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Part 8. Appeals

Chapter 17. Settlement Computations and Statutory Notices of Deficiency

Section 3. Preparing a Statement of Account

8.17.3  Preparing a Statement of Account

Manual Transmittal

January 20, 2012

Purpose

(1) This transmits a revised IRM 8.17.3, Preparing a Statement of Account.

Material Changes

(1) Minor editorial and formatting changes made throughout this IRM.

(2) IRM 8.17.3.1, paragraph (3)(f) and (g): Interim Guidance No. AP-08-0811-02, Interim Guidance on Statement of Account Requirements, incorporated in this IRM update.

(3) IRM 8.17.3.1, paragraph (4) changes made to statement of account requirements.

(4) IRM 8.17.3.1, paragraph (8) modified to clarify requirement on Form 3623 for the TC 150 date.

(5) IRM 8.17.3.1, paragraph (9) updated to remove obsolete information and modified to add information on similar payments and combining payments..

(6) IRM 8.17.3.1, paragraphs (10) and (11) deleted - this information no longer applies since Excel spreadsheets are now used to prepare statements of account.

(7) IRM 8.17.3.1, paragraph (9) deleted - information incorrect and also not necessary when preparing a statement of account.

(8) IRM 8.17.3.1.1 - Clarified and expanded on payment and assessment information.

(9) IRM 8.17.3.2 - Removed Estate of Smith references.

(10) IRM 8.17.3.1.3 - Minor rewording of language.

(11) IRM 8.17.3.3 - Removed reference to incorrect exhibit and updated years and dates in the examples.

(12) IRM 8.17.3.5 - Counsel issued Chief Counsel Notice CC-2010-006 in 2010, which eliminated the requirement to prepare Estate of Smith computations for statements of account. IRM 8.17.3.5 revised accordingly.

(13) IRM Exhibit 8.17.3-1 error in footnote and overpayment code section corrected.

(14) IRM Exhibit 8.17.3-2: Added clarification that these code sections apply for notice of deficiency cases.

Effect on Other Documents

It supersedes IRM 8.17.3 revised 11/28/2007. Interim Guidance Memorandum AP-08-0811-02, Interim Guidance on Statement of Account Requirements, which was issued August 12, 2011, is incorporated into this IRM revision.

Audience

Counsel and Appeals employees who prepare and/or use statements of account.

Effective Date

(01-20-2012)


Kirsten B Wielobob
Director, Appeals Technical Services

8.17.3.1  (01-20-2012)
Explanation of the Statement of Account

  1. A Form 3623, Statement of Account, shows each tax year's correct liability, dates and amounts of assessments, overassessments and abatements, and the resulting deficiency in assessment or overassessment. It also shows the dates and amounts of payments, credits and refunds, and the balance due or overpayment.

  2. Secure a current transcript of account before preparing the statement of account. A current transcript is generally one secured within the last two (2) weeks. Request an updated transcript if anything indicates something transpired on the account since the last transcript was secured.

  3. Statements of account are required in docketed cases involving:

    1. Unpaid assessments of tax or penalty;

    2. Overpayments;

    3. Interim payments after mailing 90-day letter;

    4. Interim assessments after mailing 90-day letter;

    5. Rule 155 computations, except where a short-form computation is used;

    6. Adjustments to Earned Income Credit included in the settlement of the case;

    7. Adjustments to Additional Child Tax Credit included in the settlement of the case;

    8. Jeopardy, termination, or prompt assessment cases.

  4. A statement of account may also be required in the following docketed cases:

    1. Unusual cases, such as some transferee cases. See IRM 8.7.5, Transferee and Transferor Liabilities.

    2. Certain overassessment cases.

  5. In most cases, the statement of account is part of the settlement computation.

    1. Enter the name of the petitioner or taxpayer in the name section.

    2. A schedule number or letter may be entered.

    3. Enter the kind of tax in the appropriate sections on the form.

    4. Insert the docket number in the space provided. Prepare a separate statement of account for each docket.

    5. Show tax and additions to the tax or penalties in separate columns.

  6. The statement of account consists of an assessment section and a payment section. In each section enter the tax and addition to the tax or penalty liability as finally determined on the line entitled Revised Liability.

  7. Reflect all additions to the tax asserted in the notice of deficiency as finally determined, even if eliminated because of income adjustments or other reasons. Show the code section rather than the name of each addition to the tax or penalty.

  8. In the assessment section, show amounts and dates of assessments and overassessments (including abatements) from the transcript of account.

    1. The "Assessment (tax on return)" date field is grayed out on the official Form 3623. Therefore normally a date is not required on Form 3623 when the taxpayer files a return and the tax is assessed with a TC 150.

  9. In the payments section, transcribe all payment dates and amounts from the transcript of account.

    1. Use due date of return for payments prior to due date, such as withholding tax, payments and credits on estimated tax, or other credits and payments.

    2. Similar payments made by the due date of the return can be combined and shown as one amount on Form 3623. For example, if there is one estimated tax payment on 6/15/XX and another on 9/15/XX, then both payment amounts may be combined on one line using the due date of the return.

    3. Payments that are not similar should be kept separate. For example, withholding credits should be listed separately from estimated tax payments.

  10. Do not prepare a statement of account for a Joint Committee case unless it is required for reasons other than Joint Committee status, such as a Rule 155 computation.

8.17.3.1.1  (01-20-2012)
Unique Issues Requiring Modification to Form 3623

  1. Occasionally unique adjustments require that the statement of account be modified to clearly explain the information in the account. Some of the more common adjustments are described below:

    1. Withholding Credits: If additional withholding credits not shown on the transcript are allowed, include the amounts on the statement of account using the due date of the return. Include a notation that these withholding credits are in addition to the amounts shown on the transcript.

    2. Unassessed Advance Payments: The term "unassessed advance payments" is used to refer to advance payments which have been posted to the taxpayer’s account, but not applied to pay an assessment of tax, penalty or interest. If there are unassessed advance payments, be careful to distinguish deposits (cash bond deposits or IRC section 6603 deposits) from advance payments of tax. See IRM 8.17.3.2.2. This subsection is entitled Advance Payments of Unassessed Liabilities and contains detailed information on preparing a statement of account with unassessed advance payments. For additional information on deposits, see IRM 8.20.6.2, Advance Payments Overview.

    3. Interim Assessments: If the interim assessment is for a delinquent return filed after the statutory notice of deficiency was issued, include the assessment on the "Assessment (tax on return)" line. Footnote the amount to show the date of the assessment. If an interim assessment is made as a result of a payment received after the notice of deficiency was issued, include the assessment on the "Additional Assessments" line. The corresponding payment would be included in the payments section. If assessments other than delinquent returns or payments are made after the notice of deficiency was issued, also include these assessments on the "Additional Assessments" line.

    4. Overpayments: Complete the section at the bottom of Form 3623 when there is an overpayment. See Exhibit 8.17.3-2. This exhibit provides an explanation of the code sections to use for notice of deficiency cases.

    5. Barred Overpayments and Deficiencies: If the total overpayment or deficiency is barred, the amount is asterisked (*) and a footnote added to Form 3623. The following is an example of the footnote for a barred overpayment case:

      "Overpayment barred by statute of limitations."

    Note:

    When the total overpayment is barred on a docketed case, there is no requirement to complete the bottom of the Form 3623.


    If only part of the overpayment or deficiency is barred, the total amount is asterisked (*) and a short summary of the barred amount is added to the bottom of the Form 3623. The following is an example of the summary for a case when only part of the overpayment is barred:

    Overpayment $6,000.00
    Overpayment barred by Statute of Limitations 1,000.00
    Overpayment Allowable $5,000.00
    ========

8.17.3.1.2  (11-28-2007)
Identifying Prior Adjustments

  1. Penalties under IRC 6651, IRC 6654, and IRC 6656 are computer generated without notations on the return.

  2. Campus adjustments subsequent to the posting of the return (the TC "150" transaction) sometimes carry a second Document Locator Number with a "54" document code (4th and 5th digits of DLN).

  3. Except for partial agreements, prior Compliance or Appeals action for Master File and Non-Master File returns generally have a second DLN with a "47" document code (4th and 5th digits of DLN).

  4. Jeopardy, quick, and prompt assessments for Master File accounts have a "51" document code. These are not re-file DLNs and are generally not stamped on the return.

  5. If the file contains a Form 1139, Corporation Application for Tentative Refund from Carrybacks, Form 1045, Application for Tentative Refund (used by individual taxpayers) or Form 8485, Assessment Adjustment Case Record, there may be a prior assessment.

  6. The DLN on an amended return does not indicate there was an assessment or overassessment. Further, a "duplicate filing condition" may exist on the Master File which requires special handling by the Campus in order to permit an adjustment to post. These cases are marked for "Special Handling" in accordance with IRM 8.20, Appeals Processing Manual.

8.17.3.1.3  (01-20-2012)
Addressing Jeopardy/Termination Assessments in Statements of Account

  1. A jeopardy assessment made prior to the issuance of a notice of deficiency is not taken into consideration in determining the statutory deficiency. In such cases, show the deficiency in tax and addition to the tax (or penalty) before the jeopardy assessment, the deficiency or overassessment of tax, and addition to the tax or penalty after considering the jeopardy assessment, and the underpayment or overpayment of tax and addition to the tax or penalty. See IRM 8.17.5.26, Jeopardy Assessments in Settlement Computations.

  2. Handle termination assessments under IRC 6851 similar to jeopardy assessments.

8.17.3.2  (01-20-2012)
Applying Payments and Credits

  1. In each docketed settlement and Rule 155 computation case, separately identify the assessments and payments of tax and additions to the tax or penalties.

    1. Prepare the statement of account so that the Tax Court can separately determine the deficiency or overpayment of tax and addition to the tax or penalty.

    2. Unless there is information to the contrary, apply payments and credits specifically to tax, addition to the tax or penalty, interest, etc., according to identification of the particular payment on the transcript.

      Note:

      See paragraph 2 below for amounts to be included on the statement of account.

  2. The Tax Court may not have jurisdiction over interest provisions, or certain additions to tax. Therefore, normally assessment and payment information are not included on the statement of account for these non-jurisdictional items. However, it may sometimes be helpful to show assessment and payment information for items not under Tax Court jurisdiction.

    1. Provide this information on a separate Form 3623 if combining it with the jurisdictional information creates confusion.

    2. No matter where it is shown, it must be clearly labeled as "Information Only" . See Exhibit 8.17.3-3.

  3. If payments are designated incorrectly on the transcript of account, notify the Appeals Officer of the error. The Appeals Officer should request a correction by Appeals Processing Services.

8.17.3.2.1  (11-28-2007)
Allocating Partial Payments

  1. When the taxpayer specifies how a partial payment of assessed tax, addition to tax or penalty, and interest is applied, reflect the allocation on the statement of account.

  2. When the taxpayer does not specify an allocation, apply payments in accordance with Rev. Proc. 2002-26.

8.17.3.2.2  (11-28-2007)
Advance Payments of Unassessed Liabilities

  1. The American Jobs Creation Act of 2004 added new IRC 6603 to permit taxpayers to make deposits to suspend the running of interest on potential underpayments of tax.

  2. IRC 6603 codifies the taxpayer's right to make a deposit in lieu of a payment to stop the running of interest on a potential deficiency, and, for the first time, provides for the accrual of interest on a deposit returned to the taxpayer to the extent that the deposit is attributable to a disputable tax. IRC section 6603 was enacted October 22, 2004.

  3. Advance payments of unassessed liabilities are discussed in Rev. Proc. 2005-18, which applies to remittances made to stop the running of interest on deficiencies, including remittances treated as deposits under IRC section 6603. Rev. Proc. 2005-18 discusses "deposits made pursuant to IRC section 6603" , which replace the "deposits in the nature of a cash bond" discussed in Rev. Proc. 84-58. Rev. Proc. 84-58 is superseded, effective with respect to remittances made on or after March 28, 2005.

    1. Unlike cash bonds, the taxpayer may be entitled to credit interest on any refunded portion of a deposit made pursuant to IRC 6603. The rate of interest allowed on returned deposits is lower than the rates for overpayments under IRC 6621(b). Credit interest on a returned deposit is computed at the Federal short term rate, compounded daily. The ACT/DMI Program provides a Federal Short Term Rate Chart specifically for computing interest on returned deposits.

    2. Remittances submitted to suspend the running of interest under this section are referred to as "6603 deposits" .

  4. Under Rev. Proc. 84-58, a cash bond deposit is not considered a payment of tax, is not subject to a claim for credit or refund, and if returned to the taxpayer, does not bear interest.

  5. Special rules apply for amounts held by the Service as cash bond deposits pursuant to Rev. Proc. 84-58 on or after the date of enactment of IRC 6603 (October 22, 2004).

    1. Rev. Proc. 2005-18 provides procedures for amounts held as deposits on October 22, 2004 through the March 28, 2005 effective date for Rev. Proc. 2005-18. Any portion of a cash bond deposit previously made pursuant to Rev. Proc. 84-58 does not earn interest unless the taxpayer provides a written statement, as described in Rev. Proc. 2005-18 section 5.02, identifying the amount as a deposit made pursuant to IRC 6603.

    2. Except as discussed in the following paragraphs, treat the date the Service receives the written statement as the date the amount is deposited for purposes of IRC 6603(d). (Rev. Proc. 2005-18 section 5.01).

    3. In the case of a deposit that is made after October 22, 2004, and before March 28, 2005, treat the deposit as made on the date remitted for purposes of IRC 6603(d) if the taxpayer provides a written statement designating the amount as a 6603 deposit before May 27, 2005. (Rev. Proc. 2005-18 section 10).

    4. In the case of an amount held as a cash bond deposit pursuant to Rev. Proc. 84-58 on October 22, 2004, treat the deposit as made on October 23, 2004, for purposes of IRC 6603(d) if the taxpayer provides a written statement identifying the amount as a "6603 deposit" before May 27, 2005. (Rev. Proc. 2005-18 section 10).

  6. See IRM 8.20.6.2, Advance Payments and Other Remittances Received in Appeals, for further information about IRC 6603 deposits.

8.17.3.3  (01-20-2012)
Deposits under IRC 6603 and Cash Bonds

  1. Unassessed advance payments designated as deposits under IRC 6603 or as cash bond deposits are not included on the statement of account.

  2. Instead, include a notation at the bottom of the statement of account as discussed in the paragraphs below.

    1. If the IRS is holding a cash bond made under Rev. Proc. 84-58 and not subsequently designated as a deposit under IRC 6603:

      Example:

      1: Taxpayer A submits a $2,000.00 cash bond deposit on 09/09/2004 under Rev. Proc. 84-58 for the tax year 2003. Taxpayer A did not subsequently designate it as a deposit under IRC section 6603. Use the following wording:

      A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004.



      See Exhibit 8.17.3-1 for illustration of Example 1.

    2. If the IRS is holding a cash bond deposit on 10/22/2004, treat the deposit as made on 10/23/2004 for purposes of IRC 6603 if the taxpayer provides a written statement before 05/27/2005 which identifies the amount as a deposit under IRC 6603.

      Note:

      Notate the date of the payment and the 10/23/2004 date at the bottom of the statement of account.

      Example:

      2: The facts are the same as Example 1, except a written statement conforming to the requirements of Rev. Proc. 2005-18 was received on 05/02/2005. Use the following wording:

      A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004, and determined to be a deposit made under IRC 6603 as of 10/23/2004.

    3. In the case of a deposit that is made after October 22, 2004, and before March 28, 2005, treat the deposit as made on the date remitted for purposes of IRC 6603(d) if the taxpayer provides a written statement before 05/27/2005 which identifies the amount as a deposit under IRC 6603.

      Note:

      Include the date of the payment and the date it is determined to be a deposit under IRC 6603 at the bottom of the statement of account.

      Example:

      3: Taxpayer B submits a deposit on 12/29/2004 in the amount of $3,000.00 for the tax year 12/31/2002. A written statement conforming to the requirements of Rev. Proc. 2005-18 is received on 05/12/2005. Use the following wording:

      A cash bond in the amount of $3,000.00 was received for tax year 2002 on 12/29/2004 and determined to be a deposit made under IRC 6603 as of 12/29/2004.

    4. In the case of a deposit in the nature of a cash bond previously made pursuant to Rev. Proc. 84-58 where the taxpayer’s statement is received on or after 05/27/2005, treat the date the Service receives the written statement as the date the amount is deposited for purposes of IRC 6603(d).

      Note:

      Include the date of the payment and the date it is designated as a deposit under IRC 6603 (the date the Service receives the taxpayer’s statement) on the bottom of the statement of account.

      Example:

      4: The facts are the same as Example 1, except a written statement conforming to the requirements of Rev. Proc. 2005-18 was received on 05/30/2005. Use the following wording:

      A cash bond in the amount of $2,000.00 was received for tax year 2003 on 09/09/2004, and determined to be a deposit made under IRC 6603 as of 05/30/2005, the date the IRS received the statement required under Rev. Proc. 2005-18.

    5. Use the wording similar to the following on deposits made under IRC 6603 on or after the March 28, 2005 effective date of Rev. Proc. 2005-18:

      A deposit made under IRC 6603 in the amount of $3,000.00 was received for tax year 12/31/2002 on 06/16/2005.

8.17.3.3.1  (11-28-2007)
Identifying Deposits on Transcripts

  1. Cash bonds:

    1. A cash bond is present if a 900 - 999 appears in digits 9, 10 and 11 of the DLN next to the TC 640 amount. It looks similar to the following:

      TC DATE AMOUNT CYCLE DLN
      640 12011996 2,000.00- 199552 55211-110-99922-1

  2. IRC section 6603 deposits:

    1. Remittances submitted after October 22, 2004, identified by taxpayers as IRC section 6603 deposits are processed and posted in the same manner as the Service previously processed a cash bond remittance. Deposits are identified by a TC 640, Blocking Series 999 and Designated Payment Code (DPC) 12.

    2. See IRM 20.2.4.8.1, Cash Bonds, for additional details.

  3. Converted deposits:

    1. Because IRC 6603 deposits are processed and posted in the same manner cash bond deposits were previously processed, identifying deposits on a transcript that have been converted from cash bond deposits to IRC 6603 deposits requires a careful analysis of the case file.

    2. Review the case file for the written statement that the taxpayer must submit to convert these previously posted cash bonds to IRC 6603 deposits.

    3. The Appeals Officer or Counsel Attorney may need to contact the taxpayer to obtain additional information to verify if a cash bond deposit was converted to an IRC 6603 deposit, and the date of the conversion.

8.17.3.4  (01-20-2012)
Earned Income Credit (EIC), Refundable Additional Child Tax Credit, and Credit for Federal Tax Paid on Fuels Cases

  1. When changes are made to the EIC, the refundable additional child tax credit, or the credit for federal tax paid on fuels previously allowed on the return and a statement of account is prepared, use the corrected credit amount rather than the adjustment amount to decrease the corrected income tax liability amount before entering the amount on the Revised Liability line of Form 3623 . Footnote this amount with an asterisk or a number and explain how it was determined at the bottom of Form 3623.

  2. Decrease the actual tax assessment on the return by the amount of credit on the return to compute the amount to be entered on the Assessment (tax on return) line of Form 3623. Show an explanation of how this amount is computed in a footnote at the bottom of Form 3623.

  3. Do not show the EIC, refundable additional child tax credit and credit for federal tax paid on fuels claimed on the return and posted to the taxpayer’s account in the payments section since these amounts are considered in the liability section.

  4. Also include the exact amount refunded to the taxpayer in the payments section regardless of whether the refund included any of these credits.

  5. This IRM section includes the following exhibits:

    1. See Exhibit 8.17.3-4 for an example of how to show adjustments to the EIC on Form 3623.

    2. See Exhibit 8.17.3-5 for an example of adjustments to both the EIC and the refundable additional child tax credit on Form 3623. This example also has a frozen refund, and the result is an overpayment.

      Note:

      Modify and use the format shown in these exhibits for any cases involving adjustments to the credit for federal tax paid on fuels which require a statement of account (such as an overpayment case.).

8.17.3.5  (01-20-2012)
Impact of the Estate of Smith Decision in Overpayment Cases

  1. When preparing decision documents, stipulations, and Rule 155 cover sheets, the Service has followed a long-standing practice of not reducing the amount of an overpayment in tax by the amount of any unpaid interest or penalties.

  2. In Estate of Smith v. Commissioner, 123 T.C. 15 (2004), the Tax Court held that the amount of overpayment was the amount by which total payments exceeded tax, including any assessed underpayment interest; and that the Service therefore could not reduce the petitioner’s refund for any outstanding underpayment interest not specified in the entered decision/stipulation.

  3. As a result of the court decision in the Estate of Smith case, the Office of Chief Counsel issued Notice CC-2004-035 advising Counsel Attorneys that assessed and unassessed underpayment interest should be taken into account when preparing overpayment decision documents and stipulations.

  4. In November of 2005 the decision in the Estate of Smith case was reversed by the Court of Appeals for the Fifth Circuit. Counsel issued Chief Counsel Notice CC-2010-006. This notice revoked Chief Counsel Notice CC-2004-035 and stated that it was inappropriate to include assessed or unassessed interest computations in decision documents, stipulations and Rule 155 computations. This notice eliminated the requirement to prepare Estate of Smith computations for statements of account.

Exhibit 8.17.3-1 
Statement of Account - Overpayment, Cash Bond Present and Penalty Conceded

OverpaymentPenaltyStatement of Account
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Exhibit 8.17.3-2 
Code Section for Overpayments - Bottom of Form 3623

OverpaymentsForm 3623
For notice of deficiency cases, show Internal Revenue Code sections as IRC 6512(b)(3) and either (A), (B) or (C). If IRC 6512(b)(3)(B) or IRC 6512(b)(3)(C) is used, an IRC 6511 section must also be used. Select IRC 6511(b)(2), IRC 6511(c) or IRC 6511(d), whichever is applicable.
Explanation of Code Sections:
IRC 6512(b)(3)(A): The amount of money refunded is from money paid by the taxpayer (TP) after the date the Statutory Notice (SN) was mailed. It is not necessary to also include an IRC section 6511 cite with IRC section 6512(b)(3)(A).
IRC 6512(b)(3)(B): The most common use would be to cite this section where a claim for refund could have been timely made on the date of the mailing of the notice of deficiency (whether or not the TP actually made the claim).
IRC 6512(b)(3)(C): The TP filed a claim before the mailing of the SN, regardless of whether it was allowed or disallowed, a suit for refund would have been timely as of the SN date.
IRC 6511(b)(2):
IRC 6511(b)(2)(A): A claim was filed within 3 years of due date of return, the TP can get refund of all tax paid.
IRC 6511(b)(2)(B): Claim filed after 3 years, the TP can get refund of taxes paid within preceding 2 years.
IRC 6511(b)(2)(C): No claim filed, the TP can get refund only for amount he could get if a claim was filed on the date the refund is allowed.
IRC 6511(c): Statute extended by Form 872 consent to extend the time to assess tax or 872-A. Special consent to extend the time to assess tax.
IRC 6511(d) – Special periods of limitation for:
  (1) Bad debts and worthless securities,
  (2) NOL or capital loss carryback,
  (3) Foreign tax credit, and
  (4) Certain credit carrybacks
   
Need to show only IRC 6511(b)(2), IRC 6511(c) or IRC 6511(d).
   
These code sections are used by Counsel to prove that the Statute of Limitations is open so a refund can be allowed. Since the statute can be open due to many reasons, specify which ones and Counsel will use them in the stipulation signed by the taxpayers. The most commonly used are IRC 6512(b)(3)(B) and IRC 6511(b)(2).

Exhibit 8.17.3-3 
Statement of Account - Non-Jurisdictional Issues Provided as Information Only

Statement of AccountNon-Jurisdictional Issues
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Exhibit 8.17.3-4 
Earned Income Credit Adjustment

Statement of AccountEarned Income Credit
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Notes to Tax Computation Specialist about Form 3623
1. The IRC 6211 deficiency is the increase in tax after the earned income credit (EIC) adjustment. This is the $624.00 shown on the "Increase (Decrease) in Assessment" line on the statement of account. This amount will be processed as a two step adjustment. $375.00 in tax will be assessed and $249.00 ($940.00 less $691.00) of the previously allowed EIC will be reversed. This will result in the net deficiency of $624.00.
2. The allowable earned income credit of $691.00 is not shown in the list of payments in the bottom part of the statement of account since it is considered in the "Revised Liability" line (1).
3. The "Less Refunds or Credit" line in the bottom part of the statement of account will include any EIC refunded to the taxpayer.
4. In this example, the "Balance Due" line on the statement of account is the same as the increase in tax shown on Form 5278 of $624.00. This is same amount that would be shown as the deficiency on the entered decision document. If there were any unassessed advance payments, prepayment credit adjustments, frozen refunds, etc., then the "Balance Due" line would not be the same as the IRC 6211 deficiency.

Exhibit 8.17.3-5 
Settlement Computations With Earned Income Credit and Additional Child Tax Credit Adjustment, Frozen Refund

Statement of AccountEarned Income CreditAdditional Child Tax CreditFrozen Refund
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Notes to Tax Computation Specialist about Form 3623
1. The IRC n 6211 deficiency is the increase in tax after the earned income credit (EIC) adjustment. This is the $1,822.00 shown on the "Increase (Decrease) in Assessment" line on the statement of account. This amount will be processed as a two step adjustment. $2,459.00 of the EIC claimed on the return will be reversed and $637.00 will be allowed as an increase to the amount of additional child tax credit (ACTC) claimed on the return. This will result in the net deficiency of $1,822.00.
2. The allowable credits (earned income credit of $1,565.00 and the allowable ACTC of $936.00) are not shown in the list of payments in the bottom part of the statement of account since these amounts are considered in the "Revised Liability" line (1).
3. The "Less Refunds or Credit" line in the bottom part of the statement of account will include any EIC or ACTC refunded to the taxpayer. In this example, the withholding credit of $1,150.00 and ACTC claimed on the return of $299.00 was refunded to the taxpayer; a total of $1,449.00. The EIC claimed on the return of $4,024.00 was not refunded to the taxpayer. This part of the taxpayer's claimed refund was held and the refund frozen.
4. Balance due (or overpayment): In this example, there is a net overpayment of $2,202.00, even though there is an increase to tax in the amount of $1,822.00. However, since the campus held $4,024.00 of the taxpayer’s claimed refund (frozen refund), the taxpayer is entitled to a refund of $2,202.00.

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