In Rev. Rul. 2004-33, taxpayers may claim erroneous reparation tax credits against the U.S. government for past injustices resulting from slavery and economic oppression. They usually indicate "Black Investment Taxes" , "Reparation for African Americans" , or a similar statement. The amount claimed per person, is often, but not always, $43,209 or $40,000.

Taxpayers claim entitlement to a tax credit because of these hardships and try to claim the credit:

DO NOT ALLOW the claim. See IRM 21.5.3.4.16.8, Identifying Frivolous Returns/Correspondence and Responding to Frivolous Arguments. If the taxpayer erroneously received a refund based on this credit, they should file an amended return to correct their account. Refer to IRM 21.4.5, Erroneous Refunds, for additional instructions.

If the taxpayer has questions regarding the legitimacy of the claim advise as follows:

The United States Supreme Court determined in Commissioner vs. Schleier, 515 U.S.323 (1995), back pay and liquidated damages recovered through the settlement of a claim under the Age Discrimination in Employment Act are not excludable from gross income. Disallow Form 1040X, Amended U.S. Individual Income Tax Return, claiming income payments as excludable under section 104(a)(2) based on age discrimination. Only amounts received on account of personal physical injuries or physical sickness may be excluded from gross income under IRC Section 104(a)(2).

Taxpayers who claim a deduction for alimony paid but do not provide the Taxpayer Identification Number (TIN) of the recipient, are contacted during pipeline process for this information. Correspondence, including late replies, may be received requesting:

The following table will help you decide if the Failure to Provide Information Penalty may be abated.

Rev. Rul. 90-38prohibits retroactive changes in accounting methods on amended returns. Taxpayers might file amended returns, based on the "Albertson's, Inc." court case, to claim:

Disallow the following:

Cite the following disallowance reason: "In order to change your accounting method, you must submit Form 3115, Application for Change in Accounting Method and receive consent from the Commissioner (Internal Revenue Code Section 446.)"

IRC Section 127 allows employers to exclude educational expenses from the employee's taxable income. The maximum annual exclusion is $5,250.

The Economic Growth and Tax Reconciliation Act of 2001, permanently extended IRC Section 127. It also reinstated its applicability to graduate courses beginning after December 31, 2001.

For complete information concerning Form 8857, Request for Innocent Spouse Relief, refer to IRM 25.15, Relief from Joint and Several Liability.

Refer to IRM 21.4.6, Refund Offset, for complete information concerning injured spouse claim procedures.

The Internal Revenue Service position on Police Meal Expense is: State trooper expenses for meals eaten while on duty are inherently nondeductible, except for the following narrow exceptions.

You may receive claims from Taxpayers outside the Eighth Judicial Circuit citing a Georgia State patrolman's article asserting that the Service had changed its position in 1993 to allow such deductions generally. This is not correct; disallow such claims using the language in paragraph (1) above.

Generally, if a debt is canceled or forgiven, other than as a gift or bequest, the canceled amount must be included in income. Refer to Publication 17, Your Federal Income Tax , Chapter 12, and Publication 525, Taxable and Nontaxable Income, "Repayments" for details and exceptions. One exception, not outlined in Publication 17, involves the issuance of Form 1099C, Cancellation of Debt, and a subsequent repayment of the debt by the taxpayer See IRM 21.6.6.4.9.2(2) through (4).

The regulations under IRC Section 6050P generally require that Form 1099C, be issued to a debtor if one of eight events occurs. One of those events is if for at least a 36 month period no payments are made toward the debt, the creditor must issue a Form 1099C, solely for reporting requirements, whether or not an actual discharge of indebtedness has occurred. IRC Section 6050P-1(b)(2)(iv) of the Income Tax Regulations.

In some cases, the taxpayer reports the amount on the Form 1099C, as income on his or her income tax return not withstanding the fact that the creditor is still pursuing collection.

If the creditor resumes garnishment of the taxpayer's earnings and the debt is paid, the taxpayer may be entitled to file an amended return to remove the income from the year it was reported. If an amended return is filed, the amount of debt discharge income should be treated as a reduction to the income reported in the year the Form 1099C, is received and not as a Claim of Right adjustment in the year of payment of the debt.

Taxpayers who repay money that was included in gross income in a previous tax year because they thought they had an unrestricted right to the money, Claim of Right, IRC Section 1341, may deduct all or part of the amount in the year in which it was repaid, if a deduction is allowable (e.g., as a business expense or a Section 165 loss). The manner in which the deduction is taken depends upon the:

Taxpayers using the cash accounting method take the deduction in the tax year in which the repayment was made.

The Department of Army or taxpayer may submit Form DA 5174-R, Refund for Prior Year Salary Overpayment. No adjustment activity is necessary.

Associate the form with the return for the year of overpayment.

All claims for refund of prior year income taxes paid on periodic partial distributions from employee savings, retirement, and investment plan distributions are worked using normal adjustment procedures. Taxpayers must show the amount contributed and withdrawn before the claim can be worked. Do not send to Examination as Category A.

Taxpayer's may claim seller paid points when purchasing a principal residence. The deduction is claimed on Schedule A, Itemized Deductions. Appraisal, inspection, title, and attorney fees are NOT deductible. Property taxes paid are not deductible as points even if designated as points. Reject the claim if proof of the claim is not provided. Taxpayer must submit:

Refer to IRM 21.5.3, General Claims Procedures.

Whenever Integrated Data Retrieval System (IDRS) Command Code (CC) LETER is input on a joint account, the system determines if the spouse is the same for the current year.

Taxpayers may file amended returns to claim a deduction for transportation expense.

In Rev. Rul. 57-383, the Service considered the Federal Income Tax treatment of certain unemployment benefits received by union members while separated from their jobs.

Rev. Rul. 57-383 provides that:

The strike fund benefits received may be offset by the amount of payments into the fund. The benefits received in excess of the payments are includible in the taxpayer's income.

Coal companies may file a claim for refund of premiums paid to the UMWA Combined Benefit Fund (the Combined Fund). Even though the amounts paid are premiums and were not paid to the Service, the companies are seeking a refund pursuant to the decision of the United States Court of Appeals for the Fourth Circuit in the Pittston Co. case, Pittston Co. vs. United States , 199 F.3d 694 (4th Cir. 1999). In that decision, the Fourth Circuit held that the premiums are taxes and that it was appropriate for a coal company to bring a tax refund action to seek a refund of premiums that it contests were wrongly assessed.

Check the taxpayer's address, if address did not originate in the Fourth Circuit research to see if taxpayer may have moved and may in fact be eligible. Additional research (i.e. CC IRPTR) needs to be completed prior to disallowing the claim. If the claim did not originate in the Fourth Circuit (that is, did not originate in Maryland, North Carolina, South Carolina, Virginia, or West Virginia), disallow it. Send Letter 105C, Claim Disallowed, include the following information: "We disallowed your claim for refund of premiums paid pursuant to Section 9704 of the Internal Revenue Code to the United Mine Workers of America Combined Benefit Fund. The Service is not following the decision of the Fourth Circuit in Pittston Co. outside the Fourth Circuit" . Route the claim to Files to be filed in the Alpha File. If case is on Correspondence Imaging System (CIS) the CIS image is the source document and it remains on CIS for further recall if needed. Since the image will remain available on CIS, Alpha File association is not necessary. For additional information pertaining to CIS see IRM 21.5.1.5, Correspondence Imaging System (CIS) procedures.

If the claim originates in the Fourth Circuit, refer to Examination as Category A. They will contact Chief Counsel and make an initial determination of whether the claim has merit. If the claim does not have merit, they will disallow it. When the disallowed claim is returned by Examination, send Letter 105C, include the following information: "We disallowed your claim for refund of premiums paid pursuant to Section 9704 of the Internal Revenue Code to the United Mine Workers of America Combined Benefit Fund. You have not alleged a ground for which a refund can be granted" . Route the claim to Files to be filed in the Alpha File. If case is on Correspondence Imaging System (CIS) the CIS image is the source document and it remains on CIS for further recall if needed. Since the image will remain available on CIS, Alpha File association is not necessary. For additional information pertaining to CIS see IRM 21.5.1.5 , Correspondence Imaging System (CIS) procedures.

If the claim appears to have some merit Examination will suspend the claim until a final determination is made. Because coordination with the Combined Fund and the Social Security Administration may be necessary, there may be some delay in making a final determination.

Veterans notified they are retroactively entitled to a Department of Veterans Affairs (VA) benefit may exclude this amount from gross income. To qualify for the exclusion, veterans, who are retired from the armed forces, must waive an amount of returned pay received of receivable from the Department of Defense (DOD) equal to the VA benefits. The waiver of DOD returned pay is filed and effective from the date of application for VA benefits. VA benefits are excluded from gross income from the date of such application. The effective date applies to any additional award for retroactive benefits. Taxpayers may file claims for refund of taxes paid on the retroactive amounts of VA benefits for prior years covered by a waiver, back to the earliest year not barred by the statute of limitations.

Review claims for completeness following the guidelines in IRM 21.5.3, General Claims Procedures .

A copy of an official letter from the VA granting the retroactive benefit must be attached to the claim. If the required documentation is not attached, refer to IRM 21.5.3, General Claims Procedures.

Information may be received indicating a taxpayer is deceased. Verification needed prior to updating the entity includes one of the following:

Section 692 provides for the forgiveness of Federal income tax for certain U.S. military and civilian employees who are killed or die of injuries received as a result of military or terrorist action. For additional information, see Publication 3, Armed Forces' Tax Guide and Rev. Proc. 2004-26 (2009–19 C.B. 890).

The following subsection includes procedures for processing claims/returns received under Section 692.