- 21.5.3.1 General Claims Overview
- 21.5.3.2 What Are Claims for Credit, Refund, and Abatement?
- 21.5.3.3 General Claims Research
- 21.5.3.4 General Claims Procedures
- Exhibit 21.5.3-1 CLAIM PROCESSING
- Exhibit 21.5.3-2 EXAMINATION CRITERIA (CAT-A)
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Claims are usually filed on Form 1040X, Amended U.S. Individual Income Tax Return, Form 1120X, Amended U.S. Corporation Income Tax Return, Form 843, Claim for Refund and Request for Abatement, or Form 8849, Claim for Refund of Excise Taxes, but may be made in an informal written inquiry. Claims include:
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Claims for Credit
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Claims for Refund
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Requests for Abatement
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This section contains the identity of claims and the processing steps necessary to complete the case, along with the required taxpayer notification.
Note:
Taxpayer Advocate Service (TAS) employees using the Operations Assistance Request (OAR) process to evaluate and process claims should follow the procedures found in IRM 13, Taxpayer Advocate Service.
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Accounts Management will expedite the resolution of all disaster claims.
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A claim is a request for refund or a request for an adjustment of tax paid or credit not previously reported or allowed. This includes protective claims and requests for abatement of interest.
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Claims do not include:
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Requests for adjustments that increase the balance on an account, such as tax increases or credit decreases. See IRM 21.5.3.4.1, Tax Increase or Credit Decrease Processing, for additional information.
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Requests to correct math errors. Refer to IRM 21.5.4.4.3, Processing Responses to Math Error Notices, for information on resolving math error replies
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Form 8379, Injured Spouse Allocation, is not a separate claim, but instead is the avenue used by the non-debtor spouse to provide additional information regarding his or her share of the overpayment shown on a jointly filed original tax return, Form 1040, or a jointly filed amended return, Form 1040X.
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There is no independent section on research. Research steps are provided in the specific processing procedures. Also, refer to IRM 21.5.3.4, General Claims Procedures, for additional research information.
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During a taxpayer contact, when:
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it appears there may be a hardship situation, or
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the taxpayer asks to be referred to the Taxpayer Advocate Service (TAS), or
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the contact meets TAS criteria, or
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you cannot resolve the taxpayer's issue the same day;
Refer the case to the Local Taxpayer Advocate (see IRM Part 13, Taxpayer Advocate Service) using Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or Form e-911.Exception:
If you are able to resolve and close the TAS issue on the same day as the taxpayer contact, do not refer the inquiry to TAS. Same day is defined as within 24 hours. If all the necessary steps to resolve the issue can be completed within 24 hours, the issue is also considered same day. Do not refer these cases unless the taxpayer asks to be transferred to TAS. For additional information, refer to IRM 13.1.7.4, Same Day Resolution by Operations, and IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines.
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This section discusses procedures. Always begin by following the procedures for disclosure in IRM 21.1.3, Operational Guidelines Overview.
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The general sequence you will follow is:
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Apply rules for disclosure
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Determine if special handling or referral to another function is required. Information regarding referrals to other areas can be located in the appropriate issue specific IRMs.
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Determine if the claim is complete
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Determine if the claim is processable
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Determine if the claim is allowable
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When a claim is submitted by a taxpayer, determine if it is complete and processable. All of the following requirements must be met before a claim or amended return is considered processable:
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Filed on a permitted form or in an informal written inquiry and includes everything necessary to input a correct adjustment.
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Contains sufficient required information to permit the mathematical verification of the amount shown on the claim.
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Contains the name, address, and Taxpayer Identification Number (TIN) of the taxpayer and is signed by the taxpayer (if a joint return, both taxpayers) or authorized representative under penalties of perjury (also known as the jurat).
Reminder:
Do not attempt to secure the return or request additional information from the taxpayer if enough specific information is available with the claim or with the various IDRS command codes.
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Once the claim is determined to be processable, determine if:
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Statute date is still open.
Exception:
Taxpayers may still be entitled to a refund on some claims for abatement/refund filed after the normal RSED. Refer to IRM 25.6.6.4.7, Offsetting the Amount of a Refund With a Time-barred Adjustment, for examples and procedures.
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There are any freezes on the tax account.
Note:
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Examination involvement is evident, such as Transaction Codes 420/424 ("L" Freeze), etc.
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Taxpayer requests full or partial disallowance.
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It is a disaster claim. (Accounts Management will expedite resolution of all claims marked as disaster.)
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It is a protective claim.
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It is a Competent Authority Claim.
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Bankruptcy is involved, such as an unreversed TC 520 (-V or -W freeze).
Note:
Take no action without contacting the Insolvency office where the taxpayer filed bankruptcy. Refer to the "Who/Where" tab on SERP for the Insolvency listing.
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A Tax Treaty is involved.
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The return was prepared under IRC § 6020(b).
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For additional Examination information, see Exhibit 21.5.3-1., Claim Processing, and Exhibit 21.5.3-2., Examination Criteria (CAT-A).
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Do not input for Distributive Input System (DIS) processing, an amended return received with a first read case. Work these cases, except Injured Spouse cases, without creating a duplicate filing condition.
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Route Third-Party Claims to the appropriate insolvency function. The Third-Party Refund Claim elements are:
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The taxpayer alleges payment of another's taxes because the Service improperly maintained a lien against the third party's property.
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The taxpayer alleges the taxes were paid under protest, or under compulsion of law, or with notice that the third party intends to sue to test the validity of the collection.
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Any reference to Williams or Williams vs. United States.
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Exempt Organization (EO) claims resulting in a refund must be routed to the Ogden Campus Examination function for Audit Information Management System (AIMS) input. See IRM 21.7.7, Exempt Organizations and Tax Exempt Bonds, for instructions.
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When a return was prepared under IRC § 6020(b), work the case if it involves a duplicate filing condition on a BMF account. If the case involves an IMF account, route the claim to Examination or Compliance Services Collection Operations (CSCO), whichever is appropriate. Refer to IRM 21.5.3.4.10, Returns Prepared Under IRC Section 6020(b).
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A Form 8379, Injured Spouse Allocation, is filed by the non-debtor spouse to claim his or her portion of a tax refund. The refund was (or is expected to be) applied to offset a past-due obligation of the other spouse, such as a premarital Federal tax debt, non-tax child support, Federal agency or State tax debt. Refer to IRM 21.4.6.5.3, Injured Spouse Inquiries, for complete information concerning Injured Spouse procedures.
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Suspend numbered returns while awaiting the taxpayer's reply to a request for additional information when the return is not complete or processable. If the information was previously requested, and the taxpayer did not reply, DO NOT request the information again.
Example:
Missing information can include forms, schedules, signatures, etc.
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Master File (MF) uses the amended claims date field (AMD-CLMS-DT) to apply the OBRA 1993 45-Day Rule. See IRM 21.5.1.4.2.4, Received Date – Determination, to determine the received date of an amended return or claim.
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Input the Amended Claims Date on the ADJ54 screen if working the claim within 45 days of the received date of the claim or amended return. See IRM 20.2.4.7.2.4, 45-Day Rule and Master File (Amended Returns and Claims), for additional information on the amended claims date.
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When an overpayment results from a claim or amended return and the refund is issued within 45 days of the received date of the processable claim or amended return, no interest is allowed from the received date of the claim or amended return to the refund schedule date. Credit interest is allowed from the credit availability date to the received date of the processable claim or amended return.
Example:
A claim for a refund of timely filed prepaid credits for a 200612 Form 1040 is received on August 14, 2007. The refund is issued on September 20, 2007, within the 45 days. Credit interest is allowed from April 15, 2007, the return due date, to August 14, 2007, the claim received date.
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When an overpayment results from a claim or amended return and the refund is not issued within 45 days of the received date, credit interest is allowed from the availability date to the refund schedule date (less a 9 or 13 day back off period). Refer to IRM 20.2.4.7.2.4, 45-Day Rule and Master File (Amended Returns and Claims), for additional information.
Example:
A claim for a refund of timely filed prepaid credits for a 200612 Form 1040 is received on August 14, 2007. The refund is issued on October 20, 2007, after the 45 days. Credit interest is allowed from April 15, 2007, the return due date, to October 20, 2007, the refund schedule date (less a 9 or 13 day back off period).
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Guidance in figuring the 45 day interest free period can be found in Exhibit 21.5.9-3, NOL 45– DAY INTEREST FREE CHART IMF, and Exhibit 21.5.9-4, NOL 45- DAY INTEREST FREE CHART BMF.
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Forward claims or amended returns showing a tax increase or credit decrease to the Statute function if it is within 90 days of the ASED expiration date. For additional information, see IRM 25.6.1.5, Basic Guide for Processing Cases With Statute of Limitation Issues.
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If more than 90 days remain on the ASED, input tax increases or credit decreases upon receipt of an amended return or written inquiry requesting a tax increase or credit decrease even without all required elements (forms, schedules, signature, etc.). Input net zero changes (TC 290 for .00) even without all required elements.
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Rev. Rul. 2005-4, applicable to additional liability on amended returns received before December 21, 2005, provides guidance on the application of IRC § 6404(g) regarding the suspension of interest with respect to all of these elements:
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An increased tax liability
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Reported on an individual amended return or written inquiry
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Requesting a tax increase or credit decrease
See (4) below to determine if IRC § 6404(g) applies before inputting the adjustment for TY 2003 and prior. -
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IRC § 6404(g) does not apply if:
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The net result is not an assessment; OR
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The original return was not timely filed, including extensions; OR
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The module contains an unreversed TC 320 or TC 240 with reference code 686; OR
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The adjustment pertains to an amended return for which the received date of the amended return/written inquiry requesting the tax increase or credit decrease is within 18 months (or 36 months, for amended returns/written inquiries received after November 25, 2007) of the date the original return was filed
Follow normal procedures if any of the conditions above are present. If none of the conditions are present, follow procedures in IRM 20.2.7.6.2, 18-Month Period (Notification Period). -
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For claims or amended returns received on or after December 21, 2005, an increased tax liability would receive interest suspension if the liability posted 18 months after the received date of the claim or amended return. See IRM 20.2.7.6.2, 18-Month Period (Notification Period), for more information.
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Call or write the taxpayer requesting any missing information using the appropriate letter, such as the Letter 178C or the Letter 324C.
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When the taxpayer responds, associate the information with the adjustment document.
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If an amended return showing a tax increase and credit increase is received without all necessary information, process using the chart below:
Note:
If the statute of limitations is imminent, follow the procedures in IRM 25.6.1.5, Basic Guide for Processing Cases With Statute of Limitations Issues.
If And Then The amount of the tax increase exceeds the amount of the credit increase (i.e., account balance will increase), The return is missing information (such as signatures), and all supporting documentation for the credit(s) is available, -
Input the adjustment.
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Correspond with the taxpayer for the missing information.
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Close the case.
Note:
When the taxpayer responds, associate the missing information with the amended return.
The amount of the tax increase exceeds the amount of the credit increase (i.e., account balance will increase) OR the amount of the credit exceeds the amount of tax increase (i.e., adjustment will result in an overpayment) The required supporting documentation for the credit(s) is not available, -
Correspond with the taxpayer for any missing information.
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Suspend the case for 40 days (70 days for overseas taxpayers).
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If no reply, input the tax increase only. Do not allow the credit increase.
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Correspond with the taxpayer explaining the difference in the adjustment.
The amount of the credit increase exceeds the amount of the tax increase (i.e., adjustment will result in a refund) The return is missing information (such as signatures), and all required supporting documentation for the credit(s) is available, -
Correspond with the taxpayer for any missing information.
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Suspend the case for 40 days (70 days for overseas taxpayers).
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If no reply, input the tax and credit increase.
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Use hold code 4 to freeze the overpayment.
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Inform the taxpayer that the adjustment was made and the refund is being held pending receipt of the missing information.
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When the taxpayer replies, associate the missing information with the amended return and release the refund.
Reminder:
IRPTRL is considered substantiation for federal income tax withheld.
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Reject all incomplete (unprocessable) claims or amended returns requesting tax decreases or credit increases. See the exception for certain Forms 941C below.
Note:
See IRM 21.5.3.4.3, Tax Decrease and Statute Consideration, for tax decreases or credit increases on statute year claims.
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Unnumbered claims or amended returns can be returned to the taxpayer with the request for missing information. Do not return numbered claims or amended returns. See additional information regarding Form 941C below.
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.
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When rejecting a claim or amended return:
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Use the appropriate "C" letter or Form 8009, We Need More Information To Process Your Amended Return, to request the missing forms, schedules, signatures, or other information. See the table below for additional information regarding missing signatures.
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Request all information necessary to complete the claim.
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Circle out the received date on the claim prior to returning to the taxpayer.
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Input a TC 971, AC 270, if the claim is being returned to the taxpayer. Input the current date for the transaction date (TRANS-DT). 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.
Note:
If the original return has not posted, do not return the claim to the taxpayer. Follow the procedures as outlined in IRM 21.6.7.4.2, Amended Return — No Original — CP 29 (Amended Return Posts to an Account With No Original Return Present).
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If not returning the claim to the taxpayer, a TC 290 .00 must be input on an IMF or BMF account to release the "-A" freeze.
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Form 941C, Supporting Statement to Correct Information, should not be rejected or returned to the taxpayer in some instances. Refer to IRM 21.7.2.4.18.1, Returning Form 941C to Taxpayer, for additional information on incomplete Forms 941C.
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Missing signature information is shown in the table below:
If And Then The signature is missing from a tax return You are in telephonic communication with the taxpayer or the taxpayer's authorized representative A faxed signature is acceptable.
Offer the taxpayer the option of providing a faxed jurat.The taxpayer is willing to provide a faxed signature Note:
Refer to IRM 11.3.1.10, Facsimile Transmission of Tax Information, for additional information regarding faxes.
1. Validate that you are speaking to the taxpayer or the taxpayer's authorized representative. Follow the normal disclosure procedures as discussed in IRM 21.1.3.2, General Disclosure Guidelines, and in IRM 21.1.3.3, Third Party (POA/TIA/F706) Authentication.
2. Specifically advise the taxpayer "the faxed signature will be treated as the taxpayer's signature, and will become a permanent part of the tax return."
3. Fax a print of the IDRS Letter 0012C, selective paragraph 7 (jurat) to the number provided by the taxpayer.
Note on the print above paragraph 8, the form number, tax period, taxpayer's name from the return or claim, and the TIN.
Refer to IRM 11.3.1.10, Facsimile Transmission of Tax Information.
4. Give the taxpayer your fax number.The taxpayer signs and returns the jurat Attach/associate the faxed jurat statement to the return.
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Care must be taken when processing statute year claims to prevent erroneous abatements and to prevent the generation of RSED-STAT transcripts. Details regarding the 2 and 3 year timeframes for submitting a claim can be referenced in IRM 25.6.1.10.2.7.2, Limitations on the Amount of a Claim.
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Refer to IRM 25.6.1.10.2.5, Claims for Credit or Refund - Processing Directions, for claims or amended returns received after the RSED has expired. Refer to IRM 21.4.6.5.3, Injured Spouse Inquiries, for information concerning Injured Spouse claim procedures.
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If additional information is necessary to process a tax decrease/no tax change claim or amended return received within 180 days of the Refund Statute Expiration Date (RSED):
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Call or correspond with the taxpayer and enclose a blank copy of the missing form or schedule.
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Suspend the case for 40 days (70 days for overseas taxpayers).
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If the taxpayer submits the information after the RSED but within 45 days (75 days for overseas taxpayers) of the IRS request, then allow the claim as referenced in IRM 25.6.6.4.2, Submission of Additional Information Necessary to Make a Determination on the Claim After the RSED.
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If there is no reply or the request for additional information is not received by the requested response date and the RSED has expired, disallow the claim.
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Send certified Letter 105C, include appeal rights.
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Input TC 290 for .00, blocking series 98 or 99, as appropriate.
Note:
Use blocking series 99 with TRPRT or IMFOLR/BMFOLR print attached if the original return was filed electronically. Do not use blocking series 98. Refer to IRM 21.4.6.5.16, Form 8379 Disallowance, for disallowance of Injured Spouse Claims.
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The taxpayer must sign the claim or amended return requesting an adjustment; or include a valid Power of Attorney (POA) pursuant to Treas. Reg. § 1.6012-1(a)(5). Both spouses must sign if the adjustment relates to a joint return. See IRM 21.5.3.4.4.1, Special Handling of Signature Requests, for exceptions. Refer to the table in IRM 21.5.3.4.2, Tax Decrease or Credit Increase Processing, for acceptance of faxed signatures.
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Signature requirements for penalty abatements are referenced in IRM 20.1, Penalty Handbook.
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Attempt to obtain the signature when an amended return or inquiry requesting a tax increase or a net zero change is received without one. These are not treated as claims. Refer to IRM 21.5.3.4.1, Tax Increase or Credit Decrease Processing.
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Refer to IRM 21.4.6.5.3, Injured Spouse Inquiries, for signature requirements on Form 8379, Injured Spouse Allocation.
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The following table illustrates procedures to follow when a signature is missing due to extenuating circumstances:
If Then One spouse is a Prisoner of War (POW) or Missing in Action (MIA) One spouse can sign if a statement attesting to those facts is attached. One spouse is deceased 1. Surviving spouse may sign and indicate the date of death.
2. The court appointed representative signing the return must attach a court certificate showing they represent the deceased and have the right to sign.
3. A POA may sign for a deceased taxpayer if they have a court certificate from the municipal government or Register of Wills attesting that the POA may continue to represent taxpayer after death.Taxpayer is divorced or separated and filing a claim or amended return requesting a tax decrease for their portion of a refund on a previously filed joint return Only the spouse who owns or has interest in the refund must sign. Refer to IRM 21.6.1.4.8, Allocating Jointly Filed Cases Procedures. A claim or amended return is filed to request a refund or credit of tax other than income tax Only the spouse who owns or has an interest in the refund must sign, unless credit is used as a credit against income tax. Note:
This includes claims for overpayments of Excise Tax, Employment Tax, etc.
A dependent child cannot sign The parent or guardian may sign as "parent or guardian of minor child." A corporate claim is filed Any of these officers may sign the claim:
– President
– Vice President
– Treasurer
– Assistant Treasurer
– Chief Accounting Officer
– Other corporate officer with authority to sign.Note:
The signature on the claim is evidence that the individual is authorized to sign.
Taxpayer files a partnership claim Any one partner may sign Taxpayer files a sole-proprietor claim The owner may sign An exempt organization files a claim Any of these officers may sign:
– Executive Director
– Director - President
– Vice President
– Treasurer
– Assistant Treasurer
– Chief Accounting Officer
– Any other officer with authority to sign.Note:
The signature on the claim is evidence that the individual is authorized to sign.
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Check claims and amended returns against Master File by checking Column A with TXMOD or IMFOL/BMFOL. Be sure to consider all adjustments made on the account. Work the duplicate or amended return without requesting the original return, if possible.
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Refer to IRM 21.5.1.4.12, Tolerances, to determine if math verification is required. Math verification is:
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Verifying the math on the entire Form 1040X, Amended U.S. Individual Income Tax Return, including any forms, schedules, and worksheets related to the change.
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Verifying Column B and Column C entries using the forms attached to the claim, schedules, worksheets, and taxpayer remarks or IDRS research.
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Verifying the tax computation in Column C.
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Checking all additional taxes to determine the correct increase or decrease in tax.
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Verify all income based items (e.g., earned income tax credit, additional child tax credit, taxable social security benefits, Schedule A deductions, etc.) on claims involving an income change. Recalculate the items when the income changes, even if the taxpayer does not address them. Advise the taxpayer of any resulting change. This is not Master File check or math verification. This must be done even if the tax or credit adjustment is less than ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
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Request technical assistance from the Examination Classifiers if a claim cites reliance on a court case, the Internal Revenue Code, Internal Revenue Regulation, Revenue Ruling, Revenue Procedure, or other legal issue. See IRM 21.5.3.4.7, Processing Claims and Amended Returns With Examination Involvement, and IRM 21.5.10, Examination Issues, for additional information.
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If discrepancies exist between the taxpayer’s reported liabilities on overpaid/amended Forms 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, and the related accounts, the case is automatically eligible for Examination. Route your recontrolled case to Examination using local procedures. Close your control base on IDRS.
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Claims and amended returns that are processable must be reviewed to determine if the taxpayer's request is allowable. Unallowable claims and amended returns are disallowed, partially disallowed, or not considered, based upon the facts and circumstances of each case.
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When reviewing the claim or amended return:
If Then Issue being considered is not allowable based on law or regulation 1. Disallow the claim.
2. "How to" information is located in IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.Claim or amended return is not filed timely .Note:
Specific statute information can be found in IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues
1. Disallow the claim.
2. "How to" information is located in IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.Amended return is filed to decrease the balance due (i.e., does not result in a refund) and meets CAT-A criteria Note:
See the information on requests for abatement below this table.
1. Do not forward to CAT-A.
2. Follow the procedures in IRM 21.5.3.4.6.3, No Consideration Procedures.
3. Include paragraph "K" of the Letter 916C.Amended return is filed for EITC to decrease the balance due See IRM 21.6.3.4.2.7.19, EITC Increases and Claims for Abatement. Examination Classification notifies the function to disallow an issue in full or in part on cases referred as CAT-A criteria or for technical advice. 1. Disallow the claim.
2. "How to" information is located in IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.Examination Classification notifies the function to not consider or reject a claim for additional information or documentation Follow the procedures in IRM 21.5.3.4.6.3, No Consideration Procedures. Also, see IRM 21.5.3.4.7.2, Examination "Disallows," "Accepts," or "Selects" the Claim. Taxpayer requests an immediate disallowance of a claim 1. Disallow the claim.
2. Include a statement indicating the claim was disallowed per their request.
3. "How to" information is located in IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.Taxpayer did not respond to a request for missing information Treat claim as a no consideration and follow procedures in IRM 21.5.3.4.6.3, No Consideration Procedures. Note:
If the statute of limitations is imminent or expired, refer to IRM 21.5.3.4.3, Tax Decrease and Statute Consideration.
Caution:
Only disallow claims after complete research and all contacts have been made for any missing information.
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A request for abatement is a request for reduction of tax, penalty, and interest that has not been paid. This includes penalty adjustment requests. These requests should not be denied consideration solely for nonpayment of tax. Process the claims using normal adjustment procedures. If Examination criteria apply, follow the no consideration procedures in IRM 21.5.3.4.6.3 .
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Send the taxpayer a disallowance letter for fully disallowed or partially disallowed claims:
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Letter 105C is used for fully disallowed claims.
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Letter 106C is used for partially disallowed claims.
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Other disallowance letters should be utilized as applicable or as identified in the subject specific IRM.
Example:
Letter 3477 should be used for interest suspension claims under § 6404(g). Letter 2289, Letter 2290, or Letter 3180 should be used for interest abatement cases under § 6404(e).
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Letters must be sent certified or registered mail.
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Letters must contain the specific reason for the claim disallowance. An IRC section, if provided by Examination, should be cited.
Note:
This explanation is required under IRC § 6402(k), formerly IRC § 6402(j), which states, "In the case of a disallowance of a claim for refund, the Secretary shall provide the taxpayer with an explanation for such disallowance."
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Letters must include appeal rights and the right to file suit.
Exception:
Do not include both appeal rights and the right to file suit in interest abatement cases. The right to file suit only occurs after a final determination is made. If no appeal is taken from Letter 2289 or Letter 2290, send Letter 3180.
Reminder:
If using CIS, capture the "request completed" screen after transmitting the letter. See IRM 21.5.1.5.1, CIS General Guidelines, for additional information.
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Actions for inputting the adjustment on fully disallowed claims:
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Input TC 290 for .00.
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Use blocking series 98 if the original return is not with the claim.
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Use blocking series 99 if the original return is with the claim.
Note:
If the original return was filed electronically, use blocking series 99 and attach an IMFOLR/BMFOLR print. Do not use blocking series 98.
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Attach a copy of the disallowance letter with the original return, if the copy is returned for association.
Note:
Copies of disallowance letters forwarded to the Centralized Print Site will not be returned for association. These letters will be available on Control-D, if needed at a future date.
Reminder:
Injured Spouse disallowance procedures are located in IRM 21.4.6.5.16, Form 8379 Disallowance.
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Actions for inputting the adjustment on partially disallowed claims:
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Input TC 29X for appropriate tax change.
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Use blocking series 00 if the original return is with the claim.
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Use blocking series 18 if the original return is not with the claim.
Note:
If the original return was filed electronically, use blocking series 00 and attach an IMFOLR/BMFOLR print. Do not use blocking series 18.
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Attach a copy of the disallowance letter with the original return, if the copy is returned for association.
Note:
Copies of disallowance letters forwarded to the Centralized Print Site will not be returned for association. These letters will be available on Control-D, if needed at a future date.
Reminder:
Injured Spouse disallowance procedures are located in IRM 21.4.6.5.16,Form 8379 Disallowance
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The following procedures apply when it is necessary to disallow a claim prior to the posting of the taxpayer's original return:
If And Then Original return has not posted Normal processing time has elapsed Request a signed copy from taxpayer. Return does not post You cannot secure a copy from taxpayer IMF – Refer to IRM 21.6.7.4.2, Amended Return — No Original — CP 29 (Amended Return Posts to an Account With No Original Return Present)
BMF – Refer to IRM 21.7.9, BMF Duplicate Filing Conditions, for CP 190 procedures.Signed copy is received No TC 150 posted Verify the entity information and process the copy as an original return. Original return has not posted Normal processing time has not elapsed, 1. Input TC 930 to file the claim or amended return and the disallowance letter. Refer to IRM 21.5.1.4.4.1, TC 930 Push Codes, for additional information.
2. When the return posts, the original return and the disallowed claim or amended return and letters are returned to the originator for input of the TC 290 for .00.Claim is not related to a specific tax return Claimant is not required to file an income tax return 1. Input TC 290 for .00.
2. Use Blocking Series (BS) 44 (IMF is MFT 30, BMF is MFT 02) to file these claims. See IRM 21.7.8.4.5, Form 8849, Claim for Refund of Excise Taxes, for Form 8849 procedures.
-
A response to Letter 105C and Letter 106C is to be treated as a new case using the guidelines in this section.
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If the taxpayer is confused and asking questions, attempt to resolve before continuing.
If And Then Taxpayer resubmits the same claim or resubmits a claim without new or additional information Does not request an appeal Close the case as a "no consideration."
Follow the procedures in IRM 21.5.3.4.6.3, No Consideration Procedures.Taxpayer sends additional information Determination can be made to allow the claim Follow normal adjustment procedures. Taxpayer sends additional information Determination cannot be made to allow the claim Do not send another disallowance letter.
Follow the procedures in IRM 21.5.3.4.6.3, No Consideration ProceduresTaxpayer resubmits the same claim or resubmits a claim without new or additional information Submits a statement requesting an appeal 1. Close the case.
2. Transfer (with original claim, return, transcript, copy of disallowance letter, and taxpayer's statement) to appropriate Appeals office.Note:
A copy of the disallowance letter can be obtained from Control-D, if it is not with the Appeals package submitted by the taxpayer.
3. Managerial review is required before cases are forwarded to Appeals.
4. Inform taxpayer when case is sent to an Appeals office. -
See IRM 20.1.1.4, Methods of Appealing Penalties, for penalty appeal procedures.
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Send the taxpayer a no consideration letter. If no reply is received to a request for missing information, treat the case as a no consideration and issue a Letter 916C.
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Letter 916C is used for no consideration or rejected claims.
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Letter must advise the taxpayer why the claim is not being considered.
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-
Input a TC 290 for .00 with the appropriate blocking series. Do not use blocking series 98 or 99.
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Review all claims and amended returns for Examination involvement, such as TC 420 or an open "L" freeze – see (5) below. Also, see Exhibit 21.5.3-2., Examination Criteria (CAT-A), IRM 21.8.2.1.11, Examination Criteria, and IRM 21.8.1.1.9, Examination Criteria, to review the claim for CAT-A criteria. Refer all cases with CAT-A criteria to Examination Classification.
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If the claim or amended return contains CAT-A criteria and a TC 420 is not present, input all tax increases and credit decreases. Input TC 470 to hold balance due notices. Use the appropriate Blocking Series and Hold Code. Refer to Examination.
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Refer technical questions or assistance requests to Examination when an issue is questionable, but does not meet CAT-A criteria. Refer to IRM 21.5.3.4.7.2.1, Examination Technical Assistance Request, for additional information on requesting technical assistance.
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Accounts Management will retain an open control in background (B) status on all cases referred to Examination and update the activity code to "CAT-A" to identify the location of the claim and status.
Note:
If using the Correspondence Imaging System (CIS), the case is automatically recontrolled to Examination and placed in suspense status for up to 180 days. No additional contact with Examination is required.
If a non-CIS case has been sent and five (5) work days have passed:
-
Contact Examination to check the status of the case.
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Request the case be returned and documented appropriately (allowed or disallowed).
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If Examination does not return the case, treat it as a selected claim. Advise Examination that the case is being recontrolled to them. Input TC 971, Action Code (AC) 013. Input the received date of the amended return for the transaction date.
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When the case is returned from Examination, either allow or disallow and notify the taxpayer accordingly.
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-
If the case has been selected for audit, (this includes Form 8862,Information to Claim Earned Income Credit After Disallowance) input TC 971, AC 013. Input the received date of the amended return for the transaction date.
Exception:
If the case is selected for audit through Command Code (CC) DDBCK, do not input the TC 971, AC 013. The TC 971 AC 013 is systemically generated by CC DDBCK in this instance.
Note:
On cases selected for audit through CC DDBCK, input all tax increases and credit decreases prior to referring to Examination. Input TC 470 to hold any balance due notice. Use the appropriate blocking series and hold codes. Route to Examination Classification on Form 5101, Examination Referral Slip. Indicate on the Form 5101 that the case was selected through CC DDBCK and an AIMS database has been opened. See IRM 21.6.3.4.2.7.18, EITC and Command Code DDBCK for additional information about CC DDBCK. If this case is being handled in the Correspondence Imaging System (CIS), see IRM 21.5.1.5.8, Examination Selected Inventory and Command Code DDBCK, for information on routing the case.
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Research IDRS using CC AMDIS, TXMOD, IMFOLT, and BMFOLT, to determine whether a case is established on AIMS. If the case is under audit, an "L" freeze will be present. See Exhibit 21.5.3-1, Claims Processing, for processing instructions. Follow these procedures even if an open IDRS control base to a CI-FDC campus is present (Do not route to CI).
Note:
Refer to IRM 2.8, Audit Information Management Systems (AIMS), for IDRS information on AIMS research.
Exception:
Refer to IRM 21.4.6.5.9.9, Exam & CI Cases, to work injured spouse claims and IRM 21.7.5, Estate and Gift Tax Returns, for Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, claim procedures.
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Refer to IRM 21.7.7, Exempt Organizations and Tax Exempt Bonds, for procedures.
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Sort all claims with examination criteria received by the Document Perfection Operation (Code & Edit) or the Accounts Management (AM) adjustment function into one of two categories, unless referred to an Area Office for association with an open audit:
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The criteria for categorizing such returns are specified in Section 144 of LEM IV.
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The examination criteria are divided into two groups, Category A and Category B (BMF only).
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Notify Examination when an "–E" freeze is on the module before inputting any adjustment.
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-
CAT-A criteria denotes high examination potential. Route CAT-A cases to Examination prior to resolution. Before routing the claim to Examination:
-
Ensure pages one and two of the Form 1040X, Amended U.S. Individual Income Tax Return or Form 1120X, Amended U.S. Corporation Income Tax Return, are complete and contain the required signatures, and
-
Attach all needed forms and schedules relating to the claim, and
-
Attach IMFOL or BMFOL transcript(s) for the year(s) involved, if available.
Note:
On site classification is completed within five (5) days at Document Perfection Operation or at Accounts Management.
-
-
Do not send cases to Examination that do not meet CAT-A classification criteria. See Exhibit 21.5.3-2, Examination Criteria (CAT-A) for the referral criteria. Category A criteria applies to net refunds only (except IRC § 3121(v) cases).
-
The dollar amount in the criteria cited refers to the amount of the tax decrease or credit increase.
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If Examination disallows the claim, send a disallowance letter. Use the explanation and citation of the law provided by the Examination Classifier. Refer to IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, for additional information.
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When Examination "accepts" a claim in full, but the amount of the claim is not computed or is computed incorrectly:
-
Recompute the allowable amount,
-
Correct if necessary, and
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Advise the taxpayer of any changes to the amount claimed.
-
-
When the Examination Classifier "Selects" a claim, it remains in Examination for an audit. Examination may need to transfer a claim to another office. The Examination site receiving the transfer claim may accept or deny the claim. Claims not selected for audit will be routed to Accounts Management at the receiving site and not routed back to the originating campus.
Note:
Refer to IRM 21.5.1.5.8, Examination Selected Inventory and Command Code DDBCK, for information regarding the routing of DDBCK selected claims processed through the Correspondence Imaging System (CIS).
-
When the Examination Classifier "Accepts" (or allows) the claim, do the following:
-
Input necessary adjustments
-
Release the TC 470 (if appropriate)
Note:
Most adjustments will release the TC 470. Refer to Document 6209, IRS Processing Codes and Information, for exceptions.
-
Notify the taxpayer the adjustment has been made.
-
-
Until selected, all claims referred to Examination Classification remain under AM adjustment function control. When a case is selected by Examination, input TC 971, Action Code 013. Input the received date of the amended return for the transaction date.
-
If the claim requires a legal interpretation, but does not meet CAT-A criteria or is not on AIMS, refer to Examination as a Technical Assistance Request.
-
To prepare a referral, take the following actions:
-
Complete Form 3210, Document Transmittal
-
Put the case in "M" Status
-
Clearly state your question or problem
-
List the TIN, MFT and Tax Period
-
Notate name control
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Include and attach any pertinent background information or research
-
Forward to the manager for review and a signature
-
Forward to Examination Classification
Note:
The Examination Classification Function should respond within 5 days. See IRM 21.5.3.4.7.2, Examination "Disallows," "Accepts," or "Selects" the Claim. Insolvent or bankrupt financial institution claims for refund for certain losses on deposit should be forwarded to Examination Classification for technical guidance.
-
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Protective Claims are formal claims or amended returns for credit or refund normally based on expected changes in a:
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Current IRC section
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Current Regulation
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Pending legislation or
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Current litigation
-
-
These claims are filed to protect the claimant's right to recover internal revenue tax before the expiration of the statute of limitations. For this reason, they are all considered to meet CAT-A criteria.
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Any claim identifying the following should be considered a Protective Claim.
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Claim identified as a pending court case or decision
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Claims recomputing the Foreign Tax Credit based on the foreign taxes "deemed paid" per IRC § 902
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Claims mentioning Goodyear vs. the United States
-
-
Claims requesting a refund of FICA on Temporary Living Allowances (Russell Anderson v. U.S.) paid by the U.S. Government or Department of Defense (DOD) are no longer considered Protective Claims. The Courts have ruled on this case.
-
Disallow IMF Claims
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Send BMF Claims to PSC
-
-
All Protective Claims must be sent to Examination Classification. If the claim is processable, Examination Classification must select or suspend the claim.
-
Do not suspend Protective Claims in the AM adjustment function inventory, unless claim is being held for additional information to become processable.
-
Protective Claims must be processable before sending to Examination Classification. Screen all Protective Claims for:
-
Statute timeliness
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Completeness
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Signatures
-
-
If the claim is not processable, call or correspond with the taxpayer for all missing information. Refer to IRM 21.3.3.5.1, Clearance of Suspense Files, for information on suspense periods. If no reply is received, follow normal adjustment procedures for rejecting the claim.
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See IRM 21.5.9, Carrybacks, for instructions on processing carryback/carryforward claims.
-
These claims include tentative carryback adjustments filed on Forms 1045, Application for Tentative Refund, and Form 1139, Corporation Application for Tentative Refund. They include restricted interest claims filed on Forms 1040X, Amended U.S. Individual Income Tax Return, Forms 1120X, Amended U.S. Corporation Income Tax Return, Amended Forms 1041, U.S. Income Tax Return for Estates and Trusts, Forms 1120C, U.S. Income Tax Return for Cooperative Associations,U.S. Income Tax Return for Cooperative Associations, and Forms 990-T, Exempt Organization Business Income Tax Return.
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Additional instructions for IMF carryforward cases are also found in IRM 21.6.7,Adjusting Individual Tax Accounts.
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Taxpayers requesting a Claim of Right adjustment may use Form 1040X or Form 1120X. A reference to IRC § 1341 identifies such claims. See IRM 21.5.9, Carrybacks, for adjustments and IRM 21.6.6.4.9, Repayments of Debt Cancellation/Claim of Right-IRC Section 1341.
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Claims received from taxpayers claiming "compensation for personal labor is not taxed by Title 26, IRC Section 1341" and are taking a deduction on Schedule A or removing the amount from their gross income, should be identified as frivolous claims. Route these claims as indicated in IRM 21.5.3.4.16.8, Identifying Frivolous Returns/Correspondence and Responding to Frivolous Arguments.
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Rev. Proc. 2006-54, 2006–49 I.R.B. 1035 updated and revised the procedures to allow a United States (U.S.) citizen or resident to request a determination by the U.S. Competent Authority on issues arising under a tax treaty between the U.S. and a foreign country.
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Usually an adjustment to tax is requested when the foreign tax administration creates a double taxation issue.
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The IRS Director, International (LMSB), acts as the U.S. competent authority charged in administering the provision of tax treaties, interpreting and applying the treaties, and reaching mutual agreement in specific cases.
-
Send written requests for, or any inquiries regarding, competent authority assistance to:
Deputy Commissioner (International)
Large and Mid-Size Business Division
Attn: Office of Tax Treaty
Internal Revenue Service
1111 Constitution Avenue, NW
Routing MA3-322A
Washington, DC 20224 -
Direct any questions regarding Competent Authority Claims to the Office of Tax Treaty at the address above.
-
Generally, non-resident aliens must contact the Competent Authority in their foreign government with their inquiries.
-
Forward claims or amended returns claiming benefits under a United States Tax Treaty to the Accounts Management Operation (International) adjustment function at the Philadelphia Campus. Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans, with an edited caption at the top of the form stating RRSP, Canadian RRIF, Canadian GIF, Rev. Proc. 2002-23, or Notice 2003-25 or 57, should also be forwarded.
Exception:
Do not forward claims filed by resident aliens or U.S. citizens that are taking the election under Rev. Proc. 2002-23 to defer U.S. tax on income accruing in the Canadian Registered Retirement Savings Plan (RRSP). The Form 8891 is not impacted by this election.
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A resident alien or U.S. citizen that has a RRSP and chooses to take the election under Rev. Proc. 2002-23 to defer U.S. tax on income accruing in the RRSP must file a Form 1040X, Amended U.S. Individual Tax Return, and attach the election to it. Take the following action:
-
Process the amended return as normal.
-
If no changes appear on the amended return, input TC 290 .00 to refile the document.
-
If the election is filed as a loose document, attach it to the original return, TC 150 DLN.
Note:
If the original return was filed electronically, input TC 290 .00 to refile the loose document.
-
-
An IRS employee prepares a return under IRC § 6020(b) when a taxpayer fails to file. The taxpayer is given the opportunity to file a valid voluntary return to correct the proposed assessment, or to agree to the proposed assessment. Subsequent posting of the taxpayer's original return creates a duplicate filing condition. Route Substitute for Return (SFR) cases prepared under IRC § 6020(b) to the Collection Function.
Exception:
BMF 6020(b) duplicate filing cases and IMF cases with a previously posted TC 29X and/or TC 599 CC 89 present on the module and the tax does not match the tax posted to IDRS, should be worked in the Accounts Management adjustment function.
-
If these cases meet examination criteria (i.e. open audit), follow normal adjustment procedures for routing to Examination.
Note:
See IRM 21.5.3.4.10.1 for information on Non-Filer Reject returns.
Exception:
Refer to IRM 4.13.5.2, Consolidation of ASFR Audit Reconsiderations, for SFR audit reconsiderations dated 01/01/2002 and later.
-
Certain Non-Filer Reject (NFR) returns do not meet SFR criteria and are forwarded to the IMF Accounts Management (AM) paper function for processing. These NFR returns will be worked in the IMF AM site where the TC 976 document posted. The returns can be identified by:
-
A TC 976 Duplicate return
-
A TC 150 Substitute Return (SFR)
-
AIMS status of 08 or less. See Exhibit 21.5.3-1, Claim Processing, for information on processing cases with an open TC 420.
-
AIMS Status 90 with any Non Examined Disposal Code. Refer to Document 6209, IRS Processing Codes and Information, for a complete list of Non Examined Disposal Codes.
Note:
Examination will release the -A freeze prior to closing the case with the Non Examined Disposal Codes.
-
Some cases will also have the letters NFR across the front of the return.
-
-
These NFR cases should be worked using category code "XRET" .
-
Adjust the account accordingly, following normal procedures.
-
Input TC 290 to assess any tax.
-
Input all appropriate credits.
-
Input all appropriate income and exemption references.
-
Use a blocking series that indicates the original return is with the adjustment (e.g., 00, 77, or 99). This return is the taxpayer's original filing.
-
Use priority code 1, if AIMS is still open.
-
Update the ASED with TC 560 using command code REQ77.
-
Assess any applicable Failure to File or Estimated Tax Penalties. See IRM 20.1.2, Failure to File/Failure to Pay Penalties, and IRM 20.1.3, Estimated Tax Penalties, for additional information on assessing penalties.
-
-
The Taxpayer Advocate Service (TAS) may issue an Operations Assistance Request (OAR) on these cases. Any OARs will also be handled by the IMF AM paper function until the TC 976 issue has been resolved.
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Taxpayers file Form 8546, Claim for Reimbursement of Bank Charges Incurred Due to Erroneous Service Levy or Misplaced Payment Check, when they have been charged for erroneous levies placed on their accounts or claim reimbursement checks.
-
Claims for bank charges due to an erroneous levy should be forwarded to Compliance Services Collection Operations (CSCO) function.
-
Claims for reimbursement of bank charges due to lost or misplaced payment should be forwarded to Accounting.
-
-
If an inquiry is received, send the taxpayer a Form 8546. Use the appropriate "C" letter and close your case unless there are other issues to address.
-
For further information, refer to Policy Statement P-5-11 and IRM 3.17.10.8, Reimbursement of Bank Charges Due to Service Loss or Misplacement of Taxpayer Checks.
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Category B Criteria applies to claims for the Form 1120 series (except Form 1120-IC DISC) and Form 1041, Form 1041-N, and Form 1041-QFT that have a refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and do not meet Category A criteria. Input Category B adjustments with:
-
Blocking Series 62 (with original return) or
-
Blocking Series 63 (without original return)
-
-
Exempt Organizations (EO) and Employee Plans Master File (EPMF) claims are no longer subject to Category B criteria. See IRM 21.7.7.4.15, EO Claim Procedures, for other EO claim procedures. See IRM 21.5.11, Employee Plan Accounts, for Employee Plans (EP) claim procedures. These are all worked in Ogden.
-
When an unprocessed annual return is received as a taxpayer inquiry and no return is posted, forward the return to be processed as an original return. If the taxpayer's figures are incorrect, a notice is generated.
-
When the return is posted and the taxpayer submits a corrected return, input the appropriate adjustment, provided enough information is available.
Note:
If you cannot determine taxpayer's intent, call or correspond with taxpayer, then input any necessary adjustment.
-
Taxpayers calling or writing in reference to the filing of a claim/request citing the May Department Stores v. U.S. or Sequa Corp. v. U.S. interest cases should be given the following information:
-
Rev. Rul. 99-40, 1999-2 CB. 441 and Chief Counsel Notice (35)000-168, dated November 9, 1999, provide guidance as to when a credit elect is applied against an estimated tax installment.
-
The date the credit elect is applied against an estimated tax installment determines when underpayment interest begins on a subsequent underpayment for the overpayment year.
-
Taxpayers may file a Form 843, Claim for Refund and Request for Abatement, or submit an informal claim citing the underpayment tax year that Rev. Rul. 99-40 applies to ( Rev. Rul. 99-40 supersedes Rev. Rul. 88-98).
-
-
These claims are processed following the information outlined in IRM 20.2.5.7.2, Rev. Rul. 99-40 and Credit Elects (May/Sequa).
Note:
Figure the correct start date(s) and amount(s) for the interest computation and input the necessary adjustment.
-
Section 3301 of the IRS Restructuring and Reform Act of 1998 (RRA98) allowed for the netting of credit and debit interest during time periods where a taxpayer had overlapping credit and debit interest accruals between two or more tax modules.
-
The law also extended the benefit to interest periods beginning prior to the enactment date (July 22, 1998).
-
If the taxpayer has made a request for the application of the net interest rate of zero for interest accruing before October 1, 1998, then that taxpayer does not have to make a separate request for the portion of the overlapping period identified in that request that impacts interest for periods beginning after July 22, 1998 (i.e., interest accruing on or after October 1, 1998).
-
Net rate claims involving pre-enactment interest periods (interest accruing prior to October 1, 1998) will be worked in Ogden Accounts Management. However, if one of the tax periods addressed on the claim is:
-
Currently open in Examination or Appeals, use CC AMDISA information and forward the claim to the appropriate office. Input Transaction Code (TC) 971, action code 013, for the tax period(s) addressed on the claim that is open on AIMS.
-
In Tax Equity Fiscal Responsibility Act (TEFRA) suspense, use CC AMDISA information and forward the claim to the appropriate TEFRA unit for association. Input TC 971, action code 013, for the tax period(s) addressed on the claim that is open on AIMS.
-
-
Taxpayers have been instructed to file Form 843, Claim for Refund and Request for Abatement, with a note at the top: "Request for Net Interest Rate of Zero Under Rev. Proc. 99-43" .
-
Claims identified as pre-enactment net rate interest claims (whether notated or not) should be transmitted to Ogden Accounts Management using Form 3210, Document Transmittal. The following information should be included:
-
The name, address, and telephone number of the sender.
-
The Taxpayer Identification Number (TIN), tax year(s), type of tax, and type of return.
-
The taxable periods for which the taxpayer overpaid and underpaid the tax liability
-
Whether the underpayment is outstanding.
-
Whether the taxpayer received a refund of tax if the overpayment is outstanding.
-
The period(s) for which the taxpayer's overpayment and underpayment overlapped and the overlapping amount.
-
The extent the equivalent amounts of underpayments and overpayments for the period(s) has (have) been used only once in a request to obtain the net interest rate of zero.
-
Provide a computation to the extent possible.
-
Address to: Internal Revenue Service, Net Rate Claim, P.O. Box 9987 Mail Stop 6800, Ogden, UT 84409.
Flag the Form 3210, Document Transmittal, "EXPEDITE-NET RATE CLAIM" . Send the IDRS Letter 86C or equivalent, informing the taxpayer their claim was referred to Ogden Accounts Management.
-
-
The transmitting offices must follow-up on non-receipted Forms 3210 three weeks after transmission to insure controls have been established in Ogden Accounts Management. The tax module(s) involved should have been controlled to IDRS number "0435500002" , case category "INTC" , when received in Ogden Accounts Management.
-
Rev. Proc. 2000-26 provides guidance on the application of section 6621 (d) for interest periods beginning after July 22, 1998 (i.e., interest accruing on or after October 1, 1998). This revenue procedure does not apply to interest accruing on or after January 1, 1999, for taxpayers other than corporations (the interest rate on underpayments and overpayments is equal for such taxpayers on or after January 1, 1999).
-
For post-enactment net rate claims, taxpayers have been instructed to send Form 843, Claim for Refund and Request for Abatement, to the IRS campus where their most recent federal tax return was filed. The taxpayer should label the top of the Form 843: "Request for Net Interest Rate of Zero Under Rev. Proc. 2000-6" . Consider the instructions in IRM 21.5.3.4.15.1, Pre-Enactment Net Rate Interest Netting Claims, before allowing the claim. Refer to IRM 20.2.14.6.1.1, Post Enactment Date Interest Periods, for processing net rate adjustments.
-
Certain items submitted by taxpayers must be referred to other functions for additional review and action.
If Then Refer to Altered Remittance Complaint The Treasury Inspector General for Tax Administration (TIGTA). Note:
Contact TIGTA at 1-800-366-4484 for referral instructions.
Renegotiation of Government Contracts Examination -
The remaining sections provide information on various other inquiries and adjustments.
-
Abate any incorrect assessment made on taxpayer's account due to IRS error.
-
Adjust penalty and interest charges generated by the incorrect assessment if it cannot be computer adjusted.
-
If the taxpayer received an erroneous billing, apologize for the error in your reply. IMF ONLY: If you do not write a letter, enter Source Code 4 with your adjustment.
-
A court decision may necessitate an adjustment to a taxpayer's account.
-
Refund checks will be issued in care of the U.S. Attorney's Office or the Assistant Attorney General - Department of Justice, or as stated in the case file.
-
Process these cases expeditiously. Civil cases involving a refund to the taxpayer received from the Office of Chief Counsel or the Department of Justice must include the following documents:
-
Form 8690, Refund Pursuant to Judgment, or Form 8691, Refund Pursuant to Settlement,
-
A transcript of account (if not attached, obtain a complete transcript of the account),
-
A Department of Justice letter authorizing the refund, and
-
Form 2285, Concurrent Determination of Deficiency, (when restriction is invalid).
-
-
Cases received by the insolvency function are processed by the Office of Chief Counsel, or the Department of Justice. In these cases, you receive a memorandum authorizing the refund instead of Form 8690, Refund Pursuant to Judgment, or Form 8691,Memorandum Refund Pursuant to Settlement/Government Concession.
-
All civil cases with the Department of Justice require managerial review. Managers must certify that the refund check amount and payee listed are correct.
-
The following actions are required for case resolution and account adjustments in order to close the Civil Cases:
-
Use Corporate Files On Line (CFOL) commands. Check IMFOL/BMFOL, MFTRA, IDRS, or NMF records for debit balances. Offset, if necessary.
-
Use a refile blocking series to adjust the account(s) using the amount(s) specified.
Note:
Use blocking series 00 with the TRPRT print attached if the original return was filed electronically. Do not use blocking series 18.
-
Prepare Form 3753, Manual Refund Posting Voucher, (MF) or Form 1331-B, Notice of Adjustment (NMF) for the over-assessment amount, plus interest.
-
Prepare Form 3753 entering the name of the taxpayer, followed by "C/O U.S. Attorney" or "C/O Assistant Attorney General" and the address shown on the Form 8690 or Form 8691 in the "Make Check Payable To" box. Enter "Civil Case" in the remark's box.
Note:
Do not schedule refunds of court costs. See IRM 3.17.79.3.18, Refunds Based on Court Decisions.
-
Only the Refund Litigation Coordinator for the campus which initially opened the case may enter TC 521. A TC 521 must be input for each module that contains a TC 520 with CC 073. At this time, all open control bases must be closed.
-
Prepare Form 3460, Transmittal Memo Accounting Control Document, labeled "Manual Refund" and route to the Accounting Function.
-
Complete any remaining necessary processing and schedule the refund by the end of the sixth workday after the receipt at the campus.
-
Notify the originator in the Chief Counsel's office if any irregularity or delay is encountered while processing the case.
-
-
Taxpayers may make a contribution to reduce the public debt in the form of a separate check or request that all or part of an overpayment be applied to reduce the public debt. For processing instructions, refer to IRM 3.14.1.6.4.4.5, Contributions to Reduce the Public Debt.
-
Statements made by taxpayers disclosing their gross income and related deductions may be accepted as a tentative return provided the taxpayer later files proper forms without unnecessary delays.
-
If an IMF return cannot be made on Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, inform the taxpayer that the information will be accepted as a timely filed return, but that taxpayer must also promptly file the required return. Send the taxpayer the proper forms and schedules.
-
If the information can be filed on a Form 1040EZ, prepare the return for the taxpayer to sign and file as indicated below:
-
Attach all forms.
-
Use filing status of single with one exemption unless the information furnished by the taxpayer indicates filing status of married filing joint.
-
Make a copy of the return, the attachments, and taxpayer’s correspondence for processing as a tentative return.
-
Annotate "Tentative Return" below the entity section of the return copy; edit the correspondence received date as the received date of the return; attach the original correspondence; and forward for pipeline processing.
-
Send the return to the taxpayer for signature along with copies of the original correspondence and blank forms and schedules.
-
-
Advise the taxpayer to file the return and to:
-
Verify the accuracy of the return.
-
Make any necessary corrections.
-
Sign and date the return.
-
Keep a copy of the return for their records.
-
Return the original with all attachments.
-
-
If the taxpayer files a signed return inconsistent with the tentative return information, resolve the discrepancies.
-
If the taxpayer timely files a purported tax return which contains only the taxpayer's signature, title, and date, or is unsigned, the filing requirements have not been satisfied for late filing (delinquency) penalty purposes.
-
If the taxpayer files a second return after the filing due date and the later return reports tax, filing the second return will result in the generation of a Duplicate Filing Condition.
-
Order the original return.
-
Adjust the account to the correct figures. Assess the late filing penalty (TC 160), and any other applicable penalties, if the original contains only the signature, title and date, or is unsigned.
-
Use blocking series 00.
-
-
Some taxpayer inquiries cannot be worked in AM adjustment function. These cases must be referred to another function for review. When appropriate, cases are returned to the AM adjustment function for account action or for a letter of explanation to the taxpayer.
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The IRS is faced with a growing number of individuals who file frivolous tax returns based upon tax avoidance arguments that are not supported by law. IRC § 6702 provides for the assessment of penalties for filing frivolous tax returns or other specified frivolous submissions (namely, a request for a collection due process hearing, or application for an installment agreement, offer-in-compromise, or taxpayer assistance order) that are based on a position which the Secretary has identified as frivolous or reflects a desire to delay or impede the administration of Federal tax law.
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A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by both individuals and businesses can be found in Notice 2008–14, 2008–04 I.R.B. 310.
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Use the following procedures when referring frivolous claims and/or correspondence to the Ogden Campus Frivolous Return Program:
-
Prepare Form 3210, Document Transmittal. Include the SSN and tax year for each claim, document or correspondence, along with the releasing official's name and the originator's address. In the remarks box of the Form 3210, indicate whether the document is an amended return or correspondence. Follow the Form 3210 along with the taxpayer's documents to the following address:
Ogden Compliance
1973 N Rulon White Blvd, M/S 4450
Ogden, UT 84404
Attention: Frivolous Return Program. -
Transship trust returns to Ogden/Frivolous Return Program (FRP) if all of the following apply: the trust is a simple, complex or grantor type; the entity was created in 1991 or later; the activity on the attached Schedule C is not oil or gas; and the tax is less than $3,000.
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If a non-frivolous claim is received and CC TXMOD shows an open control base to an employee in the FRP (Unit Numbers: 04691, 04692, 04693, 04694, 04695, or 04696), transship to Ogden/FRP.
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For claims only, input TC 971 with Action Code 13. Enter "Sent to Ogden/FRP" in the remarks area.
-
-
Taxpayers may call complaining about filing and paying taxes. It is our responsibility to educate taxpayers to help them understand and meet their tax obligations. Inform the taxpayer that the IRS administers the tax laws but does not have the authority to change the laws and cannot debate the legality or constitutionality of the laws. Respond to the taxpayers' inquiries on specific tax issues related to their account, but do not debate general tax issues. Take the following actions when speaking with a taxpayer about a frivolous argument:
-
Refer the taxpayer to the FRP toll free number 1-866-899-9083 only if there is a valid issue that you cannot address or there is an open control base to an employee in the FRP and the taxpayer is attempting to become compliant. DO NOT refer taxpayers to this number if they are only questioning IRS authority or tax law.
-
Review the activities on CC TXMOD and explain what has been done with the taxpayer's return. TC 599 with closing code 94 indicates a processable return which will be processed exactly as the taxpayer filed it but the return will be held pending an examination of the return. TC 599 with closing code 17 indicates a non-processable return that cannot be processed.
-
Determine if the taxpayer has received Publication 2105, Why Do I Have to Pay Taxes? If so, refer the taxpayer to this publication. If not, send the publication to the taxpayer and/or refer the taxpayer to the IRS web site at http://www.irs.gov. Publication 2105 lists the factual information in response to some of the most common arguments.
-
Explain the potential consequences of filing frivolous documents such as a $5,000 penalty, additional tax assessment and other penalties and interest.
-
Encourage the taxpayer to file a non-frivolous return.
-
Review the activities on CC ENMOD to see if a history item has been input indicating Letter 3175C or Letter 3176C has been sent in response to frivolous correspondence or a frivolous return. Letter 3175C, Frivolous Correspondence Response, is sent to the taxpayer in response to frivolous correspondence and explains that the argument used is frivolous and IRS will not respond to subsequent inquiries of a similar nature. Letter 3176C, Frivolous Return Response, is sent to the taxpayer in response to frivolous returns/claims and explains that the argument used is frivolous, warns of a possible penalty assessment if a corrected return or waiver of claim is not filed and that IRS will not respond to subsequent inquiries of a similar nature.
-
-
When contracts with government agencies are renegotiated and the amount of excessive profits is eliminated, the taxpayer is required to pay or repay the contracting agency. Route these cases to the campus Examination Operations.
-
During an examination, a taxpayer may make a deposit against a potential underpayment of tax liability. Pursuant to IRC § 6603, the receipt of the deposit stops the running of interest on the potential underpayment. If any portion of the deposit is returned to the taxpayer, the taxpayer may be entitled to interest on the returned amount to the extent the deposit was attributable to disputable tax. Disputable tax means the amount of tax specified at the time of deposit as the taxpayer's reasonable estimate of the maximum amount of any tax attributable to disputable items.
-
Upon receipt of a deposit:
-
Notify taxpayer of the facts relating to deposits.
-
Mail Letter 316C via certified mail, giving taxpayer the opportunity to request the return of his or her deposit if conditions are not satisfactory.
-
The second page of Letter 316C can be used for this request.
-
-
When a request from a taxpayer for the return of a deposit is received:
-
Perform research to determine if taxpayer has any other outstanding liabilities.
-
Research AIMS to determine the Status of the examination.
-
Request the posting voucher if the payment in question is not posted as a deposit. The Form 3244-A, Payment Posting Voucher – Examination, should indicate either a deposit or a cash bond.
-
Research to determine whether the taxpayer previously requested the remittance to be treated as a payment of tax.
-
-
Work these requests as expeditiously as possible.
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A deposit may be identified on the tax module by the following items:
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The posting of a TC 640 with the literal "Cash Bond" displayed.
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Tax Class 0 - 8
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Document Code 17 (19 for EFTPS)
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Blocking Series 990 - 999, and
-
-
The identity of a remittance as a deposit is lost when it is transferred from one account to another. Therefore, the tax examiner must verify the original remittance posting is indeed a deposit (or a cash bond if the remittance was made prior to the enactment of IRC § 6603).
-
Do not return a deposit when there is an outstanding liability for the same taxpayer. Apply deposits to the extent permissible under IRC § 6603.
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If there is any question whether a deposit should be returned to the taxpayer, obtain technical advice following local procedures. If the deposit is not returned for any reason, notify the taxpayer promptly.
-
Once it is determined the taxpayer is entitled to the return of a deposit:
-
Prepare Form 3753, Manual Refund Posting Voucher, according to IRM 3.17.79, Accounting Refund Transactions.
-
If Form 3244-A, Payment Posting Voucher Examination, is requested, attach it and forward it with Form 3753.
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Allow interest on the return of deposits to the extent the deposit is attributable to disputable tax. Disputable tax means the amount of tax specified at the time of deposit as the taxpayer's reasonable estimate of the maximum amount of any tax attributable to disputable items. See IRC § 6603 for more information regarding interest on deposits.
-
-
Any non-tax liability owed by the taxpayer will be offset by the Financial Management Service (FMS) through the Treasury Offset Program. Refer to IRM 21.4.6.5.3, Injured Spouse Inquiries, for additional information on refund offsets.
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If Form 1040X, Amended U.S. Individual Tax Return, or other correspondence is received with a non-negotiable remittance attached, process as follows:
-
Attach a copy of the remittance to the claim and process the claim.
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Return the remittance to the taxpayer using the variable paragraph in Letter 315C. Advise the taxpayer, the remittance must be made payable to the United States Treasury. The taxpayer should send a corrected payment as soon as possible with a copy of the letter.
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| CATEGORY A (No open TC 420) | |
|---|---|
| IF | THEN |
| Tax Decrease or Credit Increase | Send to Examination for classification. Examination will either: 1. Select the claim (case is not returned to Adjustments), or 2. Return the claim to the Adjustments function with instructions to "reject" , "accept" , "disallow" , or "no consider" . |
| Rejected by Examination | Resolve the reason for rejection and resubmit for classification. |
| Accepted by Examination | Input the necessary transactions. |
| Disallowed by Examination | Input the necessary transactions and send an appropriate disallowance letter. |
| OPEN TC 420 CASES (Open AIMS Status) | |
|---|---|
| NON-CATEGORY A | |
| IF | THEN |
| AIMS status is 08 or less and the tax or credit adjustment results in a zero, debit, or credit account balance | Input TC29X or appropriate credit adjustment. Block 05 for IMF, Block 05 or 15 for BMF without the original return, or Block
00 with the original return. Use the appropriate priority code.Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| AIMS status is 08 or less and the tax or credit adjustment results in a credit account balance AND the account contains a TC570 with 88888 or 99999 in the DLN (digits 9 through 13) | Adjust as above, using Hold Code 1. Forward the case to Examination per the AIMS data.Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| AIMS status is greater than 08 and the tax or credit adjustment results in a zero or debit account balance | Input tax increases and credit decreases. Do not input tax decreases or credit increases. Route the case to examination per
the AIMS data.
Caution:Certain freeze codes will prevent an adjustment from posting to the account. Refer to the applicable freeze code procedures prior to inputting any adjustment. Exception:Do not make any adjustments if the DLN of the TC 150 indicates Substitute for Return (SFR). An SFR DLN is XX210-888-000-XX-X. Route the case to Examination per the AIMS data. Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| AIMS status is greater than 08 and the tax or credit adjustment results in a credit account balance | Input tax increases and credit decreases. Use hold code 1. Do not input tax decreases or credit increases. Route the case
to examination per the AIMS data.Caution:Certain freeze codes will prevent an adjustment from posting to the account. Refer to the applicable freeze code procedures prior to inputting any adjustment. Exception:Do not make any adjustments if the DLN of the TC 150 indicates Substitute for Return (SFR). An SFR DLN is XX210-888-000-XX-X. Route the case to Examination per the AIMS data. See IRM 21.5.3.4.10.1, Non-Filer Reject Returns for additional information if case has "NFR" across the top or meets the Non-Filer Reject criteria. Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| AIMS status is greater than 08 and the account reflects a credit balance AND the return is a true duplicate | Input TC 290 .00, hold code 1, and route to Examination per the AIMS data, if correspondence is attached. If no correspondence
is attached, input TC 290.00, hold code 1, activity code TRUEDUPF. Do not route to examination.Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| AIMS status is greater than 08 and the account reflects a zero or debit balance AND the return is a true duplicate | Same as above except no hold code one (1).Note:In addition, if the project code is 576, 577, 579, 580 or 581, mail the claim to: |
| OPEN TC 420 CASES (Open AIMS Status) | |
|---|---|
| CATEGORY A | |
| IF | THEN |
| Any AIMS Status and the project code is 576, 577, 579, 580, or 581 | Mail the claim to: IRS Stop 4300 P-3 Kansas City, MO 64999-0065 |
| AIMS status is 08 or less and the adjustment is for a tax decrease or credit increase | Route to Examination as Category A. |
| AIMS status is greater than 08 and the adjustment is for a tax decrease or credit increase | Input TC 470 no closing code and route to the open AIMS control. |
Note:
TC 570 DLN, digits 9 through 13, will be 88888 for a revenue protection case and 99999 for a refund hold case. TC 810 with DLN digits 9 through 13 will be 88888 for a revenue protection case.
Category A (CAT-A) criterion applies to net refund returns only (except IRC § 3121(v) cases). Do not apply CAT-A criteria to Combat Zone cases. Follow normal procedures to process these cases. See IRM 5.19.1.4.10, Combat Zone Accounts, for further information.
The dollar thresholds in the table below refer to the amount of the tax decrease or credit increase, unless otherwise noted. Math verify all CAT-A claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ Superseding returns should be reviewed for CAT-A criteria.
| Category A Criteria | IMF | BMF |
|---|---|---|
| Alternative Minimum Tax (AMT) – Reduction of prior year AMT by reducing the value of an Incentive Stock Option (ISO) used in AMT calculation. | ≡ ≡ ≡ or more |
Not for BMF |
| Alternative minimum tax (corporations only) – claiming exemption as a small corporation. | Not for IMF | More than ≡ ≡ ≡ ≡ |
| Carryback or Carryforward Claims (RINTS only) – a. Joint Committee Cases (see below) b. Periods with Open TC 420, 424, 520, or 576 c. Statute for the loss year has less than 60 days remaining in the ASED or RSED d. The loss year return is consolidated and any affected year was filed under a different EIN Note:See IRM 21.5.9, Carrybacks, for Examination Criteria for Tentative Carryback Applications (TENTS). |
a. See below b. Any c. ≡ ≡ ≡ ≡ ≡ or more d. Not applicable |
a. See below b. Any c. ≡ ≡ ≡ or more d. ≡ ≡ ≡ ≡ or more |
| Civil Penalty Assessments – Claims for abatement of civil penalty assessments related to reference Numbers 623, 624, 625, 655, 656, and 657 |
Not for IMF | Any |
Constitutional objection to income tax – Route Frivolous claims to Ogden. See IRM 4.10.12.1.3.1, Detecting Frivolous Filings.
Note:All employees must discontinue identifying any taxpayer's account as a "Tax Protestor" . Do not use the term "Illegal Tax Protestor" (ITP) or similar designations on IDRS, ACS, DI, or CIS. This includes any comments, narratives, or histories. The phrasing, "Constitutional Objection to Tax" may be used. |
Any | Any |
| Disabled Access Credit and the original or amended return contains Schedule C, E, F, or evidence of "other" income. The claim can be disallowed when there is no source of business income. See IRM 21.6.3.4.1.15, Form 8826 Disabled Access Credit. | More than ≡ ≡ ≡ | Not for BMF |
| Disaster claims | ≡ ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ or more |
| Non-disaster casualty losses. | ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ or more |
Earned Income Credit: Tax Years 2005 and Later – All increases to Earned Income Tax Credit (EITC) will be input to Command
Code (CC) DDBCK. The CC DDBCK may select cases meeting Examination Criteria (See IRM 21.6.3.4.2.7.18, EITC and Command Code DDBCK).Exception:Do not refer to Examination and do not use CC DDBCK in the following instances: b. Additional Form W-2 – Increase to EIC resulting from an increase in wages. c. EIC for self/spouse only. |
CC DDBCK | Not for BMF |
Tax Year 2005 and later – EITC Claim criteria for employees who do not have access to CC DDBCK.
Exception:Do not refer to CAT/A regardless of the money amount in the following instances: a. Primary TP ITIN issue – if the primary taxpayer secured a valid SSN to replace a previously reported ITIN. b. Additional Form W-2 – Increase to EIC resulting from an increase in wages. c. EIC for self/spouse only d. TIN related math error claims in response to TIN related math error notices. |
≡ ≡ ≡ ≡ or more |
Not for BMF |
| EITC claims where CC DDBCK cannot be utilized – TY 2004 and prior. Exceptions (Not CAT-A): 1. Primary TP ITIN issue – if the primary taxpayer secured a valid SSN to replace a previously reported ITIN. 2. Additional Form W-2 – Increase to EIC resulting from an increase in wages. 3. TIN related math errors – claims filed in response to TIN related math error notices. 4. Earned Income Tax Credit Recertification (Form 8862) – see IRM 21.6.3.4.2.7.15, EITC Recertification, for details on when to refer the claim to Examination. 5. EIC for self/spouse only |
≡ ≡ ≡ ≡ ≡ ≡ or more. |
Not for BMF |
Earned Income Tax Credit Certification
Note:For claims where DDBCK cannot be utilized. see IRM 21.6.3.4.2.7.17, EITC Certification Program, for details and further guidance for examination referrals. |
CC DDBCK | Not for BMF |
| Employee Business Expenses, Form 2106 | ≡ ≡ ≡ ≡ ≡ or more |
Not for BMF |
| Estate Tax, Form 706 | Not for IMF | ≡ ≡ ≡ or more |
| Excise Tax claims: a. Form 8849 Exception: all 4081d, 4091e are CAT-A b. Form 720 Exception: Any Schedule C is CAT-A c. Form 11C or Form 730 d. Form 2290 (including Form 8849) |
Not for IMF | a. ≡ ≡ ≡ or more b. ≡ ≡ ≡ ≡ ≡ or more c. ≡ ≡ ≡ ≡ ≡ ≡ or more d. ≡ ≡ ≡ or more |
| Fellowship, grant or stipend | ≡ ≡ ≡ or more |
Not for BMF |
| FICA: Refund of FICA tax for student nurses based on IRC § 3121(b)(13) and refund of FICA tax for students based on IRC § 3121(b)(10) |
≡ ≡ ≡ or more |
Not for BMF |
Form 94X (Includes loose 941c and claims received on Form 843) – Vague descriptions for adjustment and the reduction to wages is 50% or more of the current wages posted to the module being adjusted.
Example:Administrative Error, Payroll Processing Error, Wages Overstated, Adjustment to Wages, or Correction of Reported Wages, etc. |
Not for IMF | ≡ ≡ ≡ ≡ or more |
| Form 1065 Amended, corrected, or superseding, with or without Form 8082. Note:Refer to IRM 21.7.4.4.2.9 (3), Duplicate Filing Conditions on Form 1065, for Category A criteria. |
Not for IMF | See Note |
| Form 1041 Change income from taxable to nontaxable See IRM 21.7.4.4.1.10, Form 1041 Claims and Requests for Adjustments. |
Not for IMF | ≡ ≡ ≡ ≡ ≡ ≡ or more |
Form 1120SNote:Refer to IRM 21.7.4.4.4.11.2, Form 1120S U.S. Income Tax Return for an S Corporation, for Category A criteria. |
Not for IMF | See Note |
| Form 4136, Credit for Federal Tax Paid on Fuels | Credit of ≡ ≡ ≡ or more |
Credit of ≡ ≡ ≡ ≡ ≡ or more |
| Forms 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases | Not for IMF | ≡ ≡ ≡ or more |
| Form 8082, Notice of Inconsistent Treatment or Administrative 8082 Adjustment Request (AAR)) | ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ ≡ ≡ or more |
| Form 8275, Disclosure Statement, or a written disclosure statement citing Section 6661 | ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ ≡ ≡ or more |
| Form 8697,Interest Computation Under the Look-Back Method for Completed Long-Term Contracts: Non-discrepant (the liabilities reported by the taxpayer on Form 8697 and related income tax accounts agree) overpaid and amended Forms 8697 | ≡ ≡ ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ ≡ ≡ or more |
| Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method | ≡ ≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ or more |
| Former closing agreement: References to a former closing agreement, such as Form 906, Closing Agreement On Final Determination Covering Specific Matters. |
Any | Any |
| Gift Tax | Not for IMF | ≡ ≡ ≡ ≡ ≡ |
| Goldmine Claims – Investment losses or developmental expenses/interest from a Colorado goldmine. The claims may reference IRC § 616(a) , Institute for Financial Learning (IFFL), Syndicated Gold Depository (SDG), Parklane International Corp., Stone Mountain Precious Metals Depository Corp., or Merendon Mining (Colorado) Inc. |
Any | Not for BMF |
| Golden Parachute Claims – IRC §§ 280G, 4999; Treas. Reg §1.280G-1 |
Any | Any |
| Health Coverage Tax Credit (HCTC) Form 8885, line 5. Refer to IRM 21.6.3.4.2.9.1, Eligibility Requirements/Claim Processing, for routing. | ≡ ≡ ≡ ≡ or more | Not for BMF |
| Income – Changes of any income from taxable to non-taxable | ≡ ≡ ≡ ≡ or more | ≡ ≡ ≡ ≡ or more
Note:Form 1120 |
| Interest: Refund or abatement of any previous interest assessments made by Examination, DATC/ASTA, or IRP and IRP/Substitute for Returns program |
More than ≡ ≡ ≡ | More than ≡ ≡ ≡ ≡ ≡ |
IRC § 3121(v) — Nonqualifying Deferred Compensation Arrangement
Note:Refer to IRM 21.7.2.4.7.4.2,IRC Section 3121(v) - FICA Claims from Airline Employees and Retirees, for additional information regarding airline employee claims. |
Not for IMF | All increases and decreases |
| Issues specified by the Campus Chief Compliance Division or the Compliance Campus Chief Examination Division | As specified | As specified |
Itemized Deductions – Increases to total itemized deductions on an existing Schedule A resulting in a tax decrease.
Exception:Disaster/non-disaster casualty losses reported on Schedule A have a separate CAT-A criteria, as shown above. |
≡ ≡ ≡ or more |
Not for BMF |
Joint Committee Cases Note:For multiple periods, the refund is the aggregate of the amount claimed for each period. |
Refund of ≡ ≡ ≡ ≡ ≡ ≡ or more |
Refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more |
Maritime Claims Exception:Claims received that do not have a breakdown of the days and rates should be disallowed. Refer to IRM 21.6.6.4.31, Maritime Claims, for instructions. |
≡ ≡ ≡ or more |
Not for BMF |
Medical/Dental Resident FICA Claims – Includes (Minnesota vs Apfel or U.S. v. Mayo Foundation)Note:Adjustment is made on the BMF account. Do not forward as CAT-A until the taxpayer supplies the necessary supporting statements. Refer to IRM 21.7.2.4.18.6.9, Medical/Dental Residents Excess FICA Claims (Mayo Clinic or Minnesota vs. Apfel). |
Any | Any |
| Mortgage Interest Credit – Form 8396 | ≡ ≡ ≡ ≡ ≡ or more |
|
| Penalties: Refund or abatement of any previous penalties assessed by Examination, DATC/ASTA, or IRP and IRP/Substitute for Returns program Note:See above for Civil Penalties |
More than ≡ ≡ ≡ ≡ | More than ≡ ≡ ≡ |
| Protective claims | Any | Any |
| Reed Slatkin: Claims/ Form 1040X eliminating interest, dividend, capital gain income, and theft or casualty losses associated with Reed Slatkin Investment Club. The claims may reference Reed Slatkin (Investment Club), Slatkin & Assoc., or UB 28-01 Partners. | Any | Not for BMF |
| Return Status: Requests to change return Status from Form 1120H to Form 1120 |
Not for IMF | Any |
Schedule E expenses, additional
Note:Changes based on Schedule K-1 income/loss should not be referred. |
≡ ≡ ≡ or more |
Not for BMF |
| Schedule C or F expenses, additional | ≡ ≡ ≡ or more |
Not for BMF |
| Statutes: Claims/Amended returns received within 60 day of the ASED. When figuring the 60 days, use the IRS received date. |
≡ ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ or more |
| Tax Assessment: Refund or abatement of any previous tax assessed by Examination, DATC/ASTA, or AUR and IRP/Substitute for Returns Program, unless audit reconsideration procedures apply. See IRM 4.13, Audit Reconsideration, and IRM 21.5.10.4.3, Audit Reconsiderations, for additional information. Exception:Route all claims with Project codes 0584, 0611, 0263, 0173, as Cat-A regardless of the amount of the claim (Including open Z- Freeze Cases). |
More than ≡ ≡ ≡ | More than ≡ ≡ ≡ ≡ ≡ |
| Telephone Excise Tax Refund (TETR) -- Including the TETR interest | ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ or more |
| The tax year involved was terminated by IRS under IRC § 6851 | Any | Any |
| Specific Unallowable issues defined in Document 6209, IRS Processing Codes and Information, , Section 12-13, Unallowable Codes. For issues clearly unallowable by law refer to IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, for processing guidance. | ≡ ≡ ≡ or more |
Not for BMF |
| "Passive" activities are reclassified as "active" | ≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ ≡ ≡ or more |
| Work Opportunity Tax Credit (WOTC)/ Welfare-to-Work (W-t-W). May also include the following language: Rev. Rul. 2003-112, Section 51 of the IRC Family membership, NEON criteria. |
≡ ≡ ≡ or more |
≡ ≡ ≡ ≡ ≡ ≡ or more |