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4.19.4  CAWR Reconciliation Balancing (Cont. 1)

4.19.4.3 
Replies

4.19.4.3.23  (04-04-2016)
Faxed Signatures — Replies

  1. Faxed Signature General Guidelines — These general guidelines are applicable to all divisions and cover operations related to income tax, employment tax, excise tax, estate tax, gift tax, and generation skipping tax, as well as tax exempt and employee plans determinations.

  2. In certain situations, submission of documentation, forms, letters, and returns related to CAWR inquires and interactions can be allowed via fax through taxpayer or IRS request. Chief Counsel has advised that in circumstances where contact with the taxpayer has been made and documented, faxed signatures are legally sufficient.

  3. Taxpayer signed agreements (assessments or abatement) involving any amount can be accepted by fax if taxpayer contact has been made, the case history documents the date of contact, and the desire of the taxpayer to submit the consent by fax. A faxed signature for a Form 941-X decrease where we are only lowering the wages and no refund will be issued is acceptable.

  4. Faxed signatures will not be accepted for any tax decreases (this is not an abatement of tax assessed and not yet paid, but a decrease to what is already on Master File) in which the taxpayer would be issued a refund of the taxes he/she has paid.

    Exception:

    If the employee is in telephonic communication with the taxpayer, a faxed signature is acceptable for a tax decrease or credit increase adjustment.

    IF THEN
    Taxpayer contact has been made; Document the date of contact and the desire of the taxpayer to submit by fax
    1. Assessments of tax are acceptable.

    A Form 941-X decrease (we are only lowering the wages, no refund will be issued)
    1. A faxed signature is acceptable.

    A Form 941-X shows a decrease in tax, the taxpayer would be issued a refund of taxes paid.

    Note:

    This is not an abatement of tax assessed and not yet paid, this would be a decrease to what the TC 150 is already showing on Master File.

    1. A faxed signature is not allowed.

4.19.4.3.24  (04-10-2014)
Foreign Students/Non-Resident Visitors

  1. When an employer states any or all of their employees are foreign students who may be exempt from SSA and Medicare tax, the procedures in this subsection are necessary.

    IF AND THEN
    Social Security and Medicare tax is erroneously withheld by the employer The foreign student is unable to obtain reimbursement from the employer The student files Form 843 to receive a refund of the erroneously withheld taxes.
  2. Check TXMODA for an adjustment containing information defined below.

    • 291 10162003 1,721.24- 200340 98154-123-45678-3

    • 004 22,499.77- 007 1,721.24-

    • 073 22,499.77-

    • 820 01312004 200340 98 (or 60, 78, or 66)124-123-45678-3

    • XREF-TIN> 123-45-6789 XREF-MFT> 30 XREF-TX-PRD> 201312

  3. Research adjustment to verify the below criteria.

    • The Reference amounts (004, 005, 073) may match the Form 941/944/W-2 CAWR discrepancy

    • The tax amount is 1/2 of the Social Security and Medicare tax amount (wage amount X 7.65%)

    • A TC 820, Credit Transfer, has been input with X-Ref SSN (The Foreign Student's SSN) to X-Ref MFT 30.

    • The DLN begins with 98, 60, 78, or 66.

    • The original adjustment is done in Philadelphia, Cincinnati or Ogden.

  4. Check CC IRPTRL on the student's SSN. There should be a Form W-2 for the adjusted reference amount from the EIN (employer) on the CAWR case.

    IF THEN
    see the adjustment above is present
    1. Complete Form 6209 to decrease Social Security and Medicare wages. In the remarks, select "Other" and enter "Exempt Foreign Student."

    2. Complete Form 6494 using correction code 4 and notate the need to cancel the Form W-2 due to the foreign student criteria.

    3. Attach a copy of the Form W-2 or give employee name, SSN, and wage amount to be canceled.

    4. Send a Letter 2057C to notify the employer, the employee's half of the Social Security and Medicare tax was refunded to his foreign employee. Inform the employer they must file a claim on Form 941-X within three years of when the tax return was filed or two years from when the tax was paid if they wish to request a refund of the employer’s half of the Social Security and Medicare taxes.

    5. File Correspondence following the "IRS-CAWR No Assessment needed" case processing procedures. See IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    If the employer files a Form 941-X / Form 843 for his half of the tax,
    1. Send Letter 2057C explaining actions taken and close CAP with the appropriate closing code.

    2. Input TC 291 with item adjustment code 112 for the tax amount. Do not decrease the Reference amounts 004, 073, or 005 a second time.

    Note:

    if the adjustment document is requested (using CC ESTAB) and the DLN begins with 98 it should show a copy of the student's Form W-2 and VISA. In addition a letter stating the foreign student was unable to obtain reimbursement from their employer along with Form 843.

4.19.4.3.25  (09-22-2009)
Replies Received Directly From SSA

  1. SSA will remove the Form W-2 submitted and notate on the reply that the Form(s) W-2 were received by SSA.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Do not penalize these employers. Assume the submitted forms resolved the SSA issue.

4.19.4.3.26  (04-01-2009)
Taxpayer Reply Identifying Payroll Services

  1. At times a taxpayer may state their case was being worked by their Payroll Service

    IF THEN
    info has not corrected the discrepancy
    1. Assess and close the case using the appropriate assessment needed case processing procedures. IRM 4.19.4.7

    2. Send a closing Letter 2057C explaining actions taken. Inform the employer that the information provided did not resolve the issue and that they may need to contact their payroll service to investigate the issue further.

    info provided corrects the discrepancy
    OR
    updates to the module have balanced the case
    1. Determine the effects on the case.

    2. Input automated Form 6209 if necessary.

    3. Prepare Form 6494 if applicable.

    4. Assess or file the correspondence using the applicable case processing procedures. See IRM 4.19.4.7,Case Closing Procedures.

4.19.4.3.27  (04-01-2011)
Bankrupt or Defunct CAWR Replies

  1. If the taxpayer is bankrupt or the business is defunct, research IDRS CC ENMOD to check for the CNC Indicator utilizing the TC 520/530 IAT.

    IF THEN
    IRS-CAWR TC 530 cc 07 or 10 is present on any prior or subsequent module
    1. Send a 2057C closing letter explaining actions taken

    2. Close the case on CAP using CC 98.

    3. File Correspondence following the "IRS-CAWR No Assessment needed" case processing procedures. IRM 4.19.4.7.1

      Exception:

      If the taxpayer's reply requests a tax increase ie. Form 941X, make the adjustment.

    IRS-CAWR TC 530 with a cc other than 07 or 10
    1. Close the case on CAP using CC 98.

    2. Assess and close the case using "IRS-CAWR Assessment needed " case processing procedures. See IRM 4.19.4.7.1IRS—CAWR— Reply Case Processing Procedures.

    3. On IDRS, re-input the TC 530 with CC REQ77 with the Responsible Unit Code (RUC) 3 and a Posting Delay Code "2"

    IRS-CAWR TC 520 with cc 72 or 74 is present.
    1. The case is in tax court. Close CAP 98.

    2. File Correspondence following the "IRS-CAWR No Assessment needed" case processing procedures. IRM 4.19.4.7.1

    IRS-CAWR TC 520 with any other cc than 72 or 74.
    1. Liabilities, as well as deficiencies should be assessed. Contact Insolvency prior to making assessment so they can amend their proof of claim if applicable.

    2. Input closing code 98 on the CAP.

    3. Send a closing Letter 2057C informing the taxpayer of the assessment and explain payment of tax is his/her responsibility.

    4. Assess and close the case using "IRS-CAWR Assessment needed " case processing procedures. See IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    SSA-CAWR TC 530 cc 07 or 10 is present on any prior or subsequent module
    1. Close the case on CAP using the CC 98.

    2. File correspondence using the "SSA-CAWR – No Penalty needed" case processing procedures. IRM 4.19.4.7.2

      Exception:

      If the taxpayer's reply requests a tax increase ie. Form 941X, make the adjustment.

    SSA-CAWR TC 530 with a cc other than 07 or 10
    1. Close the case on CAP using CC 98.

    2. Assess a civil penalty following "SSA-CAWR – Intentional Disregard Penalty Assessment" case processing procedures. See IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    3. If tax is also due, follow IRS-CAWR procedures.

    SSA-CAWR with TC 520 and any cc present
    1. We will not assess a civil penalty in these instances but try to obtain the Forms W-3/W-2.

    2. Send a Letter 2057C letter and explain the need for the taxpayer's cooperation in obtaining the Forms W-2.

    3. File correspondence using the "SSA-CAWR – No Penalty needed" case processing procedures. See IRM 4.19.4.7.2,SSA-CAWR —Reply Case Processing Procedures.

  2. If a payment posted to the account or is moved into the account, the TC 530 will release and the account will return to notice status.

    Reminder:

    BE EXTREMELY CAREFUL WHEN MOVING PAYMENTS FROM ONE ACCOUNT TO ANOTHER.

4.19.4.3.28  (04-01-2009)
Replies Identified As FDIC

  1. The following procedures are for handling CAWR cases with any proposed penalties against institutions that are under the control of the Federal Deposit Insurance Corporation (FDIC).

  2. FDIC cases are self identified by the taxpayer. No indicator shows on CAP for FDIC cases, therefore when an indication is notated on the correspondence, accept the taxpayer's word and follow the procedures below.

    Note:

    See http://wc.web.irs.gov/CAWR-SSA/ECS%20Contacts%20for%20FDIC%20cases.doc for ECS contacts.

    DETERMINE IF THEN
    A tax assessment is needed
    1. Assess and close the case using "IRS-CAWR Assessment needed" case processing procedures. See IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    2. Print a copy of the CAP CDC and the taxpayer's correspondence, if applicable, forward the copies to the Examination Classification Specialist (ECS) identified for your Campus.

    a civil penalty (PRN 549) assessment is required
    1. Assess a civil penalty following "SSA-CAWR – Intentional Disregard Penalty Assessment" case processing procedures. See IRM 4.19.4.7.2,SSA-CAWR —Reply Case Processing Procedures.

    2. Print a copy of the CAP CDC case and the taxpayer's correspondence, if applicable, and Forward the copies to ECS following local procedures.

4.19.4.3.29  (09-22-2009)
Reply States Taxpayer Already Filed Forms W-2

  1. When the employer states they have already filed Form(s) W-2 and gives an indication that the Form(s) W-2 were filed under another name, EIN, etc., research using information provided. If necessary, correspond with the taxpayer and request additional information needed to locate forms (i.e., EIN used, date filed, entity name used, copies of the Forms W-3/W-2, etc.).

  2. If the forms are found, notate in the remarks section of the case file and include any pertinent material. If they are not located, assess the penalty.

    Reminder:

    LOOSE FORMS W-2 have been entered onto CAP. There will be an indicator and a serial number on CAP which alerts that there are loose Forms W-2 from the employer.

  3. If the taxpayer states they filed Forms W-2 with SSA research ORS, ERQY or prepare Form 9337 , Social Security Administration (SSA) Reconciliation Referrals, and submit it to SSA via fax. If no new information is recovered, follow (2) above.

  4. A maximum of two cases (or EINs) can be entered on each Form 9337.

    1. DO NOT USE THIS FORM — If the taxpayer does not state he filed with SSA.

    2. DO NOT USE THIS FORM — If the taxpayer responds by sending the Forms W-2 or provides the information in another form, such as a list.

  5. Complete all the information requested:

    1. Item 1 — Write the EIN of the employer.

    2. Item 2 — List any other EINs the employer may have supplied. Check CC BMFOL or access ORS data to ensure the Forms W-2 are not under the new EIN before forwarding the request to SSA

    3. Item 3 — Tax year of the case.

    4. Item 4 — Notate Tape or Paper if the method of submission to SSA is known. Leave this item BLANK if not known.

    5. Item 5 — Answer all the questions a, b, and c.

    6. Item 6 — Answer if known.

    7. Leave the SSA Response and For SSA Use Only blank.

    8. Under the For IRS Use Only — This section must be filled out entirely if a reply is expected. SSA has received many forms with only a name of the tax examiner. Please give SSA the information it needs to respond back to IRS.

    9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    10. SSA will FAX the Form 9337 back to inform the examiner of the information already posted as well as any additional information they have received from the taxpayer since referring the case to IRS.

4.19.4.3.30  (04-01-2010)
CAWR Replies Requesting Additional Time

  1. When a reply is received requesting additional time and an assessment is required, suspend the case for 30 days from the date of the employer's correspondence.

  2. After the 30 days suspense period expires, assess the case following normal procedures outlined in IRM 4.19.4.7,Case Closing Procedures.

4.19.4.3.31  (04-01-2009)
Employer's Reply Requests for Copies of Forms W-3/W-2

  1. Review the CC BMFOLU for the page with the TC 980. Research ORS, ERQY, or CC IRPTRR with Doc Code WW, and when received, review them utilizing ORS screening procedures found in IRM IRM 4.19.4.2.2,Online Retrieval System (ORS) Data Screening. Otherwise follow items (2) through (5) below.

  2. Route Employer Requests for copies of Forms W-3/W-2 as follows:

    1. If the request is based on a discrepancy case (ie., the employer needs the copies before he/she can respond to a CAWR letter), the IRS site receiving the request will service it.

    2. If the employer's request does not specify a certain group of forms to be provided, attempt to contact the taxpayer if a telephone number can be located. If not, attempt to determine his/her needs by analyzing the discrepancy case.

  3. If copies of each document he/she filed cannot be provided, explain the reason and prepare a listing of copies not being sent. Include the following information:

    • Establishment number (if present);

    • Number of Forms W-2 reported;

    • Form W-3 FICA (Social Security) wages amount;

    • Form W-3 Federal Income Tax amount; and,

    • Form W-3 Medicare wages amount.

  4. Once the data is received and provided to the taxpayer assess the case following the appropriate closing procedures in IRM 4.19.4.7

4.19.4.3.32  (04-01-2011)
Replies Identified As Non-Profit Organizations

  1. Taxpayers reporting exempt wages incorrectly may cause discrepancies. Some of the mistakes commonly made are:

    1. Form W-2 wages not reported in Box 1.

    2. Social Security wages not reported in Box 3.

    3. Medicare wage not reported in Box 5, other than zero.

  2. See IRM 4.19.4.2.21,Screening Cases Identified as Exempt Church Organizations to determine the individual's exemption status. When it is determined the individual is exempt, follow the chart below:

    If ... And ... Then ...
    the discrepancy amount is found belongs to a clergyman (Form W-2 indicates Minister, Pastor, Father) or Form W-2 is showing no Social Security Tax withheld and Federal Income Tax Withheld is balanced. You may need to research IDRS CC IRPTRL to confirm.
    1. Prepare automated Form 6209.

    2. Prepare 6494 (attaching Form W-2) to correct the Social Security and Medicare wages using CC 4.

    3. File Correspondence following the "IRS-CAWR No Assessment needed" case processing procedures. IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    the discrepancy amount is not found  
    1. Assess and close the case using "IRS-CAWR Assessment needed" case processing procedures in IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    2. Send a Letter 2057C letter requesting a copy of the Form W-2C or the Clergyman's name and SSN.

4.19.4.3.33  (02-01-2008)
Replies Identified as Backup Withholding

  1. Discrepancies are usually caused by the withholding on Form(s) 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (Doc Type 98), or Form(s) W-2G, Certain Gambling Winnings (Doc Type 32) if reported as Backup Withholding. The amounts reported on Forms 1099-R and W2-G are not generally subject to Backup Withholding, so the amount shown is Federal Income Tax Withheld. Once the withholding is verified as Federal Income Tax Withheld process the case accordingly.

    IF THEN
    A Form 945 was previously filed and the taxpayer states that Federal Income Tax Withheld is included in/or reported as Backup Withholding on Form 945.
    1. Research IDRS CC TXMOD on MFT 16 for the year worked to verify.

    2. Send a Letter 2057C informing the taxpayer that Forms 1099R are not subject to Backup Withholding and that we have adjusted their account accordingly.

    3. Close the case on CAP using the appropriate closing code.

    4. Input a TC 290 .00 with Reference Code 003, (positive amount) and Reference Code 008 (negative amount) to correct the out of balance condition on MFT 16 using blocking series 55.

    5. Close any open CAWR controls on MFT 01.

4.19.4.3.34  (04-03-2012)
Replies Relating to Forms 945/1099R

  1. Discrepancies are usually caused when the taxpayer fails to file Forms 945/1099R or has a third party administrator.

    If ... Then ...
    The reply shows Forms 941/943/944 and Forms W-2 are in balance but Forms 1099R are on file with no corresponding Form 945, but the taxpayer provides a cross-reference (x-ref) EIN for a third party administrator (401k) plan that resolves the discrepancy
    1. Verify third party EIN.

    2. Do not prepare automated Form 6209 or Form 6494.

    3. Send a closing Letter 2057C explaining actions taken.

    4. Close the case on CAP with the appropriate closing code.

    5. Input a TC 290 for .00 on MFT 01 with BS 55 for the appropriate tax year.

    6. Input a TC 971 on IDRS using CC REQ 77 with Action Code 017, identifying the Cross-reference (x-ref) EIN to the last available return quarter posted for the appropriate tax year.

    The reply shows Form 945 filed but Form(s) 1099R (Doc Code 98) money amounts are more than Form 945 and does not provide information to resolve the discrepancy
    1. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    2. Send Letter 2057C explaining actions taken and close the case on CAP with the appropriate closing code.

    3. On MFT 16, input a TC 290 for the appropriate money amount and the applicable item adjustment codes using blocking series 55 with the correct correspondence and IRS received date.

    4. Assess FTD Penalty if necessary. Refer to IRM 4.19.4.7.3,, Failure To Deposit Penalty (TC 180)

4.19.4.3.35  (04-01-2009)
Federal Labor Law Replies

  1. Certain government agencies are empowered to collect, from employers, wages erroneously not paid to employees (or former employees). IRM 21.7.2.5.7 Federal Labor Laws-Wage Payments Made by Federal Agencies. Agencies are allowed to disburse these wages to the employees concerned, and withhold income taxes and employee’s share of FICA tax. Agencies allowed to take this action and the provisions which allow such action are:

    • Department of Labor - Fair Labor Standards Act

    • General Accounting Office - Davis-Bacon Act

    • National Labor Relations Board - Labor Management Relations Act.

    1. When the reply indicates Federal Labor Law, check for line item adjustments.

    IF THEN
    The amounts were reported on the original returns
    1. Follow Third Party Sick Pay instructions.

    The out of balance was caused by a subsequent adjustment
    1. Order the TC 290 adjustment if necessary to verify Form 941-C/941-X notation "Department of Labor" (DOL).

    Form(s) W-2 were filed by the employer, and "Department of Labor" (DOL).
    1. Prepare Form 6494 to notify SSA DOL filed Forms W-2.

    2. Notify the employer not to file Form(s) W-2, DOL already filed.

    3. File Correspondence following the applicable No Assessment needed case processing procedures in IRM 4.19.4.7,Closing Procedures for further instructions.

    The discrepancy amount is Federal Income Tax Withheld (only) and the amounts match Federal Income Tax Withheld on the DOL and they fall under the corresponding provisions:
    1. Do not assess the employer for Federal Income Tax Withheld.

    2. File Correspondence following the applicable No Assessment needed case processing procedures. IRM 4.19.4.7

    Note:

    Do not prepare an automated Form 6209.

4.19.4.3.36  (03-15-2017)
Large Corporation/ Large Dollar Replies

  1. When an SSA-CAWR case type 08 contains either a Large Corporation Indicator (LCI) or a proposed tax and/or penalty assessment of $1 million dollars or more that cannot be resolved through the information provided in the response, you must coordinate with your local Large Corporation Coordinator. See IRM 4.19.4.2.1.1,Large Corporation/Large Dollar Screening and see IRM 4.19.4.7,Case Closing Procedures for further information.

    Note:

    Coordination with the LCTU is required during screening for all cases other than SSA-CAWR case type 08 . Since Case Type 08 letters are auto-generated they are the only cases that need to be referred to the Large Corp. Unit during the reply or late reply phase of the CAWR program.

  2. Certain portions of the IRS-CAWR inventory is now auto generated. Refer all IRS-CAWR reply cases that were auto generated to Large Corp, if either a Large Corporation Indicator (LCI) is present or a proposed tax and/or penalty assessment of $1 million dollars or more is needed when the case cannot be resolved through the information provided in the response.

  3. Research on IDRS and CAP to determine if the case was previously referred to Large Corp. If the case was referred during the screening phase, it does not need to be referred to Large Corp again.

  4. Prior to inputting any tax or civil penalty adjustment of $100,000 or more, you MUST obtain a signature showing managerial approval that the case was reviewed on the adjustment/history sheet.

  5. Follow the procedures below for cases that contains either a Large Corporation Indicator (LCI) or a proposed tax and/or penalty assessment of $1 million dollars or more below:

    IF THEN
    The reply resolves the discrepancy.
    1. Large Corp Contact is not necessary.

    2. Utilize the information provided in the reply and take the necessary actions.

    3. File Correspondence following the appropriate case processing procedures in IRM 4.19.4.7,Closing Procedures.

    The reply brings the case below a $100,000 civil penalty (PRN 549) or tax increase,
    1. Utilize the information provided in the reply and take the necessary actions.

    2. Assess and close the case using the appropriate Assessment Needed case processing procedures in IRM 4.19.4.7,Closing Procedures.

    The reply leaves the case above $100,000 civil penalty (PRN 549) or tax increase,
    1. Contact the officer of the corporation/business and explain the need for the adjustment.

    2. Consider any additional information supplied.

    3. Ensure proper managerial signatures are obtained.

    4. Assess and close the case using the applicable Assessment needed case processing procedure in IRM 4.19.4.7,Closing Procedures.

  6. If the assessment is over $10 million dollars, send a complete copy of the case file to the following address on Form 3210 Document Transmittal.

    Business Analysis & Support Section

    333 W Pershing Road

    Kansas City, MO 64108

    ATTN: Sonja Coombes Stop 1035 S2

    OS:CFO:R:R:B

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4.19.4.3.37  (04-04-2013)
SSA-CAWR Replies with Payment of Civil Penalty

  1. When the taxpayer responds and includes a payment to the Civil Penalty (PRN 549):

    1. Research IDRS and use the payment tracer IAT to locate the payment.

    2. When the payment is posted to the incorrect module, transfer the payment to the MFT 13 using the credit transfer tool IAT prior to assessing the civil penalty.

    3. Follow the SSA-CAWR Intentional Disregard Penalty needed case processing procedures if the reply didn't resolve the discrepancy. See IRM 4.19.4.7.2,SSA-CAWR —Reply Case Processing Procedures.

4.19.4.3.38  (04-01-2009)
Employer Reply Requesting Blank Forms W-3C/W-2C

  1. When taxpayers or their representatives request Blank Forms W-3C/W-2C in order to correct a discrepancy, provide the IRS web site to the taxpayer to obtain the forms they are requesting. The web site is www.irs.gov or have them call 1-800-TAX-FORM (1-800-829-3676).

4.19.4.3.39  (04-04-2016)
Processing Miscellaneous Forms Received With Replies

  1. If the correspondence is from a Power of Attorney (POA) or other third party make sure the criteria in IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File is adhered to.

  2. Form 2848: for multiple years or a series of inclusive periods, including quarterly periods, the taxpayer may list 2012 through 2016. See example below. For fiscal years, enter the ending year and month, using the YYYYMM format. Form 941 must show 1st, 2nd, 3rd, and 4th quarters of a specific tax year using YYYYMM format. Annual returns (Forms 943, 944, 945, 1041 on BMF and Form 1040 on IMF), the (POA) must enter the ending year using a specific YYYY format.

    Example:

    2012 through 2016 or 2nd 2012-3rd 2016

    Reminder:

    Do not disclose information to the POA if it is completed using general references such as ("All years" , "All periods" , or "All taxes" or an entire tax year i.e. 2004).

    IF THEN
    A taxpayer or his representative sends Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization Research IDRS CC CFINK for POA registration on the Central Authorization File (CAF).
    The POA is registered on CAF for the specified quarters and/or tax periods.
    1. Keep a copy of the Form 2848 or 8821 with the case file.

    2. Work the case using normal procedures.

    The POA is not registered on CAF for the specified quarters and/or tax periods. See https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/CAF-Unit-Addresses-Fax-Numbers-and-State-Mapping
    1. Keep a copy of the Form 2848 or 8821 with the case file.

    2. Send or fax the original form to the CAF Unit for processing.

    3. Work the case using normal procedures. An authorization may be limited to a specified quarter, tax period, or specified tax issue. The CAF can be updated to show authorization for Civil Penalty (PRN 549) issues, as well as specific tax issues.

4.19.4.3.40  (04-04-2013)
Miscellaneous Reference Material

  1. Specific instructions for the following types of adjustments and other subjects are listed here or in IRM 21.5.1, General Adjustments:

    1. IRM 20.1, Penalty Handbook— Penalties are applicable when taxpayers fail to: file timely, make deposits, or pay taxes when due unless that failure is due to reasonable cause and not willful neglect

    2. IRM 20.2, Interest — Interest may be charged on the additional tax that resulted from the examination of a return. Interest is generally figured from the due date of the return to the date of full payment. If the employer discovers an error and corrects it in the same tax period, interest is figured from the due date of the return for that tax period

    3. IRM 21.5.5, Unpostables — An input transaction that fails to pass a series of validity checks on Master File at the Enterprise Computing Center-Martinsburg (ECC-MTB) is called an unpostable. A 3 digit unpostable code is given to the unpostable transaction

    4. IRM 21.5.7, Payment Tracers — Payments that are not applied to balances within one year from the time they are received are put in the Unidentified Remittance File (URF). Payments over one year old are transferred to the Excess Collection File.

    5. CC BMFOL — CC BMFOLU contains CAWR modules for the current CAWR and two other processing years. Tax years are available until December, four years after the tax year. Make adjustments to all years on CC BMFOL via Forms 6209.

    6. IRM 21.7.9 - BMF Duplicate Filing Conditions.

    7. IRM 21.7.2 - Employment and Railroad Tax Returns.

4.19.4.3.41  (02-01-2008)
Processing Forms W-2G and 1099R Received After IRP Processing

  1. Copy A of original Form(s) W-2G, 1099-R or a photocopy of an unprocessed Form 1096 may be received in the CAWR unit.

  2. These are forwarded to the CAWR unit because they have not been received in time to process through the normal processing for information returns; therefore, the information has not been available for the reconciliation phase of the CAWR program.

  3. Form(s) W-2G may be received from Receipt and Control stating that the information is really for a tax year CAWR is working although it is on the wrong year's form. The date in the "Date Won" box will verify which tax year is affected.

  4. To avoid erroneous taxpayer contact, or failure to consider the additional information received, process them as follows:

    1. If a tax year prior to the current processing year for CAWR is received, determine if it is a late reply or a reply to an assessment.

      If ... Then ...
      a TC 29X in Blocking Series 55 is found
      • determine if the information from the returns affects the CAWR case and follow procedures in IRM 4.19.4.6 , Processing Late Replies and Replies to Assessment.

      there is not a TC 29X adjustment
      • Follow procedures in IRM 1.15.1, Records Control Schedule 206 for Service Campuses/Centers

      the forms are not needed for a CAWR discrepancy case
      • forward them to the Campus IRP Civil Penalty unit.

  5. Never prepare a Form 6209 for Forms 1099R or W-2G.

4.19.4.3.42  (04-01-2009)
Forms W-2, W-3, W-2C, and W-3C Received Prior to SSA Processing

  1. Forms W-2C/W-3C should not be forwarded to SSA unless Social Security wages, Social Security Tips, or Medicare wages amounts have changed or if the employee SSN is being changed.

  2. When the employee's SSN is the only change on the form, write "URI" across the top of the Form W-2C/W-3C and give to clerical for proper routing to SSA.

4.19.4.3.43  (02-01-2008)
Identifying Trends

  1. Whenever a "trend" seems to be emerging for a specific type of taxpayer and/or their Payer Agent, POA, or RAA, compile documentation to show the "trend" .

    Example:

    If a taxpayer is repeatedly identified as incorrectly filing information forms.

  2. Inform your local Technical Coordinator of the trend identified who will forward the documentation to the Headquarters CAWR analyst.

4.19.4.3.44  (04-04-2016)
Replies Citing CSX Claims

  1. In the court case United States v. Quality Stores Inc., et al., 134 S. Ct. 1395 (March 25, 2014), the Supreme Court held that payments made pursuant to reduction in force programs are considered wages for purposes of FICA taxes and compensation for purposes of RRTA taxes. These types of claims should be disallowed. See IRM 21.7.2.5.16Claims Related to CSX Corp. and/or Quality Stores, Inc. Litigation and IRM 21.5.3.4.7.3.1Types of Protective Claims, for additional information.

  2. If a reply is received (correspondence only) claiming severance pay and/or supplemental unemployment compensation pay is not subject to Social Security or Medicare tax, take the following actions:

    1. Assess and close the case using the appropriate assessment needed case processing procedures.

    2. See IRM 4.19.4.7,Closing Procedures..

  3. If a reply includes Form(s) 941-C/941-X claiming severance pay and/or supplemental unemployment compensation pay not subject to Social Security or Medicare tax:

    If And Then.
    The claim was previously allowed in error (i.e. TC 291 was input and the employers’ share (7.65%) or the total (15.3%) of the Social Security and Medicare tax contributions was erroneously refunded).  
    1. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    2. Re-assess each applicable quarter for the current and/or prior tax year(s) using normal procedures.

    3. Disallow the claim(s). Follow procedures in IRM 21.7.2.5.16(4) Claims Related to CSX Corp. and/or Quality Stores, Inc. Litigation which includes language to use in the Letter 105CClaim Disallowed.

    4. Close the case on CAP using the appropriate closing code

    The claim was previously disallowed (i.e. TC 290 .00 BS 98)  
    1. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    2. Send a Letter 2057C , informing the taxpayer of the adjustments on each quarter. Also inform the taxpayer that their claim(s) were previously disallowed and that they must follow the instructions in the disallowance letter they received if they wish that matter to be reconsidered.

    3. Close the case on CAP using the appropriate closing code

    4. Re-assess each applicable quarter for the current and/or prior tax year(s) using normal procedures.

    The claim was not previously considered  
    1. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    2. Disallow the claim(s). Follow procedures in IRM 21.7.2.5.16(4)Claims Related to CSX Corp. and/or Quality Stores, Inc. Litigation which includes language to use in the 105C Claim Disallowed, letter.

    3. Close the case on CAP using the appropriate closing code

    4. Re-assess each applicable quarter for the current and/or prior tax year(s) using normal procedures.

    Note:

    Any adjustment for subsequent tax years must be forwarded to AM (Accounts Maintenance) for re-assessment.

4.19.4.3.45  (04-01-2009)
Replies Indicating Common Paymaster/ Successor/Predecessor

  1. A common paymaster is not required to disburse compensation to all of the employees of the related corporations.

    IF THEN
    The reply indicates a Common Paymaster or Successor Employer.
    1. Research to verify using ORS or ERQY.

    If research verifies that this condition caused wages over the maximum
    1. Prepare automated Form 6209 to reduce wages over the maximum.

    2. Prepare Form 6494 using Correction Code (5) remarks "Common Paymaster-employee(s) exceeded maximum wage limit" , attach the appropriate Form(s) W-2.

    3. File Correspondence following the applicable No Assessment needed case processing procedures. See IRM 4.19.4.7.

    If research verifies that this condition is due to a Successor/Predecessor situation
    1. Enter the x-ref EIN into the x-ref field on the CAP detail screen.

    2. File Correspondence following the applicable No Assessment needed case processing procedures. See IRM 4.19.4.7,Closing Procedures..

4.19.4.3.46  (04-01-2011)
Replies With Disaster Indicators on CAP

  1. The following information applies to CAWR replies with a Disaster indicator present on the CAP Detail Screen. CAWR disaster coordinators input Zip Codes for specific declared disaster area situations as necessary based on IRS Disaster Relief Memos.

  2. Access http://www.tris.irs.gov/fema/ to retrieve the beginning and ending date of the disaster period.

    Reminder:

    The -S freeze does not suppress notices. Continue normal case processing.

    If ... And ... Then ...
    The reply is received with information balancing the case.  
    1. Prepare automated Form 6209 if applicable to adjust the appropriate amounts.

    2. Prepare Form 6494 to send copies of the Forms W-3/ W-2 and/or W-3C/W-2C to SSA (if appropriate).

    3. File Correspondence following the applicable No Assessment needed case processing procedures in IRM 4.19.4.7,Closing Procedures..

    The reply is received with insufficient information to balance the case the case has a –S freeze
    1. Assess and close the case using the appropriate Assessment Needed case processing procedures in IRM 4.19.4.7,Closing Procedures..

    The reply is received with insufficient information to balance the case the case has a –O freeze and the taxpayer correspondence is dated during the disaster period and the taxpayer does not state they cannot resolve their discrepancy due to the disaster
    1. Assess and close the case using the appropriate Assessment Needed case processing procedures in IRM 4.19.4.7,Closing Procedures..

    The reply is received with insufficient information to balance the case. and the case has a —O freeze and the taxpayer correspondence is dated before the disaster period
    1. Suspend the case on CAP using the suspense code 10.

    2. Suspend the case on IDRS notating "FEMA" and the disaster expiration date in the activity field.

    3. When the disaster period expires assess and close the case using the appropriate Assessment Needed case processing procedures in IRM 4.19.4.7,Closing Procedures..

    Note:

    If the taxpayer self identifies refer to IRM 25.16.1.7.1(3) Disaster Assistance and Emergency Relief.

4.19.4.3.47  (04-01-2009)
Replies Requesting Copies of Forms 94X

  1. IF THEN
    An employer requests copies of Forms 94X in order to resolve the CAWR discrepancy.
    1. Send a closing Letter 2057C Including any or all of the following:
      CC MFTRA definer X
      CC BRTVU/RTVUE/TRDBV
      a TDU print after necessary editing has been made.

    2. Assess and close the case utilizing the appropriate case processing procedures in IRM 4.19.4.7,Closing Procedures.

      Note:

      The breakdown sheet is found on the Intranet, Wage & Correction web site at http://wc.web.irs.gov/

    Copies of the actual original returns are needed.
    1. Explain to the taxpayer Form 4506, Request for Copy or Transcript of Tax Form, should be submitted along with the required fee.

4.19.4.3.48  (04-01-2011)
Replies stating discrepancies due to Group Term Life Insurance (IRC Section 125 Cafeteria Plan)

  1. Group Term Life Insurance is a type of fringe benefit that excludes all or part of the value from the recipients paycheck. Although the amounts should not be included on the Form W-2, they often are in error. When the tax reported on line 7c of the Form 941, equals the tax of the wage discrepancy, close the case out of balance. If the tax does not appear on line 7c of the Form 941, instruct the taxpayer to correct the Form W-2.

4.19.4.3.49  (09-29-2011)
Replies stating discrepancy is due to Vow of Poverty IRC 3121

  1. A religious order whose members are required to take a vow of poverty (or any autonomous subdivision of such an order) may elect to have FICA extended to services performed by its members in the exercise of duties required by such order. They are excluded from "employment" for FICA purposes, except when an election of coverage is in effect. See IRC IRC 3121(b)(8)(A) and IRC § 31.3121(b)(8)-1; IRC 3121(r) and § 31.3121(r)-1. See IRM 21.7.2.5.6Form SS-16, Certificate of Election of Coverage Under the Federal Insurance Contributions Act (FICA)

  2. Because the Form W-2 totals are less that what is reported on the Forms 94X these cases can become CAWR discrepancies.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4.19.4.3.50  (04-10-2014)
Hiring Incentives to Restore Employment (HIRE) Act

  1. Under the Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, employers are provided a payroll tax exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees. This is effective for wages paid from March 19, 2010 through December 31, 2010.

  2. CAWR is now matching the wages reported as subject to the exemption on the employer's Form 941 line 6c and 12d, Form 943 line 7b and 13d, Form 944 line 5b and 11d against what is reported on the Forms W-2 on line 12b using code "CC" . IRM 21.7.2.5.20HIRE — Payroll Tax Exemption.

  3. When the wages claimed as exemptions do not match a CAWR case will be created. See the table below:

    If ... And ... Then ...
    The Form(s) W-2 show more exempt wages then on his Forms 941, 943, 944 and no other out of balance condition exists The taxpayer offers no explanation Close the case with no action taken.
      The taxpayer amends the Form 941, 943, 944
    1. Adjust the Form 941, 943, 944 using reference codes IRN 115 or IRN 117 for wages and 116 or 296 for tax. See IRM 21.7.2.5.20.1. Adjusting the Account — HIRE for more information.

    2. Close CAP using the appropriate closing code.

      The taxpayer amends the Form(s) W-2
    1. Input an automated Form 6209.

    2. File the corro using the "No assessment needed case closing procedures" .

    3. Close CAP using the appropriate closing code.

    The Forms W-2 show less exempt wages then on his Forms 941, 943, 944 and no other out of balance condition exists The taxpayer offers no explanation
    1. Assess the case at 6.2% of the exempt wage discrepancy using the "Assessment Needed " case closing procedures on the quarter that the HIRE exception was taken.

      The taxpayer amends his Form 941, 943, 944
    1. Adjust the Form 941, 943, 944 using IRN 115 or IRN 117 for wages and 116 or 296 for tax. See IRM 21.7.2.5.20.1Adjusting the Account — HIRE for more information.

    2. Close CAP using the appropriate closing code.

      The taxpayer amends the Form(s) W-2
    1. Input an automated Form 6209.

    2. File the corro using the "No assessment needed case closing procedures" .

    3. Close CAP using the appropriate closing code.

4.19.4.3.51  (04-15-2015)
BMF Identity Theft in CAWR

  1. BMF ID theft is defined as creating, using, or attempting to use business’ identifying information without authority to obtain tax benefits: See IRM 25.23.9,BMF Identity Theft Processing for more information.

  2. Whenever a taxpayer makes a reference to any of his forms being fraudulently filed by another party or claims there is a fraud or identity theft issue, refer the case to your Technical Coordinator who will then refer it to the CAWR HQ Analyst.

4.19.4.4  (04-04-2016)
No Replies

  1. When a taxpayer does not respond to the letter originally generated it is referred to as a No Reply. Once the suspense period has expired, additional tax due is assessed with the applicable item adjustment codes on the last available quarter of the tax year and MFT being worked.

  2. The majority of IRS-CAWR No reply cases will now be auto assessed by the CAP system. However, cases containing any of the following TC codes will need to be manually reviewed and assessed by a tax examiner: 160, 161, 180, 181, 340, 370, 400, 420, 424, 480, 520, 530, 766, 780, 788, 910, 912, 914, 916, or 918.

  3. When working cases with the above TC indicators research IDRS thoroughly to determine if any changes have been made to the module prior to assessing the case.

    1. Occasionally a taxpayer will send in a payment or missing tax return (94X) without sending in any indication as to why they took action. Research CC TXMOD for a new or pending TC 150. Close the case with no assessment if the TC 150 wage and tax amounts balance your case.

    2. If there is a return posted as a 6020(b), assess as a regular no reply.

    3. If a TC 780/788 (unreversed by a TC 781) is present on any quarter of the tax year that you are working See IRM 4.19.4.2.13,Offer in Compromise Identified During Screening for more instructions.

    4. When an adjustment or a X-reference is found that balances the case, close the case with a CC 30. Place a remark on the case to explain the action(s) taken. Input a TC 971 with AC 017 if a X-reference is found.

    5. When an account has a TC 300, TC 301, TC 308, or TC 309 on any module of the tax year you are working, do not assess, input a 290 for .00 and close using closing code 30 (549 for .00 for SSA cases using closing code 98).

    6. If there is an open control ensure you contact the other area or obtain the CIS print prior to making any assessment. The information to resolve the case could be included in that response.

  4. Review ORS data, if available, re-checking for any missing Forms W-2, Family Employment, etc., for a possible resolution that may have been overlooked.

  5. When working IRS-CAWR No Reply cases, all cases will be in status code 37. Once the tax adjustment is made utilizing the No Reply/Undeliverable IAT tool, input closing code 30 on CAP, and close the IDRS control.

  6. SSA-CAWR No Replies will be in status code 91. Cases needing additional tax assessments will be included on the CAWR No reply money screen report. Management will hand out these cases to the tax examiners to have additional tax assessed using the NO Reply/Undeliverable IAT.

  7. SSA-CAWR case type 08 cases that contain either a Large Corporation Indicator (LCI) or a proposed tax and/or penalty assessment of $1 million dollars or more must be coordinated with your local Large Corporation Coordinator. See IRM 4.19.4.2.1.1,Large Corporation/Large Dollar Screening for further instructions.

  8. For cases with a potential tax assessment of $100,000 or more, subsequent contact must be made. Call the taxpayer or send a Letter 2057C using an open paragraph and state that this is the second attempt to contact them. If no response is received, assess using normal processing procedures. See IRM 21.1.3.2.3 .Required Taxpayer Authentication.

    Note:

    For those cases referred to the Large Corp. Technical Unit, second contact is not required.

    Reminder:

    Prior to inputting any tax or civil penalty of $100,000 or more, you MUST obtain a signature showing managerial approval that the case was reviewed on the adjustment/history sheet.

  9. For cases showing a debit and credit on the CAP money fields see Exhibit 4.19.4-4,Tax and Penalty Assessment Guide. If a Form 1040, U. S. Individual Income Tax Return, with a Schedule H was filed by the taxpayer, the MFT & ADJ Screen will have the corresponding MFT 30 and SSN information. Instructions for working the Schedule H are included in IRM 4.19.4.2.7.

  10. If correspondence issued on cases with a PAL indicator and no reply is received from the taxpayer, consider the information on the PAL indicator and work the case according to the appropriate processing procedures.

  11. If an employment code "S" is present for any SSA-CAWR/SSA Indicator 2 case, a penalty assessment cannot be made to that EIN/TIN on MFT 13. Do the following:

    1. Research for a parent TIN/EIN and/or a phone number for the entity. This may include contacting the Large Corporation unit for help locating the parent company.

    2. Contact the taxpayer in an effort to obtain the missing Form(s) W-2, so that a penalty assessment does not have to be made.

    3. Be sure to consider the amounts reported under the parent TIN/EIN while working the subsidiary case.

    4. Follow normal correspondence and reply procedures for the SSA-CAWR/SSA Indicator 2 case worked as a result of this situation.

      Note:

      CORRESPONDENCE MUST BE ISSUED TO THE PARENT TIN/EIN BEFORE A PENALTY ASSESSMENT CAN BE MADE AGAINST THE PARENT ENTITY.

  12. When a disaster indicator is present on CAP on a No Reply case:

    1. Follow the step list under IRM 4.19.4.2,IRS-CAWR and SSA-CAWR Case Screening Process (6) for procedures.

    2. When the disaster expires assess the case. IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    Reminder:

    Insure all appropriate contact has been made on cases with Compliance Indicators present.

4.19.4.4.1  (04-01-2009)
No Reply Bankruptcy (TC 520) and Defunct Cases (TC 530 - cc 07 and 10)

  1. Bankruptcy cases are assigned to the Centralized Insolvency Operation (CIO) at the Philadelphia Campus. See IRM 4.19.4.2.6. (1),Bankruptcy Cases (TC 520/521) Identified During Screening.

  2. After the No Reply phase for SSA-CAWR cases, input to MFT 13, a TC 290 PRN 549 for $ .00. These cases are already closed on CAP with a status code 98 so it is not necessary to update the status on CAP.

  3. After the TC 290 .00 posts for the SSA-CAWR case, BMF will forward status code 40 to CAP to confirm the posting of the TC 290.

  4. For IRS-CAWR cases with a TC 530 closing code 7 or 10 or a TC 520 closing code 72 or 74 input the TC 290 for $.00 and close the case on CAP using CAWR closing code 98. Do not assess these cases.

  5. For IRS-CAWR cases with a TC 530 with any closing code other than 7 or 10 adjust the case following normal processing procedures. Close CAP with CC 98.

  6. For IRS-CAWR cases with a TC 520 with any closing code other than 72 or 74 contact Insolvency prior to making assessment so they can amend the proof of claim if applicable. Adjust the case following normal processing procedures. Close CAP with CC 98.

4.19.4.4.2  (04-01-2009)
Delete Cases - No Replies

  1. A delete case is one which has been brought into balance at Enterprise Computing Center-Martinsburg (ECC-MTB) through various updates to the module.

  2. If no response was received to an IRS-CAWR delete case consider the case closed, leave it in its current CAP closing status code and close the IDRS control.

  3. If no response was received to an SSA-CAWR case, BMF will send a status code 40 to CAP when the 549 penalty posts.

    Reminder:

    Do Not Open a No Reply Case once it has been closed.

4.19.4.5  (04-01-2010)
Undeliverables

  1. This section is to be used for all IRS-CAWR, SSA-CAWR, and penalty notices that are returned undeliverable.

    Note:

    Undelivered mail clarifications may be found at the following web site: http://serp.enterprise.irs.gov/databases/who-where.dr/transshipment.dr/campus_locator_guide/01_cplg_toc.htm

  2. If a TC 780/788 (unreversed by a TC 781) is present on any module of the tax year that you are working see IRM 4.19.4.2.13,Offer in Compromise Identified During Screening.

  3. When an account has a TC 300 or TC 308 on any module of the tax year you're working, do not assess, input the 290 for .00 (549 for .00 for SSA Cases) and close the case using closing code 39 or 46.

  4. Clerical will research all cases for a new/better address and:

    If ... And ... Then ...
    A new address is found It is within 30 days of the mail out date They will re-mail all information, including the original envelope to the new/better address.
      It is after 30 days of the mail out date
    1. Print the IDRS CC screen containing the new/better address.

    2. Attach the print to the Undeliverable mail.

    3. Input Undeliverable date onto CAP and batch the Undeliverable to a T/E.

    A new address is NOT found   Input Undeliverable date and batch for a Tax Examiner to work.

    Exception:

    SSA-CAWR Undeliverables received after cycle 33 are not to be worked or updated on CAP. Hand carry to your lead or manager.

4.19.4.5.1  (03-15-2017)
IRS-CAWR/SSA-CAWR Undeliverables

  1. All Letter 98C or Letter 99C undeliverable mail is to be researched for a better address within 14 calender days of receipt. If a better address isn't found the case must be controlled within those same 14 days to stop the suspense time frame from expiring.

  2. Verify Undeliverable and IDRS to ensure a new/better address is not available.

    Note:

    Do not change IDRS. Individual and Business addresses can be updated on IDRS only if the taxpayer submits Form 8822, Form 8822-B, or a written request from the taxpayer is received.

  3. The Tax examiners will research IDRS for a new/better address using command codes ENMOD, INOLES, NAMEE, BMFOL, etc.

    Reminder:

    Use the Research Address IAT Tool to research for a better address when available.

    If ... And ... Then ...
    IRS-CAWR: a new/better address was found  
    1. Ensure the undeliverable date was entered on CAP.

    2. Update CAP with new address.

    3. Reissue the Letter 99C.

    IRS-CAWR: a new/better address was not found  
    1. Ensure the undeliverable date was entered on CAP.

    2. Assess the additional tax using hold code 3 to prevent the issuance of another letter to the incorrect address. Use the No Reply/Undeliverable IAT when available.

    3. Close CAP with CC 39.

    SSA-CAWR: a new/better address was found the date is prior to cycle 33
    1. Enter the undeliverable date, if not present on CAP.

    2. Update CAP with new address.

    3. Reissue the Letter 98C .

    SSA-CAWR: a new/better address was not found the date is prior to cycle 33
    1. Ensure the undeliverable date was entered on CAP.

    2. Assess the Intentional Disregard Penalty using hold code 3 to prevent the issuance of another notice to the incorrect address. IRM 4.19.4.7.2, See SSA-CAWR —Reply Case Processing Procedures.

    3. Close CAP with CC 46.

    SSA-CAWR: a new/better address was found the date is after cycle 33
    1. Re-mail all information including the original envelope to the new/better address. Do Not Input the Undeliverable Date.

    SSA-CAWR: a new/better address was not found the date is after cycle 33
    1. Input undeliverable date on CAP.

    2. Assess the Intentional Disregard Penalty using hold code 3 to prevent the issuance of another notice to the incorrect address. See IRM 4.19.4.7.2,SSA-CAWR —Reply Case Processing Procedures.

    3. Close CAP with CC 46.

    Reminder:

    SSA-CAWR case type 08 cases that contain either a Large Corporation Indicator (LCI) or a proposed tax and/or penalty assessment of $1 million dollars or more must be coordinated with your local Large Corporation Coordinator. See IRM 4.19.4.2.1.1,Large Corporation/Large Dollar Screening.

  4. For IRS-CAWR if all fields are potential overpayments, close the case. Input a TC 290 for .00 and update the case on CAP using the appropriate undeliverable closing code.

  5. If the suspense period has expired and the case has been assessed, re-file the undelivered letter (including the envelope) with the previous 55 block for IRS-CAWR cases.

  6. If the suspense period has expired and the automatic penalty assessment has been made, file the undeliverable by inputting a TC 290 for .00 PRN 549 for .00 on MFT 13 and BS 15.

  7. Check the MFT & ADJ Screen to determine if Schedule H was filed on the MFT 30. Research that SSN for another address. If a new address is found re-mail the letter. If a new address is not found assess the tax on MFT 30 or 05 as appropriate.

4.19.4.5.2  (09-29-2011)
Undeliverable Mail for Returned SSA (CP 215 PRN 549)

  1. Process undeliverable letters within 14 calender days of the IRS received date or three business days from receipt into the department.

  2. Research undelivered correspondence with operational errors, incomplete or incorrect name and erroneous or extraneous data. Make corrections and mail the letter.

  3. Research for a better address. If a better address is found, re-mail all information, including the original envelope to this (new/better) address. Do not change IDRS.

    Note:

    IDRS CAN ONLY BE UPDATED WITH A SIGNED REQUEST FROM THE TAXPAYER.

  4. If a better address is not found and the penalty assessment was made, file the undeliverable by inputting a TC 290 for .00 PRN 549 for .00 on MFT 13 and BS 15. If the penalty was manually assessed, attach the undeliverable letter to the penalty case file.

    Note:

    Undelivered mail clarifications can be found at the following web site: http://serp.enterprise.irs.gov/databases/who-where.dr/transshipment.dr/campus_locator_guide/01_cplg_toc.htm

4.19.4.5.3  (04-01-2009)
Undeliverable Interim Letters

  1. When a Letter 2645C or Letter 2644C (or Letter 5825C when available) is returned undeliverable, take the following actions:

    1. If the case is now closed the letter can be placed in classified waste.

    2. If the case is still open, the letter should be associated with the case so the tax examiner can research for a better address before issuing a Letter 2057C explaining actions taken.

4.19.4.6  (04-04-2013)
Processing Late Replies and Replies to Assessment

  1. Late replies occur when taxpayer correspondence is received after the initial case is closed on the CAP System. CAP will now open Late Replies into a SC 47 when the date is entered through the clerical "Replies/Undeliverables Recd" screen. All SC 47 cases will be manually closed on CAP using SC 43 when the late reply is worked. See IRM 21.3.3.4.17.1Preparation of Outgoing Correspondence, IRM 21.3.3.3.4Quality and Timely Responses, and IRM 21.3.3.4.1 Case Control and Inventory management to determine if additional correspondence is required.

    Exception:

    Since interim letters are not required on TAS and Form 3870 cases they will not be controlled on CAP by the clerical staff.

    1. Late reply received and IDRS shows a Collection status . Follow procedures outlined in IRM 4.19.4.6(4), Accounts in Collection Status.

    2. Taxpayer's late reply provides information that resolves discrepancy. Follow procedures as outlined in Abatement Procedures.

  2. Late replies can fall into one of the following categories:

    • Responses that affect Form 94X Master File modules

    • Responses that affect SSA files

    • Responses that affect both SSA and the Form 94X Master File modules

    • Responses that require no change

  3. Any Late Reply that is received in an active Compliance status code on IDRS, must be coordinated with the responsible function(s) prior to the CAWR issue being worked.

  4. Accounts in Collection Status - Any reply that is received in an account with an active Collection status code (22, 24 or 26) on IDRS must be coordinated with the responsible function(s) prior to the CAWR issue being worked. For example:

    1. For all cases in Status 22, 24, or 26, input TC 470 cc 90 to remove the case from collection status while case is in inventory.

    2. If there are any other Collection issues that need to be addressed, such as a remaining balance due, Installment Agreement request, etc., those functions must work that portion of the reply.

    3. A TC 29X will ensure any case that has a balance due remaining on the module is put back into collection status. If a TC 29X is not being input a TC 472 with no closing code must be input.

      Reminder:

      Be sure to reduce any STAUP to 3 cycles when closing your case when there is still a balance due. See IRM 21.5.2.4.8.2 Suppressing Balance Due Notices.

  5. When an account has a TC 300 or TC 308 on any module of the tax year you're working, abate any CAWR tax or penalty assessment and issue a closing Letter 2057C explaining all actions taken.

  6. If the taxpayer is not addressing a CAWR issue, it is to be worked in Accounts Management (AM) regardless of the fact that a CAWR case is or was worked for the tax period of the taxpayer inquiry. AM must address the Policy Statement P-21–3 requirements if the taxpayer response is 14 days or older.

  7. Late Replies may also be Form(s) 4442 that are referrals from CSRs. Provide taxpayers with interim responses (by telephone or in writing) if Tax Law Referrals of Late Replies cannot be resolved within seven (7) calendar days or Account Referrals of Late Replies cannot be resolved with fifteen (15) calendar days.

  8. Processing: For CAWR late responses that affect the Form 94X Master File module:

    1. Research IDRS for a TC 29X with Blocking Series 55X on the Form 94X, or TC 240 with Reference number 549 or 550 on MFT 13 and order document if necessary.

    2. Refer to applicable portion of the Reply section in IRM 4.19.4.3 and follow Late Reply Processing Procedures.

    3. Attach the correspondence and a copy of the Form 6494 (if needed) with the case file.

    4. If the taxpayer responds and only provides the SSN used for the Schedule H, research CC IMFOL to obtain the X-Ref TIN/EIN. If present on CC IMFOL, continue working the case. If not, refer to IRM 21.7 , Business Tax Return and Non-Master File Accounts .

    5. Forward any Forms W-3/W-2/W-3C/W-2C (or substitutes) received from the taxpayer to SSA via Form 3210, and either the Form 9338, Closed Case Transmittal Sheet for Returned SSA Cases, or Form 6494.

    6. If the adjustment DLN is not found, research CAP or the CAWR module (MFT 88) on IDRS using CC BMFOL definer U or Research CC BMFOL definer I to determine to which module the adjustment posted. Then use CC BMFOL definer T for that MFT and period.

    7. If there is no module present on IDRS, use CC MFREQ definer C to obtain the TXMOD.

    8. If the taxpayer responds and pays the penalty amount and the case is under tolerance, close the case with the appropriate closing status code on CAP and make the assessment on MFT 13. Make sure the payment is posted to MFT 13. If it is posted to another module, move it to MFT 13. Failure to do so will issue another notice (balance due) to the taxpayer.

    9. If the taxpayer responds and only provides the SSN used for the Schedule H, research CC IMFOL to obtain the X-Ref TIN/EIN. If present on CC IMFOL, continue working the case. If not, refer to IRM 21.7.4.4.1.11Schedule H, Household Employment Taxes and IRM 21.6.4.4.8 , Business Tax Return and Non-Master File Accounts.

  9. Processing: For late responses — requiring no change (2) above:

    1. Research for a DLN TC 29X Blocking Series 55X.

    2. Issue a Letter 2057C explaining actions taken and associate the taxpayer's response with the case file.

  10. Late replies research:

    IF AND THEN
    Late reply research is completed No CAWR adjustment DLN or unpostable CAWR adjustment DLN is found Check IDRS to determine if one should have been input.
      If duplicate correspondence is found after the adjustment has been made Attach the case to the adjustment DLN (except BS 00) and update and close CAP with SC 43.
      W-2 information is needed Research ERQY or ORS.
      The taxpayer just wants an explanation of why the CP was sent Issue Letter 2057C explaining reason for letter and/or assessment. Update and close CAP with SC 43.
    1. If the taxpayer responds and only provides the SSN used for the Schedule H, research CC IMFOL to obtain the X-Ref TIN/EIN. If present on CC IMFOL, continue working the case. If not, refer to IRM 21.7.4.4.1.11, Business Tax Return and Non-Master File Accounts and IRM 21.6.4.4.8,Schedule H, Household Employment Taxes.

    Caution:

    Always be aware of the statute date.

  11. If the correspondence is from a POA or other third party make sure that the criteria in IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File is adhered to before any response is sent.

  12. Cases with Large Corp Indicators (LCI), do not require a referral to Large Corp since the assessment is already on the account. If Large Corp refers one of these cases to us, work with Large Corp to resolve the issues.

  13. When inputting an adjustment which totally eliminates the tax, penalty, and interest and there is a TC 360 assessed on the module abate the TC 360.

4.19.4.6.1  (04-16-2009)
Late Replies Addressing SSA-CAWR Penalties

  1. Prior to abating a CAWR penalty (Late Filing and/or Intentional Disregard), be aware of the numerous attempts made by both the Service and SSA to solicit the correct information from the employer. Failure to secure and properly credit the missing Form(s) W-2 will impact an individual's SSA earnings record and ultimately that individual's retirement benefits. Given the history of correspondence sent to the taxpayer by SSA and the CAWR unit, caution should be used in abating the penalty. Careful consideration should be given to all filers claiming that they filed the required Form(s) W-2 timely.

    1. A copy of Form W-3 with a timely signature date should not be accepted alone as evidence because a fictitious document can be easily prepared. However, if a taxpayer provides a copy of Form W-3 and copies of Form(s) W-2 other than copy "A" along with a timely dated return receipt, all penalties should be abated.

    2. The employer may have submitted returns timely that were returned by SSA for an unprocessed condition, then never resubmitted by the employer. The penalty would be applicable in this situation.

    3. When a payer claims the forms were filed, abate the penalty if proof of submission is made by contacting the local SSA office or accessing ORS/ERQY to verify that they have received the missing Forms W-2.

  2. When the employer's response states they did not understand why the penalty was assessed, send Letter 2057C with the applicable paragraphs explaining the penalty.

  3. When Forms W-2C are submitted in response to CAWR correspondence and:

    1. The Form(s) W-2C balance the case, abate the penalty.

    2. The Forms W-2C partially balance the case, abate the portion of the penalty corrected by the Forms W-2C.

  4. If you receive a Form 94X-X or Form 843 claim adjusting the SS wages, SS tips, Medicare wages, FIT, and/or AEIC, to match the Forms W-2/W-3, adjust the account and remove the appropriate amount of the penalty assessment.

  5. If Forms W-2/W-2C are received with the late reply, order the original CAWR documents from Files if necessary to ensure the new submission is not duplicating the original reply to our correspondence.

  6. If Form(s) W-2 are received after the Service assesses the Intentional Disregard Penalty has been assessed, follow the procedures below:

    When the postmark date is Then
    within 10 days of the CP 215 notice date (date located in the upper right hand corner under "Notice Number" ) Intentional Disregard Penalty (PRN 549) will be abated on the portion of Forms W-2 received
    AND
    The Late Filing Penalty (PRN 550) will then be assessed on ONLY those forms W-2 received in the response.
    NOT within 10 days of the CP 215 notice date (date located in the upper right hand corner under "Notice Number " ) Intentional Disregard Penalty (PRN 549) will remain on the account as originally assessed.

    Exception:

    When the taxpayer provides the applicable Forms W-2 but did not timely respond to the CP 215, abate the 549 and apply the 550 for the Form(s) W-2 submitted when there is an indication that the CAWR letter was returned as undeliverable.

    Exception:

    The penalty will be abated in full (i.e., no penalty assessed) if the taxpayer's explanation established their failure to timely file Form(s) W-2 was due to reasonable cause and not due to willful neglect. See IRM 20.1.7.8.1Reasonable Cause for reasonable cause considerations specific to information return penalties.

  7. Abate the penalties using TC 290, the negative dollar amount being abated, with Reason Code 062. The appropriate Penalty Reason Code must be entered in the fourth RC position on CC ADJ 54. See IRM 20.1.1–2 Penalty Reason Code Chart.

  8. When a taxpayer responds to the penalty assessment after the Statute has expired and establishes reasonable cause, abate the penalty.

  9. If the taxpayer responds to any collection notice issued after the CP 215, reasonable cause must be provided in order to abate the penalty. If reasonable cause or due diligence is denied take the following actions:

    1. Notify the taxpayer using Letter 854C to inform the taxpayer of their appeal rights. Include the specific reason the abatement request is being denied in the Letter 854C.

    2. Research TXMOD for a TC 470

      If ... Then ... Update
      TC 470 is found Release with a TC 472 (SSA-CAWR) CAP and close with a SC 43
      TC 470 is not found Input STAUP for 6 cycles to delay the notices. CAP and close with a SC 43
  10. IF input with BS attach Input TC Use BS RC 4th RC Position
    Original Assessment was 00 Form 13675orForm 5706 290 .00/549 98 062 Blank
    52 or 53   290 .00/549 99 062 Blank

    Reminder:

    Check for any freeze codes that would be released by the TC 290 posting. If there are any, re-file the return and associated documents under the original DLN.

  11. If the taxpayer corresponds AFTER a reasonable cause request is denied, route all Letter 854C information to the CAWR Appeals Coordinator in the CAWR units in either the Memphis or Philadelphia campus. Route the cases based on state mapping found in the Campus Program Locator Guide on SERP. The contacts can be found on the CAWR home page.

4.19.4.6.2  (09-22-2009)
Late Replies to Cases with Forms W-2C Filed

  1. If the taxpayer provides an explanation citing a problem with their RAA (for TY 2001 only), check IDRS for the name of their Reporting Agent Authorization (RAA). There should be Form(s) W-2C processed.

    IF THEN
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. The Form(s) W-2 must not be considered in the out of balance condition

    2. Prepare Form 6209 to remove the original Form W-2 and W-3 amounts in excess of the Forms W-2C and W-3C amounts.

    3. The reply should include the W-2 Federal MAG Tape Detail Report and a statement that addresses the relationship between the Posted, Processed, and Reported totals.

    4. Abate the assessment using the "IRS-CAWR Abatement" case processing procedures in IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    5. Update CAP and close with a SC 43.

    There is still an out of balance condition
    1. Work the reply using the adjusted dollar amounts.

    2. The last page of their electronic filing will show the dollar amounts reported on their Form W-3C.

    3. The amounts will correlate to the processed W-2C totals.

    4. Partially abate the assessment using the "IRS-CAWR Abatement" case processing procedures in IRM 4.19.4.7.1,IRS—CAWR— Reply Case Processing Procedures.

    5. Update CAP and close with a SC 43.

4.19.4.6.3  (04-04-2016)
Late Replies Received on Form 3870 Request for Adjustment

  1. When a case is being worked by a Field Collection, Revenue Officer (RO), the revenue officer will submit a Form 3870Request for Adjustment to request an adjustment or abatement of the CAWR tax assessment and/or civil penalty. These cases will be worked within 45 days of receipt into the department in a first-in-first-out basis while workload permits.

  2. Points of Contact (POCs) were established at each campus for the Field ROs or managers to seek assistance from. For a list of these contacts see http://wc.web.irs.gov/CAWR-SSA/Revenue%20Officer%20Contacts.htm

  3. A interim Letter 2645C (or Letter 5825C when available)is not required on these cases since the RO has already made contact with the taxpayer.

    If ... Then ...
    the Form 3870 includes information that will allow for abatement of the tax and/or penalty
    1. Prepare Form 6209 and/or Form 6494 if applicable.

    2. Abate or adjust the assessment using the appropriate Late Reply Case Processing Procedures in IRM 4.19.4.7.5,Late Reply Case Processing.

      Reminder:

      Do not send a closing Letter 2057C as the RO already explained the outcome to the taxpayer.

    the Form 3870 does not include sufficient information to resolve the discrepancy
    1. Contact the preparer of the Form 3870 to request the additional information needed to resolve the discrepancy and suspend the case for 5 business days.

    2. If the RO does not contact you after 5 business days, have your campus’s POC contact the RO group manager to assist in resolving the case.

    once you have advised the revenue officer of the documentation you need
    1. Suspend the case allowing the RO no longer than 30 days to secure the requested information from the taxpayer.

    2. Once the information is received, process your case using the procedures above.

    the information to resolve the case is not received from the revenue officer or group manager by the agreed upon receipt date (plus 5 business days mail time)
    1. Reject the case back to the revenue officer.

    2. Input "rejrodoc" in the case closing on IDRS and in the remarks field on CAP.

    3. Close case on CAP as appropriate.

4.19.4.7  (04-04-2016)
Case Closing Procedures

  1. There are certain procedures that are unique to the CAWR program that must be followed when closing cases.

  2. Adjustments can be made to the Form 94X tax modules (MFT 01, 05, 11, 14, 16), the CAWR module (MFT 88), or the Civil Penalty Module (13). When adjusting MFT 30, follow the guidelines in IRM 21.6, Individual Tax Returns. Adjustments to the CAWR module are made via Form 6209, Form 6494 , or TCs input to IDRS. Follow the instructions for the Form 6209 and/or Form 6494 in the Training Material when processing corrections to the CAWR module.

    Reminder:

    When there is a 10 Million Dollar Assessment, send copies of the case to the CFO in Kansas City, MO. IRM 4.19.4.3.36 (6) Large Corporation/ Large Dollar Replies.

  3. When a case is closed, it must be recorded on CAP. This action serves to update:

    • Unit aged inventory

    • Individual aged listings

    • Reports that are sent monthly to Headquarters and used for program tracking

    • Information compiled electronically and provided to SSA to reflect the IRS actions and resolutions obtained by correspondence for SSA-CAWR cases

  4. When closing a case the following information should be included as part of your case file. All adjustments should be input as a "Y" in the source document field.

    • History Sheet detailing all actions taken on the case

    • Attach Money Screen Print, BMFOLU Screen Print, or breakdown of account showing discrepancy so a record of the discrepancy is present with the case file.

    • Notate the Letter 2057C paragraphs used on your history sheet. When an open paragraph is used, attach a copy of the letter to the case.

    • Any taxpayer correspondence received if applicable

  5. All tax and penalty assessments of $100,000.00 or more are to be reviewed by management prior to inputting the adjustment on IDRS.

  6. The data record on CAP is obtained from responses, undeliverable mail, and additional information research provides. The data will be input by the Tax Examiner at the time of the initial closing. Then again updated, as required, for Late Replies.

  7. Update all closing actions and remarks on CAP for cases in SC 47 and close the case using SC 43.

  8. The X-Ref EIN input on the Detail Screen and the responses chosen for the SSA information on CAP provides important information to IRS and SSA.

4.19.4.7.1  (04-15-2015)
IRS—CAWR— Reply Case Processing Procedures

  1. IRS-CAWR Assessment Needed Processing Procedures: When a CAWR case results in a tax assessment on a Form 94X module follow the procedures below:

    1. See Exhibit 4.19.4-4,Tax and Penalty Assessment Guide for determining appropriate assessment amounts.

    2. Input a TC 290 for the appropriate money amount with the applicable item adjustment codes; using blocking series 55 on the correct MFT on the last available quarter with a TC 150.

    3. Use the correct correspondence and IRS received date.

    4. Assess FTD penalty if necessary. Refer to IRM 4.19.4.7.3, Failure To Deposit Penalty (TC 180).

    5. Send closing Letter 2057C explaining actions taken. Make sure the paragraphs used are notated on the history sheet.

    6. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    7. Close CAP using the appropriate closing code. See Exhibit 4.19.4-2,Closed Case Status Codes.

  2. IRS-CAWR No Assessment Needed Processing Procedures: When an IRS-CAWR case results in no assessment needed follow the procedures below:

    1. See Exhibit 4.19.4-4,Tax and Penalty Assessment Guide for determining appropriate assessment amounts.

    2. Input a TC 290 for .00 using blocking series 55 with the correct correspondence and IRS received date on the last available quarter with a TC 150.

    3. Send a closing Letter 2057C explaining actions taken.

    4. Close CAP using the appropriate closing code. See Exhibit 4.19.4-2,Closed Case Status Codes.

      Reminder:

      Ensure all control bases are closed even if you are adjusting another module.

4.19.4.7.2  (04-04-2016)
SSA-CAWR —Reply Case Processing Procedures

  1. SSA-CAWR Intentional Disregard Penalty (PRN 549) Needed Processing Procedures: When an SSA-CAWR case results in an Intentional Disregard penalty assessment follow the procedures below:

    1. See Exhibit 4.19.4-4,Tax and Penalty Assessment Guide for determining appropriate assessment amounts.

    2. Input a TC 290 for .00 and penalty reference number (PRN) 549 for appropriate money amount using blocking series 52 on MFT 13 with the correct correspondence and IRS received date. Use blocking series 53 for other than first manual assessment.

    3. Send 2057C closing letter explaining actions taken.

    4. Input the amount of the penalty you are assessing on the detail screen and close CAP using the appropriate closing code. Exhibit 4.19.4-2,Closed Case Status Codes.

    5. Attach copies of Forms W-2 to case file.

  2. SSA-CAWR Late Filing Penalty (PRN 550) Needed Processing Procedures: If the taxpayer responds filing ALL or PART of the required Forms W-2, use the following procedures to compute the Late Filing penalty (PRN 550):

    1. See Exhibit 4.19.4-4,Tax and Penalty Assessment Guide for determining appropriate assessment amounts.

    2. Input TC 290 .00 with PRN 550 with a posting delay code 1 for the appropriate money amount using blocking series 52 on MFT 13 with the correct correspondence and IRS received date. Use blocking series 53 for other than first manual assessment.

    3. If applicable, also compute the Intentional Disregard Penalty following the procedures in (1) above.

    4. Send closing Letter 2057C explaining actions taken.

    5. input the amount of the penalty being assessed on the detail screen and close CAP using CC 89.

    6. Attach copies of Forms W-2 to case file.

  3. SSA-CAWR— No Penalty Needed Processing Procedures : When as SSA-CAWR reply results in no penalty follow the procedures below:

    1. Exhibit 4.19.4-4.

    2. Input a TC 290 for .00 and a reference number 549 for .00 using blocking series 15 with the correct correspondence and IRS received date on MFT 13.

    3. Send 2057C closing letter explaining actions taken.

    4. Close CAP using the appropriate closing code. Exhibit 4.19.4-2.

    5. Attach Forms W-2 to the case folder to allow for PAS review.

4.19.4.7.3  (09-29-2011)
Failure To Deposit Penalty (TC 180)

  1. The failure to deposit (FTD) penalty may be assessed whether or not the adjustment is interest free. Tiered penalty assessments for CAWR apply only to Forms 941, 943, 944, and 945. The additional penalty is assessed on TC 290 adjustments and interest free adjustments that are paid late. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ If there is no FTD penalty, input TC 180.00 PRC 010 See IRM 20.1.4.21.6.1Computation of the FTD Penalty (CAWR & FUTA Notices). Then follow the procedures below:

    IF THEN
    the FTD penalty should be assessed
    1. Input TC 180 with PCC 018 for 10% of the TC 290 amount.

    2. Input an IDRS control to monitor and follow-up in 45 days.

    3. If the taxpayer does not respond within 45 days, input TC 180 with PCC 018 for an additional 5% of the TC 290 amount.

      Note:

      The additional 5% will be a non source document.

    If the adjustment was done as interest free and the full payment for the TC 298 tax amount is not received by the interest computation date of the TC 298 adjustment,
    1. assess a 10 percent FTD penalty (TC 180 with PCC 018) on the amount not remitted timely and input an IDRS control to monitor and follow-up in 45 days.

    2. After 45 days, If the taxpayer has not paid the full amount of the TC 298 then assess (TC 180 with PCC 018) an amount equal to 5 percent of the unpaid tax (the amount of the tax increase).

    3. See IRM 20.1.4.21.6.1Computation of the FTD Penalty (CAWR & FUTA Notices).

      Note:

      The additional 5% will be a non source document.

      Reminder:

      if the full amount of the TC 298 is received by the interest computation date DO NOT ASSESS an FTD penalty.

    If the FTD penalty should not be assessed (i.e., Reasonable Cause - See IRM 20.1.4, Failure To Deposit Penalty)
    1. Input a TC 180 for zero to restrict the Master File from computing an incorrect penalty, with appropriate 4th position PRC and, if applicable, RC 062.

    If the FTD penalty needs to be abated See IRM 20.1.4, Failure To Deposit Penalty and IRM 20.1.1.3Criteria for Relief From Penalties).
    1. Input a TC 181 for the appropriate money amount

    2. Use PRC 010 in the 4th position except if the case was assessed erroneously, in those instances use PRC 045. See IRM Exhibit 20.1.1–2 See IRM 20.1.1.3, Criteria for Relief From Penalties See 21.7.2.3.4Deposits.

    Exception:

    Do not assess a Failure to Deposit penalty (FTD) on accounts that have been subject to wage and tax increases, resulting from information received from various government agencies due to U.S. Department of Labor (USDOL) back wage audits, under Titles 26 USC 3121 and 40 USC 3141, etc. In addition, abate any penalty for any period that was incorrectly assessed penalties as a result of a USDOL back wage reporting, when working other issues on these modules and send the appropriate letter of apology.


    Exception:

    Do not assess penalties on Federal or Quasi-Federal Agencies. These cases will have a BOD Code of TEGE and a Client Code F or Q which can be found on IDRS using Command Codes TXMOD or ENMOD.

    Exception:

    Do not assess any failure to deposit penalty on state and local government Health and Welfare agencies, acting as agents under IRC Section 3504 with respect to employers for in-home domestic services for recipients of public assistance, as they are not subject to Federal tax deposit requirements. In addition, abate the penalty, on modules (for all years) with an unreversed failure to deposit penalty, when working on other issues on these modules. These types of agencies are marked with an employment code "A" on the Entity Module.

    Note:

    The only time you will automatically assess the TC 180 for the entire 15% is for IRS-CAWR undeliverables or if the case is statute imminent. If the statute date is imminent for IRS-CAWR cases, write up the adjustment slip including the TC 180 for 15% of the TC 290 amount, if appropriate, and route to Accounting.

    • For only undeliverable cases, input a hold code 3 to prevent the issuance of another letter to the undeliverable address.

    • For all other IRS-CAWR cases, if necessary send a 2057C closing letter to the taxpayer(s) to inform them of the actions taken. If the additional 5% penalty assessment is made, a letter from IDRS will be automatically generated.

4.19.4.7.4  (02-01-2008)
Failure to File A Tax Return Penalty (TC 160)

  1. IRC section 6651(a)(1) imposes a penalty for failure to file a tax return by the date prescribed (including extensions) (see IRM 20.1.2.2.7Failure to File a Tax Return—IRC 6651(a)(1)), unless it is shown that the failure is due to reasonable cause and not due to willful neglect.

    If ... Then ...
    There is a prior TC 166 or TC 167 on the module with no TC 160 or 161
    1. Do not input a 16X, the computer will automatically assess the TC 166 on the added tax.

    There is a prior TC 16X and a corresponding TC 161 with reasonable cause (RC 062) under the adjustment.
    1. Input a TC 160 for a zero.

    There is a prior TC 160 and/or TC 161 without RC 062.
    1. Determine the number of months the tax return was filed late. The maximum is 5 months.

    2. Calculate the percentage amount by multiplying the number of months by 5% (0.05). This amount will never exceed 25% (0.25)

    3. Calculate the penalty by multiplying the Calculated Percentage Amount by the TC 290 Tax Increase Amount. For Example:
      TC 290 = $200
      Number of months Late = 3 (step a)
      3 X 5% = 15% (step b)
      $200 X 15% = $30 (step c)

    If abating a TC 160 (i.e., for Reasonable Cause )
    1. Use a TC 161 (credit) with the appropriate PRC in the 4th position. The computer will not compute the TC 167 automatically.

  2. If a 6020(b) return is present and past due (it has been 5 months or more), and a Failure to File penalty is restricted on the module, increase the penalty by 25% of the TC 290. For returns due after July 30, 1996 (without regard to extensions), IRC Section 6651(g) provides that a 6020(b) return is treated the same as a return filed by a taxpayer for purposes of the Failure to Pay penalty. If not restricted make the assessment and IDRS will automatically make the adjustment to the penalty. See IRM 5.18.2, Business Returns IRC 6020(b) Processing

4.19.4.7.5  (04-04-2013)
Late Reply Case Processing Procedures

  1. IRS-CAWR- Late Reply Case Processing Procedures: When an IRS-CAWR case results in an abatement of tax assessed on a Form 94X module follow the procedures below:

    1. Input a TC 291 for the appropriate money amount with the applicable item adjustment codes; using blocking series 55 on previously assessed module.

    2. Use the correct correspondence and IRS received date.

    3. Abate the FTD Penalty if necessary. IRM 4.19.4.7.3,Failure To Deposit Penalty (TC 180).

    4. When the adjustment is a partial abatement send 2057C closing letter explaining the reason. When it is a full abatement a Letter 2057C is not necessary. IRM 21.3.3.3.4(3)Quality and Timely Responses

    5. Update CAP and close with SC 43 for all cases previously updated to SC 47.

  2. SSA-CAWR- Late Reply Case Processing Procedures: When an SSA-CAWR case results in an abatement of the penalty assessed, follow the procedures below:

    1. Input a TC 290 for .00 and the applicable penalty reference number (PRN 549 or PRN 550) for appropriate negative money amount using blocking series 52 on MFT 13 with the correct correspondence and IRS received date. Use blocking series 53 for other than first manual assessment.

    2. Use the correct correspondence and IRS received date.

    3. Use Reason Code 062 in the first position and the appropriate Penalty Reason Code in the fourth position.

    4. When the adjustment is a partial abatement send Letter 2057C closing letter explaining the reason. When it is a full abatement a Letter 2057C is not necessary. IRM 21.3.3.3.4(3)Quality and Timely Responses

    5. When assessing the Late Filing Penalty PRN 550 in the Late Reply Phase, there is the possibility that an abatement of the Civil Penalty PRN 549 will also need to be made. When this happens:
      Input a HC 3 (this only holds the notice) on the abatement and a Posting Delay Code 1 (delays the notice 1 cycle so the taxpayer receives the Letter 2057C first) on the assessment for the Late Filing Penalty PRN 550.
      Use a HC 2, if there is a payment on the MFT 13. (This will hold the notice and the credit.)

    6. Send Letter 2057C closing letter explaining actions taken.

    7. Update CAP and close with CC 43 for all cases previously updated to SC 47.

    Caution:

    Abatement of any SSA-CAWR civil penalty should only be done after adhering to the instructions in IRM 4.19.4.6.1,Late Replies Addressing SSA-CAWR Penalties.

4.19.4.7.6  (04-03-2012)
Late Replies Referring to Incentives to Restore Employment (HIRE) Act

  1. HIRE Wage Discrepancy Late Reply Processing Procedures: When a taxpayer responds to a HIRE assessment input by CAWR, follow the procedures below:

    If ... Then ...
    the taxpayer provides Form(s) W-2c that will enable you to give the HIRE credit back to the taxpayer
    1. Adjust the wage amounts on the CAP money amount screen.

    2. Send the Form(s) W-2c to SSA using Form 6494 or Form 9338.

    3. Reapply the HIRE exempt wages and tax on the quarters it was originally removed from using item adjustment code IRN 115 or IRN 117 for wages and 116 or 296 for tax. See

    4. Close CAP using closing code 43.

    1. Input a TC 290 for 6.2% of the wage discrepancy with item adjustment code 115 for wages and 116 for tax; using blocking series 55 on the correct MFT on the last available quarter with a TC 150.

    2. Use the correct correspondence and IRS received date.

    3. Assess FTD penalty if necessary. See IRM 4.19.4.7.3

    4. Send Letter 2057C closing letter explaining actions taken.

    5. Input the appropriate adjustment amount you will be assessing on the CAP Detail Screen.

    6. Close CAP using the appropriate closing code. See Exhibit 4.19.4-2Closed Case Status Codes.

4.19.4.8  (04-01-2010)
CAWR IMF Cases (W-2C)

  1. See the note below.

    Note:

    Until otherwise notified by Headquarters, this portion of the CAWR program is not being worked.

    This IRM addresses IMF cases that are identified as a result of an employer submitting amended Forms W-2 (W-2C) that increases or decreases their amount of Federal Tax Withheld. Contact must be made to their individual employees to notify them that a change to their Form 1040 may need to be made.

  2. When Form W-2C is received from the employer to change wages and withholding information for an individual, the CAWR unit must correspond with the individual employee.

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

    Note:

    It is recommended that the IMF portion of CAWR be worked with the reply phase of the CAWR program prior to closing the CAWR issue.

  4. Annotate in red, "IRS RECON" on any of the Forms W-3 or transmittal forms received and mail them to the following address:

    Social Security Administration

    Division of Employer Services

    4-E-16 NB Metro West Building

    300 N. Greene Street

    Baltimore, MD 21290-0300

4.19.4.8.1  (02-01-2008)
IMF Screening

  1. Research IDRS using all tools available to determine if the correct withholding has been reported on the original Form 1040 or if an amended Form 1040 was filed to correct the withholding.

    • Command Code IRPTR definer "O" will show if more than 1 employer is involved or if a spouse's withholding is included in the total withholding

    • If the withholding has been reported correctly then there is no IMF case; do not correspond

    Note:

    If during research there is an indication that another area is working with the case forward the Form W-2C to the proper department.

  2. After all research has been completed and it is determined that the correct withholding has not been used:

    1. When research identifies an active Automated Underreporter (AUR) case (TC 922 without a process code present in the MFT 30) transfer the W-2C to the AUR section. If there is a process code present, check Document 6209 to determine if the process code indicates that the case is still being worked by AUR or another area. Input TC 290 for .00 and close IDRS control. On the Form 3210 transmittal, notate that the Form W-2C was received as part of the CAWR program and relates to an active AUR case. If there is no active AUR case:

    2. Issue a 2474C letter if the W-2C shows an increase to FIT. Input TC 290 for .00 and close IDRS control.

    3. Issue a Letter 2474Cif the W-2C shows changes to total computation and an increase or decrease to FIT. Input TC 290 for .00 and close IDRS control.

    4. Issue a Letter 2448Cif the W-2C shows a decrease to FIT and hold case in suspense until a response is received or 6 weeks.

    5. Issue a 2448C letter if the W-2C shows No return filed and hold case in suspense until a response is received or 6 weeks.

    Reminder:

    Always attach a copy of the Form W-2C to the letter being issued to the employee.

4.19.4.8.2  (09-22-2009)
IMF Replies

  1. If correspondence received raises any other issues (tax computation, deductions, credits, exemptions, etc.), or if a Form 1040X is received (even if no other issue is raised), transfer the cases to the Campus IMF AM area, unless an active Automated Underreporter (AUR) case exists. If a TC 922 without a process code is present in the MFT 30, transfer the reply to the AUR section. If there is a process code present, check Document 6209 to determine if the process code indicates that the case is still being worked by AUR or another area.

  2. If the taxpayer disagrees with the amounts on the Form W-2C, and provides verification that the original withholding amount was correct (this verification may take the form of copies of all pay stubs or copies of the original Form W–2 that may differ in the amount from the As Previously Reported figure on the Form W-2C and/or the tax return) input 290 .00 and close the IDRS control.

  3. If the taxpayer states that they have been in contact with the employer (who maintains that the amounts on the Forms W-2C are correct) and:

    • the employee provides reasonable verification that the amounts claimed on the original return are correct or

    • the taxpayer states they have never worked for the employer shown on the Form W-2C input TC 290 .00 and

    • close the IDRS control.

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

  5. If the taxpayer sends in a second Form W-2C or a letter from the employer that provides withholding information differing from the Form W-2C that the employer sent to us, the case must be held in suspense for 30 days until the new Form W-2C can be obtained from the employer.

  6. If taxpayer provides reasonable verification of actual withholding which is in disagreement with the amounts on the Form W-2C and the employer is out of business, input TC 290 .00 and close the IDRS control.

  7. If the taxpayer indicates that he or she has not contacted the employer and provides no reasonable verification of the original amounts, close the case with TC 290 .00 and item Reference Number 807 for the withholding decrease amount.

  8. If the taxpayer agrees with the amount on the Form W-2C but does not include any payment, close the case with TC 290 .00 and item Reference Number 807 for the withholding decrease amount.

  9. If the taxpayer states that they have already filed an amended return (Form 1040X) to correct the error, research again to determine if the amended return has been received (and if the correction to the withholding has been made).

  10. If the amended return has not posted, suspense the case for 30 days for the amended return to post.

  11. If after this suspense period there is no indication of an amended return with a pending TC 807, close the case with a TC 290 .00 and item Reference Number 807 for the withholding decrease amount.

  12. If only a payment is received, close the case with a TC 290 .00 and item Reference Number 807 for the withholding decrease amount.

4.19.4.8.3  (04-01-2009)
IMF Undeliverables/No Replies

  1. If the initial correspondence has been returned undeliverable, research for a new address.

    1. If one is secured reissue the letter to the new address.

    2. If no new address is obtained, close with TC 290 .00 and Item Reference Number 807 for the withholding decrease amount.

  2. Close no reply cases, after the suspense period has expired, with TC 290 .00 and item Reference Number 807 for the withholding decrease amount.

4.19.4.8.4  (02-01-2008)
IMF Late Replies

  1. Generally, assessment of an overstated withholding credit that has been refunded or credited must be made within three (3) years from the return due date or the date the return was filed, whichever is later (ASED).

  2. If no refund or credit has been allowed, an overstated withholding credit may be reversed without assessment, and any balance due collected within ten (10) years of the assessment of the tax shown on the return (CSED).

  3. However, in situations where the taxpayer relied on the employer to furnish correct information and in good faith filed a tax return claiming the credit as indicated on the Form W-2, reversal of the withholding credits must be made prior to the ASED.

  4. If the taxpayer requested a refund or credit, notice of claim disallowance should be mailed by certified or registered mail to the taxpayer, which will start the running of the 2 year period for the taxpayer to file a refund suit.

  5. If the withholding credit was not overstated, but was allowed by IRS in error (e.g., $100 withholding credit per Form W-2 and IRS allowed $500), the error cannot be assessed. Instead, it must be recovered as an erroneous refund by bringing suit, within two (2) years from the date of the refund.

4.19.4.9  (02-01-2008)
Discovered Remittance

  1. Refer to procedures in IRM 3.8.46Discovered Remittance.

  2. The manager or designee will immediately record the remittance on the daily 3 part Form 4287 log. Route documents with the payment attached per local Campus procedures.

4.19.4.10  (03-15-2017)
Program Codes (OFP) and Program Completion Dates (PCD)

  1. For CAWR, all activity is reported under the Program Codes below.

    1. The "X" in each program code, represents the tax year being worked. However, don't use more than 2 years. Put any prior tax years with the oldest tax year for that code. For example, if you are working a late reply for TY 2012 IRS-CAWR and the current "X" represents the tax years on CAP (TY 2015, TY 2014, and TY 2013), use 18420 to report the time for the TY 2012 case. For IRS-CAWR and SSA-CAWR programs, tax examiners use:

      Telephone Function TE Function Program CAWR Program Title Definition
        710 180X0 IRS Screening
      700 710 182X0 IRS Replies
        710 183X0 IRS No Replies and Undeliverables
      700 710 184X0 IRS Late Replies and Prior Years
        710 185X0 SSA Screening
      700 710 187X0 SSA Replies
        710 188X0 SSA No Replies and Undeliverables
      700 710 189X0 SSA Late Replies and Prior Years
  2. The program completion dates and mail-out dates are outlined below:

    PROGRAM PROGRAM START-UP PROGRAM COMPLETION DATE (PCD)
    IRS-CAWR WITHIN ONE WEEK OF THE HUB RELEASE DATE. GENERALLY THE FIRST OF APRIL. THE LAST DAY OF THE FOLLOWING MARCH.
    SSA-CAWR AS THE CASES ARE DOWNLOADED TO CAP, AND/OR WITHIN ONE WEEK OF THE HUB RELEASE DATE. GENERALLY THE FIRST DAY OF APRIL. THE LAST DAY OF NOVEMBER (95%) AND TWO WEEKS LATER (100%).
    W-2C AS RECEIVED N/A, BUT PRIOR TO STATUTE EXPIRATION.
  3. TY 2015 IRS-CAWR and TY 2014 SSA-CAWR programs processing benchmark dates are listed on the chart below.

      IRS-CAWR  
    BENCHMARK Dates DESCRIPTION ACTION
    April 3, 2017 Hub begins for TY 2015 IRS-CAWR program. Hub site only.
    April 10, 2017 The Hub is completed and the TY 2015 IRS-CAWR cases released for the campuses to work. Campuses will begin working the TY 2015 IRS-CAWR cases.
    September 30, 2017 FY Closure Goal This goal is determined by HQ and supplied to each Operation via Work Plan and the Operating Guidelines.
    December 15, 2017 Terminate preparation of Form 6209 for CAWR Late Reply Program for each tax year prior to the current year Tax year 2013 cases fall off of cap in January 2017, therefore Forms 6209 are not necessary.
    December 15, 2017 All TY 2015 IRS-CAWR cases that are to be worked must have correspondence input to CAP. All correspondence to taxpayers for TY 2015 IRS-CAWR must be input and mailed.
    January 16, 2018 Begin performing Statute Searches Statute search all inventory including new receipts. See , IRM 1.4.22.2.1.1Statute Searches and IRM 4.19.4.3.12,Statute Issues/Imminent Assessments.
    January 2018 New CAP programs will be downloaded. Replies and Undeliverables must be entered into the CAP system as received.
    IDRS dead cycles occur the last week of December thru the first two weeks of January. During dead cycles CC MFREQD must be used to control and complete adjustments when the case is not online.
    February 28, 2018 Statute Awareness Research all cases for statute implications. Refer to IRM 25.6Statutes for further instructions.
    March 31, 2018 100% of TY 2015 IRS-CAWR cases must be completed and closed on the CAP system and IDRS. All control bases must be closed on IDRS.
      SSA - CAWR  
    BENCHMARK DATES DESCRIPTION ACTION
    April 3, 2017 Hub begins for TY 2014 SSA-CAWR begins. Hub site only
    April 10, 2017 The Hub completed and the TY 2014 SSA-CAWR cases released to all sites to work. TY 2013 data base remains on the CAP system. All sites will begin working the TY 2014 SSA-CAWR cases. Weekly mass generation of Letter 98C begins.
    August 18, 2017 All TY 2014 SSA-CAWR cases (including Case Type 08) must have correspondence input to CAP for issuance by August 18, 2017. No TY 2014 SSA-CAWR cases should remain in status code 88 (including Case Type 08) and must have had correspondence input or been closed in screening.

    Reminder:

    CT 08 must be entered through the Coordinators screen to be issued, except those with Compliance Indicators present. All SSA cases needing ORS research must be worked to ensure correspondence is issued by this date.

    September 30, 2017 FY Closure Goal This goal is determined by HQ and supplied to each Operation via Work Plan and the Operating Guidelines.
    November 30, 2017 95% of TY 2014 SSA-CAWR cases must be worked and closed on the CAP system and on IDRS. No exceptions. . All control bases must be closed on IDRS.
    December 1, 2017 Begin performing Statute Searches Statute search all inventory including new receipts See IRM 4.19.4.3.12,Statute Issues/Imminent Assessments and IRM 1.4.22.2.1.1Statute Searches.
    December 15, 2017 Remaining 5% of TY 2014 SSA-CAWR cases must be worked and closed on the CAP system and on IDRS. No exceptions. 100% of all cases SSA-CAWR cases must be closed. All control bases must be closed on IDRS. All SSA CAWR No Reply listings must be worked and adjustments input onto IDRS.
    January 2018 Service wide Production of new CAP programs. Continue working the remaining TY 2014 SSA-CAWR Late Reply cases All campuses must be off the CAP system if directed by HQ the weekend after the IDRS dead cycle while the old program year is purged. Replies and undeliverable mail dates must be entered into the CAP system as received.

4.19.4.10.1  (04-15-2015)
CAWR TE Responsibilities

  1. All tax examiners are responsible to monitor their CCA 4243 aged listing weekly to ensure inventory is moved according to first in first out (FIFO) order. In addition, feedback is to be given to management on discrepancies between your CCA report and your physical inventory. ORCA Lite can be used to manage your CCA inventory. Timely actions should be taken on the following:

    • Unpostable conditions

    • PNTIER cases

    • Aged Correspondence

    • STAUPS

    • Statute imminent cases

    • Interim letters

    • Erroneous/ Multiple control bases

  2. Each TE needs to ensure they are using SERP, ORS, ERQY, IATS, and the most recent IRM to perform their duties. The IRM is to be followed precisely as written, DO NOT follow local procedures where they conflict with IRM guidelines. If you have any questions, on the processing procedures or clarifications needed, please forward your question through your CAWR Coordinator.

  3. Each tax examiner needs to perform a Quarterly Physical Inventory Review, to ensure their CCA 4243 listing is verified against each case in their possession and ensure the volumes of what they actually have in their possession match the volumes listed on their CCA 4243. Adjustments are to be made accordingly and the reviews must be documented. The results of your quarterly physical inventory reviews must be maintained by your Operation for future reviews performed by HQ. See Exhibit 4.19.4-5,Physical Inventory Certification.

4.19.4.11  (04-10-2014)
IRS-CAWR/SSA-CAWR — CSR Information

  1. The CAWR program has two basic components. The two components are the BMF IRS-CAWR program and the SSA-CAWR Civil Penalty Program.

    1. The IRS-CAWR program compares the employer's data provided to the IRS on Forms 941, 943, 944, 945 or Schedule H to the data provided to SSA on Forms W-2/W-2C and/or to the IRS on Forms 1099-R and W-2G.

    2. The two sets of figures are sent to Enterprise Computing Center - Martinsburg (ECC-MTB) where they are merged, sorted and compared.

    3. If any of the information doesn't match an entity on master file or the amounts are out of balance, a CAWR discrepancy case is generated. (This helps ensure employers correctly report all wages and employees receive Social Security (FICA) coverage.)

  2. SSA operates a companion program by comparing the same information to determine if a taxpayer has failed to file all Form(s) W-2.

    1. Correspondence is initiated to employers if there are more wages and taxes reported on the Forms 94X or Schedule H than reflected on the total of Forms W-2 filed.

    2. SSA begins identification of the cases "missing" some or all of the Form(s) W-2 prior to IRS beginning work on the IRS-CAWR/SSA-CAWR cases.

    3. After SSA attempts to contact the taxpayer and is unsuccessful in resolving the discrepancy, SSA refers the unresolved cases to IRS for further action. These cases become SSA-CAWR cases. A penalty for failure to file all information returns could be assessed (MFT 13, PRN 549), if the taxpayer fails to respond to the Letter 98C.

  3. Some of the reasons for IRS-CAWR/SSA-CAWR mismatches are:

    1. EIN problems — employers or reporting agents using incorrect or more than one EIN (i.e., filed wage statements under one EIN and Form(s) 94X under a different EIN,

    2. Simple math errors on the tax returns or wage statements,

    3. Totals on tax returns not matching totals on wage statements,

    4. Third-party sick pay incorrectly reported,

    5. Returns or wage statements completed, filed or processed incorrectly in amount or on the wrong tax period,

    6. A missing tax return,

    7. Schedule H filed with incorrect or missing EIN to cross reference for the Form W-2 information, and

    8. Missing Forms W-2/W-3.

  4. Once the CAWR Unit begins working the cases, correspondence is initiated with employers if the discrepancy cannot be resolved by internal research.

4.19.4.11.1  (04-01-2011)
CSR - Researching IRS-CAWR/SSA-CAWR Issues

  1. OUT OF BALANCE (OOB) INDICATOR— If an account is identified as out of balance during the matching phase of the CAWR process, an OOB indicator appears on CC BMFOLU for MFT 88. The indicator appears as OOB CAWR on the second line directly below the name control. The accounts identified as OOB CAWR are NOT ALL worked. If the indicator is present, review the status code on BMFOLU to determine if correspondence or returns should be routed to CAWR.

  2. It is important to determine the type of correspondence the taxpayer received.

    IF THEN
    Taxpayer states he/she only received any SSA notice. ie: SSA-L-94–SM or SSA-L-96–SM
    1. The notice was issued by SSA. DO NOT prepare a referral (Form 4442 ) to the CAWR Unit.

    2. Provide the taxpayer any information available and advise them to respond to SSA at the address shown on the notice.

    Taxpayer states he/she received a CP 251, CP 253, CP 215 (with PRN of 549/550) or Letters 98C, 99C, 1534C, or 2057C
    1. It was issued by the CAWR Unit.

    2. Inform the taxpayer to immediately respond to the CAWR unit at the address on the letter via mail or fax. If this information is not available, determine the campus working the case and refer to the fax numbers found at http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm

    Taxpayer states he/she made the same mistake on numerous other information returns for which a letter has not yet been received (i.e. 3rd party payer/agent),
    1. Inform 3rd party to report the erroneous IRs to the AUR Payer Agent Coordinator. IRM 4.19.3.5

  3. The taxpayer may have specific questions the CSR can answer. Research IDRS for tax return information (specific or missing). Research CAWR cases and cross reference EINs using CC BMFOL with definer U and MFT 88. If CC BMFOLU shows the discrepancy is related to Doc Type 98 (1099–R), ask the taxpayer if withholding could have been reported under the plan administrator's EIN.

    Note:

    Be aware that CC BMFOLU may show the taxpayer is in balance. This does not mean that there is not an issue. CAWR may have made an assessment which balanced the BMFOLU MFT 88 screen. A Blocking Series of 55 on the last available quarter with a TC 150 present indicates CAWR made an adjustment to the account.


    See the table below.

    IF AND THEN
    Taxpayer states he/she needs copies of his/her Forms W-2 There are amounts in the W-2 column of CC BMFOLU
    1. Inform the employer that he should contact SSA to obtain copies of the W-2s.

      All of the amounts are ZERO in the W-2 column of CC BMFOLU
    1. The zeros indicate there is no record of Forms W-2 being filed.

    2. Inform the taxpayer to immediately respond to the CAWR unit at the address on the letter via mail or fax. If this information is not available, determine the campus working the case and refer to the fax numbers found at http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm .

    Taxpayer states he/she needs a copy of his/her tax return(s)  
    1. Probe to determine if a tax return transcript or tax account info fulfills the requirements of the taxpayer. (There is no charge for a tax return transcript or tax account information.)

    2. If the taxpayer still wants a copy of the return(s), provide Form 4506.

  4. The taxpayer may state he/she has previously sent information in response to the correspondence from SSA or IRS. If so, verify whether taxpayer has sent information to SSA or IRS. Follow the table below.

    IF AND THEN
    Taxpayer states he/she previously sent info to SSA It was in response to an SSA notice. (e.g.SSA-L-94–SM or SSA-L-96–SM)
    1. Advise taxpayer the IRS has no connection to the processing of that information.

      It was in response to CPs 251 or 253 or Letters 98C, 99C, 1534C, or 2057C
    1. Advise taxpayer to send the info to the IRS address shown on the notice or letter or via fax. If this information is not available, determine the campus working the case and refer to the fax numbers found at http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm

    Taxpayer states he/she previously sent info to IRS It was in response to an SSA notice. (e.g. SSA-L-94–SM or SSA-L-96–SM)
    1. Research the Form 94X modules and the civil penalty module for the tax year in question. for an open control or completed action on IDRS. Do NOT prepare a referral (Form 4442) to the CAWR Unit.

    2. When there is an open module inform the taxpayer that the case still open.

    3. When there is a closed control inform the taxpayer of the actions taken on the account and if necessary advise the taxpayer to respond to the appropriate CAWR site that worked the case. Refer to the CAWR/FUTA home page for the correct address. See http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm

      It was in response to CPs 251 or 253 or Letters 98C, 99C, 1534C or 2057C
    1. Determine when the taxpayer submitted the information.

    2. If it has been more than 30 days and you cannot resolve the taxpayer's issue the same day, prepare a Form 911 and forward to the local call site Taxpayer Advocate, per IRM 13.1.7.4Same Day Resolution by Operations.

      Note:

      For the definition of "same day" IRM 4.19.4.1.2(2).

    3. If it has been less than 30 days, explain it takes at least 30 days to process the response.

  5. Advise the taxpayer that failure to respond to the CAWR Unit or provide the requested information within the time period indicated in the letter/notice he/she received can result in additional tax due and/or a penalty assessment for failure to file Form(s) W-2.

  6. The taxpayer must respond immediately to the address shown on the notice/letter with a clear and complete explanation of the reason for the discrepancy and the appropriate correcting documents. You may provide the fax number of the CAWR unit if the taxpayer wants to fax his reply.Never provide the voice number of the CAWR unit to the taxpayer or transfer the call to the CAWR unit. See the prior sections of this IRM for specific CAWR information.

  7. Schedule H CAWR cases have special problems. The notices and letters issued to the taxpayer may only contain the EIN that the SSN on the Schedule H has been associated with. Verify the EIN and SSN (shown on CC BMFOLU) belong to the same taxpayer.

    1. If they do, the taxpayer needs to return the notice or letter to the CAWR Unit with information to balance the Schedule H with the Forms W-2.

    2. If they do NOT, the taxpayer needs to contact the CAWR Unit in writing or by fax. (The IRS address and CAWR fax number is printed on the notice/letter the taxpayer received.)

    3. If the notice does not have a fax number printed on it, the CAWR unit fax numbers are found at http://wc.web.irs.gov/. Never transfer the call to the CAWR Unit and NEVER provide the taxpayer with any CAWR Unit voice telephone numbers. You may only provide the taxpayer with the Fax number to the appropriate campuses' CAWR unit.

4.19.4.11.2  (03-15-2017)
CSR CAWR/SSA-CAWR Information and Procedures

  1. Late Reply Responsibilities

    1. Only taxpayer inquiries identified as addressing solely CAWR issues are to be routed to the CAWR unit for resolution. These are worked in CAWR regardless of which portion of the CAWR program is addressed by the taxpayer (IRS-CAWR/SSA-CAWR).

    2. An IRS-CAWR issue will also include any tax adjustment (TC 290/291) input with the CAWR Blocking Series 55.

    3. If the taxpayer is responding to the CAWR tax assessment or abatement, it is a CAWR issue.

    4. If the late reply involves the abatement of the Intentional Disregard Civil Penalty (PRN 549 on MFT 13) or the Late Filing Penalty( PRN 550 on MFT 13), the information should always be discussed with the appropriate campus SB/SE CAWR Unit.

    5. If necessary route the reply after contacting the appropriate campus SB/SE CAWR Unit to discuss the resolution of the case.

  2. If the taxpayer is not addressing a CAWR issue, it is to be worked in AM regardless of the fact that a CAWR case is or was worked for the tax period of the taxpayer inquiry. If AM receives a CAWR reply, AM must address Policy Statement P-21–3 requirements if the taxpayer response is 14 days or older before forwarding it to the appropriate campuses' CAWR unit. For more information see IRM 21.3.3.1.1 Policy Statement P-21-3 (formerly P-6-12)

  3. Inquiries or replies addressing issues unrelated to the IRS-CAWR/SSA-CAWR issues must be worked in AM.

    Example:

    The taxpayer is requesting an abatement of the Failure to File, Failure to Pay, or Failure to Deposit issues (except Reason Codes 549 or 550), and no CAWR issue is being addressed.

  4. CAWR Interest Free Adjustments

    1. Based on a ruling from Chief Counsel, no interest free adjustment can be made to CAWR cases after the CAWR assessment has been made.

    2. Interest free adjustments may be made prior to the actual CAWR assessment.

    3. Once the CAWR Unit assesses additional tax under the CAWR program, no interest free adjustment of such tax can be made by filing Form 941-X.

  5. Manually input an IDRS control, using "TPCI" in the Category Code. Be sure to close the control base after resolving the taxpayer inquiry.

4.19.4.11.3  (04-01-2009)
CSR - CAWR Related Forms 941-C/941-X

  1. Generally, Form 941-X is filed to make corrections to CAWR related cases. Effective January 2009, Form 941-X, 943X, 944X, 945X, CT1X was introduced to replace Form 941-C. Form 941-C is now obsolete. The new Form(s) were developed to simplify the correction process for the tax payer and will better identify the changes being made for the tax examiner. A Form 941-X is not always necessary to correct the CAWR related case. Missing Forms W-2/W-2C may be needed to balance the case and ensure the taxpayer's employees received their earnings credits with SSA.

  2. If a Form 941-X is received and there is no CAWR issue, process using normal Form 941-X guidelines. (More information on Forms 941-C/941-X can be found in IRM 21.7, Business Tax Return and Non-Master File Accounts.)

    1. Math verify taxpayer's computation on Form 941-X.

      Caution:

      DO NOT ALLOW THE TAXPAYER TO ADJUST HIS/HER LIABILITY BELOW THE FORMS W-2/W-2C TOTALS.

    2. Determine correct net adjustment to FICA wages and tax for each calendar year being corrected.

    3. Input appropriate TC 29X and appropriate Item Adjustment codes.

4.19.4.11.4  (02-01-2008)
CSR - Employer Files Forms W-2/W-2C

  1. If an employer files Forms W-2/W-2C, route the Forms W-2/W-2C to the CAWR unit. Indications that the case is CAWR related could be:

    • CAWR notice or letter attached

    • Statement by taxpayer may indicate a CAWR case

    • Previous assessment with Blocking Series 55 or PRN 549 on MFT 13

    • OOB indicator present on CC BMFOLU MFT 88

    Note:

    Chief Counsel determined IRS cannot hold employers liable for the federal income tax withholding shown on the original Forms W-2 if the amounts on the Forms W-2C are correct, even if employees received credit based on erroneous Forms W-2.

Exhibit 4.19.4-1 
Assigned Case Status Codes

Status Code Description
  IRS-CAWR
08 Assigned with SSA Indicator 1
16 Auto generated Letter 99C
24 Undeliverables — IRS
26 SC 91 w/o SSA — Indicator 2
28 Manually generated Letter 99C
37 No Reply — IRS
44 Reply Received — IRS
   
  SSA-CAWR
69 Manually generated Letter 98C
87 SSA Indicator 2 in Balance
90 Auto generated Letter 98C
92 Reply Received — SSA
93 Undeliverable — SSA
   
  BOTH IRS and SSA- CAWR
10 Research/Suspense
21 Federal Entity w/Correspondence
25 To Compliance — EXAM
27 To Compliance — CI
29 To Compliance — Collection
42 2057C Letter Issued
45 Re-analysis Requested
47 Open Late Reply
55 1534C Letter Issued
67 Reply 2645C issued (or Letter 5825C when available)
68 Late reply 2645C issued (or Letter 5825C when available)
70 Letter 2644C issued on reply (or Letter 5825C when available)
71 Letter 2644C issued on Late reply (or Letter 5825C when available)
88 Out Of Balance

Exhibit 4.19.4-2 
Closed Case Status Codes

Status Code Description
  Screening Closures
11 Total BMF Deletes
36 Closed in Screening — In Balance IRS
98 Closed in Screening — Un-reconciled IRS/SSA or TC 520/530 IRS
99 Closed in Screening — In Balance SSA
31 Closed to EXAM — IRS or SSA
32 Closed to Collections — IRS or SSA
33 Closed to CI — IRS or SSA
38 BMF Merge
  No Reply Closures
91 No Reply SSA
94 No Reply (549 Tolerance) — SSA
30 No Reply Adjustment Made — IRS
40 SSA Adjustment (549)
41 SSA Adjustment Bankruptcy/Defunct
  Correspondence Issued Closures
11 Total BMF Delete
36 Closed/Correspondence Issued — Prior to Reply Received — IRS
38 BMF Merge
39 Undeliverable — IRS
43 Closed Late Reply
46 Undeliverable — SSA
98 Closed/Correspondence Issued — Un-reconciled or TC 520/530
99 Closed/Correspondence Issued — Prior to Reply Received — SSA
  Taxpayer Response Closures
34 TC 290 .00 — IRS
35 TC 290 $$ — IRS
48 Agreed Assessment - IRS
49 Tax Return secured - IRS
89 PRN 550 $$ — SSA
95 PRN 549 or PRN 550 .00 -SSA (No $$)
96 PRN 549 or both PRNs 549 & 550 (for $$) SSA

Exhibit 4.19.4-3 
Glossary of Acronyms and of Terms

Glossary of Acronyms and of Terms
Term Definition/Explanation
Account A tax record at the Electronic Computing Center (ECC-MTB) in Martinsburg, West Virginia. Tax Data is identified by Social Security number (SSA) or by Employer Identification number (EIN).
ACS Automated Collection System - A paperless inventory system that maintains most delinquent accounts.
ADJ Adjustment: A change to what was originally input or posted to an account on IDRS. Usually caused by performing additional research of an account, taxpayer contact or receipt of additional correspondence.
Adjustment Transaction To Input an adjustment transaction use CC REQ54 to request the adjustment format ADJ54.
AEIC Advanced Earned Income Credit - Part of a Refundable Credit paid in advance to eligible employees who have filed a Form W-5, Earned Income Credit Advance Payment Certificate. Discontinued after 2010.
AIMS Audit Information Management System (AIMS) provides inventory and activity controls of active Examination cases. It uses linkage to Integrated Data Retrieval System (IDRS) to input status changes, adjustments, and case closing actions.
AM Accounts Management has many responsibilities, including Toll Free and Submission Processing.
AP Adjustment Pending: Change input onto an account which has not yet posted on IDRS.
ASED Assessment Statute Expiration Date: three years from the filing of the return, unless the return is filed before the due date (determined without regard to any extension of time to file), in which case the ASED is three years from the due date. IRM 4.19.4.3.12.
ATFI Adjustment to Social Security (FICA) tax as displayed on BMFOL Definer R or TXMOD Definer A.
BMF Business Master File - Master File processing done at the ECC-MTB.
BMFOL Business Master File On-Line — An IDRS CC which provides access to the Business Master File. See the definition of CFOL.
BRTVU Business Return Transaction On-Line — An IDRS CC which provides access to the Line Items transcribed from forms as they are processed at a campus.
BUWH Back Up Withholding as displayed on PMFOL.
CAF Central Authorization File (Power of Attorney File): A computerized system of records which houses authorization information from both powers of attorney and tax information authorizations. The CAF system contains several types or records, among them taxpayers, representatives, tax modules, and authorizations.
Calendar Year Filer Taxpayer whose Fiscal or Filing Year coincides with the Calendar Year ending in December.
CAP CAWR Automated Program — A program that runs on a stand-alone mini computer system. A compatible tape can be generated on all CAWR output tapes from the ECC-MTB through the Service Center Recirculating Master File (SCRMF). These output tapes are loaded directly onto the stand-alone mini computer system to automate the CAWR Program. Weekly updates are received from the ECC-MTB.
Case File The examined return, related work paper, correspondence, etc.
Case Type Distinguishes CAWR Cases according to specific Out-of-Balance Conditions. IRM 4.19.4.1. for additional information on CAWR Case Types.
CAWR Combined Annual Wage Reporting which evolved from Public Law 94-202.
CC Closing Code: CAWR Closing codes are listed in Exhibit 4.19.4-3 and are to be input into CAP which will be reflected on IDRS CC BMFOLU.
Command Code: A five character code used to tell the IDRS system what function to perform.
CDC CAWR Discrepancy Case - A computer identified out-of-balance case or a case identified by the SSA as missing any or all Forms W-2. The CDC shows the Form 94X Amounts and the Forms W-3/W-2 Amounts that have posted to the CAWR Module. This information allows you to see where the discrepancy exists.
CFINK An IDRS CC used to display a list of tax periods the Power of Attorney (POA) is authorized to represent.
CFOL Corporate Files On-Line - Provides on-line access to current Master File Data for IDRS users through the telecommunications network. The CFOL CCs reduce the suspense time and Unpostable Transactions, decrease return and transcript pulls, result in a better quality product, and reduce taxpayer burden.
Claims Requests for credit, refund or abatement
CNC Currently Not Collectable displays if any module in the account has an unreversed TC 530
Credit Transfers Moving payments or credits to the correct TIN, MFT, quarter or tax year.
CSR Customer Service Representative: Employee who works for Account Management responding to inquiries from taxpayers calling into the Toll Free Customer Service Phone Lines.
Cycle A seven-day processing period (usually Sunday-Saturday) at a Campus and the ECC-MTB. The cycle is expressed by a 6 digit code; the first four digits, the Processing Year and the second two digits, the Processing Week in that year.
DLN Document Locator Number - A controlled number assigned to every return or document. The DLN is used to control, identify and locate processed documents. It consists of 14-digits which encompassing the following fields:
Positions 1 and 2 — File Location Code (or Campus Code) where the return was processed.
Position 3 — Tax Class: Identifies the type of tax each transaction involves:
0 = Employee Plans Master file (EPMF), EO, and EP Determination
1 = Withholding and Social Security
2 = Individual Income Tax, Fiduciary Income Tax, Partnership return
3 = Corporate Income Tax, 990C, 990T, 838 Series, 8609,8610
4 = Excise Tax
5 = Information Return Processing (IRP), Estate and Gift Tax
6 = NMF
7 = CT-1
8 = FUTA
9 = Mixed-Segregation by tax class not required
Positions 4 and 5 — Document Code (Doc Code): Identities the specific type of return or document that was filed or processed.
Positions 6 through 8 — Julian Date-The numeric day of the year that the return of document was numbered for processing, (for example: January 15+MC= 015)

Note:

If the DLN is IDRS generated, this date will increment by 400, so January 15 would be shown as 415.

Positions 9 through 11 — Blocking Series: Returns or documents grouped together for filing purposes. The ninth, tenth, and eleventh digits of the DLN indicate the Blocking Series under which the return is filed.
Positions 12 and 13 — Serial Number: The maximum number of records within a block is 100 and they are serially numbered from 00 thru 99.
Position 14 — Year Digit or List Year: The last year digit of the year the DLN was assigned. This digit is computer generated.
DOD Taxpayer's official/legal Date of Death as issued on Death Certificate.
Dummy Module A module created on IDRS in order to record case control information when the Tax Module is not present. It contains Name Control, TIN, MFT, and Tax Period information. The Dummy Module will be replaced by the true Tax Module, when a generated TC 902 finds a match on the Master File.
ECC-MTB Enterprise Computing Center - Located in Martinsburg, WV this center houses the master file records for the entire nation. Previously known as the Martinsburg Computing Center
EIC Earned Income Credit is a Refundable Credit received on an Employee's Form 1040 or provided on each pay period by the employer. (See AEIC)
EIN Employer Identification Number. A nine-digit number, also referred to as the EI number, used to identify business taxpayers on the Business Master File. The first two digits represent the Area Office Code.
ENMOD An IDRS CC that will provide name, address, and any other Entity Information from an input of the Taxpayer Identification Number (TIN).
Entity Module The portion of the Master File Record which identifies the taxpayer. It contains his/her name, address, Social Security or employer identification number, Employment Code if applicable, Name Control, Location Codes, Filing Requirement Codes, Tax Period, and date of establishment.
ERQY The Employer Report/Adjustment Query (ERQY) is used to obtain employer report and adjustment information from the SSA Employer Control Data Base and covers years 1937 to present.
FICA Federal Insurance Contribution Act provides for a Federal System of old age, survivors, disability, and hospital insurance.
Fiscal Year A twelve month accounting period.
FIT Federal Income Tax Withheld: The employer should withhold income tax from employees' pay. Tax also may be withheld from certain other income, including pensions, bonuses, commissions, and gambling winnings. In each case, the amount withheld is paid to the Department of the Treasury in the employees' name.
FITP Social Security (FICA) Tip Amount as displayed on BMFOL with Definer R or TXMOD with Definer A.
Form 94X Amounts The amounts accumulated by the IRS from the Employment Tax Returns posted on the BMF. Note: This includes amounts from a filed Schedule H.
Form W-2 Amounts The amounts accumulated by the SSA for all Forms W-2 filed under a Form W-3.
Form W-3 Amounts The amounts shown by the employer on Form W-3. These represent the employer's totals of the associated Form W-2 Amounts.
Freeze Code A Freeze Code places a Taxpayer's Account in a condition which requires additional action before the account can be settled. There can be more than one Freeze Code present on an account.
Freeze Conditions/Releases Affect normal refund operations and normal credit offset. Freeze codes conditions should be considered when researching and inputting adjustment transactions.
FTD Federal Tax Deposit. Under the Federal Tax Deposit System, a taxpayer does not make payments to the Internal Revenue Service. Instead, taxpayers deposit payments with a Federal Reserve Bank (FRB) or an authorized commercial bank. after December 31, 2010, all deposits are made electronically, generally through Electronic Federal Tax Payment System (EFTPS).
HIRE Hiring Incentives to Restore Employment (HIRE) Act, enacted for the period of March 18, 2010 through December 31, 2010, employers are provided a payroll tax exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees.
Hold Codes Used with TC 29X or TC 30X when it is desired to prevent or delay the issuance of a refund and/or notice.
IAT Integrated Automation Technologies (IAT) is a program that can read information from the IDRS screen and automates the initiation of command codes to the IDRS system. It checks the input for accuracy to avoid an unposted transaction and contains convenient links to IRM references and other information for faster research.

Example:

The Address Change tool pulls up a menu where the user types in the updated address and the tool will initiate all the necessary command codes and complete the applicable fields.

IDRS Integrated Data Retrieval System - A computer system with the capability to instantaneously retrieve or update stored information. IDRS works in harmony with the master file of taxpayer accounts. This system is aimed at quick resolution of problems and queries concerning current taxpayer accounts. It is used to perform case research, case control, data requests, account updates and/or adjustments, and generation of letters and/or notices.
IMF Individual Master File/ A file containing information about taxpayers who file individual income tax returns (1040 series) and related documents.
IMFOL Individual Master File On-Line: An IDRS CC which provides access to the Individual Master File. See the definition of CFOL for capabilities.
INOLE Information National On-Line Entity: An IDRS CC which enables employees to access a nationwide file of selected Master File Entity Data.
IRC Internal Revenue Code: Federal tax law begins with the Internal Revenue Code (IRC), enacted by Congress in Title 26 of the United States Code (26 U.S.C.).
IRM Internal Revenue Manual: Outlined procedures to ensure a program is worked correctly, efficiently, and consistently throughout all campuses and with other programs. FOIA allows IRMs to be public documents unless it states OUO (Official Use Only)
IRP Information Returns Processing: The processing of the tax documents businesses are required to file to report certain business transactions to the Internal Revenue Service (IRS). The requirement to file Information Returns is mandated by the Internal Revenue Service and associated regulations.
IRPTR Information Returns Processing Transcripts An IDRS CC used to request computer transcripts of an Employer's Information Returns filed with the IRS.
IRS-CAWR Internal Revenue Service Case - Cases identified by the IRS for not filing any or all required Forms 94X or Schedules H.
Medicare tax The tax that finances the hospital insurance portion of FICA (Social Security).
MFREQ An IDRS CC used to request an Entity Module or a Tax Module and its related Entity Data from IMF, BMF, IRAF, or EPMF, when case control is not required.
MFT Master File Tax is a two-digit number code that identifies the type of return filed by the taxpayer.
MFTRA Master File Transcripts - An IDRS CC used to order computer transcripts for accounts.
Name Control The first 4 letters of the Taxpayer's Last Name (in the case of individuals) and the first 4 letters of the Business Name (in the case of Partnerships, Corporations etc.). The Name Control is used to check the Master File and assure that the TIN corresponds with the proper taxpayer.
NAMEE An IDRS CC used to search for EINs for both the Primary and the Doing-Business-As (DBA) Names.
NAMES An IDRS CC used to search for SSNs for both the Primary and the Secondary Filer.
OIC An "Offer in Compromise" (OIC) is negotiated with a taxpayer in certain situations. Under an OIC, the IRS is willing to accept a lesser amount on a taxpayer debt to retire the debt and generally reduce collections costs.
ORS Online Retrieval System: ORS (On Line Retrieval System) The system in which the SSA uses to maintain data. ORS is used to research information from the SSA data base within 7 days of receipt to SSA. In the future, ORS will supply the CAWR tax examiner with an image of what the taxpayer submitted to the SSA.
OUO Official Use Only (OUO) information not to be viewed or discussed with the public, now imbedded within the IRM shown as information surrounded by ## signs.
PCD Program Completion Date - The date determined by Headquarters for the completion of a specific program.
PCC Penalty Computation Code: is used to show why a Master File computed or manually computed penalty is on the account. See IRM 20.1.4.14.3Penalty Computation Codes (PCC).
PMFOL Payer Master File On-Line: An IDRS CC used to provide full transcript data on-line for filed Forms 1096. The payer transmittal information includes payments, withholding, number of documents filed by the payer, and the document type.
PN A Pending Transaction input to IDRS but not yet effective at the Master File Account.
POA Power of Attorney: Section 6103 of the Internal Revenue Code, prohibits IRS employees from disclosing federal tax returns and return information unless there is a legal exception that permits the disclosure. Form 2848 is commonly used when a taxpayer wishes to appoint an individual to serve as a POA and act on the taxpayer's behalf before the IRS.
Posting Delay code Used when multiple transactions are required to adjust an account and some must post in a later cycle than others. A posting delay code may be input with the adjustment transaction to be cycled.
PRC Penalty Reason Code: are entered to indicate why a penalty was abated. For a complete listing of PRCs see IRM Exhibit 20.1.1-2.
Priority Codes Used in order to post adjustments (Doc. Code 47 and 54) to the Master File when certain module conditions exist.
RC Reason Code - A three-digit code used when adjusting an account to denote which item on the tax return is affected by the adjustment. It can also stand for Reference Code.
Recon Reconciliation - The program designed to reconcile Forms W-2 and W-3 Amounts filed with the SSA to the information filed on Form 94X, Schedule H, Form 1096, Form 1099-R, or Form W-2G with the IRS.
Refund Money returned to the taxpayer as a result of overpayment of a tax liability.
REL Reference Employer Listing - The REL is a tape file that contains additional information, which can verify the information sent for case processing. The REL will show the Tax Year, the EIN, and (in one column) the Medicare wages, Social Security wages, and Social Security tips. It will also give an indicator as to which type of wages the amount is and the RLN.
RFINK An IDRS CC used to research the Reporting Agent File.
RLN Report Locator Number is assigned by SSA and is used to request AWR microfilm replacement document stored in ORS (Online Retrieval System). It is a 14 position number replacement for the 11 position microfilm reference number (MSN). The RLN is derived as follows:
Positions 1-4: Year Assigned: CCYY
Positions 5–7: Day Assigned: Julian Date
Positions 8–9: Camera Number: AA-ZZ (electronic) or 01–99 (paper)
Positions 10–14: Sequence # : 00001–99999
Positions 1–7 are the year and day the RLN was assigned.
Positions 8–9 (camera #) are numeric for paper reports, or alphabetic for electronic reports.
For electronic W-3/W-2 reports the camera number sequence is AA, AB, AC, etc.
For electronic W-3c/W-2c reports the camera number sequence is ZZ, ZY, ZX, etc.
RMF Recirculating Master File - This Master File contains the Discrepant Case Records.
RN Reference Number/ Item Adjustment Code. The code used on the REQ 54 to adjust wage and tax fields. See Document 6209
RSED Refund Statute Expiration Date: A claim for credit or refund must be filed 3 years from the time the return was filed or two years from the time the tax was paid, whichever is later. IRM 4.19.4.3.12.
RTVUE Return View - An IDRS CC used to access the Return Transaction File (RTF). Provides on-line access to Forms 1040, 1040A and 1040EZ and their accompanying schedules and forms for three processing years. (Current Year and Two Prior Years) Provides only the Line Items transcribed from these returns during initial campus processing.

Note:

It does not provide information on Amended or on Duplicate Return Data.

Social Security Tax The tax that finances the old age, the survivors, and the disability part of FICA. (Social Security)
Source Document Backup documentation used by Service Personnel to explain an adjustment to a Taxpayer's Account; for example, taxpayer correspondence.
SSA The Social Security Administration is the nation's primary income security agency. It pays retirement, disability and survivors benefits to workers and their families, administers the Supplemental Security Income program, and issues Social Security numbers.
SSA-CAWR Social Security Administration Case - Cases identified by the SSA and referred to the IRS to obtain any Forms W-2 not filed from the taxpayer.
SSN Social Security Number- nine digit number used to identify an Individual Taxpayer Account in NNN-NN-NNNN format issued by the SSA.
Status Code (SC) Two digit number code indicating the Master File and/or IDRS Status on a Tax Module.
Status Code Date (SCD) The date the last status code was updated on CAP
STAUP Used to interrupt normal balance due notice routine by delaying, accelerating or skipping notices.
TAS Taxpayer Advocate Service: An independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.
Tax Module Part of a taxpayer's account which reflects tax data for one tax class (MFT) and one tax period. For example: A taxpayer has filed 12 Forms 941 and 3 Forms 940 within a three year period. He has only one account on the Master File, but 15 modules.
Tax Period The period of time for which a return is filed. The IRS uses a six digit code to indicate the end of the tax period for a given return. The first four digits represent the year and the next two digits represent the month.
TC Transaction Code - A three digit code used to identify actions being taken to a taxpayer's Account on IDRS.
TC470 Used to delay issuance of a TDA notice and to stop offsets into an account because of a pending claim or adjustment.
TDA Taxpayer Delinquent Account: A computer generated printout indicating that the taxpayer's account has reached a delinquent status. TDAs are sent to the respective districts for collection action.
TDI Taxpayer Delinquency Investigation: A computer generated printout indicating that a taxpayer is delinquent filing a return. TDIs are sent to the District Areas for collection.
TIN Taxpayer Identification Number: Every taxpayer on the master file has a permanent number for identification of the tax account. The employer identification number (EIN) is used to identify a taxpayer's business account. The Social Security number (SSN) is used as the account number for an individual taxpayer. Other identification numbers are issued to individuals who cannot obtain an SSN.
TY A tax year is an annual accounting period, usually made up of 12 consecutive months.
UPC Unpostable Code:) A three digit numeric number. with a 1 position Reason Code (RC) separate from the unpostable code. These codes identify transactions and why they failed to meet validity checks.
URI An abbreviation the SSA uses internally to indicate the only change on a Form W-3/W-2 is an EIN or an SSN. The SSA has asked the IRS to notate this on forms it identifies and forwards to them.

Exhibit 4.19.4-4 
Tax and Penalty Assessment Guide

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Exception:

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Note:

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Note:

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Example:

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Note:

For all tax years except 2011 and 2012 the Social Security tax rate is 12.4%. For 2011 and 2012 the Social Security rate is 10.4%.

Exhibit 4.19.4-5 
Physical Inventory Certification

Tax Examiner Name:
IDRS #:
Date of CCA 4243:
Number of cases listed on your CCA 4243:
Action Taken Yes/No
Verified received dates are correct.  
Verified the case was classified as the correct program.  
Ensured the correct MFT Code was input.  
If the case is missing, have you followed the missing case procedures?  
Ensured all appropriate interim letters have been issued.  
Verified the need for STAUPS or TC 470s and input if necessary.  
Ensured you are working your cases in FIFO (First in, First out) order according to IRS earliest received date.  
Are your cases in the correct status? (A-Assigned, M-Monitored, S-Suspense, etc.)  
Program (IRS-CAWR,SSA,FUTA) # of cases
Cases listed on your CCA 4243  
Missing  
Closed  
Added (newly controlled)  
TOTAL  
Number of cases currently in your possession:
I certify I have taken all actions as stated above.
Print Name:
Sign Name:
Date:

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