- 4.4.24.1 Introduction
- 4.4.24.2 Form 3244–A
- 4.4.24.3 Advance Payment on Deficiency
- 4.4.24.4 6603 Deposits (formerly known as Cash Bond)
- 4.4.24.5 Payment Received Prior to Issuance of Notice of Deficiency
- 4.4.24.6 Payment Received After Issuance of Notice of Deficiency
- 4.4.24.7 Payments of $100,000 or More
- 4.4.24.8 Discovered Remittances
- 4.4.24.9 Criminal Restitution Payments for IRS
- Exhibit 4.4.24-1 Form 3244–A, Payment Posting Voucher — Examination
- Exhibit 4.4.24-2 Preparation of Form 3244–A
- Exhibit 4.4.24-3 Form 4287 Record of Discovered Remittances
- Exhibit 4.4.24-4 Preparation of Form 4287
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This chapter contains information and instructions on payments and remittances.
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When a payment is received by an Examination employee, Form 3244–A will be prepared. Complete a separate Form 3244–A for each tax year and class of tax involved. See Exhibit 4.4.24–1
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Transmit the payment, Form 3210 and related Form 3244–A to the remittance processor at the address shown on the AIMS website http://sbse.web.irs.gov/AIMS/docs/Payments.xls for your designated Submission Processing Center within 24 hours. All payments must be double-wrapped (with the payment placed in an opaque envelope before placing in the overnight mail envelope) and marked or delivered via overnight traceable method. A receipted copy of Form 3244–A may be used in lieu of Form 3210 only for payments which are hand-carried to the remittance processor.
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If a remittance must be held overnight, make certain it is stored securely in a locked container.
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When a payment is received by an examiner in the field, the 24 hour processing time is still in effect as well as storing the payment in a locked container.
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Enter the payment amount as a TC 640 on Form 3244–A for payments received on cases open in Examination. This ensures against erroneous refunds of advance payments. Mail the payment and Part 1 of Form 3244-A as directed in section 4.4.24.2.2 above.
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Attach Part 2 of Form 3244–A to the face of the return.
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The American Jobs Creation Act of 2004, P.L. 108-357, 118 Stat. 1418 (the "Act" ) was enacted on October 22, 2004. Section 842 of the Act added new section 6603 to permit taxpayers to make deposits to suspend the running of interest on potential underpayments of tax. Rev. Proc. 2005-18 provides guidance establishing procedures for taxpayers to make, withdraw, or identify deposits to suspend the running of interest on potential underpayments under section 6603. This revenue procedure supersedes Rev. Proc. 84-58, 1984-2 C.B. 501, which provided procedures for taxpayers to make remittances (cash bonds) in order to suspend the running of interest on deficiencies. Under Section 6603, the terminology "cash bond" is obsolete. Remittances submitted to suspend the running of interest under this section are referred to as "6603 deposits" .
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Section 6603 codifies the taxpayer's right to make a deposit in lieu of a payment to stop the running of interest on a potential deficiency, and, for the first time, provides for the accrual of interest on a deposit returned to the taxpayer to the extent that the deposit is attributable to a disputable tax. See IRM section 20.2.4.8.1 for detailed information on cash bonds converted to a 6603 deposit and credit interest information.
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Section 6603 deposits can be made using the EFTPS (electronic payment) system, a check, or money order accompanied by a written statement designating the remittance as a deposit.
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Case file documentation is critical when a taxpayer requests that an amount be treated as a 6603 deposit or a previously posted cash bond is "converted" to a 6603 deposit. The date of the taxpayer letter requesting the "conversion" must be reflected in the source documents maintained with the case file. To document the request, date stamp the original letter maintaining it in the case file and provide the taxpayer a copy advising the taxpayer to maintain it for his/her records. The date on which the Service receives the written statement describing the amount and return of the disputable tax is the date that a converted deposit begins to accrue credit interest if returned to the taxpayer. See IRM section 20.2.4.8.1.3 for exceptions to this date.
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Follow the instructions for preparing the Form 3244–A in Exhibit 4.4.24–2. Remittances submitted after October 22, 2004, identified as "6603 deposits" are processed and posted in the same manner as the Service previously processed a cash bond remittance. Deposits are identified by TC 640 (Advanced Payment of Determined Deficiency or Underreporter Proposal), Blocking Series "999" and Designated Payment Code (DPC) 12.
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The original and a photo copy of the Form 3244–A should be sent to the remittance processor via Form 3210.
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6603 deposits received prior to the issuance of a statutory notice of deficiency will be considered a payment of tax upon the expiration of the 90/150 days, unless the taxpayer has petitioned the Tax Court and re-requested the remittance continue to be considered a 6603 deposit.
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This will necessitate the manual computation of interest any time the final determination results in a refund of any part of a 6603 deposit which was subsequently transferred to a payment of tax.
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If full payment is received prior to the issuance of a statutory notice of deficiency without an agreement (i.e., no signed waiver form), look for a statement that this constitutes an advance payment or evidence that the taxpayer intends to file a protest.
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If there is no statement that this is an advance payment or that the taxpayer intends to protest, Centralized Case Processing should close the case under agreed closing procedures.
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If the taxpayer does state that this is an advance payment and/or that he/she intends to file a protest, refer the case to Technical Services Staff or the designated Technical Services Manager.
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Determine if the taxpayer has submitted a full or partial payment of the deficiency by matching the dollar amount of the remittance to the tax deficiency dollar amount shown on the Notice of Deficiency. If the remittance exceeds the tax deficiency amount, check for the taxpayer’s designation of the excess as payment of interest. Also check to see if the taxpayer submitted a full or partial agreement (i.e., signed waiver form), or has requested, in writing, that the remittance be treated as a 6603 Deposit.
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If full or partial payment is received, prepare Form 3244A and forward payment to your designated Submission Processing Center shown on the AIMS website http://sbse.web.irs.gov/AIMS/docs/Payments.xls .
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If a remittance is received as a payment of tax with a partial agreement, have a partial assessment done on the amount. Partial assessment procedures are as follows:
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Flag these cases via Form 3198 as partial agreement cases for identification and processing purposes.
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Fax copies of the examination report, the agreement, Form 5344 and Form 3198 to your Centralized Case Processing FORT (Field Office Resource Team) unit requesting input of the partial assessment. CCP FORT fax numbers can be located on the "Exam" tab on the CCP website http://sbse.web.irs.gov/CCP.
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When the assessment has been completed, verification will be returned to the Technical Services Area. The case will remain in 90-Day Suspense awaiting either further correspondence, petition, or default.
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If a full agreement is received with the payment, close out all 90-Day suspense file controls on the case and send the case file to Centralized Case Processing for closure.
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All employees will notify their immediate manager upon receipt of a remittance of $100,000 or more to ensure timely processing.
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The immediate manager will determine what extraordinary steps should be taken to ensure timely deposit. All overnight mail delivery services must be traceable. Though not required, it would be beneficial to annotate the envelope containing a payment(s) of $100,000 or more with the word "LARGE" . Measures to ensure timely deposit will include, but are not limited to, the following:
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Express Mail—to ensure next day delivery. (See IRM 1.22 Mail and Transportation Management Handbook.)
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Private Delivery Service within 300 miles; for example United Parcel Service, Purolator, etc.
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Private Delivery Service over 300 miles; for example Emory, Airborne, etc.
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Hand-carry remittance to teller by car or plane (in extreme cases)
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Determine which of the above is most cost-effective.
Note:
The cost of transportation of the remittance should be commensurate with the interest to be gained by expeditious deposit.
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If there is a Teller Function (located in the Collection organization) in your immediate post of duty, alert them in advance of the receipt of a remittance of $100,000 or more.
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When an area office does not have a Teller Function in their immediate post of duty, payments will be sent to the Submission Processing Center designated on the AIMS website http://sbse.web.irs.gov/AIMS/docs/Payments.xls.
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Cash and non-cash remittances found outside of the Receipt and Control secured/restricted area are "discovered remittances." Discovered remittances may include cash or other items of value, including credit, debit and gift cards. If an employee discovers a remittance, he/she will handle that remittance expeditiously as follows.
Note:
See IRM 3.8.46 for detailed information on discovered remittances.
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The employee will immediately notify the supervisor of the area where the remittance was discovered to verify with him or her the amount of the remittance and date of discovery.
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Form 4287, Record of Discovered Remittances, will be prepared in duplicate, signed by the employee, verified and signed by the supervisor (see IRM Exhibit 4.4.24–4).
Note:
When credit card information is discovered, record only the last four digits of the credit card number, the expiration date, the taxpayer's name and SSN on Form 4287.
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The remittance and related documents will be replaced in the original envelope if available or a new envelope, stapled closed and mailed via overnight traceable mail to the remittance processor at the address shown on the AIMS website http://sbse.web.irs.gov/AIMS/docs/Payments.xls for your designated Submission Processing Center within 24 hours. Form 4287 will be prepared for each delivery of discovered remittances.
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All cash discovered remittances exceeding $20 must be converted to check or money order by a management designated individual. The check or money order will be made payable to "United States Treasury" .
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The remittance processor will verify the contents of the envelope and sign both copies of the Form 4287.
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The original Form 4287 will be retained by the remittance processor. The supervisor of the area where the remittance was originally discovered will retain the copy of Form 4287 for one year.
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All employees should be aware that remittances must be expeditiously processed in order to insure that interest to the Government is not lost. For example, if a check for $20 million was delivered to an office on Thursday and not deposited until the following Wednesday, it would result in the Government losing $5,479 (at 10%) in interest for each day the deposit was delayed. In addition, if the payment is not promptly identified as being received on the proper date, the taxpayer will be overcharged interest that they would not otherwise be subjected to.
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On occasion you may receive a payment designated as a "Criminal Restitution" payment. The IRS has a specific office to collect and process all criminal restitution payments to the IRS. Criminal restitution payments should be mailed or delivered via an overnight traceable method to: Internal Revenue Service, ATTN: MPU, Stop 151 Restitution, 4800 Buford Highway, Chamblee, Georgia 30341.
Print all information legibly to ensure proper posting.
Enter the taxpayer's SSN or EIN including a file source, if present, e.g., N for NMF, V for Form 706, * for invalid SSN, W for invalid Form 706 TIN, or P for IRA account.
Enter return form number and proper MFT code. (reference Document 6209)
Enter tax period in YYYYMM format.
Enter IRS received date or postmark date, if appropriate, in MMDDYYYY format.
Enter full name (identify name control) and address of taxpayer whose account is to be credited with the payment.
Enter amount for TC 670 if it is NOT an advance payment being made on an account open to Examination.
Enter amount for TC 640 if it is an Examination or Appeals advance payment.
Enter zero in the amount field for TC 570 when TC 670 is used to process the payment.
Cash Bond, (until Form 3244-A is updated the "cash bond" box will be checked for Section 6603 Deposits) - As applicable
Send letter 316(c) - As applicable
Prepared By - enter the Primary Business Code, Secondary Business Code and Group number along with the preparer's name and telephone number (including area code) so that the preparer of Form 3244-A may be contacted if necessary.
Remarks - indicate any pertinent information regarding the transaction, such as: the amount of payment allocated to tax and interest, as well as any special instructions; when the date of an agreement precedes the date of the advance payment by more than 30 days, enter the agreement date; if the first payment is not for the full amount of the deficiency, enter "Part Payment" or if part payment is other than the first payment, designate the payment, e.g., "2nd payment" and note restricted interest cases identified on Form 3198.
Stop # : Enter your PBC (Primary Business Code) and SBC (Secondary Business Code)
Unit: Enter your EGC (Employee Group Code)
Telephone #: Enter the phone number of your group including Area Code.
Date: Enter the date Form 4287 is prepared.
Type of Document: Enter the type of document applicable to the discovered remittance, for example: "941," "1040." Enter "unknown," if applicable return number cannot be determined.
Tax Period: Enter the tax period in YYYYMM format.
Type of Remittance: enter "cash," "check," or "money order," as appropriate.
Amount of Remittance
Name: Enter the taxpayer's first and last name.
SSN, EIN, DLN: Enter Social Security Number (SSN) or Employer Identification Number (EIN), as appropriate. Enter Document Locator Number (DLN), if available.
Discoverer's Name
Discoverer's Supervisor’s Initials
Receiving Unit Initials: The teller or payment processing center employee will initial for the receiving unit.
Receiving Unit Date Rec’d. — the teller or payment processing center employee will enter the date received.