Recent Updates to Form 8038-CP and Processing Changes

 

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Electronic filing of Form 8038-CP is now available. Also, Schedule A (Form 8038-CP) was changed. The schedule now requires entering the interest payment date instead of the date of issue. Use the December 2022 revision of Schedule A with the January 2022 revision of Form 8038-CP.

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How to file an electronic Form 8038-CP?

Generally, information returns and tax returns filed electronically must be transmitted to the IRS through an authorized e-file provider. The first step for issuers that are new to electronic filing of their returns is to find an authorized e-file provider. A continually updated list of approved e-file providers can be found on the Exempt Organizations and Other Tax Exempt Entities Modernized e-File Providers page on irs.gov. You'll see several options, listed by tax year. Under Tax Year 2021 you will find Tax Year 2022 Other Tax Exempt Entities Modernized e-File (MeF) Providers – Form 8038-CP for software that can be used now through April 30, 2023. Under Tax Year 2022 you will find Tax Year 2023 Other Tax Exempt Entities Modernized e-File (MeF) Providers – Form 8038-CP for software that can be used now through April 30, 2024.

If you encounter difficulties preparing or transmitting your e-filed return, a first step is to refer to the error message generated when the return is not accepted for filing. You may also find it helpful to check Recent Developments on the website page About Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds.

If you can't find the solution in the Form 8038-CP instructions, your next step should be to contact the MeF provider for the software. The IRS regularly communicates known issues to the software providers. If an issue you encounter has come up for someone else, your software provider may already be aware of it and have a solution.

If the software provider cannot resolve the issue, call the e-Help Desk at 866-255-0654. Please be aware that these inquiries must be limited to technical issues about electronic filing. You will need to have attempted to e-file and know which specific errors are causing your e-file efforts to fail. The e-Help Desk cannot provide tax advice.

What to do when e-filing ultimately isn't accepted by the IRS in 2023?

If the electronic return cannot be accepted for processing electronically in 2023, the filer must file a paper return with the Internal Revenue Service Center where it would normally be filed. The paper return must be completed consistent with the instructions to file the return, including providing required information from the issuer and include the signature of the tax return preparer, if any.

Mandatory electronic filing in 2024

Under Treasury Regulations titled "Electronic-Filing Requirements for Specified Returns and Other Documents" (26 CFR Par. 23 Section 301.6011-11), published February 23, 2023, electronic filing of Forms 8038-CP filed after December 31, 2023, is mandatory for certain filers.

Reminders

Tax Exempt Bonds made important changes to Form 8038-CP and how we process requests for refundable credit payments. The revised form and procedures apply to all Forms 8038-CP received after January 1, 2022. For a detailed discussion of the January 2022 revisions watch the Revisions to Form 8038-CP video.

Report numbers

Issuers are required to assign permanent report numbers for bonds currently eligible to receive credit payments and consistently use the same report number when filing to claim the credit for the bonds. Issuers assign a separate report number in the range 401–450 for each type of bond that is required to be treated as a

separate bond issue for purposes of Form 8038-CP payment requests.

Once a report number is used for any bonds, it must be used as the report number for all future filings of Form 8038-CP returns for those bonds. The report number may not be used for any other Direct Pay bonds, even after bonds are redeemed or are no longer outstanding.

Schedule A

Schedule A is required for new clean renewable energy bonds (NCREBs), qualified energy conservation bonds (QECBs), qualified zone academy bonds (QZABs), and qualified school construction bonds (QSCBs) and the total from line 3 of Schedule A is entered on line 19c of Form 8038-CP. Therefore, NCREBs and QECBs with multiple maturities are no longer reported on separate Forms 8038-CP.

Interactive features of Form 8038-CP and Schedule A

Form 8038-CP is still interactive. You can avoid delays in getting your refund due to missing or incorrect information by using the interactive Form 8038-CP and Schedule A available at IRS.gov. To use the new interactive feature, complete it in the order presented and it will alert you to missing fields and other errors. Then use the "Verify and Print" button at the top of the form to check for other errors and print the document for mailing to the IRS. Download the new interactive version of Form 8038-CPPDF and Schedule APDF. When Schedule A is required to be filed, it should be completed prior to completing Form 8038-CP because the interactive features are not linked.

How we process Form 8038-CP

Before we can process your Form 8038-CP, all required lines must be completed. If your claim is missing required information, we'll request the necessary information from you by mail. We will not process your return until we receive the requested information. This delay may impact when you receive your refund, so it's important to provide the requested information timely. If you don't respond to our request for information within the prescribed timeframe, we will not process the Form 8038-CP. In summary:

  • Form 8038-CP: All required Form 8038-CP lines must be completed.
  • Schedule A: Schedule must be completed for NCREBs, QECBs, QZABs, and QSCBs.
  • Requests for missing information: If you don't include all required information and documents when filing your Form 8038-CP, including Schedule A for NCREBs, QECBs, QZABs, and QSCBs; we'll send you a correspondence letter requesting the missing information.
    • If you file the original return with missing or incomplete information, payment of your requested refundable credit may be delayed.
  • Requests to verify certain Information: If Information provided on your Form 8038-CP is inconsistent with information provided on previous returns; we’ll send you a correspondence letter to verify certain information in order to process the return.

What if you don't provide the requested information?

If you don't provide the missing information asked for in Letter 6436C within 30 days of the IRS request, we'll notify you by mail that we're unable to consider your claim. To have your claim considered after we notified you of our no consideration, you must file another Form 8038-CP containing all required information for the respective interest payment date.

If you don't provide the information requested in Letter 6539C within 30 days of the IRS request, we may send a check to an appropriate address. However, until the requested information is provided the processing of subsequently filed returns will be delayed and additional correspondence may be sent.

IRS correspondence letters you may receive

You may receive one or more of these IRS correspondence letters:

Letter 6436C, Request for Missing Information Letter

  • Issued when your Form 8038-CP can't be processed due to missing or incomplete information.

Letter 5836C, No Consideration Letter

  • Issued when you did not respond within the 30-day timeframe to the IRS' request for missing/additional information that was needed to process your return.
  • The No Consideration Letter indicates that your filed Form 8038-CP cannot be processed and you will not receive your refund.

Letter 5980C, Claim Disallowance Letter

  • Issued to deny your request for refundable credit when you did not file your Form 8038-CP within the Statute of Limitations.

Letter 510C, Refund in Error

  • Issued to request repayment of an erroneous refunded credit payment.

Letter 6539C, Verification for Form 8038-CP

  • Issued when Information provided on that return is inconsistent with information provided on previous returns.

IRS notices you may receive

You may receive one or more of these computer-generated IRS notices:

Notice CP152A, Acknowledgment of Return and Notice of Sequestration

  • Generates upon the receipt and processing of your Form 8038-CP.
  • This Notice provides the Report Number associated with a particular interest payment date.

Notice CP153, Notice of EFT Refund Not Allowed

  • Generates when the requested refundable credit payment cannot be direct deposited due to a problem with the direct deposit information provided on your Form 8038-CP. You will receive a hard copy check.

Notice CP138, Notification That the Overpayment on the Return was Offset Against Another Tax Period with a Balance Due

  • Generates when your requested refundable credit payment is offset against another tax period with a balance due.

Notice CP116, Math Error

  • Generates when a math error on your Form 8038-CP results in an overpayment of more than $1.00.

Notice CP161, No Math Error, Balance Due

Generates when there is a balance due on your Form 8038-CP with no math error.

Notice CP210, Tax Adjustment

  • Generates when there is a subsequent adjustment that creates a balance due, overpayment, or a zero balance on your Form 8038-CP.

Notice CP220, Tax Adjustment

  • Generates when there is a subsequent adjustment entered on your Form 8038-CP.

Notice CP231, Undelivered Refund Check

  • Generates when your refund check was returned undeliverable and requests that you provide a correct mailing address.

Questions about a Form 8038-CP payment?

If payment has not been received, you may contact TEGE Customer Service at 877-829-5500.

  • If the return has been filed at least 45 days before the interest payment date, and
  • It is less than 3 weeks before the interest payment date.

Only the issuer, or the trustee if authorized by the issuer on Form 8038-CP, may ask a question. You'll need the Employer Identification Number(s) of the Part I entity and the Part II issuer (if different), the interest payment date, the report number (as indicated on Notice CP 152A), and the anticipated refundable credit payment amount. You may also need to provide the CUSIP number of the issue (if applicable) and the issue price of the issue.

Additional resources

Page Last Reviewed or Updated: 11-Apr-2023