Part 21. Customer Account Services

Chapter 6. Individual Tax Returns

Section 7. Adjusting Individual Tax Accounts

21.6.7 Adjusting Individual Tax Accounts

Manual Transmittal

August 22, 2023

Purpose

(1) This transmits revised IRM 21.6.7, Individual Tax Returns, Adjusting Individual Tax Accounts.

Material Changes

(1) IRM 21.6.7.4.1 Reorganized information to make it easier to read.

(2) IRM 21.6.7.4.4.1 (IPU 22U0978 issued 10-03-2022) Updated link to Document 6209 Section 8C and added Caution in paragraph 9 to write the taxpayer if it appears they are expecting a response and a notice will not be generated, also added to IF/Then chart to No Consider cases with no response.

(3) IRM 21.6.7.4.4.1 (IPU 22U1237 issued 12-20-2022) Added entry to the paragraph 8 If/Then table to provide guidance for unresolved TPP indicators to address related cases.

(4) IRM 21.6.7.4.4.4 (IPU 22U1237 issued 12-20-2022) Deleted Caution for paragraph 3. Due to processing delays, employee will research to determine the most current address in all cases.

(5) IRM 21.6.7.4.10 (IPU 22U0978 issued 10-03-2022) Added caution regarding Covid processing delays and received dates.

(6) IRM 21.6.7.4.14 (IPU 22U1237 issued 12-20-2022) Added instructions to If/Then table in paragraph 3 for removing -A Freeze Code on True Duplicate Returns for clarity.

(7) IRM 21.6.7.4.14 (IPU 23U0236 issued 02-03-2023) Added instructions to address calculating interest when an original return (TC 150) posts after a duplicate return (TC 976) was processed and a refund was issued.

(8) IRM 21.6.7.4.14 (IPU 23U0412 issued 03-16-2023) Corrected instructions to address calculating interest when an original return posts after a duplicate return was processed and a refund was issued.

(9) IRM 21.6.7.4.14 Added reference for manually computing credit interest.

(10) Exhibit 21.6.7-1 (IPU 23U0412 issued 03-16-2023) Added tax year 2021 to Reason Code 096 instructions.

(11) Exhibit 21.6.7-1 Added reason codes 226, 227, 228, and 229 with definitions.

(12) Various editorial changes, such as correcting links, typographical errors, etc., throughout the IRM.

Effect on Other Documents

IRM 21.6.7, Individual Tax Returns, Adjusting Individual Tax Accounts, dated August 15, 2022 (effective 10-03-2022) is superseded. The following IRM Procedural Updates (IPUs) have been incorporated: IPU 22U0978 issued 10/03/22; IPU 22U1237 issued 12/20/22; IPU 23U0236 issued 02-03-2023; and IPU 23U0412 issued 03-16-2023.

Audience

All employees performing account/tax law work in SB/SE and W&I.

Effective Date

(10-02-2023)

Joseph Dianto
Director, Accounts Management
Wage and Investment Division

21.6.7.1 (06-23-2021)

Program Scope and Objectives

  1. Purpose: This IRM provides instruction on adjusting individual tax accounts. There are various reasons a tax account may need to be adjusted.

  2. Audience: The primary users of the IRM are all Accounts Management employees who are in contact with taxpayers by telephone, correspondence, or in person. This includes Contact Representatives, Tax Examiners, and management officials.

  3. Policy Owner: The Director of Accounts Management is the policy owner of this IRM.

  4. Program Owner: Accounts Management, Policy and Procedures IMF (PPI) is the program owner of this IRM.

  5. Primary Stakeholders: The primary stakeholders are organizations that collaborate with Accounts Management, including:

    • Wage and Investment (WI) Return Integrity & Verification Operations (RIVO)

    • WI Service Centers, Submission Processing (SP)

    • Small Business/Self Employed (SB/SE) Service Centers, Compliance

  6. Program Goals: Program goals for this type of work are:

    • Achieve a high customer accuracy rate for phone calls and paper adjustments related to adjusting individual tax accounts

    • Efficiency in resolving paper adjustment cases related to adjusting individual tax accounts

    • Continuous assessment for vulnerabilities and opportunities for improvement

    • Effective communication with customers

    The Accounts Management Program Letter, which can be found on the AM website, and IRM 1.4.16, Accounts Management Guide for Managers, have more information on these goals.

21.6.7.1.1 (06-23-2021)

Background

  1. Employees in the Accounts Management (AM) organization respond to taxpayer inquiries and phone calls, as well as process claims and other internal adjustment requests related to adjusting individual tax accounts.

  2. This IRM includes information and instructions on how to process these adjustment requests in order to provide a complete and accurate adjustment to taxpayer accounts.

21.6.7.1.2 (10-03-2022)

Authority

  1. Authority for these procedures is found in the following sections of the Internal Revenue Code (IRC) and their corresponding Treasury regulations.

    • IRC 199A

    • IRC 6201(a)

    • IRC 6402(a)

    • IRC 6511

    • Protecting Americans from Tax Hikes Act (PATH Act) enacted December 18, 2015

    • The Disaster Tax Relief and Airport and Airway Extension Act of 2017, enacted on September 29, 2017

    • The Tax Cuts and Job Act (TCJA) enacted on December 22, 2017

    • The Bipartisan Budget Act of 2018 enacted on February 9, 2018

    • The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020

    • The Consolidated Appropriations Act, 2021, enacted on December 27, 2020

    • The American Rescue Plan Act of 2021 enacted on March 11, 2021

21.6.7.1.3 (10-01-2020)

Responsibilities

  1. The Director of Accounts Management is responsible for monitoring operational performance for all the Accounts Management campuses.

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

  3. The Team Managers and Leads are responsible for ensuring employees have the tools to perform their duties.

  4. Employees are responsible for following the instructions contained in this IRM and maintaining updated IRM procedures.

21.6.7.1.4 (10-01-2020)

Program Management and Review

  1. Program Reports: The program reports provided in this IRM are for identification purposes for the Accounts Management Contact Representatives and Tax Examiners. For reports concerning quality, inventory, and aged listings, refer to IRM 1.4.16, Accounts Management Guide for Managers. The overage report can be viewed by accessing Control Data Analysis, Project PCD, and are on the Control-D/Web Access server, which has a login program control.

  2. Program Effectiveness: Program effectiveness is determined by Accounts Management’s employees successfully using IRM guidance to perform necessary account actions and duties. The following are used to ensure program effectiveness:

    • National Quality Review System (NQRS)

    • Centralized Evaluative Review (CER)

    • Managerial Reviews

  3. Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration. This may be included under responsibilities for a manager.

21.6.7.1.5 (10-01-2020)

Program Controls

  1. Federal Managers Financial Integrity Act (FMFIA) of 1982 requires federal agency executives periodically review and annually report on the agency’s internal control systems.

  2. The Government Accountability Office (GAO) sets forth the standards for an effective Internal Control in the Federal Government.

  3. Systemic controls are embedded in the xMend Integrated Automation Technologies (IAT) tool and the Integrated Data Retrieval System (IDRS).

21.6.7.1.6 (10-03-2022)

Acronyms

  1. For a comprehensive listing of acronyms, refer to the Acronyms Database.

    Acronym Definition
    ACA Affordable Care Act
    AM Accounts Management
    AMS Account Management Services
    APTC Advance Premium Tax Credit
    ASED Assessment Statute Expiration Date
    BMF Business Master File
    BS Blocking Series
    CCC Computer Condition Code
    CII Correspondence Imaging Inventory
    CP Computer Paragraph
    CRN Credit Reference Number
    DLN Document Locator Number
    DPAD Domestic Production Activity Deduction
    EIP Economic Impact Payment
    EITC Earned Income Tax Credit
    ERS Error Resolution System
    ES Estimated Tax
    FS Filing Status
    FTP Failure to Pay
    HC Hold Code
    IAT Integrated Automated Technologies
    IDRS Integrated Data Retrieval System
    IMF Individual Master File
    IRA Individual Retirement Account
    IRC Internal Revenue Code
    IRM Internal Revenue Manual
    ITIN Individual Taxpayer Identification Number
    MEF Modernized Electronic Filing
    MFJ Married Filing Jointly
    MFS Married Filing Separately
    MXEN Mixed Entity
    NOL Net Operating Loss
    PECF Presidential Election Campaign Fund
    PII Personally Identifiable Information
    PRC Penalty Reason Code
    PTC Premium Tax Credit
    QBID Qualified Business Income Deduction
    RC Reason Code
    RIVO Return Integrity and Verification Operations
    RPD Return Processable Date
    RSED Refund Statute Expiration Date
    RTR Remittance Transaction Research
    SC Source Code
    SE Self-Employment
    SFR Substitute For Return
    SSA Social Security Administration
    TIN Taxpayer Identification Number
    TPP Taxpayer Protection Program

21.6.7.1.7 (10-01-2017)

Related Resources

  1. The basic IMF account resolution/adjustment procedures are found in IRM 21.6, Individual Tax Returns. Use the general procedures outlined in this IRM in conjunction with:

    • IRM 13, Taxpayer Advocate Service

    • IRM 21, Customer Account Services

    • IRM 25, Special Topics

    • IRM 20, Penalty and Interest

    Additional related resources include the following (list is not all inclusive):

    • Document 6209 (IRS Processing Codes and Information)

    • Integrated Automation Technologies (IAT) Tool Instructions

    • IDRS Command Code Job Aid

  2. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights.

21.6.7.2 (10-01-2002)

What Are Adjustments to Individual Tax Accounts?

  1. Adjustments to individual tax accounts are required changes because of the following:

    • An amended or duplicate return filed

    • Taxpayer call

    • Taxpayer written request

    • Face-to-face request

21.6.7.3 (10-01-2021)

Individual Tax Accounts Research

  1. Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 10.5.1.6.7.2, Answering Machines or Voicemail. Fax procedures contained in IRM 10.8.1.3.18.6.2.2, Facsimile and Facsimile Devices, must be reviewed prior to faxing confidential information to the taxpayer or authorized representative.

  2. This section presents information on adjusting individual tax accounts. There are various reasons a tax account may need to be adjusted.

  3. It may be necessary to prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), to the Local Taxpayer Advocate. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for complete information.

    Note:

    Form 911 is on the Accounts Management Service (AMS) system for on-line completion.

  4. To adjust individual tax accounts you may have to research the following:

    • Source and Reason Codes - Computer Paragraph (CP) - CP 21A/ CP 21B/ CP 21C/ CP 22A

    • Amended Return - No Original - TRNS29

    • Post Refund Case - Form 1040-X

    • Duplicate or Amended Return - TRNS36

    • Superseding Return

    • State Tax Return Posts to Account

    • Presidential Election Campaign Fund

    • Return for Each Form W-2

    • True Duplicate

    • Duplicate or Amended - Transaction Code (TC) 420 - TRNS93

    • Duplicate Assessment - Document (Doc) Code 51 - TRNS35/TRNS35A

    • Net Operating Loss (NOL) - Carryforward

    • Identity Theft Indicators on ENMOD

  5. See IRM 21.5.2.3, Adjustment Guidelines - Research, for additional research information.

    Caution:

    Prior to converting a Form 1040-X to a Form 1040 when reprocessing a return to another Taxpayer Identification Number (TIN), research the spouse's TIN to determine if an original return has already posted there. This will prevent generation of a TRNS36F. Also research other TINS where the return may have posted, for example invalid segments and/or ITINs.

    Note:

    If claim is located under the spouse's TIN, follow E-freeze procedures in IRM 21.5.6.4.9, E- Freeze.

21.6.7.4 (10-01-2002)

Adjusting Individual Tax Accounts Procedures

  1. This section explains the procedures for adjusting individual tax accounts.

21.6.7.4.1 (10-02-2023)

Source and Reason Codes - CP 21A/CP 22A Notices

  1. A taxpayer is issued a notice of adjustment when the IRS takes an action on the taxpayer's tax account. The notice, Computer Paragraph (CP) CP 21A, CP 21B, CP 21C and CP 22A is sent with an explanation of the action. The explanation is specified on the notice by use of one source code (SC) and one to three reason codes (RC). The SC and RC advise the taxpayer of the adjustment action taken.

    Note:

    A CP 21A, CP 21B, CP 21C and CP 22A is not issued if the account balance is zero or credit balance and an adjustment (command code (CC) ADJ54) for TC 290 .00 is input with ONLY item reference numbers (IRNs) changing numerical data - NOT TAX (e.g., IRN 886, 887, 888, 889, 892, 895, 896, etc.). However, a CP 21A, CP 21B, CP 21C and CP 22A will be issued if the account was in balance due status before the adjustment was input. If you choose to NOT send a notice to the taxpayer, Hold Code (HC) 3 must be included in the adjustment. Refer to IRM 21.5.2.4.15 , Rules on Hold Codes (HC), and IRM 20.1.2.2.10, Hold Codes and Notices, for additional information.

    Note:

    When using the IAT xMend tool to input an adjustment, the user is prompted to issue a Letter 4364C, xClaim Correspondence Letter - IMF. If not sending a Letter 4364C, deselect the "Load Letter Dialog" check box. If sending a different letter, select the "Write Your Own" check box.

    Caution:

    If a letter is appropriate and HC 3 is used, you must send correspondence to the taxpayer.

21.6.7.4.1.1 (10-01-2002)
Action for CC ADJ54

  1. Enter a SC and at least one RC on CC ADJ54 when inputting:

    1. TC 29X for an amount with or without secondary transactions and/or credit/item reference numbers.

    2. TC 290 for zero with secondary transactions and/or credit/item reference numbers.

    3. TC 290 to disallow a claim.

      Reminder:

      When disallowing a claim or releasing a freeze it is NOT necessary to enter a SC; SC 0 generates.

21.6.7.4.1.2 (10-01-2021)
Source Code (SC)

  1. Source code (SC) selection designates which opening statement is used on a taxpayer's notice.

  2. The valid range for the SC is 1 through 9.

  3. When the taxpayer's filing requirement code is "7," a SC marked with two asterisks (**) prints in Spanish.

  4. Use the SC with the highest numeric code if more than one SC applies.

  5. Application of SC(s):

    If Then
    Releasing a freeze on the account, disallowing a claim or inputting RC 054, RC 097, or RC 098 SC 0 generates.
    Adjustment is exactly what the taxpayer requests on a claim or duplicate/amended return Input SC 1.
    Adjustment is the result of a CP 08, CP 09, or CP 27 Input SC 1.
    Adjustment was made based on an internally generated notice. Input SC 2.
    Taxpayer replies to a math error notice and SC 3 or 4 do not apply Input SC 2.
    Adjustment is due to new legislation which changes the law too late to update current tax forms or makes an issue effective retroactively Input SC 3.
    Adjustment is the result of an error by an IRS employee Input SC 4.
    Adjustment is a carryback claim Do not use a SC; SC 5 generates.
    Adjustment reflects a math error made by the taxpayer on a claim or duplicate/amended return Input SC 6.

    Reminder:

    DO NOT use SC 6 for adjustments based on a taxpayer’s reply to a previous math error notice.
    Adjustment is an offset reversal, TC 897, or TC 766 with an Offset Trace Number (OTN)

    Note:

    SC 7 may only be used with RCs 086, 087, 089, 090 and 091

    		 Input SC 7.
    Adjustment results from taxpayer contact with the Taxpayer Advocate Service (TAS) Input SC 8.
    Adjustment is made by the Underreporter function Input SC 9.

  6. For SC notice verbiage, see Document 6209, Master File Source Codes, Section 8C.2.

21.6.7.4.1.3 (01-11-2016)
Reason Code (RC)

  1. Reason code (RC) selection designates the end of the statement that is printed on the taxpayer’s notice.

    1. The RC should describe the area(s) of the return affected by the adjustment action.

    2. Use the RC(s) which best describes the cause of the adjustment.

    3. A reason code is not required for a ripple effect change. This is when cascading effects from an adjustment affect other items by the change made.

    4. When indicated in other IRM references, enter a reason code even when a TC 29X for .00 is made to the account.

      Exception:

      Do not enter a reason code if specific instructions direct you not to.

    Example:

    The taxpayer provides an additional Form W-2 which changes wages and withholding. A change to Earned Income Tax Credit (EITC) results. Use RC 007, wages, and RC 051, withholding; the EITC change does not require RC 053.

  2. A maximum of three RCs may be used. If more than three are necessary, use the three which most clearly explain the reason for the adjustment.

  3. Refer to Exhibit 21.6.7-1, Reason Codes, for RC language. RCs are marked with:

    1. One asterisk (*) for international accounts (PSC only).

    2. Two asterisks (**) to print in Spanish when the taxpayers filing requirement code is "7" ; RC 042 only prints in Spanish.

    3. Three asterisks (***) when reversing offsets through the Treasury Offset Program.

      Note:

      RCs 086, 087, 089, 090 and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.

    For additional information see Document 6209 Section 8C - Master File Codes.

21.6.7.4.1.4 (10-01-2017)
Penalty Reason Code

  1. The penalty RC does not print on the Individual Master File (IMF) taxpayer notice.

  2. Only enter a penalty RC if the adjustment includes a penalty change.

  3. The penalty RC is input in the fourth RC position on the CC ADJ54 format. Use the regular RC 062 or RC 065 (071 for Spanish) in the first, second, or third position.

  4. See the applicable section of IRM 20.1, Penalty Handbook, for complete penalty relief criteria, and penalty RC application for the given penalty. General information is found in IRM 20.1.1, Introduction and Penalty Relief, and Exhibit 20.1.1-1, Penalty Relief—Application Chart, contains the complete penalty reason code chart. Penalty specific relief information (including any specific reason code requirements) are found in the IRM for the specific penalty.

21.6.7.4.2 (01-17-2008)

Amended Return - No Original - TRNS29 (Amended Return Posts to an Account with No Original Return Present)

  1. When an amended return posts on an account with no original return present, Master File generates:

    • A TRNS29

    • An "E-" freeze on the account. See IRM 21.5.6.4.9, E- Freeze

  2. A TRNS29 notice generates electronically as follows:

    1. Fifteen cycles after the Return Due Date (RDD), when an amended/"G" coded return (TC 977) or a duplicate return (TC 976) posts to an account with no original return (TC 150).

    2. Four cycles after the return due date when an amended return contains blocking series 93.

21.6.7.4.2.1 (10-01-2021)
Analyzing TRNS29 Notices

  1. Analyze the return generating the TRNS29 notice by using CC TRDBV and CC RTVUE. Cases may be resolved at this level.

    If the Form(s) W-2 Then
    For the primary spouse is a copy and the filing status is joint The original return may be filed under the other spouse's TIN.
    Have a different year than the return Refer to IRM 21.6.7.4.2.7, Tax Period Changes.
    Is an original (Copy B of Form W-2) The amended return may be an original return prepared by taxpayer.

  2. Check for taxpayer notes or explanations.

    If the return causing the TRNS29 Then
    Indicates Injured Spouse or the TRNS29 indicates Debtor Master File Case (DMFC) Work according to the procedures in IRM 21.4.6, Refund Offset.
    Is a tentative return (filed prior to due date and lacking sufficient information to process as an original return)

    1. Process as an application for an extension to file.

    2. Photocopy the return and correspondence indicating an extension request.

    3. Write "photocopy" on the copy.

    4. Route the copy to Taxpayer Relations with instructions to process as an extension request.

    5. Input TC 971 action code (AC) 002 to release the "E-" freeze. See IRM 21.5.1.4.8, Transaction Code 971.

    6. Enter "extension request" in the CC FRM77 remarks area.

    7. Send the return back to Files.

  3. If the original return was filed with International file location codes 66 or 98 (first 2 digits of Document Locator Number (DLN)):

    1. Route the case to the Philadelphia Campus (PSC).

    2. Recharge the amended return to PSC. Refer to IRM 21.2.4.3.7, Transferring Cases to Another Campus, and IRM 21.5.1.4.9, Recharging and Re-filing Documents, for additional information.

    3. Send a Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to the taxpayer if correspondence is attached. For additional information regarding Letter 86C, refer to IRM 21.3.3.4.2.1, Use of 86C Letter - Referring Taxpayer Inquiry/Forms to Another Office.

21.6.7.4.2.2 (03-18-2022)
Locate an Original Return (TC 150)

  1. Request additional information via Integrated Data Retrieval System (IDRS) to locate the taxpayer’s original return. Check the following:

    • On the IAT RESULTS tool bar, click on the R button (Refund Screen Button), this launches the Refund Research Screen. The Refund Research screen allows the assistor to quickly obtain information from several IDRS Command Codes.

    • CC FFINQ for returns in processing. The return DLN is displayed on IDRS.

    • CC SUMRY, CC TRDBV, CC REINF, CC RTVUE, CC IMFOL, and CC ENMOD to research for any current year information under the TRNS29 TIN (valid or invalid).

    • CC NAMES, CC INOLE and CC ATINQ for any other TINs (valid and invalid) under all names pertaining to the TRNS29 case.

    • CC ERINV for unprocessed returns in the reject area. Follow local procedures for completing open reject cases.

    • CC IMFOL for a spouse's TIN (valid and invalid).

    • CC IMFOL for the posting of TC 150, 977, or 976 with a current list year DLN on any TIN located in the above steps.

    • CC IMFOL for a complete record of the entity and tax periods for the TRNS29 TIN when the above steps show no data available.

    • CC UPTIN for an unpostable return with a current list year. Follow unpostable procedures if original return is unpostable.

  2. If there are payments (credits) on the module, and a TC 150 cannot be located:

    1. Request the payment posting document(s).

    2. Review for any indication of another name or TIN.

      Exception:

      If the payment is an Integrated Submission and Remittance Processing (ISRP) or Lockbox payment and you have access to the Remittance Transaction Research (RTR) system, research RTR for the posting document and notes indicating changes or deletions. See IRM 21.5.7.3, Missing Payments Research, and IRM 21.5.7.3.1, Remittance Transaction Research (RTR) System, for additional information.

    Note:

    During filing season, a return other than "refund" may be delayed in processing. If TC 610 (remittance with return) posted, the return may be in-house awaiting processing. See IRM 21.2.4.3.44.1, AMRH12 Resolution, for additional information on TC 610 remittances.

  3. If you need more information to process the TRNS29, contact the taxpayer. Take the following action to correspond:

    1. Photocopy the return, when available.

    2. Write "Copy" on the photocopy.

      Caution:

      Do not send a TRNS29 to the taxpayer.

    3. Prepare Form 8009-A, We Need More Information to Process Your Amended Return, or if using Correspondence Imaging Inventory (CII) use the appropriate C-Letter to request missing forms, schedules, signatures or other information. Refer to IRM 21.5.1.5.6, Incomplete CII Claims, for additional information.

      Note:

      If using a copy of a numbered return to respond to a taxpayer inquiry, or sending a copy back for any reason, make sure the Document Locator Number (DLN) is not visible.

    4. Input TC 971 AC 270 using the current date for the transaction date (TRANS-DT). See IRM 21.5.1.4.8, Transaction Code 971.

      Note:

      It is not necessary to input TC 290 .00 on an IMF account. Input of the TC 971, AC 270, will release the "-A" freeze on an IMF account. BMF accounts still require the input of a TC 290 to release the "-A" freeze. Refer to IRM 21.5.1.5.6, Incomplete CII Claims, (6), for additional information

    5. Request all needed information.

    6. Enclose a return envelope.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. Refer to IRM 21.3.3.4.25, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

  4. If taxpayer does not respond or submits an incomplete response:

    1. Perfect the document for input as an original

    2. Attach a copy of the C-Letter, if available

    3. Prepare for reprocessing following procedures in IRM 21.6.7.4.2.5, TC 150 Not Located - Duplicate or Amended Return Obtained

21.6.7.4.2.3 (10-01-2018)
TC 150 - Different Year or Different TIN

  1. If you identify a different year or different Taxpayer Identification Number (TIN) case while responding to inquiries on the AM toll-free telephone line, prepare Form 4442, Inquiry Referral, and route it to the Campus AM Account Paper function within your Directorate, using either Mixed Period or Mixed Entity as the reason for referral.

    Exception:

    If there is an open control on the account, refer Form 4442 to the employee with the open control using Open Control as the reason for referral.

  2. If the original return is posted on a different year, take the following action:

    If the original return is located on a different year and the duplicate or amended return posted to Then
    The correct period

    1. Request the original return using CC ESTAB or use the MeF return.

    2. Back out the original return from the incorrect tax period. Follow procedures in IRM 21.6.7.4.2.7, Tax Period Changes.

    3. Compare the returns for any adjustments.

    4. Correct the posted account to include any changes on the duplicate or amended return.

    5. Edit the original return for reprocessing to the correct tax period, prepare Form 3893, Re-Entry Document Control, if needed, and forward for processing.

      Note:

      Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents, for additional information.
    An incorrect period

    1. Transfer any misapplied payments to the correct tax period.

    2. Adjust the correct tax period to include any changes on the duplicate or amended return.

    3. Input TC 971 AC 002 on the incorrect tax year to cross-reference the correct tax period. See IRM 21.5.1.4.8, Transaction Code 971.

  3. If the original return is found on another TIN, determine if the accounts can be resequenced. Follow procedures in IRM 21.6.2.4.1, Resequencing Accounts.

    If the accounts Then
    CAN be resequenced Follow the instructions in IRM 21.6.2.4.1, Resequencing Accounts.
    CANNOT be resequenced

    1. Compare the duplicate or amended return with the posted TC 150.

    2. Transfer any misapplied payments to the correct TIN. Follow procedures in IRM 21.5.8, Credit Transfers.

    3. Adjust the posted tax module to include any changes on the duplicate or amended return, if necessary.

    4. Input TC 971 AC 002 on the incorrect TIN to cross-reference the correct TIN; and release the "E–" freeze. See IRM 21.5.1.4.8, Transaction Code 971.

  4. When working filing status changes involving a joint account, follow procedures in IRM 21.6.1, Filing Status and Exemption/Dependent Adjustments.

21.6.7.4.2.4 (10-01-2018)
TC 150 - Original Return Not Obtained

  1. If a TC 150 is located and there is no reason to request the original return for verification, make the adjustment using the appropriate blocking series. See IRM 21.5.2.4.22, Blocking Series (BS).

    If the original return is requested but not received and Then
    The return is charged out to another area Contact the area for the return or a complete copy.
    The return is not charged out to another area Request the return a second time.
    A second request does not secure the return

    1. If unable to secure the return after the two previous requests, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge. For information on where to fax Form 2275, refer to Who/Where Tab, then click on the Files Contact Listing to research the fax number of the file location needed.

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.
      Note: Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing, for additional information.

    4. If no reply to the Letter 418C, follow procedures in IRM 21.5.3, General Claims Procedures.

21.6.7.4.2.5 (04-18-2022)
TC 150 Not Located - Duplicate or Amended Return Obtained

  1. If the duplicate or amended return is received and is intended to be an original return:

    1. Determine if the return is complete and processable.

    2. Telephone or correspond for missing forms, schedules, or signatures.

    3. Suspend for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing, for additional information.

    4. If no correspondence was necessary (return was complete and processable as filed) or if there is no reply to correspondence, process the return as follows:

    If Then
    The return is a Form 1040 series

    1. Circle out in red, all "G" coded marks and/or notations on the return (e.g., "Duplicate," "Copy," "Amended," etc.).

      Exception:

      If the return was GUF voided/deleted in error by Integrity and Verification Operation (IVO)/Taxpayer Protection Program (TPP), and the IRP data supports the income/withholding shown on the return or the taxpayer provides substantiation, change the received date to the received date of the deleted return.

    2. To determine the DLN to be used on the reprocessed return refer to IRM 21.5.2.4.23.3, DLNs Used for Reprocessing Documents.

    3. Enter Computer Condition Code (CCC) "3" on refund returns, when the signature and/or Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, is missing.

      Reminder:

      CCC "3" generates a TC 570 and a "-R" freeze on the account when the TC 150 posts. The overpayment will not refund until the freeze is released.

      Note:

      Computer Condition Codes (CCCs) are entered in the blank area to the right of “Spouse itemizes on a separate return, or you were a dual-status alien”. Refer to Exhibit 3.11.3-4, Computer Condition Codes (CCC), for additional information.

    4. Process the return as original. Refer to IRM 21.5.1.5.5 Processing/Reprocessing CII Tax Returns.

    5. Input TC 971 AC 002 to indicate the duplicate return is being reprocessed as the original (to post as TC 150). Use the posted TC 976 date as the transaction date.
    The return is a Form 1040-X, Amended U.S. Individual Income Tax Return

    1. Circle out, in red, the word "Amended" and the "X" in the return title.

    2. Prepare a blank Form 1040, U.S. Individual Income Tax Return, or conversion Form 6114, Prior Year and Conversion Form 1040 Edit Sheet, with all relevant tax data.

    3. Reprocess the return as an original. Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents.

    4. Input TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150) which will release the E– freeze. Use the posted TC 977 date as the transaction date.

    5. Enter CCC "U" when forms or schedules, to support the return entries, are missing.

  2. In cases where the TC 971 AC 010 created an "E-" freeze because no TC 150 posted, research CC FFINQ:

    If Then
    Original return is in processing Monitor IDRS until the TC 150 posts. Refer to IRM 21.4.1.4.1.2.6, Error Resolution System (ERS) Status Codes, for additional information when considering ERS involvement.
    TC 610 is posted and there is no information on CC FFINQ, the return may be a balance due e-filed return that has not posted, or the original return due date has not expired Push code the return with your IDRS number. Follow procedures in IRM 21.5.1.4.4.2, TC 930 Push Codes, or IRM 21.5.1.5.7, CII Push Codes.
    TC 610 posted, determine if the original return was rejected by researching CC TRDBV Follow the procedures in (1) above to process the taxpayer's Form 1040-X as the original
    None of the above apply and Form 1040-X is for the current year

    1. "G" code the Form 1040-X.

    2. Send to Numbering for processing.
      Note: This action allows the "E–" freeze to remain on the module awaiting TC 150 posting.
    None of the above apply and Form 1040-X is for a prior year Follow procedures under (1) above.

21.6.7.4.2.6 (10-01-2021)
TC 150 Not Located - Duplicate/Amended Return Not Obtained

  1. When there is no TC 150 and the duplicate or amended return cannot be obtained, take the following action:

    If Then
    TC 971 created the TC 977

    1. Correspond with the taxpayer using a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to request copies of the original and duplicate amended return.

    2. Suspend case for 40 days; 70 days for overseas taxpayers.
    TC 971 did not create the TC 977

    1. Request TC 976/977 DLN.

    2. If unable to secure the return after the two previous requests, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge

    3. Send a Letter 418C, to the taxpayer to request copies of the original and duplicate amended return.

      Note:

      Do not send Letter 418C if return is charged out to another area. Contact the area for the return or a complete copy.

    4. Suspend case for 40 days; 70 days for overseas taxpayers.

  2. If there is no reply to the correspondence and you have not received the duplicate or amended return take the following action:

    If Then
    No credits posted on the account

    1. Prepare a dummy return.

    2. Use the DLN of the TC 976 or 977 to post a TC 150 and release the freeze. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns.
    Credits posted on the account

    1. Prepare a dummy return, with a tax liability equal to the credits.

    2. Use the DLN of the TC 976 or 977. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns.
    TC 971 created the TC 977

    1. Prepare a dummy return with a new DLN to post a TC 150 and release the freeze.

    2. Input TC 971 AC 002 to release the E- freeze and prevent the issuance of an erroneous "-A" freeze. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns.

    Caution:

    This procedure is used only if insufficient information is available to process the return as an original. This action satisfies the filing requirement for the module. Ensure the return was not intended for another module.

21.6.7.4.2.7 (10-01-2021)
Tax Period Changes

  1. Returns may be processed to an incorrect period or taxpayer requests a change in accounting period. The following procedures are included in this section:

    • Mixed Periods

    • Change in Accounting Period

  2. When a return is posted to an incorrect period it may be necessary to correct the assessment statute expiration date (ASED) to reflect the correct return received date. Use CC REQ77/FRM77 to input TC 560 to correct the ASED if necessary. See IRM 2.4.19.2, Overview of Command Codes REQ77, FRM77, and FRM7A, for information on CC REQ77. Refer to IRM 25.6.1.5, Basic Guide for processing Cases with Statute of Limitation Issues, for ASED related concerns as applicable.

  3. Use the following instructions when using TC 560 to correct the ASED:

    1. TC 560 on CC REQ77 must be input on IDRS to correct the ASED to show the posting of the correct return

    2. Input "70" (in the DLN-CD field) to extend the ASED or "99" (in the DLN-CD field) to back date/back down the ASED

21.6.7.4.2.7.1 (10-01-2018)
Mixed Periods

  1. A mixed period duplicate filing condition (TRNS36, Duplicate Filing Condition) is created when returns from different tax periods, but for the same taxpayer, are processed to the same tax module.

  2. One of two conditions occur on mixed period cases.

    1. The correct year return posts first

    2. An incorrect year return posts first

  3. If you identify a Mixed Period case while staffing the AM toll-free telephone line or are located in a Taxpayer Assistance Center, prepare Form 4442, Inquiry Referral, and route it to the Campus AM paper function within your Directorate using Mixed Period as the reason for referral.

    Exception:

    If there is an open control on the account, refer the Form 4442 to the employee with the open control using Open Control as the reason for referral.

  4. If a return needs to be reprocessed, you must research the secondary SSN (if the filing status is joint) to see if a return has already been filed for that tax period. If an original return is found on the secondary TIN, do not reprocess the return. Follow appropriate adjustment procedures on the secondary SSN. See IRM 21.6.1.5, Filing Status Change Procedures.

  5. Refer any reprocessable/reinput return for which the ASED has expired or is imminent to the Statute function as indicated below:

    If Then
    Document posted as a TC 150 Within 90 days of expiration
    Document did not post as a TC 150 (e.g., document posted as a TC 976/977 and never posted as a TC 150) Within 180 days of expiration

  6. Do not abate tax on the incorrect module before referring the cases to the Statute function.

  7. Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, and Document 7368, Basic Guide for Processing Statute Cases.

21.6.7.4.2.7.2 (10-01-2017)
Correct Year Return Posted First

  1. If the correct year posted first, take the following action:

    1. Transfer any misapplied payments to the correct period.

    2. Use a secondary TC 570 on the credit side, if needed, to prevent refunds from generating.

    3. Release the "-A" freeze by inputting a TC 29X.

    4. Input a TC 971 AC 002 to cross-reference the other tax period. Use the posted TC 976/977 date as the transaction date.

  2. Do not request the return from files. Prepare a dummy return, including all schedules and forms, using the information from CC TRDBV or CC RTVUE, for the correct tax period if there is no return posted. Refer to IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns, for additional information. Input TC 971 AC 017 on the reprocessable year. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns.

  3. If there is a TC 140 in the module, input TC 599 closing code (CC) 094 for taxable return secured, TC 599 CC 096 for non-taxable return secured, and TC 971 AC 017 on the reprocessable year. Refer to IRM 5.19.2, Individual Master File (IMF) Return Delinquency, for additional information.

  4. See IRM 21.5.1.5.5, Processing/Reprocessing CII Tax Returns, for information on processing CII images.

  5. If there is a return posted on the other tax period, adjust the tax, credit, and reference fields to reflect the correct return information.

21.6.7.4.2.7.3 (04-18-2022)
Incorrect Year Posted First

  1. If the incorrect year posted first, take the following action:

    Caution:

    Refer to IRM 20.1.2.2.6.2, Incorrect Tax Shown Recorded, and IRM 20.1.2.2.6.3, Wrong Return Posted First, for procedures on accounts when the taxpayer’s original, true return is being processed after a TC 150 has posted or when correcting errors related to the "tax shown" on the original return.

     

    1. Transfer any misapplied payments to the correct period.

    2. Use a secondary TC 570 on the credit side, as needed.

    3. Input TC 570 on the debit side, if a refund was not issued, to suppress CP 60, We removed a payment Erroneously Applied to Your Account - Balance Due issuance.

    4. Increase or decrease tax and credits to reflect the correct figures. Use the appropriate hold code. For additional information, see Document 6209 Section 8C - Master File Codes, 3 - Hold Codes.

    5. Use blocking series "00."

    6. Update the Return Processable Date and if needed update the ASED using TC 560 to 3 years from the received date of the TC 976 return as applicable.

    7. Include a statement in the Remarks section indicating that because of the mixed period, the TC 976 is now the original return.

    8. Adjust any item reference fields.

    9. Use Hold Code 3 or 4, as needed.

    10. Advise taxpayer of corrected figures if the account will now be in balance due status. Correspond with the taxpayer using a Letter 2670C, Wrong Year Post First/Correction Notification.

    11. Consider any posted penalties.

    12. Analyze the module to determine if ES penalty should be assessed or recomputed. See IRM 20.1.3, Estimated Tax Penalties.

    13. Input TC 971 AC 001. Cross-reference the other tax period.

    14. Correct the withholding to reflect any refund or offsets previously issued from the incorrect year's modules.

    15. If a refund was previously issued, follow procedures in IRM 21.5.2.4.23.10, Moving Refunds.

    16. When a refundable credit was involved, the credit must be reversed and any refund or offset must be corrected. Refer to IRM 21.5.2.4.23.10, Moving Refunds, and IRM 21.6.3.4.2, Refundable Credits, for additional information.

      Caution:

      Enter Computer Condition Code (CCC) O in the filing status portion of the return to prevent a second refund.

    17. Correspond with taxpayer if a refund was issued using a Letter 2670C, Wrong Year Post First/Correction Notification. Advise a processing error was made and an additional refund or balance due notice will be issued.

    18. Refer to IRM 21.4.6.4.1, Tax Offset, if TC 896 or TC 826 posted to the module.

  2. Do not request the return from files. Prepare the dummy return, including all schedules and forms, based on the information from CC TRDBV or CC RTVUE, if a TC 150 is not posted. If the Modernized e-file system (MeF) return is available on the AMS system, thru the Employee User Portal (EUP) application, you can print and process the return. Refer to IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns, for additional information. Input TC 971 AC 017 on the reprocessable year. Use Form 3893, Re-Entry Document Control, and route appropriately.

  3. If there is a TC 140 in the module, input TC 599 CC 094 for taxable return secured, TC 599 CC 096 for non-taxable return secured, and a TC 971 AC 017 on the reprocessable year.

    Note:

    Use posting delay code for one cycle, on the correct year, if the incorrect year is in balance due status and the correct year in overpayment status.

  4. Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns. Follow local procedures for bypass DIF scoring.

  5. Refer to IRM 21.5.1.5.5, Processing/Reprocessing CII Tax Returns, for information on processing CII images.

  6. If there is a return posted on the correct tax period:

    1. Increase or decrease the tax, credit, and reference fields to reflect the correct return information.

    2. Use posting delay code on the correct year for one cycle if the incorrect year is in balance due status and the correct year is in overpayment status. Follow the procedures in IRM 21.6.7.4.14, True Duplicate Return, if the posted data matches the second return.

21.6.7.4.3 (10-01-2018)

Post Refund Case - Form 1040-X

  1. Forms 1040-X, for which refunds are issued by Document Perfection, are received in AM when a TC 150 is not present on the module.

    1. The Form 1040-X is processed with Document Code 54.

    2. The adjustment resequences for 10 cycles.

    3. The adjustment then unposts if no TC 150 is present.

    4. A TC 977 and TRNS29 notice is generated.

    5. The TRNS29 is sent to AM.

  2. Contact the Unpostable function if Form 1040-X and the deleted adjustment document are not received in AM.

  3. Review the Form 1040-X and the TRNS29 to determine the correct TIN or tax period. Follow TRNS29 research procedures in this section.

  4. Take the following action to resolve the case:

    1. Math verify the Form 1040-X.

    2. Obtain the original return, as necessary.

    3. Determine if an incorrect refund was issued due to a math error or erroneous refund. Refer to IRM 21.5.4.5, Math Error Procedures Processing, or IRM 21.4.5.5, Erroneous Refund Categories and Procedures, for additional information.

    4. Input the adjustment to the correct account.

    5. Use the appropriate blocking series, RC and SC. See Document 6209 Section 8C - Master File Codes, for additional information.

21.6.7.4.4 (04-18-2022)

Duplicate or Amended Returns - TRNS36

  1. A Duplicate filing condition (TC 976/977) occurs when a duplicate or amended return posts to an account with an original return (TC 150) posted. Transcript (TRNS) 36, Duplicate Filing Condition, are displayed on Servicewide Notice Information Program (SNIP) as TRNS36. Consider all of the following when working Duplicate filings:

    • Superseding returns

    • Return filed for each income document, for example Form W-2 and/or Form 1099

    • True Duplicate returns

    • TRNS29, Duplicate/Amended Return Posts to an Account with No Original Return Present, TRNS29 are displayed on SNIP as TRNS29.

    • TRNS36/TRNS29 - When changing the filing status (except Single to Head of Household or Head of Household to Single) and one of the Premium Tax Credit (PTC) data elements as shown in IRM 21.6.3.4.2.12.7, Premium Tax Credit (PTC) - Adjusting the Account, are on the module, refer to IRM 21.6.1.5, Filing Status Change Procedures, (5), to determine potential impact.

    • TRNS36/TRNS29 - When adding an exemption (spouse or dependent) and the PTC data elements are NOT present, deleting an exemption and one or more of the PTC data elements are present, or correcting the TIN of an exemption claimed on the return due to math error, then research Coverage Data Repository (CDR) to verify if the person being added/deleted received the Advanced Premium Tax Credit (APTC). If they received APTC, then refer to IRM 21.6.3.4.2.12.6, Premium Tax Credit Amended Returns, IRM 21.6.3.4.2.12.6.1, 8962 PTC Calculator Response, and for math errors refer to IRM 21.6.3.4.2.12.5, Premium Tax Credit Notice / Letter Responses, for additional information.

    • TRNS36/TRNS29 - When increasing or decreasing income and there is PTC data elements on the module as shown in IRM 21.6.3.4.2.12.7, Premium Tax Credit (PTC) - Adjusting the Account, then refer to IRM 21.6.3.4.2.12.6, Premium Tax Credit Amended Returns, for additional information.

    • Penalty and interest

    • Math Errors. Follow procedures in IRM 21.5.4.5, Math Error Procedures Processing

    • Refer to IRM 21.6.2, Adjusting TIN-Related Problems, for any TIN related problems

    • Injured Spouse allocations when the TC 976/977 is blocked in "92" , refer to IRM 21.4.6.5.2, Injured Spouse Inquiries.

  2. When a Duplicate filing occurs, master file generates:

    • A TRNS36, Duplicate Filing Condition (associated with the amended or Duplicate return)

      Note:

      When the original return (TC 150) posts after multiple amended/duplicate returns, only one TRNS36 Notice will generate based on the last TC 976/977. You must consider all posted TC 976/977s when adjusting the account.

    • A "-A" freeze on the account.

    Caution:

    There are situations when a return with a later received date posted as the TC 150, while a return with an earlier received date is posted as a TC 976 on the account. Make sure thorough research is completed in these situations. For information on correcting the Assessment Statute Expiration Date (ASED), follow IRM 21.6.7.4.2.7.3, Incorrect Year Posted First.

  3. For Duplicate filed returns where the Economic Impact Payment (EIP) was not issued see IRM 21.6.3.4.2.13.1, Economic Impact Payments- Account information, for information regarding systemic release of these payments.

21.6.7.4.4.1 (12-20-2022)
TRNS36 - Control

  1. The TRNS36 electronic transcripts are assigned through CII and the control base (DUPF) remains open until:

    • The "-A" freeze is released, or

    • The case is referred to the appropriate area and resolved.

  2. The release of the "-A" freeze allows the computer to generate a refund or offset of any credits. See Document 6209, Section 8A, Master File Codes - Transaction, MF and IDRS Collection Status, Freeze and IDRS Status 48, Restrictive and Filing Requirement, for instructions on releasing the "-A" freeze.

    Caution:

    If TRNS36 is on an invalid SSN, Do Not release a refund unless the taxpayer responded to CP 54B.

  3. The Files function no longer pulls returns for the original TRNS36, TRNS36B, TRNS36F, and TRNS36S transcripts. Utilize CC ESTAB to request the return when necessary.

    Note:

    Do not request the return for a signature on the duplicate filed return.

  4. Following are some conditions where a return is necessary:

    Note:

    This list is not all inclusive.

    Reminder:

    Do not request the return if you are transferring the case to identity theft.

    • No information on CC TRDBV for the duplicate return

    • Unable to verify the income and withholding information claimed on the duplicate return using CC IRPTR

    • AUR and CAT A criteria

    • Taxpayer is deceased and the Form 1310 is needed

    • SFR audit reconsideration

    • **For tax period 2019 only** some taxpayers used the Non-filer tool on IRS.gov to obtain Economic Impact Payments (EIP); they subsequently filed Amended EIP Returns to report income. This caused Duplicate filing conditions (TC 976/977) and generated Transcript (TRNS) 36 cases. Temporarily, until the Federal Records Center (FRC) is reopened and Campus Files Areas are caught up, CSR’s are processing the claims using the information based upon IDRS data (CC TRDBV).If CAT-A criteria is met, DO NOT REQUEST the original or duplicate return. Suspend the case to CAT-A with "Amended EIP $1" Non-filer tool return in the CII Case Notes. The CAT-A classifier reviews the IDRS data and attempt to make a determination with the information available or advise the CSR to request the documents.

      Caution:

      Do not order the document if the DLN contains a Julian date of 888 or 887. These are Exam SFR cases and were not sent in by the taxpayer and not in Files.

  5. Input CC ESTAB to request the original return and/or the TC 976.

    If Then
    The return is charged out to another area Contact the area to determine the actions needed..
    Unable to secure the return after two CC ESTAB requests

    1. Input a third request as a "Special Search" using Form 2275, Records Request, Charge and Recharge. For information on where to fax Form 2275, refer to Who/Where Tab, then click on the Files Contact Listing to research the fax number of the file location needed.

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.

    4. If no response is received, follow No Consideration procedures for the claim and send a Letter 916C. Refer to IRM 21.5.3.4.6.3, No Consideration Procedures, for more information.

  6. If the TC 976 generated as a result of TC 971 AC 141 (automated Substitute For Return (SFR)) or the module has a history item of "REPRXAS150" and you can determine that the original return (TC 150) belongs to the taxpayer then release the -A freeze.

  7. Utilize CC TRDBV and CC IRPTR to research the original and duplicate return to verify the following:

    1. The name(s) of the taxpayer(s)

    2. The address on the two returns

    3. The filing status on both returns

    4. The dependents on both of the returns

    5. The income and credits (e.g., federal withholding) reported on the original and/or duplicate return

      Note:

      For additional information on the entity refer to IRM 21.6.7.4.4.4, Entity Verification.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  8. Follow the table below for researching the TRNS36 Accounts:

    If Then
    After research you determine the two returns belong to the same taxpayer

    1. Verify the income reported on the two returns using CC IRPTR.

    2. Determine why the duplicate return was filed.

    3. Make adjustments to the return if needed.
    Taxpayer is responding to a math error or adding additional information to original return Input a TC 290 for the amount of the adjustment with the appropriate reference numbers and RCs. See Document 6209 Section 8C - Master File Codes, for additional information. If no change to the return, input a TC 290 .00 to release the -A freeze.
    You can determine either the duplicate or the original return belongs to another tax period Follow the procedures in IRM 21.6.7.4.2.7.2, Correct Year Return Posted First, and IRM 21.6.7.4.2.7.3, Incorrect Year Posted First.

    Note:

    Do not request the return from files. Prepare the dummy return, including all schedules and forms, based on the information from CC TRDBV. If the return is available on AMS, you can print and process the return.
    After research you determine that the returns do not belong to the same taxpayer and the case meets Mixed Entity criteria Follow the procedures in IRM 21.6.2.4.2, Mixed Entity Procedures.
    After research you determine that the returns do not belong to the same taxpayer and the case meets identity theft criteria as described in IRM 21.3.4.28, Identity Theft Issues

    1. Do not request the tax returns, MFTRA U (Numident), or TRPRT prints

    2. Notate your research in the Case Notes section of CII for example: "Researched CC TRDBV, CC IRPTRL and CC IMFOL" .

    3. Research account for related cases and documents and link to case

    4. Use CC REQ77 to input the TC 971 AC 522 on CC ENMOD. For information on the appropriate tax administration Source Code (SC) refer to Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Suspicion)

    5. Update the program number to 710-40011 and mark the case as statute searched

    6. Change the category code to either IDT1 (taxpayer identified identity theft) or IDT3 (IRS identified identity theft)

    7. Reassign the case to Identity Theft. See AM Site Specialization Temporary Holding Numbers.
    After research you determine that an unresolved TPP Indicator is present on the account Follow the procedures in IRM 21.5.6.4.9.1, E-Freeze Procedures for Unresolved Taxpayer Protection Program (TPP) Issues.
    The TC 976 Document Locator Number (DLN) is assigned blocking series 920-929, (indicates a Form 8379, Injured Spouse Allocation, has been filed with the return)

    1. Reassign the case to Injured Spouse. See AM Site Specialization Temporary Holding Numbers.

    2. Use category DMFC.

    3. Update the program code to 97140.

    4. Refer to IRM 21.4.6.5.2, Injured Spouse Inquiries, for additional information.

  9. If all case actions have been completed and you are monitoring the account to ensure proper posting, close the case and establish a monitor base on IDRS using category code "MISC" with the current date as a received date.

    Note:

    When establishing this monitor control base, using an asterisk (*) does generate the current date when used with CC ACTON.

    Caution:

    If it appears that the taxpayer is expecting a response and a notice will not be issued, correspond with the taxpayer using an appropriate C-Letter.

  10. Take the following actions concerning Social Security Administration (SSA) Benefits on a duplicate return or Form 1040-X that claims withholding and/or refundable credits:

    • Review any duplicate or amended return that claims SSA benefits (total or taxable) with refundable credits and/or withholding and the refund is equal to the amount of the credits.

      Note:

      For a complete list of refundable credits, refer to IRM 21.6.3.4.2, Refundable Credits.

    • Research CC IRPTR to substantiate the income and/or withholding. If CC IRPTR does not substantiate the request, follow "No Consideration" procedures by using Letter 916C, Claim Incomplete for Processing; No Consideration. Refer to the procedures in IRM 21.5.3.4.6.3, No Consideration Procedures. Suggested paragraph: "We cannot substantiate the income, withholding, or credits being claimed on the return. Therefore, we cannot process your claim at this time. If you have official supporting documents such as Form W-2, Forms 1099, or any other form that reports information concerning the income, withholding or credit, you may file another claim and attach your documentation" .

    Note:

    These procedures should be followed even though the withholding or refundable credit is below the specified tolerance amount. If cases are routed to the ID Theft sites, they will be returned to the originator.

  11. When working correspondence and the Form 14039, IRS Identity Theft Affidavit, is attached, take the following actions:

    • Send Letter 5073C to the taxpayer

    • Input the TC 971 AC 522 on CC ENMOD

      Note:

      Do not input an additional TC 971 AC 522 if one already exists for the same tax year.

    • Change the category code to IDT1

    • Reassign the case to identity theft. See Accounts Management Site Specialization Temporary Holding Numbers.

21.6.7.4.4.2 (10-01-2018)
Unnumbered Form 1040-X, Subsequent Return or Unnumbered Subsequent Return

  1. Unnumbered Form 1040-X or subsequent return meeting Accounts Management (AM) criteria may be directly routed or hand carried to AM. Refer to IRM 3.11.6, Data Processing (DP) Tax Adjustments, for additional information.

  2. The Correspondence Imaging Inventory (CII) inputs a TC 971 AC 010 on these cases.

    • A TC 977 with Document Code 77 generates indicating a return is "in house."

    • The -A freeze does generate on the account.

    • Input the appropriate adjustment or TC 290 .00 to release the -A freeze (which sets when the TC 971 AC 010 posts).

      Note:

      AM employees MUST use the Integrated Automations Technologies (IAT) tools, as mandated in Exhibit 21.2.2-2, Accounts Management Mandated IAT Tools, to input adjustment of tax, penalty, interest and the release of freeze codes. Refer to IRM 21.2.2.4.4.14, Integrated Automation Technologies, for more information.

  3. Process these returns in the same manner as duplicate or amended returns received with a TRNS36 or TRNS29.

  4. Input the appropriate TC 971 action code when rerouting misdirected Forms 1040-X or subsequent returns. See IRM 21.5.1.4.8, Transaction Code 971.

21.6.7.4.4.3 (10-01-2011)
Preliminary Verification Procedures

  1. Compare the duplicate, amended or subsequent return with the TRNS36 notice or CC TXMOD. Note any discrepancies in the:

    • Document Locator Number (DLN)

    • Year

    • Name

    • TIN

    • Address

    • Filing Status

  2. Review the case for any missing forms and schedules. Follow procedures in IRM 21.5.3.4, General Claims Procedures, for numbered and unnumbered claims when information is missing.

21.6.7.4.4.4 (12-20-2022)
Entity Verification

  1. Compare the subsequent return's entity with the posted account information.

    If Then
    Entity does not match Search for any other TIN or names entered on the return.
    Another TIN is found

    1. Use CC NAMES, CC INOLE, or CC ATINQ to locate the correct account.

    2. Request CC IMFOL for any newly found TIN.

  2. Compare the address, filing status and exemptions for entity corrections:

    1. See the procedures in IRM 3.13.5.49, Updating Address Records, and IRM 3.24.37.6.16, Street Address Entries, (2)(e), for information about entering PO Boxes and street addresses.

      Caution:

      Exercise caution when correcting addresses shown on copies of returns and amended return, since they may reflect an old address.

    2. To verify the correct zip code for a taxpayer, refer to the United States Postal Service (USPS) Web Page, Look Up a ZIP Code

    3. Refer to IRM 21.6.1, Filing Status and Exemption/Dependent Adjustments, for information on correcting the filing status and exemptions.

  3. If a new address is shown on the subsequent return and CC ENMOD does not reflect the change, then update the entity with the new address. Research the entire account for any indication of identity theft before making any address updates.

21.6.7.4.4.5 (10-01-2002)
Income, Tax, Deductions, and Credits Verification

  1. Follow procedures in IRM 21.5.3.4.5, Math and Master File Verification of Claims and Amended Returns.

21.6.7.4.5 (05-05-2022)

Multiple Uses of Taxpayer Identification Numbers - TRNS36F (DUPTIN Filing Condition)

  1. A multiple (DUPTIN) filing condition occurs when the same TIN is used as a primary taxpayer on one return and a secondary taxpayer on another return for the same tax year. These cases have an open control to Brookhaven or Philadelphia only. If there is no open control and the account contains a TC 971 AC 151 with a TC 570 holding the refund, follow the procedures in (16) below. The TRNS36F, is an electronic transcript and is assigned through CII. TRNS36F is displayed on Service Notice Information Program (SNIP).

  2. When a DUPTIN filing condition occurs, Master File posts the second return and:

    • Freeze any overpayment on the second return with a TC 570 (-R freeze).

    • Post a TC 971 AC 151 to indicate there is a multiple TIN filing condition. The primary TIN from the X-Ref return is reflected in the TC 971.

    Note:

    When working CII cases, refer to IRM 21.5.1.5, Correspondence Imaging Inventory (CII) Procedures, for additional information.

  3. Telephone assistors should advise taxpayers to respond to the Letter 31C, Duplicate Returns Filed; Explanation Requested. Once taxpayers have responded to the letter, they should hear something within 30 - 45 days.

  4. Below are definitions for use when working TRNS36F transcripts:

    • DUPTIN return is the return that posted second and generates the TRNS36F

    • X-Ref return is the return that posted first

    • Common taxpayer is the taxpayer found on both returns

      Note:

      This taxpayer is always referred to as the common taxpayer even when discussing their separate return (primary filer).

    • Primary taxpayer is the taxpayer who filed the joint return with the common taxpayer.

  5. There are three scenarios involved when working DUPTIN Filing Conditions.

    • Scenario 1 - DUPTIN return is filing status (FS) 1 (Single), 3 (Married Filing Separate), or 4 (Head of Household)

    • Scenario 2 - DUPTIN return is FS 2 (Married Filing Joint) or 6 (Married Filing Joint and your spouse cannot be claimed as a dependent on another person's return)

    • Scenario 3 - DUPTIN return and X-Ref return is FS 2 (Married Filing Joint) or 6 (Married Filing Joint and your Spouse cannot be claimed as a dependent on another person’s return)

    Note:

    Refer to CC RTVUE/ENMOD to check the filing status on the returns. When a TRNS36F transcript generates on a Scenario 3 account, the filing status on the X-Ref module changes to FS 1.

  6. When working TRNS36F cases, it may be necessary to follow procedures in other IRM sections such as IRM 21.3.3.4.9.2, Campus Collection Function Correspondence/Inquiry/Notice, IRM 21.5.1, General Adjustments, IRM 21.6.1, Filing Status and Exemption Adjustments, IRM 21.6.2, Adjusting TIN-Related Problems, IRM 3.21.263, IRS Individual Taxpayer Identification Number (ITIN) Real Time System (RTS), and IRM 25.6, Statute of Limitations.

    Note:

    When referring a case to other areas, ensure that all relevant documents have been scanned and attached and that all actions taken on the case have been recorded on Correspondence Imaging Inventory (CII).

    Caution:

    Be sure to research both accounts to determine international involvement which may include but is not limited to:
    DLNs
    Addresses
    Forms
    Location Code

  7. The DUPTIN case is controlled on IDRS/Correspondence Imaging Inventory (CII) and assigned for review. The control base should be established on the Common Taxpayer's TIN (DUPTIN) and should remain open until:

    • The "-R" freeze is released, or,

    • The case is referred to the appropriate area.

  8. The release of the "-R" freeze allows the computer to generate a refund or offset credits.

    Note:

    If TRNS36F is on an invalid SSN, Do Not release the refund unless the taxpayer responded to CP 54B.

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

    Note:

    Accounts with category code "CRIM" that do not have one of the above freeze codes, may be worked by AM employees.

  10. If at any point the taxpayer provides documentation that states fraud or forgery, or the taxpayer gives an indication of fraud or forgery, refer the case to Exam following instructions in IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status, (3). Use the "CAT-A Other" option on CII.

  11. If there is any indication the taxpayer is in a combat zone and the TRNS36F is the only issue, release the -R freeze and take no further action. If working case through CII, follow the current CII Updates to reassign CII case to designated employee per local procedures for -C/-G/-I freezes. See IRM 21.5.1.5, Correspondence Imaging Inventory (CII) Procedures.

    Exception:

    Do not release the -R freeze when there is an indication of mixed period, mixed entity or identity theft involvement.

    Note:

    If the account indicates the taxpayer exited the combat zone, the combat indicator on CC IMFOLE must be a "2" before any action can be taken.

  12. When there is an indication on the account of Automated Underreporter (AUR) involvement (TC 922) and the case meets ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, manually input a TC 971 AC 151 on the X-Ref account that has the TC 922 on the module, by using CC REQ77. Inputting the TC 971 AC 151 is an indication to AUR to close their case.

    Note:

    If AUR process code is pending (PN) on the account, input the TC 971 AC 151 with posting delay 1.


    When the TC 922 is located on the tax module, locate the Process Code. Follow the table below for routing the case:
    If Then

    1. Process Code below 55

    2. TC 971 AC 151 was input

    3. Exam criteria is met

    		 Forward case to Exam. Exam accepts case before AUR inputs their closing code.

    1. Process code 55 and above

    2. TC 971 AC 151 was input

    3. Exam Criteria is met

    		 Hold case until AUR inputs closing code and then forward case to Exam. On Process Codes 55 and above AUR has sent out a notice to the taxpayer concerning underreported income. AUR has to wait for response before inputting Process Code to close.

    Note:

    AUR closing code must be present prior to routing to Exam.
     

  13. Input CC ESTAB to request the return posted on the DUPTIN only if necessary. For a list of when a return is necessary refer to IRM 21.6.7.4.4.1 (4), TRNS36 - Control. Use the table if unable to secure a return:

    If Then
    The return is charged out to another area Contact the area to determine the actions needed..
    Unable to secure the return

    1. If unable to secure the return after the two previous requests, input a third request as "Special Search" using Form 2275, Records Request, Charge and Recharge

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.
    No reply to Letter 418C, Amended/Original Return Unavailable; Copy Requested

    1. Assess the amount of any payment received with the return on the X-Ref SSN.

    2. If there is a credit on the module, transfer the credit following instructions in IRM 21.2.4.3.10, Applying Unresolved Credits for AMRH.

    .

  14. AM works each TRNS36F up to the point that it is determined that the case's category code is procedurally required to be changed to one which would move the case to another area. This means that work with TIN-related problems such as identity theft, scrambled SSNs, IVO involvement or no merges should be routed to the appropriate area. Before transferring the case to another area to complete, notate your research on CII (e.g., “Researched CC TRDBV, CC IRPTRL and CC IMFOL”). If the taxpayer is due a refund, perfect the entity information if needed and release the refund.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), Do Not send Letter 31C or any other type of correspondence.

  15. AM employees who have access to the Integrated Automation Technology (IAT) aMend tool are required to use the tool. The tool assists in making adjustments, combining returns, separate to joint, sending letters and inputting required transaction codes when necessary. This tool performs unpostable checks and ensures use of appropriate codes, amounts and dates to prevent unpostables.

  16. When researching a joint return and a TC 971 AC 151 with a TC 570 has posted on the account, additional research needs to be completed. Take the following actions to resolve the account:

    If And Then
    TC 971 AC 151 with TC 570 is posted on a joint account Research of the secondary SSN shows:

    • there is no open control base with category code "C36F" ,

    • there is no return posted on Master File (per CC IMFOLT), and

    • CC TRDBV shows a return was received that was deleted or voided by Submission Processing

    • or CC TRDBV and CC IMFOL shows a return posted with MFT 32

    1. Do not forward a Form 4442 to Brookhaven AM

    2. Verify the information on the joint return

    3. Input a TC 571 (using CC REQ77) on the joint account to release the refund

  17. The TRNS36F cases are ran through the CP36 Transcript Tool weekly to identify what type of case it may be. All cases identified as IDT1, IDT3 and IDT8 are removed from the inventory and transferred to identity theft teams. The tool leaves a history item on CC ENMOD that assists in identifying the action needed to close the case. If there isn’t any history item on CC ENMOD, the case should be worked following normal duplicate return procedures. See the table below for the TRNS36 Transcript Tool category and the description on how the history item is displayed.

    Category History Item IRM Reference
    International INTRNTNAL Review case to determine any additional actions.
    CP05A CP05A IRM 25.23.4.8.1.1, Identity Theft (IDT) with RIVO Involvement.
    IDT1 IDT1 IRM 21.6.2, Adjusting TIN-Related Problems
    IVO IVO IRM 25.23.4.8.1.1, Identity Theft (IDT) with RIVO Involvement
    IDT3 IDT3 IRM 21.6.2, Adjusting TIN-Related Problems
    Prior Actions PRIORACT Review case to determine any additional actions.
    FS Changes FSCHANGE IRM 21.6.1.5, Filing Status Change Procedures
    Refund Schemes RFNDSCHEME IRM 25.23.4.8.1.3, Identity Theft (IDT) with IRP DATA, Refund Scheme or Schedule C Involvement
    AUR AUR IRM 21.6.7.4.6, Adjustment Considerations
    Deceased DECEASED IRM 25.23.4.8.1.2, Identity Theft (IDT) with Decedent Taxpayer Involvement
    Mixed Period MIXEDPRD IRM 21.6.7.4.2.7.1, Mixed Periods
    Refund/Balance Due Match REFBDMATCH Review case to determine any additional actions.

21.6.7.4.5.1 (01-30-2014)
TRNS36F Entity Verification

  1. Review both the DUPTIN and X-Ref return by using the appropriate command codes to verify if the name of the Common Taxpayer matches on both returns. Examples:

    • Jane Doe and Jane Doe - matches

    • Jane E Doe and Jane A Doe - does not match

    • Jane Doe and J Doe - does not match

    • Kathy Doe and Kathleen Doe - does not match

    • Kathy Doe and Cathy Doe - does not match

  2. If the Common Taxpayer's name does not match see IRM 21.6.2, Adjusting TIN-Related Problems, unless there is a clear indication there is only one taxpayer involved.

  3. If the Common Taxpayer's name does match then determine if Scenario 1 or Scenario 2 exist and follow procedures below in IRM 21.6.7.4.5.3, DUPTIN Return is FS 1/3/4 (Scenario 1) X-Ref Return is FS 2/6; IRM 21.6.7.4.5.4, DUPTIN Return is FS 2/6 (Scenario 2) X-Ref Return is FS 1/3/4; and IRM 21.6.7.4.5.5, DUPTIN is FS 2/6 (Scenario 2) X-Ref Return is FS 2/6.

21.6.7.4.5.2 (07-13-2017)
Telephone Inquiries Regarding TRNS36F

  1. If there is a TC 971 AC 151 on the DUPTIN module and you receive a telephone contact regarding the case, follow the chart below:

    If Then
    The call is regarding a refund and this is the first contact

    1. Do not complete a Form 4442/e-4442, Inquiry Referral.

    2. Advise the caller they might be receiving a letter and they have to complete the attached questionnaire and return it to the address on the notice.

    Note:

    Do not release any freeze conditions on the account.
    45 days have passed since the first contact and a letter has not been issued to the caller

    1. Complete a Form 4442 and fax it to the site with the TRNS36F control or attach to the Correspondence Imaging Inventory (CII) case if you have CII access. See IRM 21.3.5.4.2.1.1, Preparing an e-4442/4442, for additional information.

    2. Advise the caller they should be receiving a letter within 30 days and they must complete the questionnaire and return it to the address on the notice.

    Note:

    Do not release any freeze conditions on the account
    If more than 30 days have passed from the Form 4442 referral date and taxpayer has not received a letter Taxpayer meets TAS Criteria, refer to the procedures in IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, to determine if referral to TAS is appropriate.

    Note:

    Do not release any freeze conditions on the account.
    The caller states they are a victim of identity theft

    1. Complete a Form 4442 and fax it to the site with the TRNS36F control or attach to the CII case if you have CII access. See IRM 21.3.5.4.2.1.1, Preparing an e-4442/4442, for additional information.

    2. Advise the caller to send a Form 14039, IRS Identity Theft Affidavit.

    3. Input a TC 971 AC 522 on CC ENMOD with PNDCLM. For additional information on TC 971 IDT indicators, refer to IRM 25.23.2.4.4, Initial Allegation or Suspicion of Tax-Related Identity Theft - IMF Identity Theft Indicators.

    Note:

    Do not release any freeze conditions on the account.
    The caller states an incorrect SSN was used on the return Complete a Form 4442 and fax it to the site with the TRNS36F control or if using Correspondence Imaging Inventory (CII) notate all remarks in the history section. See IRM 21.3.5.4.2.1.1, Preparing an e-4442/4442.

    Note:

    Do not release any freeze conditions on the account.
    The case has been closed and the R freeze has not been released

    1. Do not release the freeze.

    2. Prepare a Form 4442 and forward to the area that last had the case.

    Note:

    If Brookhaven AM referred the TRNS36F case to another area i.e., EXAM, ID Theft/MXEN route the Form 4442 to that appropriate area.
    TC 971 AC 151 with a TC 570 on the account and no open control Refer to IRM 21.6.7.4.5 (16), Multiple Uses of Taxpayer Identification Numbers - TRNS36F (DUPTIN Filing Condition), for additional information.

21.6.7.4.5.3 (05-05-2022)
DUPTIN Return is Filing Status 1/3/4 (Scenario 1) X-Ref Return is Filing Status 2/6

  1. Follow the procedures below when working cases where the DUPTIN (DUPTIN return is the return that posted second) on a FS 1/3/4 return has already been used as a secondary TIN on a joint return for the same tax period.

  2. Correspond with the Common Taxpayer using Letter 31C, Duplicate Returns Filed; Explanation Requested. Letter 31C is shown on ENMOD and the request complete screen may be captured on CII.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), Do Not send Letter 31C or any other type of correspondence.

    Exception:

    If Form 1040-X, Amended U.S. Individual Income Tax Return, is received before the Letter 31C is mailed to the common taxpayer, or is received from the common taxpayer or the primary taxpayer on a joint return and based on the actions, resolves the TRNS36F issue, then use the Form 1040-X to adjust the account. Do not send the Letter 31C. Take all actions that are required to correct the account.

    Caution:

    For ASED/RSED considerations when the taxpayer is changing the filing status on a statute return, refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues, for additional information. For more information on filing status changes refer to IRM 21.6.1.4, Filing Status Research, IRM 21.6.1.5.5, Married Filing Joint to Married Filing Separate, Single, or Head of Household Procedures, or IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and the X-Ref (X-Ref return is the return that posted first) return if different. Correspondence should be addressed to the Common Taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria, refer to IRM 21.8.1.2.14, International Forms Processing.

  4. If Correspondence Exam selects the case (one return is joint and the other a non-joint return), the case file should contain the taxpayer’s response to AM to assist Exam with working these cases.

  5. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam; AM has the authority to work these cases. When referring a CP 36 F case to Exam use CAT-A CP 36 F.

    Note:

    Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is self-employment (SE) tax. Refer the case to Philadelphia IMF International since the case meets international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing.

    Note:

    If the required case action is to back out FS 1/3/4, refer to IRM 21.6.1.5, Filing Status Change Procedures; IRM 21.6.1.7.2, Command Code DDBCK; and IRM 21.5.2.4.23.10, Moving Refunds, for additional information.

    Caution:

    If changing the filing status and name on a return, per the table below and there are offsets, reverse the offsets back to the spouse’s account. Use a posting delay code to allow the entity change to post first.

    If And Then
    Reply indicates the common taxpayer filed both returns The X-Ref return, filing status (FS) 2/6, is the correct filing

    1. Refer to IRM 21.6.1.5.3.1, Married Filing Separate, Single, or Head of Household to Married Filing Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.7.2, Command Code DDBCK, for additional information.

    2. If all the income from the FS 1/3/4 return is reported on the FS 2/6 return, back out the FS 1/3/4 return on the common taxpayer SSN. If refund was issued on the FS 1/3/4, move the refund to the joint return. Notify the taxpayer of the action taken on the account by using a Letter 673C.

    3. If any of the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures, see note above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 return. Use the Letter 673C to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040-X must be filed if changes are needed to the FS 2/6 return.
    Reply indicates the common taxpayer filed both returns

    1. The DUPTIN return (FS 1/3/4) is the correct filing and was filed prior to the due date or

    2. filed after the due date and the common taxpayer has provided documentation to support the marriage was not legal for federal tax purposes, refer to IRM 21.6.1.5.7, Married Filing Jointly or Married Filing Separately is Invalid or Filed with Incorrect Status, for additional information.

    1. Refer the primary taxpayer on the joint return to Exam (CAT-A CP 36F) for deficiency procedures, per note, above.

      Note:

      If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return based on the action being taken on the common taxpayer. For example, if a Form 1040-X filed by the primary on the FS 2 return to change from FS 2 to FS 3 was disallowed for not being timely on the election.

    2. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the name and TIN of the common taxpayer from the account. Do not change any tax or credits on the return.

    3. Release the refund on the FS 1/3/4 using a Posting Delay Code (PDC).

    4. If the refundable or non-refundable credits on the joint return belong to the common taxpayer, erroneous refund procedures should be researched. Refer to IRM 21.4.5.5, Erroneous Refund Categories and Procedures, for additional information. For a list of refundable and non-refundable credits refer to IRM 21.6.3.4.1, Non-Refundable Credit Procedures, and IRM 21.6.3.4.2, Refundable Credits.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer a Form 1040-X may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.
    Reply indicates the common taxpayer filed both returns The DUPTIN return (FS 1/3/4) is the correct filing but was filed after the due date

    1. Compare return information to verify if all income reported on the DUPTIN return was reported on the joint return.

    2. If all income was reported, disallow the claim in full, refer to IRM 21.6.1.5.5, Married Filing Joint to Married Filing Separate, Single, or Head of Household Procedures, and send Letter 105C, Claim Disallowed. Back out the DUPTIN return.

    3. If not all income was reported, the joint return must be assessed using deficiency procedures. Refer the case to Exam as a "CAT-A CP 36 F" , see note above.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 return. If a refund was issued on the FS 1/3/4, move the refund to the joint return. For additional information refer to IRM 21.5.2.4.23.10, Moving Refunds. Notify the taxpayer by using the Letter 105C, the FS 1/3/4 was not accepted.
    Reply indicates common taxpayer did not file one of the returns The FS 2/6 return is not valid

    1. Follow procedures in IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status, (3), if the taxpayer indicates fraud or forgery.

    2. If the taxpayer does not indicate fraud or forgery and does not meet the criteria for Exam as stated in note above, release the refund on the FS 1/3/4 return using a PDC.

    3. Change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the name and TIN of the common taxpayer from the account. Do not change any tax or credits on the return. If the credits on the joint return belong to the secondary taxpayer, erroneous refund procedures may need to be followed. Refer to IRM 21.4.5.5, Erroneous Refund Categories and Procedures, for additional information. For a list of refundable and non-refundable credits refer to IRM 21.6.3.4.1, Non-Refundable Credit Procedures, and IRM 21.6.3.4.2, Refundable Credits.

    4. If any of the FS 1/3/4 refund was applied to the joint return due to a balance due return, reverse the offsets.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040-X may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Note:

    If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return based on the action being taken on the common taxpayer. For example, if a Form 1040-X filed by the primary on the FS 2 return to change from FS 2 to FS 3 was disallowed for not being timely on the election.
    Reply indicates common taxpayer did not file the FS 1/3/4 but the return matches IRP data The income on the FS 1/3/4 return matches the information on CC IRPTR.

    1. Send a letter advising the taxpayer to file a Form 14039, Identity Theft Affidavit, and return it within 40 days. Leave the control base open.

      • If Form 14039 is received within 40 days indicating identity theft, follow the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control, and route the case to identity theft.

    2. If the Form 14039 is not received within 40 days, follow the procedures below:

      • Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

      • If all income is reported, back out the FS 1/3/4 and notify the taxpayer of all actions taken by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If all income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures, see note above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the return. If refund was issued on the FS 1/3/4, move the refund to the joint return. Use the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040-X must be filed if changes are needed to the FS 2/6 return.
    Reply indicates common taxpayer did not file one of the returns The taxpayer has no knowledge of one of the returns. It appears 2 taxpayers are using the same SSN and may be a victim of ID Theft. Transfer the case to identity theft by following the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control.
    No reply from common taxpayer, or no signature on Letter 31C Return was timely filed

    1. Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

    2. If all income is reported, back out the FS 1/3/4 and notify the taxpayer of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If any of the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see note above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures:

      • Change the filing status on the FS 2/6 to FS 1/3/4.

      • Remove the name and TIN of the common taxpayer from the joint return. Do not change any tax or credits on the return.

      • Send a letter to the primary taxpayer stating the filing status has been changed due to information received and a Form 1040-X may need to be filed.

      • Release the refund on the FS 1/3/4 using a PDC.

    Note:

    If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return. For example, if a Form 1040-X filed by the primary on the FS 2 return to change from FS 2 to FS 3 was disallowed for not being timely on the election.
    No reply from common taxpayer, or no signature on Letter 31C Return was filed after the due date

    1. Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

    2. If all the income is reported, back out the FS 1/3/4 and notify the taxpayer of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If all income was not reported, back out the FS 1/3/4 return completely, and send the Letter 916C, Claim Incomplete for Processing; No Consideration.

      Note:

      If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return. For example, if a Form 1040-X filed by the primary on the FS 2 return to change from FS 2 to FS 3 was disallowed for not being timely on the election.

    Caution:

    It is extremely important that you carefully review for the Assessment Statute Expiration Date (ASED),and the Refund Statute Expiration Date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  6. Refer to the following IRMs when the taxpayer responds after the case has been closed and submits information indicating a return that was previously backed out was correct.

    • IRM 25.15.19.2.4, Joint Returns – Invalidated,

    • IRM 25.15.19.2.4.2, Determining if Joint Election is Valid, and

    • IRM 25.15.19.2.4.3, Joint Election is Invalid.

  7. If taxpayer does not respond (no reply) or no signature on the Letter 31C, and the common taxpayer has made payments on the account, compare the data on the FS 1/3/4 to the FS 2/6 to verify income/withholding is reported. Follow the table below to resolve the cases:

    IF THEN
    Income is reported on the FS 2/6

    1. Back out the FS 1/3/4. Refer to IRM 21.6.1.5.3.1, Married Filing Separate, Single, or Head of Household to Married Filing Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.7.2, Command Code DDBCK, for additional information.

    2. Send Letter 673C, informing the taxpayer of the actions taken on the account.
    Income is not reported on the FS 2/6

    1. Thorough research should be completed to determine the taxpayer’s intent.

    2. Research tax years prior and after the tax year of the case.

    3. If the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see note above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, and the taxpayer has made payments on the FS 1/3/4:

      • Change the filing status on the FS 2/6 to FS 1/3/4.

      • Remove the name and TIN of the common taxpayer from the joint return. Do not change any tax or credits on the return.

      • Release the refund on the FS 1/3/4 return using a PDC.

      • Send a letter to the primary taxpayer stating the filing status has been changed due to information received and a Form 1040-X may need to be filed.

      • Do not back out the FS 1/3/4 return.

21.6.7.4.5.4 (05-05-2022)
DUPTIN Return is Filing Status 2/6 (Scenario 2) X-Ref Return is Filing Status 1/3/4

  1. Follow the procedures below when working cases where the DUPTIN (DUPTIN return is the return that posts second) Return is FS 2/6 (Scenario 2) and has already been used as a primary TIN on a FS 1, 3, or 4 return for the same year.

  2. Correspond with the common taxpayer using Letter 31C, Duplicate Returns Filed; Explanation Requested. Letter 31C is shown on ENMOD and the request complete screen may be captured on CII.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), Do Not send Letter 31C or any other type of correspondence.

    Exception:

    If Form 1040-X, Amended U.S. Individual Income Tax Return, is received before the Letter 31C is mailed to the common taxpayer, or received from the common taxpayer or the primary taxpayer on a joint return and based on the actions, resolves the TRNS36F issue, then use the form to adjust the account. Take all actions that are required to correct the account.

    Caution:

    For ASED/RSED considerations when the taxpayer is changing the filing status on a statute issue, refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues, for additional information. For more information on filing status changes refer to IRM 21.6.1.4, Filing Status Research, and IRM 21.6.1.5.5, Married Filing Joint to Married Filing Separate, Single, or Head of Household Procedures.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and X-Ref (X-Ref return is the return that posts first) return if different. Correspondence should be addressed to common taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing.

  4. If Correspondence Exam selects the case, (one return is joint and the other return non-joint) the case file should contain the taxpayer’s response to AM to assist Exam with working these cases.

  5. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam, AM has the authority to work these cases. Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is Self-Employment (SE) Tax. Refer these cases to Philadelphia IMF International since these cases meet international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing, for additional information. When referring a CP 36 F case to Exam use CAT-A CP 36 F.

    Note:

    If the required case action is to back out FS 1/3/4, refer to IRM 21.6.1.5.3.1, Married Filing Separate, Single, or Head of Household to Married Filing Joint and Both Taxpayers Previously Filed, IRM 21.6.1.7.2, Command Code DDBCK, and IRM 21.5.2.4.23.10, Moving Refunds, for additional information.

    Caution:

    If changing the filing status and name on a return, per the table below and there are offsets, reverse the offsets back to the spouse’s account. Use a posting delay code to allow the entity change to post first.

    If And Then
    Reply indicates the common taxpayer filed both returns FS 2/6 DUPTIN return is the legally valid filing and the statute for filing a joint election has not expired

    Note:

    If the taxpayer wants to change the filing status of a legally filed FS 2/6 return, an amended return will have to be filed.

    1. Refer to IRM 21.6.1.5.3.1, Married Filing Separate, Single, or Head of Household to Married Filing Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.7.2, Command Code DDBCK, for additional information.

    2. Back out FS 1/3/4 return on the common taxpayer SSN if all the income is reported on the joint return. If the taxpayer received a refund move the refund to the joint return. Refer to IRM 21.5.2.4.23.10, Moving Refunds, for additional information. Notify the taxpayer of the action taken on the account by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained. Release the refund on the FS2 return using a Posting Delay Code (PDC) if applicable, refer to IRM 21.5.8.4.6, Posting Delay Code.

    3. If income on FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures per note above. Do not back out the 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4, and move the refund to the joint return. Notify the taxpayer by using a Letter 673C that a Form 1040-X should be filed if changes are needed to the FS 2/6 return. Release the refund using a PDC if applicable.
    Reply indicates common taxpayer filed both returns The FS 2/6 DUPTIN return is the legally valid filing, but was filed after the statute for filing a joint election expired, and one taxpayer has not previously filed

    1. Compare the income on the joint return to the income on the separate return. If there is income on the joint not reported on the FS 1/3/4, verify if it meets 25 percent or more omission and ≡ ≡ ≡ ≡ ≡ or more net tax increase/decrease. If it does meet the 25 percent omission and the ≡ ≡ ≡ ≡ ≡ ≡ or more refer to Exam.

    2. If the joint return meets the threshold for deficiency procedures per note above, refer to Exam (CAT-A CP36 F).

    3. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate, unless additional information supports another filing status. Remove the name and TIN of the common taxpayer from the return. Do not change any tax or credits on the return. Release refund using a PDC.

    4. Send the Letter 105C informing the primary taxpayer that the IRS has accepted the return, but has changed the taxpayer’ s filing status from MFJ to MFS because the time to make the joint election has expired. Refer to IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, for additional information. Inform the taxpayer that a Form 1040-X may need to be filed. The refund should be released on the primary taxpayers account.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.
    Reply indicates the common taxpayer filed both returns. The FS 1/3/4 X-Ref return is the legally valid return for the common taxpayer, and the FS 2/6 return is void for the common taxpayer, but a valid tax return for the primary taxpayer(but shows an incorrect filing status)

    Caution:

    The return may be void for the common taxpayer only because the common taxpayer did not make a valid joint election (because the common taxpayer either is not legally married, executed the return under duress, or submitted the return after petitioning the Tax Court or more than three years after filing the original separate return). Otherwise, the IRS must accept the valid MFJ election for both taxpayers. If the common taxpayer indicates that the two taxpayers are married, or if the original return is MFS, the FS 2/6 return is valid for both taxpayers and you should follow procedures in Box 1 above.

    1. Refer the primary taxpayer to Exam (CAT-A CP 36 F) for deficiency procedures per note above.

    2. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the name and TIN of the common taxpayer from the joint return. Do not change any tax or credits on the return. Release the refund on the FS 2 return using a PDC.

    3. Send a letter to the primary taxpayer on the joint return notifying the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040-X may need to be filed. Caution: In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    4. When changing a joint return to a FS 3, research the account to verify if any offsets from the spouse’s returns were made to pay on the balance due. If there are offsets, reverse and place back on the spouse’s account to refund.
    Reply indicates the common taxpayer did not file the FS 1/3/4 return It appears multiple individuals are using the same TIN Refer to IRM 21.6.2.4.2, Mixed Entity Procedures.

    Note:

    If you can determine through preliminary research the joint return is the good return, and the income reported matches IRPTR, release the -R freeze on the joint return. Continue to follow the procedures above for the FS 1/3/4. The joint return is not needed as part of the preliminary research if the refund has been released. If you cannot make a clear determination that the joint return is good, do not release the -R freeze and continue to follow the procedures in IRM 25.23.4.4, Taxpayer Inquiries Involving Identity Theft (IDT).
    Reply indicates common taxpayer did not file the FS 1/3/4 return The income on the FS 1/3/4 return matches the information on CC IRPTR

    1. Send a letter advising the taxpayer to file a Form 14039, Identity Theft Affidavit, and return it within 40 days. Leave the control base open.

      • If Form 14039 is received within 40 days indicating identity theft, follow the procedures in IRM 21.6.7.4.4.1 (11), TRNS36 - Control, and route the case to identity theft.

    2. If the Form 14039 is not received within 40 days, then follow the procedures below:

      • Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

      • If all income is reported, back out the FS 1/3/4 and move the refund, if present, to the joint return. Notify the taxpayer of the actions taken on the account by using a Letter 673C. Release refund on FS 2 return using a PDC if applicable.

    3. If all income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see note above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 and move the refund if present to the joint return. Use the Letter 673C to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040-X must be filed if changes are needed to the FS 2/6 return. Release the refund on the FS 2 return using a PDC if applicable.
    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The FS 2/6 return is not valid

    1. Follow procedures in IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status, (3), if the taxpayer indicates fraud or forgery.

    2. If the taxpayer does not indicate fraud or forgery, and/or the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, as stated in note above, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the name and TIN from the joint return. Do not change any tax or credits on the return.

    3. When changing a joint return to a FS 3, research the account to verify if any offsets from the spouse’s returns were made to pay on the balance due. If there are offsets, reverse and place back on the spouse’s account to refund.

    4. Release the refund on the FS 2/6 unless the refund statute has expired using a PDC. If the statute has expired, transfer the refund to excess.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status on the return. Inform the taxpayer that a Form 1040-X may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.
    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The taxpayer has no knowledge of the FS 2/6 return. It appears 2 taxpayers are using the same SSN and could be a victim of ID Theft. Transfer the case to identity theft by following the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control.
    No reply from common taxpayer or no signature on Letter 31C The statute has or has not expired

    1. Compare the income on the joint return to the income on the separate return.

    2. If the common taxpayer’s income on the joint return was not reported on separate return, refer the case to Exam for deficiency procedures per note above.

    3. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the common taxpayer’s name and TIN from the joint return. Do not change any tax or credits on the return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, release the refund.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040-X may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  6. Refer to the following IRMs when the taxpayer responds after the case has been closed and submits information indicating a return that was previously backed out was correct.

    • IRM 25.15.19.2.4, Joint Returns – Invalidated,

    • IRM 25.15.19.2.4.2, Determining if Joint Election is Valid, and

    • IRM 25.15.19.2.4.3, Joint Election is Invalid.

21.6.7.4.5.5 (05-05-2022)
DUPTIN is Filing Status 2/6 (Scenario 3) X-Ref Return is Filing Status 2/6

  1. Follow the procedures below when working cases where the same TIN is used as a primary TIN on a FS 2 or 6 return and as a secondary TIN on another FS 2 or 6 return for the same tax year:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam; AM has the authority to work these cases. When referring a CP 36 F case to Exam use CAT-A CP 36 F. Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is self-employment (SE) Tax. Refer the case to Philadelphia IMF International since the case meets international criteria. See IRM 21.8.1.2.14, International Forms Processing, for additional information.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), Do not send Letter 31C or any other type of correspondence.

    If And Then
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and the taxpayers on both returns are the same (e.g., John and Mary Birchtree; Mary and John Birchtree)

    1. Compare figures on both returns to verify they are the same.

    2. If same, back out DUPTIN return.

    3. If figures are not the same, refer to IRM 21.6.7.4.13, Return for Each Form W-2 and/or Form 1099, to adjust the filing that posted first to include any unclaimed income, withholding, etc. shown on the second return.

    4. When comparing returns remember to check for additional exemptions. If needed, adjust the exemptions on the account.

    5. Input adjustment on account where second return posted to back it out; use Hold Code 4. For additional information on inputting adjustments, refer to IRM 21.6.7.4, Adjusting Individual Tax Accounts Procedures.

    6. Notify the taxpayer whose information is changed of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and common taxpayer on both returns but with different spouses. (e.g., John and Mary Birchtree; Mary Birchtree and Bob Greenleaf)

    1. Correspond with the common taxpayer to determine if taxpayer filed both returns. Send Letter 31C.

    2. Send Letter 31C to both addresses as shown on the DUPTIN and the X-Ref returns, if different. Address correspondence to the common taxpayer only. Send correspondence under the common taxpayers SSN.

    3. If the taxpayer is due a refund, advise the refund is held until the matter is resolved.

    4. Suspend the case for 40 days; 70 days for overseas taxpayers.
    Reply indicates common taxpayer did not file one of the returns One of the returns is not valid. The common taxpayer has a different spouse on each return

    1. Follow procedures in IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status, (3), if the taxpayer indicates fraud or forgery.

      Caution:

      If the additional assessment does not meet the deficiency criteria for fraud or forgery, follow #3 below.

    2. If the taxpayer does not indicate fraud or forgery, refer the primary taxpayer on the invalid return to Exam for deficiency procedures per (1) above.

    3. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate, unless the additional information supports another filing status. Remove the name and TIN of the common taxpayer from the return. Do not change any tax or credits on the return. Release the refund using a posting delay code.

    4. Send a letter to the primary taxpayer on the joint return that the common taxpayer stated they did not file, notifying them that our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040-X may need to be filed.

      Caution:

      In the letter, do not inform the taxpayer how the information was received to change the joint return.
    No reply from common taxpayer or no signature on Letter 31C Research indicates a mixed entity Follow procedures in IRM 21.6.2, Adjusting TIN-Related Problems. All cases determined to be Mixed Entity (MXEN) are worked by employees who work duplicate filings.
    No reply from common taxpayer or no signature on Letter 31C and IDRS history indicates the correct spouse Research indicates the common taxpayer on both returns is the same person Refer both joint returns to Exam. Do not take into consideration the deficiency procedures in (1).
    Reply indicates common taxpayer did not file one of the returns The taxpayer has no knowledge of one of the returns. It appears two taxpayers are using the same SSN and may be a victim of ID Theft. Follow the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control, to transfer the case to an identity theft specialized site.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

    Note:

    See IRM 4.13.2.2, Function Responsible and Routing Instructions, for Automated Substitute For Return (ASFR) Reconsideration cases.

21.6.7.4.5.6 (05-05-2022)
DUPTIN EIP Adjustments

  1. Research first to determine what year the Economic Impact Payment (EIP) was issued from. If the EIP for both TINs was based off of 2018 and you are working a 2019 CP 36 F, no adjustment to the EIP is needed.

  2. When working a CP 36F case which involves an EIP use the tables below to resolve the EIP issue on the 2020 or 2021 module. Use the tables below to correct the EIP on the accounts for 2020 and 2021.

    If you are following IRM 21.6.7.4.5.3, DUPTIN Return is FS 1/3/4 (Scenario 1) X-Ref Return is FS 2/6, use table below to resolve the EIP.

    If And Then
    Reply indicates the common taxpayer filed both returns The X-Ref return, FS 2/6, is the correct filing Take no action on EIP
    Reply indicates the common taxpayer filed both returns The DUPTIN Return (FS 1/3/4) is the correct filing and was filed prior to the due date Take no action on EIP
    Reply indicates the common taxpayer did not file the FS 1/3/4 or common taxpayer did not file FS 2/6 due to multiple individuals using the same TIN It appears multiple individuals are using the same TIN Follow IRM 21.6.2.4.7.2, Economic Impact Payment (EIP) - Manual Adjustments - General Information, to balance the account
    Reply indicates common taxpayer did not file the FS 2/6 return The FS 2/6 return should not stand

    • Review the TC 971 AC 199/195 amount shown for each TIN on CC IMFOLE. The TC 971 AC 199 is systemically generated when EIP is decreased. The TC 971 AC 195 must be input manually when making a positive adjustment to EIP using HC 4.

      Note:

      Refer to IRM 21.6.3-2, TC 971 AC 199 MISC Field Descriptions for Economic Impact Payments (EIPs), for details on inputting the AC 195 manually.

    • Reverse the entire EIP adjustment on the FS 2/6 return using the applicable reference numbers and reason codes from IRM 21.6.3.4.2.13.1(4), Economic Impact Payments (EIP) - Account Information. This creates a systemic TC 971 AC 199 in the entity.

    • Input a second adjustment under the TIN for the primary on the FS 2/6 return. Make a positive adjustment to EIP with HC 4, using the same reason codes, CRNs, and dollar amounts.

    Note:

    When multiple EIP adjustments are needed, input each adjustment separately. Use posting delay codes as necessary.
    No reply from common taxpayer   Take no action on EIP

    If you are following IRM 21.6.7.4.5.4, DUPTIN Return is FS 2/6 (Scenario 2) X-Ref Return is FS 1/3/4, follow the table below to resolve the EIP.
    If And Then
    Reply indicates the common taxpayer filed both returns FS 2/6 DUPTIN return is correct Take no action on EIP
    Reply indicates the common taxpayer filed both returns The FS 1/3/4 X-Ref return is the correct filing and was filed prior to the due date. Take no action on EIP
    Reply indicates the common taxpayer did not file the FS 1/3/4 return or common taxpayer did not file FS 2/6 due to multiple individuals using the same TIN It appears multiple individuals are using the same TIN Refer to IRM 21.6.2.4.7.2, Economic Impact Payment (EIP) -Manual Adjustments- General Information, for information on how to resolve these cases
    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The FS 1/3/4 filing should stand

    • Review the TC 971 AC 199/195 amount shown for each TIN on CC IMFOLE. The TC 971 AC 199 is systemically generated when EIP is decreased. The TC 971 AC 195 must be input manually when making a positive adjustment to EIP using HC 4.

    • Reverse the entire EIP adjustment on the FS 2/6 return using the reference numbers and reason codes from IRM 21.6.3.4.2.13.1 (4), Economic Impact Payments (EIP) - Account Information. This creates a systemic TC 971 AC 199 in the entity.

    • Input a second adjustment under the TIN for the primary on the FS 2/6 return. Make a positive adjustment to EIP with HC 4, using the same reason codes, CRNs, and dollar amounts.

    Note:

    When multiple EIP adjustments are needed, input each adjustment separately. Use posting delay codes as necessary.
    No reply from common taxpayer   Take no action on EIP

    If you are following IRM 21.6.7.4.5.5 , DUPTIN is FS 2/6 (Scenario 2) X-Ref Return is FS 2/6, use the table below to resolve the EIP.
    If And Then
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and taxpayers on both returns are the same (e.g. John and Mary Cypress; Mary & John Cypress) Take no action on the EIP
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and common taxpayers on both returns but with different spouses (e.g. John and Mary Cypress; Mary Cypress & Robert Maple Follow procedures below based on taxpayer response or lack of response
    No reply from common taxpayer   Take no action on EIP
    Reply indicates common taxpayer did not file one of the returns

    • One of the returns is not valid
      OR

    • If taxpayer has no knowledge of one of the returns and it appears 2 taxpayers are using the same SSN

    • Review the TC 971 AC 199/195 amount shown for each TIN on CC IMFOLE. The TC 971 AC 199 is systemically generated when EIP is decreased. The TC 971 AC 195 must be input manually when making a positive adjustment to EIP using HC 4.

    • If first bullet from “AND” column, then reverse the entire EIP adjustment on the invalid FS 2/6 return using the reference numbers and reason codes from IRM 21.6.3.4.2.13.1(4), Economic Impact Payments (EIP)- Account Information. This creates a systemic TC 971 AC 199 in the entity.

    • Make a positive adjustment to EIP with HC 4, using the same reason codes, CRNs, and dollar amounts.

    • If a refund was issued, follow procedures in IRM 21.5.2.4.23.10, Moving Refunds, to transfer the refund information to the correct account.
      OR

    • If second bullet from “AND” column then follow Refer to IRM 21.6.2.4.7.2, Economic Impact Payment (EIP) and Multiple Taxpayers Using the Same TIN- Manual Adjustments- General Information, for information on how to resolve the EIP for these cases.

    Note:

    If multiple EIP adjustments are needed, input each adjustment separately. Use posting delay codes as necessary.

  3. For more Information on how to adjust the EIP, see IRM 21.6.3.4.2.13.3, Economic Impact Payments (EIP) - Manual Adjustments.

21.6.7.4.6 (10-01-2021)

Adjustment Considerations

  1. Review the account for freeze conditions. Follow procedures in IRM 21.5.6, Freeze Codes, and Document 6209, Chapter 8A, Section 4, Master File Freeze Codes and IDRS Status 48, for the following items:

    • A list of freeze codes

    • A brief explanation of why they generate

    • Releasing freeze conditions

  2. If the taxpayer's response results in either a full or partial abatement of the AUR assessment on a married filing joint (MFJ) account, any refund generated by the abatement must be paid jointly to both spouses unless one or more TC 706 is present and all four of the following are true:

    • The TC 706 credit(s) offset from one of the spouses on the joint return, but that taxpayer is currently filing as a single or separate filer, or as a joint filer with a new spouse

    • No payment or credits other than a TC 706 posted to the account since the AUR assessment

    • In the case of partial abatements, all TC 706 credits offset from the same person

    • All TC 706 occurred less than two years before the date of the full or partial abatement
      If a TC 706 is present and all four of the above are true, move the applicable TC 706 credits back to the modules where they originated.

      Note:

      For additional information refer to IRM 21.4.6.4.1.1, Tax Offset Reversal.

      Example:

      The primary taxpayer and secondary taxpayer file a joint return for 2019. AUR assessed an additional $800.00 on their 2019 joint liability. Taxpayers divorce, secondary files a return for 2020 that claims a $500.00 overpayment and the primary doesn't file a 2020 return that would claim the overpayment. Due to the outstanding AUR assessment, the $500.00 overpayment is transferred in April 2021 to the MFJ tax liability for 2019. No other payments are made towards the MFJ 2019 return. Then in September 2021, there is a partial abatement of $400.00 for the 2019 AUR assessment. Because the 4 requirements above are met, move the $100.00 credit that results from the partial abatement back to the secondary's 2020 account to prevent the credit from refunding on the joint return.

      Example:

      The primary taxpayer and secondary taxpayer file a joint return for 2019. AUR assessed an additional $800.00 on their 2019 joint liability. Taxpayers divorce, the secondary files a return for 2020 that claims a $500.00 overpayment and the primary files a return for 2020 that claims $300.00 overpayment. Due to the outstanding AUR assessment, the $500.00 and the $300.00 overpayments are transferred in April 2021 to the MFJ tax liability for 2019. No other payments are made towards the MFJ 2019 return. Then in September 2021, the AUR assessment is completely backed out. Because all 4 requirements above are met, move the overpayments back to the original 2020 returns of the primary and secondary before refunding; do not refund from the 2019 joint account.

  3. Use hold codes and priority codes when necessary.

  4. Use posting delay codes when necessary. Transactions may need to post later than others when multiple transactions are input. A posting delay code can be entered for 1 to 6 cycles.

  5. Notice Review may delete a refund and assign a case to AM because of a TC 976 or TC 977.

    1. Ensure the TC 841 ("P-" freeze) is posted.

    2. Input necessary credit transfers or adjustments after the TC 841 posts.

  6. Input a TC 170 for zero (.00) when decreasing withholding and/or transferring timely payments from the module and tax is also being adjusted when there is not a Computer Condition Code (CCC) "P" present.

  7. If a return is "U" coded during processing, the "U" coding is displayed on CC TXMOD. Update the Return Processable Date (RPD) as applicable. Follow procedures in IRM 20.2.4.5.1, Updating the RPD on Unprocessible Returns.

  8. If the adjustment notice does not give a clear explanation and/or a notice will not be issued, provide the taxpayer with an explanation by telephone or letter. Follow procedures in IRM 21.5.4.5.1, Setting the Initial Math Error Action, if appropriate.

    Example:

    There is a difference between the taxpayer’s figures and the adjustment made.

  9. A refund for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more will not systemically generate (TC 846). Do not input TC 290 for .00 to release the refund. A manual refund is required using Form 3753, Manual Refund Posting Voucher. Follow procedures in IRM 21.4.4.5.2, Preparation of the Form 3753, Manual Refund Posting Voucher, to prepare the manual refund. If the taxpayer submitted Form 8302, Electronic Deposit of Tax Refund of $1 Million or More, include it with Form 3753. Follow procedures in IRM 3.17.79.3.10.1, Form 8302, Electronic Deposit of Tax Refund of $1 Million or More.

21.6.7.4.7 (10-03-2022)

Interest and Penalty Considerations

  1. The computer assesses or abates Failure To File (FTF) or Failure To Pay (FTP) penalties according to interest and penalty adjustments made on the module, except when the penalties were manually assessed.

  2. The computer generates assessments and abatements of interest on all transactions.

    1. Usually, adjustments to interest are not necessary.

    2. Follow procedures in IRM 20.1, Penalty Handbook, and IRM 20.2, Interest.

    3. The Desert Storm/Shield or Bosnia "-C" freeze no longer requires manual computation of interest and penalties.

      Note:

      Not all Combat Zone cases (-C Freeze) require manual computation of interest once the taxpayer exits the Combat Zone. Master File (MF) will resume interest once taxpayer exits if the account is not restricted. Follow procedures in IRM 20.1.2.2.2.1, Combat Zone - IRC 7508. If the account is subject to penalty, the failure to pay (FTP) penalty requires manual computation if the taxpayer has exited the Combat Zone. Follow procedures in IRM 20.1.2, Failure to File/Failure to Pay Penalties.

    Note:

    Refer to the IRM 5.19.10.6.3, Combat Zone Freeze Code, for further information on freeze code for combat zone.

  3. Review amended returns for corrections to estimated tax (ES) penalty.

    1. ES penalty is based on the original TC 150 (minus EITC and Fuel Tax Credit).

    2. Correct the ES penalty if the adjustment is due to a "superseding" or a "Separate to Joint" case.

    3. Correspond with taxpayer, if a requested adjustment to penalty is not allowed.

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

  5. If the taxpayer submits a recomputation of the penalty, math verify it.

    If adjusting withholding and Then
    Module shows TC 170/171 with a Document Code 17, 18, 24, 47, 51, 52, or 54

    1. Review the ES penalty.

    2. Determine if the penalty should be adjusted. Refer to IRM 3.14.1.6.21.4.8, ES Penalty Computation, and IRM 3.14.1.6.21.4.9, ES Penalty Command Codes, for additional information.
    Account has a posted TC 176 ES penalty recomputes systemically.

21.6.7.4.8 (10-01-2015)

Special Considerations

  1. Check for decedent refund returns.

    • These returns require special handling

    • Follow procedures in IRM 21.4.1.5.9.4, Deceased Taxpayers

  2. Check for statutes; see IRM 25.6, Statute of Limitations.

    Caution:

    Form 1040-X may appear to request a tax decrease, however, when verified against posted data, the actual result may be a tax increase.

    1. Any claim received prior to the Refund Statute Expiration Date (RSED) is considered timely, even if taxpayer contact is necessary to perfect the claim.

    2. If a protective claim is received, follow procedures in IRM 21.5.3.4.7.3, Protective Claims.

  3. Review for credit-elect requests, offsets and reversals.

21.6.7.4.9 (10-01-2002)

Signature Verification

  1. Make sure the signature agrees with the entity. If the signature is a copy, missing, or does not agree with the entity, follow procedures in IRM 21.5.3.4.4, Signature Requirements for Claims.

21.6.7.4.10 (10-03-2022)

Superseding Returns

  1. The due date of a calendar year individual income tax return is generally April 15th. A fiscal year individual income tax return is generally due the fifteenth day of the fourth month following the close of the fiscal year. If the due date falls on a weekend or holiday, the return is due on the next business day. Under Notice 2020-23, the due date of a 2019 calendar year individual income tax return is postponed to July 15th, 2020. Under Notice 2021-21, the due date of a 2020 calendar year individual income tax return is postponed to May 17, 2021. For more information on Statute consideration, refer to IRM 21.5.3.4.3, Tax Decrease and Statute Consideration.

    1. An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date is a superseding return.

      Note:

      See IRM 21.5.3.4, General Claims Procedures, for information regarding the amended claims date.

    2. Correspondence postmarked on or before the due date or extended due date, requesting changes to tax returns, is processed as superseding information.

    Caution:

    A superseding return may have posted before the return filed as the original. Refer to IRM 21.5.1.4.2.4, Received Date - Determination, for assistance. Submission Processing does not date stamp timely filed returns, nor does it keep envelopes for timely filed returns.

  2. Consider the following when making a superseding adjustment:

    • Changes in irrevocable elections (e.g., Section 179, Joint to Separate)

      Note:

      A return filed after the original due date but on or before the extended due date does not constitute a superseding return in this situation.

    • Manual computation of ES Penalty. Refer to IRM 20.1.3, Estimated Tax Penalties.

    • Reversal of offsets to other Individual Master File (IMF), Business Master File (BMF), and Debtor Master File (DMF) accounts when increasing the balance due

    • Returns meeting Examination criteria. Follow procedures in Exhibit 21.5.3-2, Examination Criteria (CAT-A) - General.

    • Reversal of the offset to the Treasury Offset Program, refer to IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals.

    • Use the appropriate non-refile blocking series. Refer to IRM 21.5.1.5.3, CII Source Documentation, and Document 6209 - Section 4 - Adjustment Blocking Series, for additional information.

    • Use item reference number 871 when necessary. Refer to IRM 20.1.2.2.6.2, Incorrect Tax Shown Recorded, and IRM 20.1.2.2.6.3, Wrong Return Posted First, for additional information.

    Exception:

    Use the appropriate refile blocking series when required to be associated with the original return (e.g., separate to joint).

21.6.7.4.11 (10-01-2018)

State Tax Return

  1. If the taxpayer submitted a State tax return or State information on a Form 1040 series return and/or the State portion of the Form W-2.

    1. Block out the DLN on the State return and make a copy.

    2. Return the photocopy and/or Form(s) W-2 to the taxpayer using a Letter 315C, Form/Document/Payment Unnecessary; Returned to Taxpayer.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. See IRM 21.3.3.4.25, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

    3. Consider possible changes to the return processable date (RPD).

    4. Release the "-A" freeze, using the appropriate blocking series. See IRM 21.5.2.4.22, Blocking Series (BS), for additional information.

      Note:

      If the TRNS36 is on an invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54B, use HC 4.

21.6.7.4.12 (10-01-2021)

Presidential Election Campaign Fund (PECF)

  1. Congress established the Presidential Election Campaign Fund (PECF) to support financing of presidential election campaigns.

    1. Taxpayers may file an amended return to designate a part of the tax liability to the PECF, if not specified on the original return.

    2. The amended return must be filed within 20 and one half months after the original due date for filing the return.

      Note:

      If claim is not received timely and the only change is to the PECF, follow "No Consideration" procedures for the claim.

    3. The PECF fund amount is $3.

  2. Only take action on an amended return with a PECF designation change from "No" to "Yes." A "Yes" designation may not be changed.

  3. Research CC IMFOLR to determine any change to the election. Prepare a "dummy" Form 1040-X, for input whenever the taxpayer indicates an addition to the PECF.

  4. Using a blank Form 1040-X, take the following steps:

    1. Edit the tax period at the top of the form.

    2. Edit the taxpayers name control and social security number.

    3. Edit the filing status code.

    4. Edit IMF Computer Condition Code (CCC) "5," in the blank area above column C heading, if the taxpayer checks one box. Edit CCC "6," if taxpayer checks two boxes.

    5. Enter the received date in MMDDYY form in the blank section of columns.

    6. Use the CII image Stamp feature or write "0/S" (original signed on taxpayers Form 1040-X) in red ink at the bottom of page 1.

    7. Write your employee number at the bottom of the return.

    8. Edit the PECF, in Part II on the second page of the Form 1040-X.

    9. Edit "PECF Prep" in the left margin of the Form 1040-X then continue processing the return.

    10. Attach a routing slip and send to the batching function in a Submission Processing (SP) site to be processed using Tax Class/Doc Code 211 and blocking series 990-999.

      Note:

      Complete the Form 3210, Document Transmittal, and have it shipped by UPS Ground to a SP site.


      The SP site addresses are:
      Austin - Internal Revenue Service, 3651 South I-H 35, Austin, TX 78741, Stop 6054
      Kansas City - Internal Revenue Service, 333 W. Pershing Road, Kansas City, MO 64108–4302 Stop 6052
      Ogden - Internal Revenue Service, 1973 N Rulon White Blvd. Ogden, UT 84201 Stop 6054

21.6.7.4.13 (10-13-2017)

Return for Each Form W-2 and/or Form 1099

  1. Taxpayers may erroneously file a separate return for each Form W-2 and/or Form 1099 received. Take the following action to resolve the duplicate filing condition:

    1. Secure returns, if needed, to verify wages, credits, and tax liability.

    2. Combine wages, other income and withholding.

    3. Compute the correct tax liability.

    4. Input the appropriate adjustment transaction to increase or decrease the tax, credits, income, and deductions.

    5. Send the taxpayer a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, or Letter 4364C, xClaim Correspondex Letter - IMF.

    6. Provide a detailed explanation of the changes to the account.

    7. Advise the taxpayer that all Forms W-2 and/or Form 1099 should be filed on one return in the future and that an amended return should be filed for additional Forms W-2 and/or Form 1099 received after the return is filed.

  2. If the correct tax liability is greater than taxpayer expected:

    1. Treat as a math error.

    2. Use blocking series 77 or 78.

    3. Follow procedures in IRM 21.5.4.5.1, Setting the Initial Math Error Action.

  3. If the taxpayer submitted original copy of Forms W-2 to substantiate entries on an original or amended return, do not return documents to the taxpayer.

21.6.7.4.14 (10-02-2023)

True Duplicate Return

  1. A true duplicate condition occurs when the taxpayer files two returns with the exact same tax information. The most common reasons for duplicate filings are:

    1. The taxpayer files a copy of the original Form 1040, 1040A, 1040EZ, or 1040-SR.

      Reminder:

      For tax year 2018 and subsequent years Form 1040A/1040EZ are obsolete.

      Note:

      The original return may have been filed electronically.

    2. A return is filed with a payment of an outstanding balance.

    3. The original refund claimed was reduced by a math error.

    4. The taxpayer did not receive a refund within their expected time frame and files another return.

    5. Photocopies of pages 1 and 2, Form 1040, intended for Form 1045, Application for Tentative Refund, are input as an original return.

    6. The taxpayer did not receive the expected refund due to an invalid TIN condition.

    7. The taxpayer did not receive a refund because of a missing signature on Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer ("-R" freeze).

  2. Six common checks for resolving a true duplicate condition are:

    1. Reviewing the account for unreversed penalties.

    2. Checking the received date of both returns to make sure the earliest post marked return posted first. If the TC 150 has a later received date than the TC 976, update the Return Processing Date (RPD) to record the TC 976 return received date and manually recompute any overpayment interest that was based on an improper return received date (see IRM 20.2.4.4, Delinquent Returns) and post it with TC 770. Follow IRM 20.1.2.2.6.3, Wrong Return Posted First, for procedures on accounts when the taxpayer’s original, true return is being processed after a TC 150 has posted or when correcting errors related to the tax shown on the original return. For assistance in manually computing credit interest, refer to IRM 20.2.4.12, Manually Computing Credit Interest.

    3. Searching for taxpayer notes or letters.

    4. Checking for name and address changes.

    5. Making sure no corrected or prior year Forms W-2 and/or Forms 1099 are included.

    6. Checking all attachments for Forms 1045 or 1040-X claiming a carryback. Follow procedures in IRM 21.5.9, Carrybacks.

  3. Compare the TRNS36 and/or the second return to the original return's using CC TRDBV, CC IMFOL and CC RTVUE. The amounts for the taxable income, adjusted gross income, total tax, self-employment tax, primary and secondary self-employment income as well as the number of exemptions should match before determining it is a true duplicate case.

    If Then
    Second return is a true duplicate

    1. Release the "–A" freeze by inputting a TC 290 .00. No Reason Code required.

    2. Use the appropriate hold code (HC) and blocking series (BS). See IRM 21.5.2.4.15, Rules on Hold Codes (HC), for additional information.
    A true duplicate return posted to an invalid TIN

    1. Review the TXMOD notice section.

    2. Determine if a CP 54B was issued.

    3. DO NOT release the refund if taxpayer did not reply to the CP 54B.

    4. Release the "-A" freeze by inputting a TC 290 .00.

    5. Use HOLD CODE 4 to hold the credit.

    6. Initiate taxpayer correspondence.

  4. If it appears the taxpayer is expecting a response, and previous actions haven’t resolved the issue, send a letter advising the taxpayer of the action taken.

    Example:

    An original refund return was filed in February. The taxpayer submitted a second return in September with no changes to the original return. Account research shows a refund was issued in September. It appears the second return was filed because a refund wasn’t issued, and now that the refund has been issued, no letter is needed.

21.6.7.4.14.1 (11-06-2017)
Systemically Identified True Duplicate Returns

  1. Duplicate returns are systemically compared to the original return utilizing established criteria. If all items match, the duplicate return is considered a true duplicate return and systemically closed as a true duplicate return. No TRNS36 will generate. Systemically identified and closed true duplicate returns are identified by TC 971 AC 142.

  2. If a systemically identified true duplicate return is later identified as not being a true duplicate, follow established procedures for processing duplicate returns outlined in IRM 21.6.7.4.4, Duplicate or Amended Returns - TRNS36.

    Note:

    If information is received while staffing the AM toll-free telephone line indicating that the duplicate return is not a true duplicate return, prepare Form 4442, Inquiry Referral, and forward to the campus where the duplicate return was processed.

    Exception:

    If a TC 971 AC 125 is also present on the account, refer to IRM 25.23.4.4, Taxpayer Inquiries Involving Identity Theft (IDT), for guidance.

21.6.7.4.15 (10-01-2002)

Duplicate/Amended TC 420 - TRNS93

  1. A TRNS93 generates electronically to CII when a duplicate or amended return posts to a module which contains an open TC 420 as stated in IRM 21.5.6.4.24, -L freeze. To resolve TRNS93:

    1. Use TRNS36 procedures in addition to data from the Audit Information Management System (AIMS) file.

    2. Research the AIMS file with CC AMDISA for the current status.

    3. Follow the procedures outlined in IRM 21.5.3, General Claims Procedures.

21.6.7.4.16 (10-01-2002)

Duplicate Assessment - Doc Code 51 - TRNS35/TRNS35A

  1. Examination and Collection functions, as well as certain servicing campus functions may request an expeditious assessment (Prompt, Quick, Jeopardy) when:

    • The statute is imminent (does not apply to jeopardy)

    • The collection of taxes is in jeopardy

  2. The servicing campus Accounting function makes the assessment.

    1. The tax data necessary for these assessments is transmitted to the Accounting function by telephone, mail, or facsimile (fax).

    2. Tax, penalty, and interest are assessed.

    3. A balance due notice is sent to taxpayer or given to taxpayer if a jeopardy levy is contemplated.

  3. The information is entered into the Distributed Input System (DIS) to post to the master file.

  4. These pre-journalized transactions are numbered with a Document Code 51.

21.6.7.4.16.1 (10-01-2016)
General - TRNS35/TRNS35A

  1. A TRNS35/TRNS35A generates electronically to CII when a prompt assessment attempts to post as an original return, to a module containing a TC 150. A prompt assessment, identified by TC 370 and Document Code 51:

    • Posts as a TC 290 with all tax, penalty, and interest transactions associated with the TC 370

    • Generates a TC 976 and sets the duplicate filing condition "-A" freeze

  2. Action required:

    1. Follow TRNS36 verification procedures outlined in IRM 21.6.7.4.4.3, Preliminary Verification Procedures.

    2. Determine the reason for the prompt assessment.

    If it is determined that Then
    This is a valid additional assessment Input a TC 290 to release the "-A" freeze.

    Note:

    If TRNS35 is on invalid TIN, DO NOT release a refund unless the taxpayer responded to CP 54B; use HC 4.
    This is an erroneous assessment Input a TC 291 to abate the assessment.

21.6.7.4.17 (02-03-2020)

Net Operating Loss (NOL) - Carryforward

  1. Taxpayers may carry a Net Operating Loss (NOL) or excess business credit forward to the current tax year.

  2. Taxpayers eligible to carryback a net operating loss may elect to forgo the carryback period and carry the entire NOL forward. Carrybacks, carryforwards, and requests for an election to forgo a carryback period are worked in the carryback teams. If received by a non-Carryback team, reassign the case per the AM Site Specialization Temporary Holding Numbers under the Who/Where tab on SERP. See IRM 21.5.9, Carrybacks, for technical information.

  3. Unlike carryback claims, carryforwards do not require special processing guidance. The carryback team resolves carryforwards using the procedures included in IRM 21.5.3, General Claims Procedures.

21.6.7.4.18 (10-01-2021)

Qualified Business Income Deduction (QBID)

  1. IRC 199A allows individuals, and certain estates and trusts to deduct up to 20 percent of Qualified Business Income (QBI) from a qualified trade or business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate. QBI includes income from a qualified domestic trade or business. Amounts received as wages, capital gain, interest, and dividend income that are not considered QBI are excluded from the calculation.

  2. IRC 199A also allows individuals, and certain estates and trusts to deduct up to 20 percent of the eligible taxpayer’s qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.

  3. The Qualified Business Income Deduction (QBID) is limited to the lesser of:

    1. The sum of the amounts described in the paragraphs (1) and (2) above;
      or

    2. An amount equal to 20 percent of the excess (if any) of taxable income of the taxpayer for the taxable year, over the net capital gain of the taxpayer for the taxable year.

  4. A deduction under IRC 199A(g) is also available to specified agricultural and horticultural cooperatives. This deduction is similar to the domestic production activities deduction under former IRC 199. The deduction can be taken by the cooperative or passed through to patrons and taken on Form 1040. See IRM 21.6.7.4.18.1, Adjusting the Qualified Business Income Deduction, for guidance when adjusting this deduction.

  5. Individuals, estates and trusts, and specified agricultural and horticultural cooperatives that directly claim the deduction will figure their allowable QBID for 2018 using a worksheet that is not required to be filed with the IRS. Beginning in 2019, Form 8995, Qualified Business Income Deduction Simplified Computation or Form 8995-A, Qualified Business Income Deduction, must be filed with the IRS. Partnerships, S corporations, and certain estates and trusts do not claim the deduction but must report information necessary for their owners and beneficiaries to claim the deduction.

  6. The QBID is available for tax years ending after December 31, 2017 and is generally reported on the 2018 Form 1040, Line 9 or the 2019 Form 1040 and 1040-SR, Line 10. While this topic is currently out of scope (OOS), there is basic information that should be provided to the taxpayer concerning resource materials and self-help methods (e.g., for 2018 Form 1040 Instructions and Publication 535, Business Expenses, and for 2019 and after, Form 8995 and Form 8995-A Instructions), see IRM 21.1.1.3.2, Out of Scope and Limited Service, for more information.

21.6.7.4.18.1 (10-03-2022)
Adjusting the Qualified Business Income Deduction

  1. QBID is subject to CAT-A criteria, see IRM 21.5.3-2, Examination Criteria (CAT-A) - General, for more information. If CAT-A criteria is met, forward the case to CAT-A via Correspondence Imaging Inventory (CII), using the CAT-A referral reason code “HQ Reserved 19”.

  2. If the claim does not meet CAT-A criteria, and the QBID line 9 on Form 1040 exceeds the taxable income limitation detailed below, limit the deduction to the taxable income limitation and follow IRM 21.5.4.5.1, Setting the Initial Math Error Action. Send the taxpayer Letter 474C, Math Error Explained (IMF), explaining the changes.

    The explanation should be similar to the following paragraph:

    “The Qualified Business Income Deduction claimed on the return filed on MM/DD/YYYY is more than the statutory maximum allowed. We have limited the deduction accordingly. For 2018, see Form 1040 Instructions and Publication 535, Business Expenses, and for 2019 Form 8995 Instructions and Form 8995-A Instructions, for additional information.”

    Exception:

    If the adjustment to the QBID does not require the assessment of additional tax, see IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, and send the taxpayer a Letter 106C, Claim Partially Disallowed, instead of the Letter 474C.

  3. The taxable income limitation is calculated as follows:

    If Then
    The taxpayer files a Sch. D

    1. Start with the AGI from Form 1040/ 1040-SR/1040-NR.

    2. Subtract the standard/itemized deductions from Form 1040/1040-SR/1040-NR.

    3. Subtract the “net capital gain”- which is the smaller of Schedule D, line 15 or line 16, unless either line 15 or 16 is blank or a loss, in which case the net capital gain is $0.00.

    4. Subtract any qualified dividends from Form 1040/1040-SR/ 1040-NR.

    5. Multiply the resulting amounts by 20 percent (.20)- this is the taxable income limitation.
    The taxpayer does not file a Sch. D

    1. Start with the AGI from Form 1040/Form 1040-NR.

    2. Subtract the standard/itemized deduction from Form 1040/1040-SR/1040-NR.

    3. Subtract the “net capital gain”- which includes any positive amounts reported as capital gain distributions from Form 1040/1040-SR/1040-NR.

    4. Subtract any qualified dividends from Form 1040/1040-SR/1040-NR.

    5. Multiply the resulting amounts by 20 percent (.20)- this is the taxable income limitation.

  4. For tax year 2018 only, taxpayers who are claiming a Domestic Production Activity Deduction (DPAD) under IRC 199A(g) are instructed to:

    • Write-in the deduction and subtract it from their taxable income using line 10.

    • Attach a statement that the reduced income was a result of the DPAD under IRC 199A(g).


    This write-in deduction does cause the return to fall out to Error Resolution System (ERS).
    Example: AGI (line 7) minus standard/itemized deduction (line 8) minus QBID (line 9) will not equal taxable income (line 10) if DPAD is reported.
    If DPAD is reported on Form 1040 line 10, ERS employees review the return for the supporting statement attached to the return. If the statement is not present, a Taxpayer Notice Code (TPNC) 731 is assigned and a notice is sent to the taxpayer.
    NOTE: The “write-in” amount entered on Form 1040 line 10 cannot exceed the taxable income.
    If Then
    The taxpayer contacts the Service to correct the math error.

    • Review the account to ensure the necessary information (as described above) has been included.

    • If you cannot verify the information, request the taxpayer to provide the supporting documentation.

    • Once verified, accept the taxpayer’s figures and adjust accordingly.

    • For additional information see IRM 21.5.4.5.3, Processing Responses to Math Error Notices.
    The taxpayer files a Form 1040X claiming the DPAD deduction.

    • Review the account to ensure the necessary information ( as described above) has been included.

    • If you cannot verify the information, send the appropriate letter requesting the missing information.

    • Once verified, accept the taxpayer’s figures and adjust accordingly.

    • For additional information see IRM 21.5.4.5.3, Processing Responses to Math Error Notices.


    For tax years 2019 and subsequent, taxpayers must report their deduction on Form 8995, Qualified Business Income Deduction Simplified Computation, or Form 8995-A, Qualified Business Income Deduction.

  5. When adjusting the Qualified Business Income Deduction (QBID):

    • Use TC 29X to reflect any tax changes from QBID.

    • Use reason code 156 and the appropriate source code and blocking series.

    • Input item reference number 886 to adjust the taxable income as needed.

Exhibit 21.6.7-1

Reason Codes

The following tables list the reason codes printed on adjustment notices, or found throughout the IRM.
Filing Status and Exemptions:

Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Filing Status and Exemptions (Use the RC for the new filing status; e.g., single to HOH - use RC 004)
001 Filing status to single
002 Filing status to married filing a joint return
003 Filing status to married filing a separate return
004 Filing status to head of household
005 Filing status to qualifying widow(er) with dependent child
006 Total exemption amount (2017 and prior)
040* Bona fide and physical presence test
104 Total exemption amount for Katrina house guest

Income:

Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Income
007 Income from wages, salaries, tips, etc.
008 Interest and/or dividends income
012 Business income (or loss)
013 Investment gain (or loss)
014* Foreign Earned Income reported on Form 2555
016 Pensions and Annuities
017

Note:

Nothing prints on CP 21A/22A. Beginning 10/1/2002, reintroduce RC 017 for tracking purposes only. Used with RC 053 when adjusting an account ONLY for CP 27 or 09.

Note:

The RC 017 was previously used for tax year 1993 OBRA.
018 Schedule E income (or loss)
019 Farm income (or loss)
020 Unemployment compensation
021 Other income
022 Total Income
029 Taxable Social Security Benefit
042** Ingreso por cuenta propia

Adjustments to Income:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Adjustments to Income
025 Amount claimed as payment made to a qualified retirement plan
027 Interest penalty on early withdrawal of savings
030 Adjustments to income
031* Foreign earned income exclusion
032 Adjusted Gross Income
052 Roth Individual Retirement Account (IRA) election to reflect that the total taxable conversion amount is subject to tax (Primary Taxpayer)
058 Roth IRA election to reflect that the taxable conversion amount must be reported and any tax due paid over 4 years (Primary Taxpayer)
059 Roth IRA election to reflect that the total taxable conversion amount is subject to tax (Secondary Taxpayer)
060 Roth IRA election to reflect that the taxable conversion amount must be reported and any tax due paid over 4 years (Secondary Taxpayer)
083* Income exempt per tax treaty
084* Scholarship or fellowship exclusion
094* Net operating loss carryback or carryforward
139 Adjustments made due to fraudulent identity theft return

Tax Computation:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Tax Computation
033 Additional taxes from Form 4970, Tax on Accumulation Distribution of Trusts, Form 4972, Tax on Lump-Sum Distributions, or Form 8814, Parents' Election To Report Child's Interest and Dividends
034* Dual status tax
043 Schedule D computation.

Note:

Includes Schedule D, Schedule D Worksheet, Capital Gain Tax Worksheet (CGTW) and Qualified Dividend and Capital Gain Tax Worksheet (QDCGTW).

(Use RC 043 for Schedule D tax computation change; use RC 013 for Schedule D investment gain or loss.)
046 Schedule J (Prior to 1999, RC 046 was used for recomputing prior year investment credit.)
070* Zero Bracket Amount
075 Taxable income
076 Schedule A
092 Standard deduction
124 Schedule L, Standard Deduction for certain filers
136 Additional Medicare Tax
137 Net Investment Income Tax

Credits:
Reason Code Literal Which Prints on the CP 21A/CP 22A Notice
Credits
035 Education Credit, see IRM 21.6.3.4.1.5.2, Form 8863 - Adjusting the Credit.
036 Tax credits, see IRM 21.6.3.4.1.2, Adjusting Non-Refundable Credit Modules.
041* Alternative Minimum Foreign Tax Credit
063* Virgin Island credit on Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands
072 Health Insurance Credit, see IRM 21.6.3.4.2.9.7, Adjusting the Credit
172** Employer Credit for Paid Family and Medical Leave
173** Credit for Other Dependents

Other Taxes:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Other Taxes
024** Uncollected Social Security and/or Medicare Tax
037* Non-effectively connected tax
038* Backup withholding
044** Self-Employment Tax
045 Minimum Tax or Alternative Minimum Tax
047 Social Security Tax on Tip Income not reported to employer or uncollected employee Social Security Tax Railroad Retirement Tax Act (RRTA)Tax on Tips
048 Tax on your Individual Retirement Account
049 Total tax
050 Household Employment Taxes (Schedule H)
095* Tax computation using the 30 percent statutory rate or reduced treaty rate
136 Additional Medicare Tax
137 Net Investment Income Tax
153 Shared Responsibility Payment (ACA)
154 Shared Responsibility Payment (Compliance use only) (ACA)
Shared Responsibility Payment (5000A penalty)
170 Schedule H FUTA
171 Schedule H CAWR

Affordable Care Act (ACA):
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Affordable Care Act (ACA)
151 Premium Tax Credit
152 Excess Advanced Premium Tax Credit Repayment
153 Shared Responsibility Payment
154 Shared Responsibility Payment (Compliance Only to be used on the CP 15H)

Tax Reform:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Tax Reform
156** Qualified Business Deduction
157** Opportunity Zone
158** Reversal of Installment Deferral
159** Excess Business Loss
164** IRC 965 Systemic Credit Reversal
174** Net tax liability under Section 965
190** This is amount deferred for next 7 years under 965(h)

Economic Impact Payments:
Reason Code EIP Reason Codes (Informational Only)
Literal Will Not Print on the CP 21/CP 22A Notice
200 No payment or “plus-up payment” due (includes AGI phase-out)
201 No payment due to the taxpayer being claimed on another return (TC 971 AC 199 may reflect “DSI”) or Someone can claim you/spouse as a dependent box checked
202 No payment due to TIN issues (an invalid primary or secondary SSN, invalid due to assignment date, and ITIN) (A TC 971 AC 166 in the entity identifies SSNs issued for non-work purposes)
203 No payment due to the filing of Form 1040-NR, Form 1040-PR, or Form 1040-SS
205

  • Systemic catch-all for when a payment cannot be issued, such as a refund less than $1 and SSA/RRB deceased individual

  • Payment was previously considered (including an amount for zero) and could be reduced or eliminated.

  • Tax year 2021 “plus-up payments”
206 Payment reduced to AGI phase-out
207 Deceased taxpayer, payment issued to surviving spouse
209 Taxpayer qualifies for $1,200/$2,400
211 One or more children have an invalid SSN
213 All claimed children qualify
214 EIP 1 and EIP 3, split equally between primary and secondary taxpayer
215 EIP 1 and EIP 3, attributed to only the primary taxpayer
216 EIP 1 and EIP 3, attributable to only the secondary taxpayer
217 EIP 2 split equally between primary and secondary taxpayer
218 EIP 2 attributable to the primary taxpayer
219 EIP 2 attributable to the secondary taxpayer

Payments:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Payments
051 Total Federal Income Tax Withheld
053 Earned Income Credit (allowed/increased/decreased)
054 Earned Income Credit (disallowance only). Used with SC 0 and reads: "Your claim for Earned Income Credit is not approved. You will be sent a separate letter formally disallowing your claim."
055 Excess Social Security Tax or RRTA Tax Withheld
057 Regulated Investment Company Credit
061 Payments and/or credits
069* Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests, or Section 1446 withholding
039* Social Security tax withheld based on your visa
071 Advanced Child Tax Credit
Tax Year 2007 Economic Stimulus Payment
072 Health Coverage Tax Credit

Note:

RC 072 is valid for tax year 2001 and subsequent.
077 Advance Child Tax Credit
078 Advance Child Tax Credit
079 Advance Child Tax Credit
102 Credit for Federal telephone excise tax paid (Effective January 2007)
103 EIC Certification
105 Making Work Pay and Government Retiree Credit - If no government retiree credit is taken
106 Refundable Education Credit
108 Making Work Pay and Government Retiree Credit - If government retiree credit of $250 is taken
109 First-Time Homebuyer Credit - 2008 Credit required to be repaid
110 First-Time Homebuyer Credit - When the home was purchased in 2009 or 2010

Note:

Do not use RC 110 when adjusting accounts for FTHBC recapture.
111 Making Work Pay and Government Retiree Credit - If government retiree credit of $500 is taken
112 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness for taxpayers who had a loss when the house was sold
113 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness for taxpayers who had a loss on the house due to natural disaster
114 Repayment of the First-Time Homebuyer Credit. This is for taxpayers who converted their home to rental or business use. Systemic use only
115 First-Time Homebuyer Credit transferred to spouse. Transfer to spouse requested on Form 5405, Repayment of the First-Time Homebuyer Credit
116 Repayment of spouse's share of the First-Time Homebuyer Credit waived. This is forgiveness if the primary taxpayer is deceased
117 Repayment of spouse's share of the First-Time Homebuyer Credit waived. This is forgiveness if the secondary taxpayer is deceased
118 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness when both taxpayers are deceased
119 Repayment of First-Time Homebuyer Credit. Used when updating the primary entity section
120 Repayment of First-Time Homebuyer Credit. Used when updating the spouse's entity section
121 Internal Use Only. Used to adjust the primary First Time Homebuyer Credit year

Note:

When adjusting both the primary and secondary year, use RC 000. When the adjustment posts to Masterfile RC 000 drops off.
122 Internal Use Only. Used to adjust the spouse's First-Time Homebuyer Credit year. See the note in RC 121 above
123 Repayment of First-Time Homebuyer Credit. This updates the joint entity section
124 Schedule L Standard Deduction for Certain Filers
125 First-time Homebuyer Credit - this is for the repeat home owners up to $6,500 ( up to $3,250 for married individuals filing separately)
126 First-Time Homebuyer Credit - this is for the military, foreign service, or intelligence community
127 Requirement to repay the First-Time Homebuyer Credit waived. This is for members of the military, foreign service, or intelligence community
128 First-time Homebuyer Credit for homes purchased by first time homebuyer without binding contract attached
129 First-Time Homebuyer Credit for homes purchased by long time residents without binding contract or 5 out of 8 years documentation attached
130 Income Exclusion for Loan Forgiveness for Health Professionals
132 Repayment of First-Time Homebuyer Credit. Used to adjust a joint FTHBC repaid via separate returns
133 Repayment of the First-Time Home Buyer Credit. This is for taxpayers whose home was destroyed, condemned, or disposed of under threat of condemnation, and had a gain
135 2010 Gulf Region Oil Spill

Penalties, Fees and Interest:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Penalties, Fees, and Interest
 
023 Interest charged. We reduced the interest because you were located in a Presidentially Declared Disaster Area. We eliminated the interest charged during the time period for which an extension of time to file returns and pay taxes was granted

Caution:

For 1996 (and subsequent) - RC 23 is used ONLY for Legislative interest abatement for taxpayers in Disaster areas; see IRM 20.2, Interest.


For 1993: RC 023 was used with SC 0 and read You elected on your 1993 federal income tax return to defer two-thirds of additional 1993 tax associated with the tax rate increase imposed by the 1993 Budget Reconciliation Act. The third and final installment of deferred tax is now due.

Note:

RC 023 was used for the tax year 1993 only with the Budget Reconciliation Act wording.
062** Penalty due to reasonable cause (Interest is charged on any unpaid tax and may not be removed for reasonable cause)

Note:

Use RC 062 only when Penalty Reason Code (PRC) is in the "Reasonable Cause" category.
064 Reconsideration No-Response. (Compliance Examination use only.)
065** Penalty Charge

Note:

Use RC 065 only when PRC is NOT in the "Reasonable Cause" category.
066 Reconsideration disallowed in full. (Compliance Examination use only.)
067 Reconsideration disallowed in part. (Compliance Examination use only.)
068 Reconsideration allowed in full. (Compliance Examination use only.)
071** Reserved
073 Assessment of fee
074 Interest Charges
077** Reserved
080 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21A/CP 22A
081 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21A/CP 22A
082 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21A/CP 22A
226 MFT 40, Form 8849 No interest. For tracking purposes only, nothing prints on the CP21A/CP22A.
227 MFT 40, Form 8849 Interest required if not paid within 20 days of return processible date. For tracking purposes only, nothing prints on the CP21A/CP22A.
228 MFT 40, Form 8849 Interest required if not paid within 45 days of return processible date. For tracking purposes only, nothing prints on the CP21A/CP22A.
229 MFT 40, Form 8849 Interest required if not paid within 60 days of return processible date. For tracking purposes only, nothing prints on the CP21A/CP22A.

Treasury Offset Program:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Treasury Offset Program
086*** An Injured Spouse Claim was filed, requesting a refund of the non-obligated spouse's share of the amount applied against the non-tax debt

Note:

RC 086 used only with SC 7.
087*** We have corrected a math or processing error on your return

Note:

RC 087 used only with SC 7.
089*** The offset was done in violation of the automatic stay of bankruptcy

Note:

RC 089 used only with SC 7.
090*** The offset resulted from a payment which was specifically intended for application to an outstanding IRS balance

Note:

RC 090 used only with SC 7.
091*** Based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return

Note:

RC 091 used only with SC 7.

Miscellaneous and Special Projects:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Miscellaneous and Special Projects
085 Refund status. Based on a review of your account or on the information you provided, we are releasing your overpayment. Your overpayment is being refunded unless you have other outstanding liabilities
093 Immediate Tax Relief credit — RELIEF Act 2001
For tax year 2000 (ONLY): RC 093 is generated if the TC 290 .00 CRN 338 was systemically reversed (cycle 200151 or 200152). RC 093 can be manually input; SC 0 generates.
For tax year 2000, RC 093 reads:"We reversed the Immediate Tax Relief credit on your 2000 tax account since it was not refunded to you by December 31, 2001, as the law requires. We are sorry the refund was not issued in time to meet this requirement." .
For tax year 2019: RC 093 prints as a standalone without a Source Code.
RC 093 reads: We are required by law to mail the Economic Impact Payment by December 31 2020. We could not issue the check by this date so you will not get the payment based on your 2019 tax account. However, you may be able to claim a credit on your 2020 Federal Return.
096 Tax Relief Credit
2020 and 2021 Recovery Rebate Credit
For tax year 2020 and 2021: RC 096 is used when correcting account information. Use RC 096 with appropriate SC and any other RCs. RC 096 reads: Recovery Rebate Credit.

2008 Recovery Rebate Credit
For tax year 2008: RC 096 is used when correcting account information. Use RC 096 with appropriate SC and any other RCs. RC 096 reads: Recovery Rebate Credit.

Immediate Tax Relief credit — RELIEF Act 2001
For tax year 2001: Use RC 096 with the appropriate SC and any other RCs; RC 096 reads:Tax Relief Credit.

For tax year 2000: RC 096 alone does generate (no manual input of RC 096) ONLY with the systemic posting of TC 290 .00 CRN 338 (DLN of NN254-999-05099-1). RC 096 read: "We applied a credit to your 2000 tax account due to new legislation. We used (offset) all or part of your credit to pay your past due Federal tax as the law requires. We will send a separate notice to you about the offset."
097 Innocent Spouse Claim-Disallowed (Never prints a CP 21A/CP 22A. RC 098 used for tracking purposes.)
098 Innocent Spouse Claim-Allowed (Never prints a CP 21A/CP 22A. RC 098 used for tracking purposes.)
099** Account Information
Note: Use ONLY when RCs above do not apply or when instructed by a specific IRM.
100 Form 1040, U.S. Individual Income Tax Return, filer converted to Form 1040NR, U.S. Nonresident Alien Income Tax Return, filer - used by PSC
101 Form 1040NR, U.S. Nonresident Alien Income Tax Return, filer converted to Form 1040, U.S. Individual Income Tax Return, filer - used by PSC
131 Return Preparer Misconduct - information that prints on the adjustment notice is return data due to return preparer misconduct
160 Recipient’s Form 1042-S indicates money is in escrow
161 Recipient’s Form 1042-S does not match the Withholding Agent’s Form 1042-S copy
162 Recipient has already claimed the Form 1042-S credit
163 Withholding Agent did not deposit sufficient funds
165 Multiple Issues Concerning Form 1042-S and Form 1040NR/NR-EZ
166 Form 1042-S Escrow Box Checked on WA Copy
167 Form 1042-S Name Mismatch to Form 1040NR/NR-EZ
168 Form 1042-S TIN Mismatch to Form 1040NR/NR-EZ
169 Form 1042-S FTW Mismatch to Form 1040NR/NR-EZ
176 Home Grant Penalty and Interest Free Adjustment
177 Home Grant with Carryback Criteria Penalty and Interest Free Adjustment
221 Excess Advance Child Tax Credit Repayment

Reserved for Criminal Restitution Assessments:
Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Reserved for Criminal Restitution Assessments
141 Criminal restitution assessment with IMF client returns of the preparer the basis for the underlying tax liability, with duplicate or possible duplicate civil assessments
142 Criminal restitution assessment with BMF client returns of the preparer the basis for the underlying tax liability, with duplicate or possible duplicate civil assessments
143 Criminal restitution assessment with IMF underlying tax liability, with duplicate or possible duplicate civil assessment
144 Criminal restitution assessment with BMF underlying tax liability, with duplicate or possible duplicate civil assessment
145 Criminal restitution assessment with IMF underlying tax liability, with duplicate criminal restitution assessment
146 Criminal restitution assessment with BMF underlying tax liability, with duplicate criminal restitution assessment

Note:

Any TC 29X with RCs 141 through 146 must also have either RC 147 or RC 148.
147 There is reasonable cause to waive the FTP penalty, if known

Note:

RC 147 may not be used without using one of the RCs 141 through 146, except with a TC 290 for zero amount.
148 There is NO reasonable cause to waive the FTP penalty, if known

Note:

RC 148 may not be used without using one of the RCs 141 through 146, except with a TC 290 for zero amount.
149 RESERVED
150 Used with CRN 337 to mirror payments applied to duplicate restitution-based assessments

Reserved Reason Codes:
Reserved Reason Codes
Reserved: RCs 009, 010, 011, and 026

Note:

*RCs marked with one asterisk (*) for international accounts (PSC) only.
** RCs marked with two asterisks (**) print in Spanish when the entity filing requirement is '7'.
***RCs marked with three (***) for reversing offsets through the Treasury Offset Program.
RC 042 prints in Spanish only.
RCs 086, 087, 089, 090, and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.
For additional information see Document 6209 Section 8C - Master File Codes.