings Which Contest the Substantive Merits of the Tax Claim
4301 Bankruptcy—Proceedings Which Contest the Tax Claim on Procedural Grounds Other than Priority
4302 Bankruptcy—Proceedings Which Contest the Priority to be Accorded the Tax Claim
4303 Bankruptcy—Complaint to Determine Dischargeability of Tax Claim
4304 Bankruptcy—Complaint to Sell Property
4305 Bankruptcy—Objection to Confirmation of Plan or to Disclosure Statement
4306 Bankruptcy—All Other Miscellaneous Matters
4307 Bankruptcy—Request by United States for the Lifting of the Automatic Stay
4308 Bankruptcy—Request for Injunction or Contempt by Debtors and/or Trustee
4309 Bankruptcy—Motion to Dismiss Proceeding or to Convert to Chap. 7 Proceedings or to Appoint Trustee
4310 Interpleader Action by Third Party
4320 Suit to Reduce Assessment to Judgment
4330 Suit to Foreclose Tax Lien
4340 Suit to Set Aside a Fraudulent Conveyance
4350 Probate Proceedings
4360 Action to Obtain Writ of Entry
4370 Suit to Establish Third Party Liability under 26 USC, Sec. 3505
4380 Intervention to Enforce Lien
4390 Forcible Opening of Safety Deposit Box
4400 Suit for Erroneous Refund
4410 Failure to Honor Levy Suit
4420 Suit Against Fiduciaries under 31 USC, Sec. 191
4430 Insolvency Proceedings Other than Bankruptcy
4440 Sec. 2410 Case Assigned to the Lien Unit
4450 Sec. 2410 Case Reopened—Offer or Other Reason
4490 Other Recovery Suit on Behalf of the U.S.
4491 Injunctive Suit Against Return Preparer or Shelter Promoter
5501 Freedom of Information Act Suit
5502 Privacy Act Suit, Including Action Against the U.S. for Alleged Violation Thereof
5510 Declaratory Relief Suit Filed Pursuant to Sec. 7428
5521 Suit to Prevent State and Local Taxation of Federal Property
5522 Suit by State or Local Taxing Authorities Seeking to Tax the Federal Government
5525 Other Suit Involving Government Immunity
5530 Third Party Challenge to IRS or Treasury's Administrative Ruling or Regulation-Related Activity
5540 Injunction Suit by a Summoned Party or Taxpayer to Prevent Enforcement of a Summons
5541 Proceeding to Quash Summons Pursuant to Sec. 7609(B)(2)
5542 Proceeding to Quash Formal Document Request Pursuant to 26 USC, Sec. 982
5543 Proceeding to Quash and Enforce Summonses Issued on Behalf of Tax Treaty Partners
5544 Proceeding to Quash and Enforce Domestic Summonses Which Req. Production of Foreign-Based Documents
5550 Summons Enforcement/Special Agent Referral to the Tax Division/General
5551 Summons Enforcement/Special Agent Referral to the Tax Division/Tax Pool Analysis
5552 Summons Enforcement/Special Agent Referral to the Tax Division/Tax Shelter
5553 Summons Enforcement/Special Agent Referral to the Tax Division/Church Issue
5554 Summons Enforcement/Special Agent Referral to the Tax Division/Domestic Summons for Foreign-Based Records
5555 Summons Enforcement/Special Agent Referral to the Tax Division/Tax Treaty Enforcement
5560 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/General
5561 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/Tax Pool Analysis
5562 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/Tax Shelter
5563 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/Church Issue
5564 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/Domestic Summons for Foreign-Based Records
5565 Summons Enforcement/Special Agent Referral to the U.S. Attorneys/Tax Treaty Enforcement
5570 Summons Enforcement/John Doe Summons/General
5571 Summons Enforcement/John Doe Summons/Tax Pool Analysis
5572 Summons Enforcement/John Doe Summons/Tax Shelter
5573 Summons Enforcement/John Doe Summons/Church Issue
5574 Summons Enforcement/John Doe Summons/Domestic Summons for Foreign-Based Records
5575 Summons Enforcement/John Doe Summons/Tax Treaty Enforcement
5580 Summons Enforcement/Revenue Agent or Officer Referral to the Tax Division/General
5581 Summons Enforcement/Revenue Agent or Officer Referral to the Tax Division/Tax Pool Analysis
5582 Summons Enforcement/Revenue Agent or Officer Referral to the Tax Division/Tax Shelter
5583 Summons Enforcement/Revenue Agent or Officer Referral to the Tax Division/Church Issue
5584 Summons Enforcement/Revenue Agent or Officer Referral to Tax Div./Domestic Summons for Foreign-Based Records
5585 Summons Enforcement/Revenue Agent or Officer Referral to the Tax Division/Tax Treaty Enforcement
5590 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/General
5591 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/Tax Pool Analysis
5592 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/Tax Shelter
5593 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/Church Issue
5594 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/Domestic Summons for Foreign-Based Records
5595 Summons Enforcement/Revenue Agent or Officer Referral to the U.S. Attorneys/Tax Treaty Enforcement
5600 Other Non-Collection Suit
5608 Other Non-Collection Matter

Department of Justice Glossary

Common Cause
of Action
Narrative Description
of Case
Administrative Office of U.S. Courts Central support entity for the Judicial Branch. The Administrative Office (AO) provides a wide range of administrative, legal, financial, management, program, and information technology services to the federal courts. Located in Washington D.C.
Advisory/Advisory Probation Liaison Function in Collection that provides technical services to the field and handles various specialized programs. Specific Advisors have been designated as probation liaisons and are responsible for monitoring cases within their districts in which the defendant is required to comply with IRS-related conditions of probation, including the payment of restitution to the IRS. Advisory used to be called Technical Support prior to being split into Technical Services Exam and Technical Services Advisory.
Assistant United States Attorney (AUSA) Attorneys who work for the U.S. Department of Justice in local U.S. Attorney's offices. Generally, the prosecutors in federal criminal tax cases are AUSAs. There are 93 U.S. Attorneys stationed throughout the United States and its possessions.
Bankruptcy Decision in case directs payment to DOJ rather than to Insolvency.
CIMIS (Criminal Investigation Management Information System) Computer database used to track, among other things, data on investigations undertaken by Criminal Investigation. CIMIS is used by special agents to monitor compliance with the conditions of probation.
Clerk of Court Chief Administrative officer of the court. Among the clerk's many functions are: Maintaining the records and dockets of the court
Paying all fees, fines costs and other monies collected into the U.S. Treasury
Administering the court's jury system
Providing interpreters and court reporters
Sending official court notices and summons
Providing courtroom support services
Conditional Probation Expiration Date The date on which the defendant's term of supervised release or probation ends. Noncompliance with the terms of probation must be reported to court prior to this date.
Conditions of Probation When the court orders an individual convicted of a tax or tax related crime to perform certain acts while they are on probation; these are known as conditions of probation. If the conditions involve the IRS, such as requirements to file returns, cooperate with the IRS, and/or pay restitution to the IRS, these are referred to as IRS-related conditions of probation. The failure to comply with conditions of probation may result in the defendant's probation being revoked.
Defendant/Offender The party accused of a criminal offense. May also be referred to as the Taxpayer when the party is ordered to comply with IRS-related conditions of probation.
Department of Justice, Tax Division An agency within the Department of Justice. The Tax Division represents the United States and its officers in most civil and criminal litigation that concerns or relates to the internal revenue laws. Tax Division attorneys work closely with the IRS and United States Attorney's Offices to develop tax administration policies; handle civil trial and appellate litigation in federal and state courts; pursue federal grand jury investigations; and handle criminal prosecutions and appeals.
Department of Justice, U.S. Attorney's Office The U.S. Attorney is the chief law enforcement officer of the United States within his or her particular jurisdiction. There are 93 United States Attorneys stationed throughout the United States and its possessions. United States Attorneys conduct most of the trial work in which the United States is a party.
Embezzlement by Employee Case in which an assessment has been made against an employee or former employee under IRC 7804.
Enforce Levy Failure to honor levy—IRC 6332(c).
Foreclosure Tax Lien IRS has requested a judicial foreclosure of the federal tax lien rather than an administrative seizure.
Fraud Suspense Coordinator Coordinator responsible, with Technical Services, for cases in Fraud and/or Grand Jury Suspense. Coordinator also monitors SBSE adherence with IRM 25.1.4.5 requirements.
Fraud Technical Advisor (FTA) The FTA serves in an advisory and support role in both Examination and in Collection. Their primary role is to assist in the development of fraud and support revenue agents and officers.
Financial Litigation Unit (FLU) Unit in every U.S. Attorney's Office which has responsibility for collecting and enforcing all civil and criminal judgements on behalf of the United States.
Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Over-assessment Form that allows the IRS to immediately assess a defendant’s tax liabilities. By signing the form, the defendant waives the restrictions on assessment and collection, such as the requirement that the IRS issue a Notice of Deficiency.
Form 4135, Criminal Investigation Control Notice Form used by CI to place account controls or update account controls on IDRS. In probation cases, there should be a transaction code (TC) 910 entered on the account
Form 8821, Tax Information Authorization Form signed by the taxpayer that authorizes a designated person to inspect and/or receive confidential information in any IRS office for the type of tax and the years or periods listed.
Form 13308, Criminal Investigation Closing Report (Tax and Tax related only) This is the form that is initially completed by CI for each closed and discontinued tax and tax related investigation. After completion, the form is forwarded to the appropriate Technical Services Fraud Coordinator and Advisory Probation Liaison. Thereafter, it is used by all parties to monitor compliance.
ICS (Integrated Collection System) A computer system used by Collection consisting of dedicated hardware, software and communications which permit profiled employees to access certain active Collection cases and take actions on those cases.
Judgment and Commitment (J&C) or Judgment and Commitment Order (JCO) This is the official court document that is signed by the judge and details the sentence imposed by the court. The J&C will contain the information needed to calculate the Conditional Probation Expiration Date. Any award of restitution to the IRS must be included in the J&C Discrepancies between the J&C and the plea agreement or sentence imposed orally at the sentencing hearing should be brought to the attention of the prosecutor.
Questionable Refund Program (QRP) The purpose of the Questionable Refund Program (QRP) is identifying and developing schemes for the purpose of referring and supporting high-impact criminal tax and related financial investigations. (Revenue Protection is no longer part of the QRP program). The goal of QRP is to investigate and prosecute promoters and conspirators to foster confidence in the tax system and enhance voluntary compliance. See IRM 9.5.3.2.5, Questionable Refund Program.
PACER (Public Access to Court Electronic Filed Records) An electronic court notification/information system providing ready information to the public on court records. PACER maintains records and provides a current status of district court cases. PACER may be used by authorized IRS employees to check the status of cases in litigation.
Plea Agreement Agreement reached as a result of negotiations between the accused and the prosecutor to dispose of a criminal case. The agreement may include concessions regarding the type and length of the defendant’s sentence and include conditions of probation or supervised release. A defendant may agree to pay restitution to the IRS as part of a plea agreement.
Pre-Sentence Report (PSR) To assist the court in imposing a prison sentence or granting probation, the probation service may initiate a pre-sentence investigation and generate a report. The investigation and report concern any prior criminal record of the defendant and personal background, relevant conduct, individual characteristics, financial condition, and any circumstances that may have affected the defendant's behavior. In the course of a pre-sentence investigation, the probation officer will usually consult with the special agent for information about the defendant's cooperation (or lack thereof) during the investigation, the defendant's relevant conduct, the defendant's mental and physical history, whether the defendant made any payments on the tax deficiencies involved in the criminal investigation, other tax obligations due the government, and data regarding any other matters that might be helpful to the court in imposing a sentence.
Probate Decision in case directs payment to DOJ rather than to Advisory.
Probation A sentencing option in the federal courts. With probation, instead of sending an individual to prison, the court releases the person to the community and orders him or her to complete a period of supervision monitored by a U.S. probation officer and to abide by certain conditions. A violation of probation can lead to revocation of probation and the imposition of a prison sentence.
Probation Officers (POs) District court employees who work with offenders "post-conviction," after they're tried and found guilty of federal crimes and also after they're released from prison. They also help ensure that offenders released to the community obey the law rather than commit further crime.
Prosecutor A public official who prepares and conducts the prosecution of persons accused of crime. In federal district courts, the prosecutor is usually an Assistant U.S. Attorney from the local U.S. Attorney’s Office.
Reduce Tax to Judgment Only includes cases in which the IRS has requested the judgment. Does not include cases where the Department of Justice has counter-claimed and obtained judgment such as in 100% Penalty refund suits.
Release Date Date on which defendant is released from prison. A defendant’s projected release date can be found on the Bureau of Prisons web site.
Restitution The act of making good, or giving the equivalent for, any loss, damage or injury. Through a restitution order, a court can require a defendant in a criminal tax case to pay money to the IRS in order to redress the losses he or she has inflicted on the Federal Treasury.
Return Preparer Program (RPP) The Return Preparer Program (RPP) involves claims on Federal income tax returns prepared by unscrupulous return preparers who knowingly claim excessive deductions and exemptions on returns prepared for clients. The clients may or may not have knowledge of the excessive deductions and exemptions claimed. See IRM 9.5.3.2.6, Return Preparer Program.
Scheme Detection Center – Ogden The Scheme Detection Center in Ogden monitors compliance with orders to pay restitution to the IRS in Questionable Refund Program (QRP) and Return Preparer Program (RPP) cases.
Seizure Bid Default Sale under IRC 6335/deferred pay.
Suit for Refund Suit to recover a partial payment of an assessment. Only includes divisible taxes such as 100% Penalty, Employment and Wagering taxes.
Supervised Release A term of supervision is served after a person is released from prison. The court imposes supervised release during sentencing in addition to the sentence of imprisonment. Unlike parole, supervised release does not replace a portion of the sentence of imprisonment but is in addition to the time spent in prison. U.S. probation officers supervise persons on supervised release.
Tax Division An agency within the Department of Justice. The Tax Division represents the United States and its officers in most civil and criminal litigation that concerns or relates to the internal revenue laws. Tax Division attorneys work closely with the IRS and United States Attorney’s Offices to develop tax administration policies; handle civil trial and appellate litigation in federal and state courts; pursue federal grand jury investigations; and handle criminal prosecutions and appeals.
Tax Crime and Tax Related Crime Tax and Tax Related Crimes are violations of the criminal provisions of Title 26, the Internal Revenue Code, and violations of Title 33, Title 18 §§ 286, 287, 371K, 371B or 514).
Technical Services (TS) - Exam The role of TS is to support examiners by providing current technical and procedural guidance to management and technical personnel. See IRM 4.8, Technical Services.
Transaction Code 910 (TC 910) Transaction code used to monitor the accounts of defendants that are on probation. Reversed/terminated by TC 911.
Transaction Code 914 (TC 914) Transaction code normally placed on a taxpayers' account at the outset of the subject criminal tax investigation to indicate CI involvement and prevent the posting of most original input transactions on tax modules. Reversed/terminated by TC 912.
Transaction Code 916 (TC 916) Transaction code used on Questionable Refund Program investigations. The Scheme Detection Center will input TC 916 and TC 918 as appropriate on tax modules.
Title 18 Criminal Investigation has jurisdiction over certain tax and tax-related offenses under Title 18 of the United States Code, such as conspiracies to defraud the United States for the purpose of impeding and impairing the IRS; conspiracies to commit substantive tax offenses (18 USC 371); filing false claims for refund or conspiracy to file false claims for refund (18 USC 286-287); and making false statements (18 USC 1001).
Title 26 The provisions of the Internal Revenue Code, which are found in Title 26 of the United States Code. Title 26 crimes include attempts to evade or defeat tax (26 USC § 7201), willful failure to collect or pay over tax (26 USC § 7203), and willful failure to file or pay tax (26 USC § 7203).
Unassessable Refund Unassessable erroneous refund suit that was initiated by Collection. Does not include litigation instituted by Criminal Investigation to recover fraudulent refunds.
United States Attorney The U.S. Attorney is the chief law enforcement officer of the United States within his or her particular jurisdiction. There are 93 United States Attorneys stationed throughout the United States and its possessions. United States Attorneys conduct most of the trial work in which the United States is a party.
28 USC 2410 Case Judicial foreclosure where a federal tax lien is affecting the property, Quiet Title, Interpleader, etc.

USDA Contacts

Department of Justice Contacts:
Name: Telephone: E-mail:
Susan Ullman 202-616-0680 Susan.Ullman@usdoj.gov
Maria Swails-Brown Maria.Swails-Brown@usdoj.gov
Lavavia White Lavavia.White@usdoj.gov
Bureau of Fiscal Services (Formerly Financial Management Services):
DOJ overnights the IPAC request to the address/contact below:
Dorothy Washington 202-874-6664 Dorothy.Washington@fms.treas.gov
Dept. of Treasury - Judgement Fund
3700 East-West Highway
Room 6E15
Hyattsville, MD 20782
EPIQ Systems Inc:
Richard Bithell 503-350-5855 RBithell@epiqsystems.com
Alicia Lopez 503-350-5989 ALopez@epicsystems.com
Kansas City Submission Processing:
Sheryl Dayton 816-499-6001 Sheryl.M.Dayton@irs.gov
Kansas City Accounts Management
Teresa Olsen 816-499-5158 Teresa.M.Olsen@irs.gov

Write-Off Cover Memorandum

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