AccessibilitySkip to Top NavigationSkip to Main ContentHome  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Part 20. Penalty and Interest

Chapter 2. Interest

Section 3. Command Code PINEX

20.2.3  Command Code PINEX

20.2.3.1  (11-18-2008)
PINEX Overview

  1. When interest is computed by Master File, the Penalty and Interest Notice and Explanation (PINEX) Command Code (CC) may be used to explain the debit or credit interest computations when a taxpayer questions those calculations. If the Master File module is restricted, CC PINEX cannot be used. A transcript (e.g., TXMOD, IMFOL, BMFOL, MFTRA), will reflect a - I Freeze or Transaction Code (TC) 340/341. See Document 6209 Section 8 for further explanations.

20.2.3.1.1  (11-18-2008)
PINEX Computations

  1. PINEX computations are IDRS calculations of penalties and interest using both posted and pending transactions. The specific tax module requested must be on the IDRS TIF (Taxpayer Information File) database in order for PINEX to return a calculation and at least one unreversed penalty or interest transaction must be posted. PINEX is not available for MFT's 13, 40, 42, 46, 55, 68, and 74, and for tax periods 198212 and prior.

    Caution:

    Prior to mailing any notices, ensure only the last four digits of the taxpayer's SSN is reflected in the document being mailed (per OMB Memorandum M-07-16).

    See IRM 2.4.43, Command Code PINEX, for instructions to:

    • use CC PINEX to access screen displays

    • secure hardcopy notices

20.2.3.2  (11-18-2008)
PINEX Command Codes

  1. There are two command codes used to access the PINEX program. These command codes produce a screen display of PINEX computations to explain any unrestricted interest or penalty charges. See IRM 2.3.39, Command Code FTPIN, and IRM 2.3.40, Command Code PICRD, for instructions.

20.2.3.2.1  (11-18-2008)
Command Code FTPIN

  1. This command code displays the computation of Failure to Pay (FTP) penalty and debit interest (interest charged to the taxpayer), when there are no restricted conditions in the module.

  2. When only one restricting condition is present, FTPIN may attempt to make a computation and thus generate an incorrect report. In cases where there are multiple restricted conditions, all non-compute conditions are reflected in the messages displayed on the screen. See IRM 2.3.39.2, Terminal Responses-CC FTPIN, for a list of these messages.

    1. See IRM 20.1, Penalty, for additional information on FTP computations.

  3. FTPIN computes the FTP penalty for all balance due accounts. FTPIN will match Master File only when the Master File Status is 10 or 12 and the Master File module balance is zero.

20.2.3.2.2  (11-18-2008)
Command Code PICRD

  1. This command code displays the calculation of credit interest (interest paid to the taxpayer) on refunds and offsets when there are no restricted conditions in the module to prevent its computation.

  2. Only tax periods after 198212 will be considered for PICRD refund interest computations. PICRD cannot compute credit interest on offsets posted before July 1986 (Cycle 198629).

  3. See IRM 2.3.40.3, Informational Messages Displayed After Computation Breakdown on the Screen, and IRM 2.3.40.2, Terminal Responses-CC PICRD, for lists of messages and responses which explain how credit interest is computed or why it is restricted.

20.2.3.3  (11-18-2008)
Hardcopy Notices

  1. Use CC PINEX to request a hardcopy notice of selected penalty and interest explanations and computations.

    1. The notice is returned to the requester for review prior to mailing to the taxpayer.

    2. Notices are generated for the taxpayer and the taxpayer's authorized representatives as recorded on the Centralized Authorization File (CAF) and, for MFT 01 and 10, on the Reporting Agents File (RAF).

      Note:

      If a valid Power of Attorney (POA) is received with the taxpayer's correspondence and is not already recorded on the CAF, input two identical requests for a PINEX notice and use local procedures to mail the duplicate notice to the authorized representative. For additional information, see IRM 3.11.3.7.1.3.3, Power of Attorney.

    3. When the tax module is on IDRS, the notice should be generated the next day following input of CC PINEX.

    4. Notify the IDRS Control Staff if the notice is not received by Wednesday of the week following the date of input.

  2. When the tax module requested is not on IDRS, PINEX creates a dummy module generating a TC 902 (Campus IDRS Indicator) to Master File so that the module, if posted, can be extracted to the TIF for completion of the PINEX request.

    Note:

    Consider use of CC MFREQ to immediately create an IDRS module.

  3. If the module is not extracted to the TIF within four weeks, PINEX will purge the request and issue an action sheet to the requester.

  4. The PINEX notice includes:

    1. PINEX Requester Action Sheet (if required).

    2. The letter page.

    3. A literal transcript of transactions on account.

    4. Penalty and interest explanations.

  5. PINEX notices must be manually date stamped. Review the notice and, if appropriate, date and mail by the first Friday following the weekend the notice was generated. Follow local procedures to manually mail the notice.

  6. See IRM 2.4.43, Command Code PINEX, for instructions on input of CC PINEX.

  7. When a PINEX request is completed, the notice history section of the tax module is systemically updated. On balance due modules, the next IDRS notice is automatically delayed one week for BMF and five weeks for IMF after the PINEX notice is generated.

    If Then
    A longer delay is needed Input CC STAUP for the appropriate number of cycles.

    Note:

    CC STAUP for a longer period has priority over the automatic PINEX delay of the next IDRS notice.
    CC STAUP for a longer period was previously input to the module and is no longer needed Be sure to release the STAUP.

20.2.3.4  (11-18-2008)
Requester Action Sheet

  1. A Requester Action Sheet is generated whenever a PINEX request is input.

    If Then
    The PINEX notice is generated The Requester Action Sheet transmits the PINEX notice to the requester.
    The PINEX notice is not generated The Requester Action Sheet explains why it did not generate.

  2. The action sheet displays freeze codes, manually restricted penalty and interest transactions and amounts, and the module balance.

    1. The system uses the PINEX computations to determine the module balance. The balance is not taken from the amount shown as the module balance on TXMOD.

    2. Messages further explaining the reason for the action sheet may also be printed.

  3. An action sheet alone is returned to the requester when:

    • the PINEX request is four weeks after a TC 902 is generated,

    • a return has not posted to the module, and/or

    • there is bad data on the TIF.

20.2.3.5  (11-18-2008)
Interest Computation Explanations

  1. The requester must analyze the account and the notice to determine if it can be mailed to the taxpayer or if further action is necessary.

  2. When a requested penalty or interest transaction is restricted from Master File computation, the balance shown on the PINEX notice will always differ from Master File. In this situation, the balance must be manually computed.

    Note:

    Beginning May 1, 2003 inquiries received by AM toll-free telephone staffers that require a manual computation of interest must prepare e-Form 4442, Electronic Inquiry Referral and route the form to the Campus AM Account Paper function within the phone staff Directorate.

  3. Manually recompute the balance, prepare the explanation for that type of penalty and interest, and insert the figures onto the notice (several blank lines appear on the notice following the general explanation. Use these lines to insert the manual computation).

    Note:

    A print from CC COMPAD or the Automated Computational Tool (ACT) InterestNet 490 report developed by Decision Modeling Inc. (DMI), may be sent to the taxpayer in lieu of PINEX.

  4. See IRM 20.2.8.3, Manual Computations, for instructions regarding manual interest computations and adjustments to interest transactions.

  5. Request the return or other adjustment document, if necessary, in order to correctly compute and explain restricted interest and penalties.

  6. The PINEX notice provides the taxpayer with the dates and transactions of all computations, including accruals.

  7. Manually review any discrepancy with a Master File computation in order to determine whether the PINEX computation is correct.

  8. On balance due modules, there will generally be a discrepancy between the posted Master File amount of interest and the PINEX computation. This is due to interest continuing to accrue until the balance due is fully paid.

  9. Pending transactions, if present, are used in the PINEX computations to provide the most current account information available. Since pending transactions are not used by Master File or IDRS, a discrepancy attributable to a pending transaction will not require an adjustment to the module.

  10. When the PINEX result differs from the Master File result by one dollar or more:

    1. Manually compute to determine if the Master File posting is valid.

    2. If so, prepare a manual computation to send to the taxpayer.

  11. If the PINEX amount is incorrect, do not mail the notice.

  12. If the requester action sheet contains bankruptcy, abusive tax shelter or intelligence freeze codes, contact Collection, Examination or Criminal Investigation, as appropriate, to determine if the case should be referred to them before the notice is mailed.

  13. A credit balance may signify:

    • a discrepancy between the PINEX and Master File computations, or

    • other conditions requiring adjustment action.

      Caution:

      Verify the module balance before mailing the notice to the taxpayer.

  14. If the credit balance is an accurate reflection of the taxpayer's module status, mail the notice without further action.

  15. Determine which additional action to take:

    • mail the notice, as is,

    • manually perfect, then mail the notice, or

    • destroy (do not mail) the notice. Prepare a manual computation instead.

    1. If Then
      The notice is mailed Remove the action sheet and manually date the notice.

      Reminder:

      Report procedural or systems problems, identified through PINEX, to the IDRS Control Staff or to management.


More Internal Revenue Manual