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Part 21. Customer Account Services

Chapter 2. Systems and Research Programs

Section 4. Master File Accounts Maintenance (Cont. 1)

21.2.4  Master File Accounts Maintenance (Cont. 1)

21.2.4.3 
Procedures for Accounts Maintenance

21.2.4.3.31 
Amended Return — No Original (03 E-)

21.2.4.3.31.1  (10-01-2008)
AM03 Resolution

  1. If a valid and invalid account need to be merged, route the case with documentation to the Entity Control function to merge the accounts.

  2. Determine whether the taxpayer filed an original return. Order the TC 976 or TC 977 DLN that created the freeze (unless a TC 971 Action Code 010 created the TC 977).

    If Then
    1040 was processed as 1040X. Reprocess as original per IRM 21.5.2.4.23, Reprocessing Returns/Documents.
    Other than processing error. Request copy of original return from the taxpayer.
    No reply. Prepare return from information on the amended return; input as original; retain the original DLN if valid.

  3. If an amended return (TC 976/977) posts to an incorrect TIN/tax period and the account for which it was intended does not contain a TC 150:

    1. Transfer any misapplied credits to the correct module.

    2. Reprocess the amended return to the correct module; use a new DLN.

    3. Circle out "G" code and any other "amended" indications written on the return.

    4. Circle out remittance amount, if applicable.

    5. Input TC 971 with Action Code 002 to release the "E" freeze; identify Xref TIN/tax period on the REQ77 input.

  4. If an amended return (TC 976/977) posts to an incorrect TIN/tax period and the account for which it was intended has a TC 150:

    1. Transfer any misapplied credits and adjust the tax to correct the module based on the amended return.

    2. Input TC 971 with Action Code 002 to release the "E" freeze and identify XREF TIN/tax period on the REQ77 input.

      Note:

      If TC 971 Action Code 010 with Doc Code 77 caused the amended return, reinput the return with a new DLN. Input TC 971, Action Code 002, to release the freeze.

    3. If a return is input to the Master File, no further action is required.

  5. If amended return (976/977) posts to an incorrect MFT and the taxpayer is not liable for filing the return (e.g. return posted to MFT 10 and account shows employment code W), input TC 971 with action code 002 to release the "E" freeze.

  6. Consider case resolved after taking the following actions. See IRM 21.5.1, General Adjustments, for additional information.

21.2.4.3.31.2  (10-01-2008)
AM03 Resolution for Other Cases

  1. If unable to secure a copy of the return and TC 976/977 DLN was not located through Files or CIS research, and the module balance is zero, or a debit balance, input TC 971 AC 002 to release freeze.

  2. If unable to secure a copy of the return and TC 976/977 DLN was not located through files, leave credit balance on Master File and close case control "NOREPLY" .

21.2.4.3.32  (05-30-2008)
Duplicate Return (04–A)

  1. Generates after a duplicate return (TC 976) or amended return (TC 976 BMF/TC 977 IMF, IRAF) posts to a module with an original return (TC 150) posted. CP 36/36A (IMF) and CP 193 (BMF) identify this condition.

  2. Use the following instructions to resolve this freeze condition:

    1. If an adjustment was input and requires no further action, close the case.

    2. If the TC 976/977 return was returned to the taxpayer and there is not a credit balance on the account, input 290 .00 to release the freeze. No taxpayer contact is needed. You may identify if a return was sent back to the TP if a 178C letter was sent or, for IMF, Form 8009, We Need More Information To Process Your Amended Return, was sent for the year in question by the examiner handling CATG CODE "XRET" base; and/or a posted TC 971 AC 270.

      Note:

      See IRM 21.5.3.4.2, Tax Decrease or Credit Increase Processing, and IRM 21.7.2.4.18.1, Returning Form 941c to Taxpayer, for additional information on amended returns returned to taxpayer.

    3. Research account using CIS, DI or Corporate Files On Line (CFOL) to verify whether or not the adjustment to correct the freeze condition posted to another module. Request the adjustment document only if necessary. If the adjustment posted incorrectly, correct accordingly.

    4. When an original, amended or duplicate return is posted to an incorrect TIN or tax period and should be reprocessed or backed out, input TC 971. See IRM 21.5.1.4.8, Transaction Code 971.

    5. If prior adjustment is incorrect, correct the account per the information available.

    6. If account reflects correct information, input 290 .00 to release freeze.

      Note:

      If original return and/or TC 976/977 were secured, staple duplicate return behind original and use blocking series 00.

  3. If the case is still not resolved, and the returns cannot be secured, request a signed copy of the amended return and all schedules and attachments from the taxpayer. See IRM 21.5.1.5.4, Viewing or Requesting Documents on CIS Cases, before requesting the return from the taxpayer. When reply is received, take corrective action based on response. If no reply received, resolve as follows:

    1. If a payment was submitted with the amended return, assess tax for the amount of the payment. If the account is in credit balance for more than the payment amount, reduce any refundable credit by the amount of the remaining overpayment.

    2. If a payment was not submitted with the duplicate return, input a TC 290 for zero amount to release the freeze.

    Note:

    If the taxpayer submitted Form 1040X , Amended U.S. Individual Income Tax Return, with Form 8862, Information To Claim Earned Income Credit After Disallowance, route the EIC recertification case to Adjustments for consideration. See IRM 21.6.3.4.2.7.15, EITC Recertification.

21.2.4.3.33  (01-11-2008)
Examination DP Tax Hold Codes (05–K)

  1. Caused by an unreleased Hold Code 1, 2, 4 adjustment action (TC 29X/30X) and a credit balance exists after posting. On BMF, it may be caused when condition code "N" (Joint Committee Case sent to Examination) posts to a Form 1120, U.S. Corporation Income Tax Return, module.

    Note:

    If the account shows a TC 420/424, TC 421/425, and/or a TC 595, and ASFR created the TC 150, send the case to Exam.

21.2.4.3.33.1  (06-05-2008)
AM05 Resolution

  1. Research DI, CFOL, and CIS to determine what caused the freeze, look for outstanding liabilities on the appropriate Master File.

    1. If the credit was held because documentary evidence required for decedent account refund was not received, obtain required documentation before releasing freeze. See IRM 21.2.4.3.37.1 , Computer Condition Code (CCC) 3 or U-Coded Returns, and follow procedures to resolve the case.

    2. If the credit posted to the wrong module, transfer to the correct module before releasing freeze.

    3. If the freeze was set because of a Scrambled SSN, (an open base with control category "SCRM" or "SSA2" , or Scrambled SSN Indicator 01, 10, 12, 13, or 20) route the transcript to the open IDRS base. If there is no open base, and a Scrambled SSN indicator is present, route the transcript, using AMS/DI and include a "Summary Print " in place of the transcript, to the site working the account. To determine the site, use the two middle digits of the IRSN, (e.g., 08 - Andover). See IRM 3.13.5.9.4, Internal Revenue Service Number (IRSN) Format. No additional research or taxpayer contact is necessary.

      Exception:

      Do not refer cases with Scrambled Indicator 21, 22 or 24 (the Scrambled SSN issue has been resolved on these accounts).

  2. Consider case resolved after taking action indicated:

    1. If a liability exists in another module, release the freeze and let the credit offset. For debit balances, do not transfer a credit to a module containing a freeze or restricted condition that would prevent the computer from offsetting in, unless the credit belongs on the debit module (ex. "—E" freeze, Master File Status 14, etc.).

    2. If a liability will be established on another module, follow the above instructions.

    3. If all liabilities are posted and satisfied, release the freeze.

    4. Forward —K freezes on carryback cases to Adjustments.

    5. Forward —K freezes from TC 30X adjustments, other than disposal codes 07 or 11, to Examination.

  3. In certain cases, a TC 150 may incorrectly post to a module and a subsequent tax liability decrease results in a credit balance. Send correspondence to the taxpayer requesting the correct return for that period. See IRM 21.2.4.3.10., Applying Unresolved Credits, if a reply is not received, for procedures on how to transfer the credit.

21.2.4.3.34  (01-11-2008)
Claim Pending (06–W)

  1. Transcript is generated when the taxpayer makes a claim (unreversed TC 470) and an adjustment in process delays the Tax Delinquent Account (TDA) (other than Collection Closing Codes 94 or 99).

  2. CSCO works all Claim Pending cases except 06—W cases with TC 470 CC 97; the area that handles Large Dollar cases works these. Route these transcripts, using AMS/DI and include a "Summary Print" in place of the transcript, to CSCO; do not include in AMRH inventory.

21.2.4.3.35  (01-11-2008)
Automatic Data Processing (ADP) Credit to Non-Master File Liability (07–V)

  1. These are IMF cases only and are generated on credit balance accounts when a TC 130 (Account Refund Freeze) is input to a Master File account because the taxpayer owes a tax liability on an account that cannot be reached by offset. CP 44 (IMF) generates when credits are available for refund. When a second credit posts, a new CP 44 will not generate if a prior CP 44 is unresolved. Certain other freezes, such as "R" , "P" , and "A," suppress the CP 44.

  2. CSCO works all of these cases. Route any transcripts received in AMRH to CSCO; do not include in AMRH inventory.

21.2.4.3.36  (10-01-2008)
Manual Refund (08–X)

  1. Transcript is generated when one or more of the following conditions are present:

    1. TC 840 (Manual Refund) posted with no TC 150 posted.

    2. TC 150 posted with CCC "O" (pertains to pre-settlement refunds with(out) hardship–IMF, BMF), and no TC 840 posted.

    3. TC 840 and posted TC 150 is not coded with (CCC) Computer Condition Code "O" , and module balance is equal to or less than TC 840 amount with no TC 29X or 30X posted.

    4. On IMF, a manual refund for a claimed overpayment of excess Estimated Tax (ES) credits is pending. Transcripts issued for this situation show a module frozen by both "J" and " X" conditions. See IRM 21.2.4.3.24., Processing EXES-TC 840 Transcripts.

    5. On IMF, a manual refund is pending on a module with CCC "L" (refund for first or second name line) or "W" (refund to second name line or to a person who is a stateside spouse of an Armed Forces member) and there is not a second name line for the refund period, or a later tax module exists. See IRM 21.2.4.3.19., Processing TRNS46 Cases.

21.2.4.3.36.1  (10-01-2008)
AM08 Resolution

  1. If both a TC 846 and a TC 840 post to the same module, determine if an erroneous refund was issued. See IRM 21.2.4.3.11. , Erroneous Refunds.

    Exception:

    A TC 840 with Blocking Series 6XX indicates that Refund Inquiry is waiting for notification to post a TC 841 credit. Route the case to the Refund Inquiry function.

    Note:

    When the erroneous refund involves a hardship manual refund, route these cases to the Erroneous Refund Team of the campus where the latest dated TC 84X was issued.

  2. On remaining cases, request the document that created the freeze and any necessary account data. Close the case if:

    1. A return coded "O" (IMF or BMF) posted to the module with TC 840.

    2. A valid and invalid account merged resulting in a freeze release.

  3. Consider case resolved after taking action indicated if:

    1. A valid and invalid account merged on the TIN of the AMRH transcript, the module balance is a debit, and an erroneous refund is present. See above instructions for erroneous refunds.

    2. A valid and invalid account must be merged and a computer-generated refund was not issued. See IRM 3.13.2 , BMF Account Numbers and IRM 3.13.5, IMF Account Numbers.

    3. A valid and invalid account must be merged and a TC 846 was issued.

    4. The TC 840 posted to the correct module and the TC 150 posted to an incorrect module. Reprocess the return; make necessary adjustments.

  4. The TC 840 posted to the correct module; however, the taxpayer is not liable for a return. Use the following instructions:

    • Input TC 590 (CC 20) to release the " X" freeze after the credit/debit is resolved and the account is in zero balance. If the taxpayer filed a consolidated return (the manual refund document references Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax), input TC 590 or TC 591 (CC 14) to release the "X" freeze after the balance is resolved.

    Note:

    TC 59X is not valid for MFT 15 accounts. Therefore, close with no action.

    1. The TC 840 posted to incorrect module and the TC 150 posted to correct module. See IRM 3.17.79, Accounting Refund Transactions.

    2. Freeze was created by posted TC 150 coded "O" without a TC 840 issued. Input a TC 29X with Priority Code 8 or prepare a manual refund for the credit balance. Compute interest and check for any outstanding debit balances prior to releasing the freeze.

    3. Both the TC 840 and the TC 150 without CCC "O" posted to the correct module and the case is not an erroneous refund, release the freeze. For both BMF and IMF, input TC 29X with Priority Code 8. If the module pertains to Form 1120S, U.S. Income Tax Return for an S Corporation or Form 1065, U.S. Return of Partnership Income, and there is an unreversed TC 055 in the entity, release the freeze and forward the case to Entity.

  5. If unable to resolve the freeze, contact the taxpayer and request a copy of the return or ask about the non filing of a return. If the taxpayer does not reply, leave credit on Master File, and close case control, "NOREPLY" .

21.2.4.3.37  (01-11-2008)
Additional Liability Pending (09–R)

  1. Caused by a credit balance module with an unreversed TC 570 with(out) a posted TC 150, other than Doc Code 33, Form 1040C , U.S. Departing Alien Income Tax Return. On IMF modules, a TC 570 will generate and set a freeze if computer condition code 3 is present.

  2. Based on specific postings (e.g., return with CCC "X" ; TC 291 with Priority Code 7; TC 670 with an unreversed TC 420/424; Form 1120F, U.S. Income Tax Return of a Foreign Corporation ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, in Status 14 going to credit balance). Consider the case resolved after taking the following action:

    1. Close the case if subsequent action released the freeze.

    2. Release the freeze and close the case if the credit module balance approximately equals accrued interest or the taxpayer paid twice.

    3. Request the document that created the freeze and any other documents needed. Cross reference account data and analyze research. If, after conducting CIS, DI, CFOL and Remittance Transmittal Research (RTR) system research, you are unable to determine credit disposition, contact the taxpayer. Take appropriate action when reply is received.

21.2.4.3.37.1  (10-01-2008)
Computer Condition Code (CCC) 3 or U-Coded Returns

  1. If a module is frozen because of TC 806 and there is no supporting documentation to justify the amount claimed (e.g., Forms W-2, 1099, etc.):

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Adjust the account to allow the withholding credit using the withholding information found on IRPTR and input the Return Processable Date (RPD), with the date the information was found on IRPTR to prevent interest on the refund. If no information is reported on IRPTR, send the taxpayer Letter 12C requesting the supporting documentation needed to allow the withholding credit. Suspend for 45 days.

    3. If a reply is received, adjust withholding as appropriate with the RPD of the taxpayer's response.

    4. If after 45 days no reply is received, initiate adjustment to decrease the unsubstantiated credit amount.

  2. If the taxpayer claimed Earned Income Tax Credit (EITC), transfer the EITC to the Excess Collection File (XSF - Account 6800). Input TC 971 AC 296 to show that credit will be applied to the XSF. (This credit could be considered unprocessable until the W-2 is received). See IRM 21.6.3.4.2.7.1 , EITC Eligibility Criteria.

  3. On an original return which was unprocessable due to missing signature(s), (see CC ENMOD Letter 12C paragraph information requesting missing signature), send Letter 707C or 143C to obtain the signed declaration. Suspend the case for 45 days.

    1. If a reply is received with the missing signature, input a TC 290 .00 with an RPD of the taxpayer reply.

    2. If no signature is obtained and the module is in credit balance, transfer the credit to Unidentified Remittance File (URF) or Excess Collection File (XSF) and close the case "NOREPLY" . Input TC 971 AC 296 to show that credit will be applied to the URF/XSF.

  4. If the original return was filed jointly and one signature was missing, send a Letter 707C or 143C to obtain a signature declaration for the missing signature. Suspend the case for 45 days.

    1. If a reply is received with the missing signature, input a TC 290 .00 with an RPD of the taxpayer reply.

    2. If the taxpayer response indicates that the second signature cannot be obtained due to divorce or inability to locate the spouse, change the filing status, and allocate income, deductions and credits using the return and information provided by the taxpayer. If an additional assessment is needed due to a change in filing status, treat these changes as examination adjustments. Route the case, using AMS/DI and include a "Summary Print" in place of the transcript, to exam for appropriate deficiency procedures. See IRM 21.2.4.3.21, IRS Prepared Returns.

      Note:

      If the taxpayer fails to submit sufficient information, do not attempt to compute separate liability or allocate income, deductions or credits. Transfer the credit to URF or XSF. Input TC 971 AC 296 to show that credit will be applied to the URF/XSF.

  5. If the taxpayer is deceased, request the return or the required documentation (e.g., Form 1310, court appointment documentation, etc.). If all required information is attached, see (5)(a) below. If the required documentation is not attached to the return, send Letter 18C to the taxpayer's estate requesting the missing information. Suspend the case for 45 days.

    1. If the required documentation is received, input a TC 290 .00 using a Hold Code 4, and an RPD of the taxpayer reply (or the date when the return should have been considered processable if all information was attached to original return). Also prepare Form 5792, Request for IDRS Generated Refund, and input a manual refund using CC RFUNDR. The account must be controlled on IDRS and monitored until the TC 840 posts.

    2. If a reply is not received with the required evidence, transfer the credit to the Unidentified Remittance File (URF) or Excess Collection File (XSF) and close the case "NOREPLY" . Input TC 971 AC 296 to show that credit will be applied to the URF/XSF.

  6. If the SSN starts with 58X through 59X, the module has TC 971 AC 052, AND the refund was not released (no TC 846) and no notices were issued, close your control base through AMS/DI. Open a control base using the same IRS received date, to the Philadelphia Fraud Detection Center (FDC) to 0585399999 - CIAM09TRAN. CI will utilize its inventory listing to work the cases.

    Note:

    If the SSN does not begin with 58X through 59X, these procedures do not apply. Continue to process the account.

  7. If it cannot be determined why original return was considered unprocessable, request return to see if all required information is attached to return.

    1. If all required information is attached, input a TC 290 .00 with an RPD using the date the original return should have been considered processable.

    2. If all required information is not attached, send the appropriate C-letter for the missing information and suspend for 45 days.

    3. If reply is received with the required information, input a TC 290 .00 with an RPD of the taxpayer reply.

    4. If a reply is not received with the required information, transfer the credit to the Unidentified Remittance File (URF) or Excess Collection File (XSF) and close the case "NOREPLY" . Input TC 971 AC 296 to show that credit will be applied to the URF/XSF.

    5. Update DI history indicating what items are needed in order to process the return to allow for the release of the overpayment.

  8. If the return has a Questionable Refund Program (e.g. QRP-19, QRP-23) stamp on it, close your control base through AMS/DI; then open a control base using the same IRS received date, to the Philadelphia Fraud Detection Center (FDC) to 0585399999 - CIAM09TRAN. CI will utilize its inventory listing to work the cases.

  9. If the entity does not have a complete address or a campus address is shown, research IDRS for a current address. See IRM 21.2.4.3.6, Undeliverable Correspondence. If a better address is not available, transfer the credit to Unidentified Remittance File (URF) or Excess Collection File (XSF) and close the case "UNDEL" . Input TC 971 AC 296 to show that credit will be applied to the URF/XSF.

  10. If the freeze was set because of a Scrambled SSN, (an open base with control category "SCRM" or "SSA2" , or Scrambled SSN Indicator 01, 10, 12, 13, or 20) route the transcript, using AMS/DI and include a "Summary Print" in place of the transcript, to the open IDRS base. If there is no open base, and a Scrambled SSN indicator is present, route the transcript to the site working the account. To determine the site, use the two middle digits of the IRSN, (e.g., 08 - Andover). See IRM 3.13.5.9.4, Internal Revenue Service Number (IRSN) Format. No additional research or taxpayer contact is necessary.

    Exception:

    Do not refer cases with Scrambled Indicator 21, 22 or 24 (the Scrambled SSN issue has been resolved on these accounts).

21.2.4.3.37.2  (10-01-2008)
AM09 Resolution

  1. Consider case resolved after taking action indicated if:

    1. If the credit can be identified as an overpayment, (e.g. balance equals reversed penalty and interest amounts; taxpayer paid same amount twice), release to credit or refund.

    2. An invalid and valid account merged on the TIN of AMRH transcript, review data for possible freeze release and resolve accordingly.

    3. An invalid and valid account should be merged on either an AMRH transcript TIN or another TIN, resulting in a freeze release, route the case with documentation to Entity.

    4. The merge will not result in the module balance becoming zero or debit, release the TC 570 freeze one cycle prior to the merge. Coordinate with Entity to determine who will reverse the freeze.

  2. If another campus function is working the case, contact that area and request status and expedite action; determine if the case can be transferred.

  3. If the module contains a TC 971 AC 199 with a DLN ending in 88888 (category control base, CRIM), close your base through AMS/DI; then open a control base using the same IRS received date to the Philadelphia Fraud Detection Center (FDC) to 0585399999 - CIAM09TRAN. CI will utilize its inventory listing to work the cases. CI will review the cases and may determine an appropriate referral to Adjustments or Examination for final resolution.

  4. If the TC 570 freeze was applied as a result of an adjustment (Doc Code 54), review the reason for the adjustment and determine if it was completed correctly. If necessary, complete the adjustment and release the freeze. If no action is needed, release the freeze.

  5. If a payment in the related module is more than the computer-generated write-off (TC 606), use Doc Code 24 with TC 672 and TC 670 for the write-off amount prior to releasing the R freeze. This generates a TC 607, which reverses the TC 606. To prevent an unpostable, use a posting delay code (1 cycle) on the credit portion of the transfer document.

  6. If the case is still unresolved, analyze credits as follows:

    1. If the taxpayer requested a credit elect on the return, transfer the overpayment to the next year's tax; use TC 830 on the debit side and TC 710 on the credit side. The transaction date is either the payment received date or the return due date (plus one month for MFT 02, Form 1120, U.S. Corporation Income Tax Return).

    2. If applicable, contact the taxpayer and correct as taxpayer intended. See IRM 21.2.4.3.10., Applying Unresolved Credits, to transfer the credit if no reply is received.

21.2.4.3.37.3  (10-01-2008)
Unreversed TC 570, No Return

  1. If the tax module has an unreversed TC 570 credit balance and no return posted, consider the case resolved after taking the following action.

  2. Close the case if:

    1. TC 150 posted in a later cycle; the module must also be in zero or debit balance.

    2. All credits were transferred to another module.

    3. In a later cycle, IDRS indicates it is in delinquency status, Master File code 02 or 03. Input TC 571 to release the —R freeze.

  3. Determine if the credit should be transferred to another period or TIN.

  4. If some of the credits were transferred to another module, determine if remaining credits should also be transferred. Transfer credit, if appropriate.

  5. If a return incorrectly posted to another module, reprocess return to correct module and make necessary adjustments.

  6. If a return was not input, process the return. Release the freeze only if the credits in the module are claimed on the return. If the credits are not claimed, resolve the remaining credits before releasing the freeze.

  7. If a credit transfer with Doc Code 24 or 34 was input on the module, research the account via RTR and RTVUE to determine if action is correct. If credit transfer was correct contact taxpayer for return. If not correct, revise the action.

  8. If a different entity is found, research that account; transfer credit, or merge accounts, as appropriate.

  9. If the type of tax is Form 1040C, U.S. Departing Alien Income Tax Return (TC 430 Doc Code 61), prepare Form 2859, Request for Quick or Prompt Assessment, to request a prompt assessment. The module must be monitored on IDRS until the assessment posts to ensure the correct posting of tax.

  10. If, after all actions have been taken, the case is still unresolved, send 112C letter requesting return. If reply is received, process the return. If no reply, input TC 571 to release the R freeze, and allow CP 80/080 to generate when AMRH criteria is met. Leave credit on Master File and close case control,"NOREPLY."

21.2.4.3.38  (01-11-2008)
VERFPYMT Transcripts

  1. VERFPYMT transcripts generate when a payment posts to a debit balance module resulting in a credit balance over ≡ ≡ ≡ . The VERFPYMT transcripts generate on a weekly basis. The purpose of the transcript is to determine if the payment(s) belong to the taxpayer, using the following steps.

  2. If there is another debit balance in the account, release the "R" freeze allowing the overpayment to offset to the debit balance module.

  3. If there is a multiple freeze condition (i.e. -W, -V, -L) on the module, follow the procedures for the specific releases.

  4. Research Integrated Submission and Remittance Processing (ISRP) or RTR for check copies and/or payment documents for the payment(s) that created the credit balance.

  5. If credit resulted from levy payments (i.e., designated payment codes 04, 05, 15, 16, 17, 18, 20, or 21) and the source document indicates a levy payment, route case to CSCO. Close your base through AMS/DI; then open a control base, using the same IRS received date, to 0765500001, for a levy release and credit disposition.

  6. Use the check copies and payment documents to research each payment to allow you to determine whether the credit posted correctly.

    1. Identify all misapplied payments.

    2. Review the account and determine if the payment posted to the correct taxpayer, MFT, calendar year, fiscal year, etc.

  7. If payment posted to the correct account, and the account does not contain pending assessment, look for an open control.

    1. If account contains an open control, contact the controlling employee to determine if you should route the case to the controlling employee.

    2. If account does not contain an open control, release the "R" freeze allowing the overpayment to refund.

    3. Send a closing letter to the taxpayer explaining the refund.

  8. If the payment posted to the incorrect taxpayer or account, and you can identify the correct taxpayer and/or account;

    1. Transfer the credit to correct account.

    2. See IRM 21.5.8, Credit Transfers.

  9. If payment posted to the incorrect taxpayer or account and/or you cannot identify the correct taxpayer and/or account:

    1. Ensure TC 570 is posted to prevent payment from refunding.

    2. Send 1687C letter, Unidentified Payment/Credit, to taxpayer whose account has credit. (Request that taxpayer reply within 30 days; 45 days for overseas taxpayers.)

    3. When reply is received, apply credit as taxpayer requests.

    4. If taxpayer indicates payment is not his or hers, or if no reply is received, transfer credit to the Unidentified Remittance File (Account 4620) or Excess Collections (Account 6800) as appropriate. See IRM 21.2.4.3.10., Applying Unresolved Credits.

  10. If payment is scheduled for release, and this will cause an Erroneous Refund, input CC NOREF to stop the refund.

  11. If payment erroneously refunds, refer to IRM 21.4.5 , Erroneous Refunds.

21.2.4.3.39  (10-01-2008)
Refund Repayment, Cancellation, or Deletion (10 P-)

  1. This freeze is caused by a credit balance module with an unreversed TC 720 (Repayment), TC 841 (Cancellation) or TC 842 (Deletion–BMF only). The module is frozen from offset and refund. See IRM 21.4.3, Returned Refunds/Releases, for information (e.g., returned refund checks or because the taxpayer is deceased). Refer to IRM 20.2, Interest, to determine if interest is due the taxpayer when releasing the "P" freeze.

  2. Consider these cases resolved if the account indicates:

    1. Duplicate refundable credits; initiate adjustment action.

    2. Refund is due; release freeze after evaluating research.

  3. On remaining cases, research as necessary. Check IDRS with BRTVU/RTVUE, examine both the entity at the time of the refund and the current entity; request data from cross-referenced accounts, payment vouchers involved with the credit balance, and the return, if necessary. TCs 841 can be divided into four categories:

    1. Recertified: Regional Financial Center (RFC) recertifies refund for reissuance. TC 841 and duplicate TC 846 post the same cycle. Blocking series and serial number of TC 841 DLN is 88888 (no "P" freeze) or 88899 ("P" freeze).

    2. Intercepted: Campus intercepted refund check. The blocking series and serial number of TC 841 DLN is 55555 or 77799.

    3. Returned: Check is returned to RFC or the IRS (IRS returns check to RFC). Blocking series and serial number of TC 841 DLN is 99999 or 88888. Send 407C letter to the taxpayer, requesting the reason for the returned refund.

    4. Direct deposits: Returned to the RFC by financial institutions post as TC 841 with block and serial 77777. If the 77777 is erroneously missing, a "P-" freeze results. See IRM 21.4.1.4.8.1(3), Direct Deposit Reason Codes, for further information.

    Note:

    Checks returned to the RFC for reasons other than undeliverable post as TC 841 with block and serial number 99999 and set as "P" freeze. On accounts with this transaction, check with the Refund Inquiry team for any open cases before contacting the taxpayer.

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

    1. Take no action ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Route the case, using AMS/DI and include a "Summary Print " in place of the transcript, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. Open a control base using the same IRS receive date and category code to the Philadelphia ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    See IRM 21.5.6.4.43(11) (c) and (d), Notice CP 05, Information Regarding Your Refund, Issued to Taxpayers With CI-FDC Involvement, for appropriate CI-FDC campus

  5. Resolve case by taking the following action:

    1. Case is being worked by another campus function; contact that function for status and request expedite action.

    2. An outstanding balance exists on another module; transfer the credit, or release freeze, as applicable.

    3. Each spouse received a refund; start erroneous refund action.

    4. An assessment is being input to the Master File; no further action is necessary.

    5. Duplicate FTDs were credited to the module; verify and take appropriate action.

    6. An assessment is due (e.g., payment voucher is notated "941C)" , input adjustment.

  6. If case is still unresolved, send a 407C letter to the taxpayer, requesting disposition of the credit. If no reply, or if the 407C letter is returned as undeliverable and you cannot obtain a more current address, transfer the credit to either Account 6800 or 4620.

  7. Initiate adjustment action to TC 806 for invalid (unsubstantiated) withholding credits. See IRM 21.2.4.3.10., Applying Unresolved Credits, for valid (substantiated) withholding credits and residual credits (cash remittance).

21.2.4.3.40  (01-11-2008)
Advance Payment (11–F)

  1. These transcripts generate when a TC 640 (Advance Payment) posts and one of the following conditions exist:

    1. TC 300 posted with 23c date earlier than the TC 640 date.

    2. TC 150 posted without a subsequent TC 300.

    3. No TC 240 in Civil Penalty module.

    4. The TC 150, TC 640 and TC 300 appear to have posted timely and there is no regular module balance.

21.2.4.3.40.1  (10-01-2008)
AM11 Resolution

  1. If TC 300 posted with 23c date earlier than the TC 640 and:

    1. The payment resulted in a credit balance and additional liability is to be posted, or if the case was transferred to Appeals, no further action is necessary; consider the case closed.

    2. An outstanding liability exists in another module, transfer credit (excess amount).

    3. The TC 640 was used in error, reverse the TC 640 and post correct transaction code. To release the freeze, correct the latest payments with a TC 642/670; use bypass indicator 1, and a designated payment code (DPC) 99, on the credit portion of the DRT24.

    Example:

    The taxpayer paid the additional assessment twice. Both payments were input as TC 640 but only one posted with a date prior to the assessment. The account is in credit status with an —F freeze. To release the freeze, correct the payment made after the assessment with a TC 642/670 on a DRT24.

  2. If no subsequent TC 290/300, examine the tax module for information or request the document via RTR of the payment posted to the Master File. If the payment was:

    1. Processed with the wrong transaction code, use DRT24 to change the transaction code. Use a bypass indicator on credit portion.

    2. Misapplied, transfer the credit to the intended period; do not release it to offset.

    Note:

    If the credit cannot be resolved using the above, contact the taxpayer to determine why the payment was submitted; request the return if necessary. If no reply from the taxpayer, follow the instructions in (3) or (4) below as appropriate.

  3. If the TC 640 is valid, the related TC 290/300 never posted to the tax module and AMDIS indicates there is an open module controlled to Appeals or Examination, coordinate with the responsible function.

    1. If they will accept the issue, route the case. Take no further action.

    2. If they will not accept the issue or are unable to locate the tax return, notate this in the case history. Prepare assessment or Form 2859, Request for Quick or Prompt Assessment. The module must be monitored on IDRS until the assessment posts to ensure the correct posting of tax.

  4. If the case is not controlled by Examination or Appeals on AMDIS or there is no TC 420/424 and the module contains a valid TC 640, make the proper assessment.

    1. See IRM 21.2.4.3.3. , Civil Penalty Modules, if the TC 240 did not post to the Civil Penalty module. Contact the proper area prior to making an assessment.

    2. If the TC 150, TC 640 and TC 290/300 posted and