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Part 5. Collecting Process

Chapter 1. General Collecting Procedures

Section 2. Remittances, Form 809 and Designated Payments

5.1.2  Remittances, Form 809 and Designated Payments

5.1.2.1  (08-15-2008)
Remittance Processing Overview

  1. This IRM provides procedures for Collection Field function (CFf) remittance processing. All remittances secured by Collection Field function (CFf) employees (whether in the field or in the office, whether in person or by mail) must be transmitted promptly to meet Service goals for timely deposit. See Title 31, U.S. Code § 3302.

  2. These procedures apply primarily to revenue officers (ROs). Procedures for managers and clerical staff are incorporated under the applicable subsection.

  3. Submission Processing is responsible for processing the remittances. See the Collection Field Office Payment Processing"Collection" page at: http://hqnotes1.hq.irs.gov/SubmissionProcessing/SPWebPage.nsf/319d028917d59aa38525684b004cf7ba/72abd89f115b81338525734e005a4f67?OpenDocument . This site provides a list of the key remittance processing contacts and additional information.

    Note:

    Much of the information contained on the web site is designated "Official Use Only (OUO)" and the information is primarily for CFf employees.

  4. Form 795 /795A, Daily Report of Collection Activity, is used to transmit remittances. Remittances must be sent to the appropriate designated Submission Processing Center on the day they were collected or as soon as possible the next business day to meet Service goals for timely deposit and avoid unnecessary delays in processing. See IRM 5.1.2.4, Daily Report of Collection Activity — Form 795 for further information on report procedures.

    Note:

    Local management is responsible for establishing a procedure to handle the processing of remittances and returns that are directed to employees who are away from the office. Clerical staff cannot prepare payment posting documents. See IRM 5.1.2.4 for further details.

5.1.2.2  (08-15-2008)
Physical Security Controls

  1. All employees and managers are required to adhere to the minimum protection standards for remittances, set forth in the following three IRM sections:

    1. IRM 1.16, PHYSICAL SECURITY PROGRAM — specifies physical security controls.

    2. IRM 1.4.6, Managers Security Handbook — provides guidelines for management when performing their role to ensure established security standards are followed.

    3. IRM 3.0.167, Losses and Shortages — provides procedures for losses and shortages of tax collections, disbursement losses, deposit discrepancies, and transfer of accountability.

  2. The following items must be safeguarded at all times:

    • Remittances, in whatever form

    • Form 809, Receipt for Payment of Taxes

    • The official Received date stamp

    • Personally Identifiable Information (PII)

5.1.2.2.1  (08-15-2008)
Remittances

  1. Ensure money and securities, etc., are safeguarded at all times, while in the office, on Flexiplace, and/or making field calls. Follow the procedures displayed in the table below for safeguarding remittances.

    SAFEGUARDING REMITTANCES
    In the Office Each office is responsible for developing procedures to address physical security controls over remittances while they are in the custody of Collection Field Function (CFf) employees because physical security facilities vary.
    In general, to safeguard remittances, place the remittances in a safe or a designated locking desk drawer or file cabinet.
    Flexiplace Under the National Agreement, " At a minimum, this will require that all records and data be kept under lock and key when not in the possession of the employee."
    Provide and use some type of locking desk drawer or file cabinet to safeguard remittances. See Article 50 Section 5 B of the National Agreement.
    Field Calls by Car Place remittances in a locked compartment of the vehicle.
    Field Calls by Public Transportation Place remittances in a locked brief case or other secure place.

  2. Date-stamp remittances for the business day they are received.

  3. Use traceable overnight service or other approved method for shipment of remittances, returns, and posting documents to ensure the security of tax receipts during transit.

  4. Follow up when the Submission Processing Teller Unit doesn't acknowledge receipt within 10 workdays. See IRM 5.1.2.4.5.1, Form 795 Follow Up

5.1.2.2.2  (08-15-2008)
Form 809

  1. Form 809, Receipt for Payment of Taxes is a receipt book that contains receipts to issue to taxpayers (customers) who request a receipt for cash (or check) payment of their taxes. Safeguard Form 809 at all times.

  2. Form 809 receipt books are required to be returned to the issuing Submission Processing Center if there has been no activity. For example:

    1. No receipt has been issued for 3 years.

    2. Not used by an RO for 10 workdays due to a change of position or field office, or separation from service.

    Note:

    Managers must include the return of the Form 809 receipt book as part of the clearance process upon separation from service of an employee.

5.1.2.2.3  (08-15-2008)
Official Received Date Stamp

  1. The official Received date stamp is used to record received dates for remittances and filed returns.

  2. Safeguard the official Received date stamp at all times. Keep it in a secure office location when not in use to protect assigned stamps against unauthorized or indiscriminate use.

    Caution:

    Provide the stamp with high security.

  3. The official Received date stamp should contain the following elements:

    Internal Revenue Service

    Received

    Month, Day, Year

    Area Director (City, State)

  4. When you use the date stamp:

    1. Place the date stamp in the middle of the front page of a secured return (or other document that requires a date stamp).

    2. Make sure the stamp placement will not obscure any information that the taxpayer wrote/printed/entered on the return/document.

  5. If a document is date-stamped in error, cross-out the incorrect date and initial the correction. This is a necessary step because the Data Conversion employees (who are on production by document) are not required to turn documents over, and the Service must maintain "received date" integrity.

    Note:

    The Submission Processing Centers request Collection Field function (CFf) employees who date-stamp payments and/or posting vouchers to make sure they date-stamp on the front of the document.

5.1.2.2.4  (08-15-2008)
Personally Identifiable Information

  1. Personally Identifiable Information (PII) is a specific type of sensitive information that includes the personal data of taxpayers, IRS employees, contractors, job applicants and visitors to IRS offices. Safeguard PII at all times.

  2. Take care to protect personally identifiable information (PII) at all times. Any loss of PII could result in information being compromised to perpetuate identity theft. Learn more about protecting PII and deterring identity theft. Access the Office of Privacy, Information Protection and Data Security website at: http://irweb.irs.gov/Privacy/info_protection.html. Also see IRM 5.1.12.2, Identity Theft.

  3. Report immediately if you suspect or know of a potential PII loss (including the loss of a deposit package).

    Example:

    A check was mailed to the Submission Processing Center but it was never received. This would be a reportable PII incident.

  4. Report a PII loss, in the following order to:

    1. Your manager.

    2. Computer Security Incident Response Center (CSIRC) at 1–866–216–4809.

    3. Treasury Inspector General for Tax Administration (TIGTA) hotline. See IRM 5.1.2.2.6.1.

    Note:

    Access the REPORTING FRAUD, WASTE & ABUSE page on the Intranet at: http://irweb.irs.gov/hotline.asp or TIGTA's internet site at: http://www.treas.gov/tigta/.

5.1.2.2.5  (08-15-2008)
Payment Loss Procedures

  1. Report any loss to your manager immediately if you:

    • experience a cash shortage.

    • receive counterfeit funds.

    • are missing negotiable checks or other instruments.

    • are missing seized property.

  2. For additional information relating to payment loss, refer to:

    • IRM 5.1.1, newly titled, Balance Due Accounts under IRM 5.1.1.5 entitled, Security and Control.

    • IRM 3.0.167, Losses and Shortages

    • See IRM 5.1.2.2., Physical Security Controls.

  3. Report any potential theft or embezzlement to:

    1. Treasury Inspector General for Tax Administration (TIGTA) hotline, and

    2. Remittance Security Coordinator (RSC) at the designated Submission Processing Center.

  4. Prepare a brief narrative report.

  5. Send the report (and attachment(s)) to TIGTA.

    Note:

    TIGTA will conduct an investigation and report the results of the investigation.

  6. Send a copy of the report (and attachments) to the RSC.

    Note:

    The remittance security coordinator will monitor the loss and take steps to ensure relief is granted to the taxpayer expeditiously. The RSC will control the case and protect the taxpayer from incorrect notices while TIGTA conducts their investigation. The RSC will ensure that incorrect penalty and/or interest are abated.

5.1.2.2.5.1  (08-15-2008)
Replacement Check

  1. Request a replacement check from the taxpayer, if applicable.

  2. Prepare Form 795/795A, Daily Report of Collection Activity, to submit the replacement check (with the current date).

  3. Complete Form 3465, Adjustment Request.

  4. Attach Form 3465to the replacement check to request that the interest and penalty be abated.

  5. Send the replacement check and Form 3465 with Form 795/795A, to Submission Processing.

    Note:

    The remittance perfection technician will post the check with the current date. Form 5919will not be issued for the replacement check unless other error conditions exist.

5.1.2.2.6  (08-15-2008)
Stolen and/or Altered Remittance

  1. Sometimes a taxpayer will provide evidence that a remittance that he/she gave or sent to the IRS has been stolen and/or altered.

  2. Identify a stolen or altered remittance by the characteristics displayed in the table below:

    IDENTIFYING A STOLEN OR ALTERED REMITTANCE
    Type of Remittance Characteristics
    Altered Remittance

    • Endorsed or made payable to someone else (other than Treasury or IRS)

    • May include changes to money amount
    Stolen Remittance

    • May or may not be cashed.

    • May have been stolen to steal the taxpayer's identity

  3. Report any potential theft or embezzlement to:

    1. Treasury Inspector General for Tax Administration (TIGTA) hotline, and

    2. Remittance Security Coordinator (RSC) at the designated Submission Processing Center.

  4. If a taxpayer provides evidence that a remittance has been stolen and/or altered.

    1. Obtain a written statement from the taxpayer that the original negotiable instrument was made payable to the United States Treasury (or Internal Revenue Service (IRS)) and sent to IRS.

    2. Input Transaction Code (TC) 470 on the impacted module(s).

    3. Prepare a brief narrative report.

    4. Photocopy both sides of the original negotiable instrument made payable to someone other than the IRS and retain a copy of the evidence in the case file with the report.

      Note:

      Retain the original negotiable instrument in your case file unless TIGTA instructs you to send it to them by mail.

    5. Obtain a photocopy of the "customer’s receipt" if the stolen or altered remittance was a money order, cashier check, etc.

5.1.2.2.6.1  (08-15-2008)
Report to TIGTA

  1. Send the report (and attachment(s)) to Treasury Inspector General for Tax Administration (TIGTA) and TIGTA will conduct an investigation and report the results of the investigation.

  2. Make a report to the TIGTA hotline by one of the following methods:

    • Online — complete and submit the online form on TIGTA's web page at: http://www.treas.gov/tigta/contact_report.shtml

    • E-mail — send a secure E-mail message to the TIGTA Hotline Complaints Unit at: Complaints@tigta.treas.gov

    • Telephone — 1-800-366-4484

    • Fax — 202 927-7018

    • Mail — see note

5.1.2.2.6.2  (08-15-2008)
Report to the RSC

  1. Send a copy of the report (and attachments) to the Remittance Security Coordinator (RSC). The RSC will control the case and protect the taxpayer from incorrect notices while TIGTA conducts their investigation. The RSC will ensure that incorrect penalty and/or interest are abated.

  2. Obtain the name and telephone number of the RSC contact by checking the Submission Processing web site at: http://hqnotes1.hq.irs.gov/SubmissionProcessing/SPWebPage.nsf/7746d2301afe8b468525684b004d8cc0/6eaac23277c8234485256ed100726b3b?OpenDocument

5.1.2.3  (08-15-2008)
Timeliness of Remittances

  1. Remittances are due at the Submission Processing Center within 3 business days from the date the IRS received the funds. The timeliness criteria are based on Title 31, U.S. Code § 3302. In general, any employee receiving a remittance from a taxpayer must transmit the remittance the same day as received or as soon as possible the next business day to ensure receipt in the designated Submission Processing Center within 48 hours of receipt from the taxpayer. One additional day is allowed for cash conversion.

  2. An overnight traceable method of shipping remittances to Submission Processing is required to ensure the earliest deposit to the Treasury.

    1. Five business days are allowed (from the date the revenue officer collected the funds) for transmitting remittances to the designated Submission Processing Center via regular mail.

    2. Seven business days are allowed (from the date the revenue officer collected the funds) for transmitting remittances to the designated Submission Processing Center from overseas (all locations outside the continental United States, including Alaska and Hawaii).

    Exception:

    The Service recognizes that an overnight traceable method is not always available to revenue officers in the field or outside of the continental United States, so remittances may need to be transmitted using regular mail or overseas mail, as applicable. In those instances additional mailing time is allowed.

  3. Annotate the Form 795, Daily Report of Collection Activity, to alert the remittance processor at the Submission Processing Center to apply the extended timeliness criteria, as displayed in the following table, .

    1. EXTENDED PROCESSING TIME ANNOTATIONS
      Criteria Annotation
      5-day NOT SENT VIA OVERNIGHT MAIL
      7-day SENT VIA OVERSEAS MAIL

  4. Follow the procedures below to prepare and submit Form 795/795A, Daily Report of Collection Activity .

    Reminder:

    Maintain an adequate supply of overnight envelopes while on field calls or Flexiplace to facilitate timeliness of remittances.

5.1.2.4  (08-15-2008)
Daily Report of Collection Activity - Form 795/795A

  1. A Form 795/795A, Daily Report of Collection Activity, is prepared each day that payments and/or returns are secured, or as soon as possible the next business day.

  2. You must make alternate arrangements for processing remittances and/or returns received by mail while you are on leave or otherwise away from the office.

  3. Local management is responsible for establishing a procedure to handle the processing of remittances and returns that are directed to employees who are away from the office. To ensure separation of duties:

    • Clerical employees must not prepare payment posting documents.

    • Payment posting documents should only be prepared by a revenue officer or group manager.

  4. The Integrated Collection System (ICS) records time and activity data and produces electronically generated reports. ICS electronically gathers much of the information required to complete these reports and the rest of the information is input by the user through the ICS workstation.

  5. The two ICS generated reports are (both are printable):

    • Form 795A (CG), Return and Remittance Report — use to transmit remittances and returns.

    • Form 795B (CG), Closure/Document Transmittal — use to transmit closed cases.

      Note:

      The preparation and submission of Form 795/795B (CG) to transmit closed cases is discussed in IRM 5.4.1, Remittance Processing.

5.1.2.4.1  (08-15-2008)
Paper Form 795

  1. Use paper Form 795 only when unable to print Form 795A (CG).

    Example:

    You are working out of the office and will not be able to connect to the local area network (LAN) on the next business day so you must complete a paper Form 795.

    1. Print your name, SEID, address, contact telephone, and all other entries accurately and legibly in ink.

    2. Submit the paper Form 795 at the close of business each day or as soon as possible the next business day.

  2. Update the cases that were listed on the paper Form 795 on ICS as soon as you have access to the LAN.

    Note:

    Failure to update the cases will generate an error on the Submission Processing Center unconfirmed transactions report and the Submission Processing Center will issue a Form 5919, Submission Processing Center Teller’s Error Advice.

5.1.2.4.2  (08-15-2008)
Supplemental Form 795

  1. Prepare a supplemental Form 795/795A if submission of returns and remittances is delayed for any reason, including discovered remittances.

  2. Enter a brief explanation for the delay on both the remittance processor's and manager's copies of Form 795/795A:

    1. Write an explanation for the delay on the reverse of the original copy of the supplemental Form 795 if preparing a paper form.

    2. Enter an explanation into ICS if preparing Form 795A (CG), Return and Remittance Report.

      Note:

      You may input up to 30 characters under the Taxpayer's Name which allows the information to be retained with the 795 record on ICS. For example, RECEIVED AFTER UPS PICKUP

      .

  3. Ensure the supplemental Form 795/795A has the date the transmitted item was received.

  4. Secure your manager's initials on the Form 795 /795A.

  5. Submit the supplemental Form 795/795A as soon as possible.

    Note:

    A supplemental Form 795 is considered a late remittance error. This error will be included in the "Late Remittances and Trends and Patterns" reports, but Form 5919 , Submission Processing Center Teller’s Error Advice, will notbe issued if no other errors exist with the remittance.

5.1.2.4.3  (08-15-2008)
Revenue Officer Procedures for Form 795/795A

  1. Revenue officers will prepare and process a Form 795/795A, Daily Report of Collection Activity, each day that payments and/or returns are secured as follows:

    1. List all secured payments and returns.

    2. Prepare the appropriate posting document for all secured remittances. See IRM 5.1.2.5.

    3. Enclose the completed Form 795/795A, Daily Report of Collection Activity and secured remittances in a sealed envelope.

  2. Label the envelope with the following information:

    1. Name of the revenue officer.

    2. Date of Form 795/795A.

    3. Revenue officer SEID number.

    4. Annotate the envelope with the term "LARGE" when Form 795/795A includes a remittance(s) of $100,000 or more, (single or multiple remittances) to ensure the earliest deposit to the Treasury. See IRM 5.1.2.6.1, Large-Dollar Remittance.

  3. Submit the sealed envelope as follows:

    IF THEN send the envelope to the
    a. Working in a multiple revenue officer post of duty (POD), Designated clerical contact in the POD
    b. Working in a single revenue officer POD, Submission Processing via overnight traceable mail with carrier packaging
    c. Working away from the POD on extended field calls or Flexiplace, Submission Processing via overnight traceable mail with carrier packaging provided by the PO
    d. Unable to send via overnight traceable mail, Submission Processing via regular mail or overseas mail

    Note:

    Overnight traceable carrier labels can be generated from the laptop computer using the UPS internet site at: http://www.ups.com/content/us/en/welcome/basics/shipping.html. Further information regarding shipping can be found on the intranet at: http://publish.no.irs.gov/mailtran/ChSmPKG.html.

  4. Retain a control copy of the Form 795/795A until the receipted copy is returned from Submission Processing.

  5. Retain the receipted copy of the Form 795/795A in a locked cabinet based on standard security practices.

5.1.2.4.4  (08-15-2008)
Collection Field Clerical Staff Procedures for Form 795/795A Processing

  1. The designated clerical contact is responsible for submitting the completed envelopes to Submission Processing as follows:

    1. Bundle the sealed envelopes, containing the Form 795/795A and remittances, into a single package for overnight mail to Submission Processing.

    2. Prepare the Form 3210, Document Transmittal Form, with the name of the Revenue Officer, their SEID number and date from each sealed envelope.

    3. Send the prepared package (including a copy of the Form 3210) to Submission Processing via overnight mail.

    4. Retain a control copy of the overnight mail transmittal until the receipted copy is returned from Submission Processing.

    5. Retain the receipted copy of the Document Transmittal form.

    6. Reconcile all Form 3210 transmittals and the acknowledgements on a bi-weekly basis. Make sure that Submission Processing returned the acknowledgements and that all listed items have a check mark.

    7. Follow up with the destination site if remittance transmittals are not returned within 10 days or if all remittances were not marked with a distinctive check mark, and no error was charged by the Teller Unit. See IRM 5.1.2.4.5.1.

      Note:

      All pages of remittance transmittals must be returned. If remittance transmittal pages are lost or missing, this is a loss of personally identifiable information (PII)and must be reported to CSIRC.

  2. Double-wrap the package (i.e., multiple sealed envelopes or just one sealed envelope) in an opaque paper envelope or box.

  3. Write the following on the inside envelope or box:

    1. Name of the person who is authorized to open the package: (i.e., the Submission Processing Operations Manager with responsibility for deposits).

    2. Address of the receiving office.

    3. Return address of the office mailing the remittance package.

    4. "Limited Official Use" is required to be clearly marked or stamped on the front and back of the inside envelope or box

      Note:

      If control of Form 795 is centralized, you must include the specific address where all Form 795s are maintained, on the package.

    5. When the envelope or box contains a single remittance of $100,000 or more or the aggregate total of remittances is $100,000 or more (i.e., whether a single remittance or multiple remittances) you must annotate "LARGE" on the envelope or box to ensure the earliest deposit to the Treasury.

  4. Write the following on the outside envelope or box:

    1. Title of person authorized to open the envelope or box

      Caution:

      Do not include the name of the person.

    2. Name and address of the receiving office

    3. Return address of the office mailing the remittance package

5.1.2.4.5  (08-15-2008)
Form 795 Control

  1. Establish and monitor a control to ensure delivery of the remittance package.

  2. The control must include the amounts of taxpayer receipts by taxpayer identification number (TIN), correlated to the package tracer information.

    Example:

    If the transit provider informs IRS that package number 12345-67-89 was destroyed, a control is needed to enable proper identification of the impacted taxpayer(s) if it is necessary to grant relief.

  3. The control is the overnight mail transmittal (either the copy of Form 3210 or the copy of Form 795/795A (in the case of a single Form 795 /795A in one sealed envelope).

  4. In the event of loss, if the control was Form 3210, the employee responsible for following up must gather a copy of each Form 795/795A that was included in the package from each revenue officer.

5.1.2.4.5.1  (08-15-2008)
Control Follow up

  1. Follow up on a timely basis with the destination Submission Processing Center regarding delayed acknowledgment of a deposit package.

    Note:

    The remittance processor in the teller unit is required to return an initialed copy of Form 795/795A, Daily Report of Collection Activity, to the originating employee as acknowledgment of receipt for the remittances, returns, and posting documents. The remittance processor must acknowledge receipt of each remittance with a distinctive check mark on the transmittal and return an acknowledgement copy of the transmittal to the originator at the specific address listed on the transmittal within 5 workdays.

  2. Establish a paper or electronic follow-up system to ensure:

    1. an acknowledgement copy of Form 795/795A has been received from the Submission Processing Teller Unit, and

    2. all the remittances have been processed.

  3. Reconcile all Form 795/795A or Form 3210 transmittals and the related acknowledgements on a bi-weekly basis (at a minimum) to ensure that all remittances have been received in and processed by the Submission Processing Teller Unit.

  4. Follow up with the destination center if the teller unit does not acknowledge receipt. Follow up when:

    1. you do not receive an acknowledgement copy of the transmittal with 10 days, or

    2. all remittances are not acknowledged (i.e., marked with a distinctive check mark on the transmittal) and no error was charged by the Teller Unit.

  5. Request follow up from the campus by faxing a copy of the remittance transmittal to the Field Office Payment Processing designated liaison.

  6. The appropriate fax numbers are:

    • Cincinnati (859) 669–3792

    • Ogden (801) 620–3962

  7. Place the receipted copy of the document transmittal form in the file.

5.1.2.4.5.2  (08-15-2008)
Form 795 Loss Report

  1. Report a lost remittance package (i.e., the loss of personally identifiable information (PII)) immediately to:

    1. your manager,

    2. the Computer Security Incident Response Center (CSIRC) at 1–866–216–4809, and

    3. the Treasury Inspector General for Tax Administration (TIGTA) hotline.

    See IRM 5.1.2.2.6.1, Personally Identifiable Information, for information about how to contact the TIGTA hotline.

  2. Describe the contents of the remittance package in the report:

    1. Number of sealed envelopes (containing Form 795 /795A, remittances (i.e., checks, money orders, cashier's checks, or cash), and secured returns).

    2. Form 3210, if applicable.

    3. Overnight mail transmittal, if applicable.

5.1.2.4.6  (08-15-2008)
Responding to Form 5919

  1. Submission Processing will send Form 5919, Teller's Error Advice electronically to your manager when a remittance processor receives one of the following:

    • Form 795/795A, Daily Report of Collection Activity with an error(s) or submitted late.

    • Late remittance.

    • Late return.

    • Form 809 with an error(s) or submitted late.

      Note:

      Refer to IRM 3.8.45.30.9, Form 5919, Teller's Error Advice Issuance Criteria, for further information. Also see IRM 3.8.45–98, Form 5919 Teller’s Error Advice Issuance Criteria (How to Handle Errors).

  2. For the procedures specific to Form 5919 involving Form 809, See IRM 5.1.2.7.6.

5.1.2.4.6.1  (08-15-2008)
Processing Form 5919

  1. The manager will forward an electronic copy of the Form 5919to the originating employee for corrective action.

  2. Take corrective action upon receipt of Form 5919 from your manager.

    1. Prepare a supplemental Form 795/795A, Daily Report of Collection Activity, as the transmittal to return the Form 5919 to the Submission Processing Field Office Payment Processing Unit.

    2. Include copy of Form 5919 with Form 795/795A.

    3. Annotate "Response to Form 5919" on Form 795/795A to identify Form 5919 as the basis for submitting a supplemental Form 795/795A.

    4. Send the correction, together with copy of Form 5919, to the remittance processor via the supplemental Form 795/795A, generally within 15 workdays of issuance.

5.1.2.5  (08-15-2008)
Payment Documents and Posting Procedures

  1. Use suitable posting documents containing all of the information needed for deposit and input into the Integrated Submission Remittance System (ICS) whenever possible. Acceptable payment documents include, but are not limited to the following:

    • Form 3244, Payment Posting Voucher.

    • Form 809, Receipt for Payment of Taxes.

    • Turnaround notices (MF and IDRS notices to taxpayer).

    • Form 1040-ES, Estimated Tax for Individuals.

    • Correspondence.

    Note:

    Some documents may be brought up to acceptable standards by adding information and coding and editing.

  2. To be acceptable for input, the posting document must identify the originator and contain:

    • Taxpayer name, last known address (including zip code), and Taxpayer Identification Number (TIN).

    • MFT and period.

    • Payment received date.

    • Payment amount(s) and transaction codes(s).

      Reminder:

      Do not use pen and ink changes on ICS or macro generated payment processing vouchers. Pen and ink changes are never acceptable.

  3. For the payment received date, use the date the payment is actually received by the IRS. However, if some other designated official/agency initially receives the remittance, e.g., the U.S. Attorney in foreclosure actions, use the date of receipt by that agency and enter a brief statement in the remarks section of the posting document to explain why the earlier date was used.

  4. Prepare Form 3244 to process a payment if:

    1. Form 809 receipt is either not required or can not be used as a posting voucher, or

    2. Other suitable posting document is not available.

  5. Prepare payment documents (other than receipts) in original only.

  6. Prepare Form 3244 (or other posting document) carefully and correctly to avoid posting delays. Only one debit transaction and two credit transactions are allowed per posting voucher. Additionally the dollar amounts must be in balance to the credit side.

    Note:

    Submission Processing identified problem areas including the lack of designated payment codes, lack of employee numbers to identify the preparer, incorrect name controls, and incorrect TINS. The procedures for completion of the Form 3244 are in IRM 3.8.45–9.

  7. Pay close attention to the amount of money collected and ensure the posting voucher reflects the actual amount of money collected.

    Example:

    If a balance of $1,200 is due on a notice, and the taxpayer remits $600, ensure the amount collected is accurately reflected as $600. If using a pre-printed payment posting voucher, write in the actual amount collected.

  8. Payments remitted with a posting voucher for the wrong taxpayer or incorrect money amount will be issued Form 5919 Teller's Error Advice.

5.1.2.5.1  (08-15-2008)
Transaction Codes

  1. A transaction code is a three digit numeric code used to identify a transaction being processed and to maintain a history of actions posted to a taxpayer's account on the Master File.

  2. Use Transaction Code (TC) 670 when preparing a payment posting document for:

    1. All assessed amounts, all accrued failure to pay (FTP) penalty, and accrued interest, except in those instances described in (3) below.

    2. All federal tax deposits (FTDs) secured by an employee in an area office. These FTDs are not routed through the FTD system and are, therefore, treated as subsequent payments.

    3. All BMF estimated payments (ES) for the Form 1120 series of returns.

    4. Payment of lien fees. If the lien fees have not yet been assessed, use TC 360 simultaneously with TC 670.

    5. Payment received resulting from service center actions e.g., a substitute for return (SFR) or an additional tax assessment.

  3. Use the appropriate transaction code in the following special cases:

    TRANSACTION CODES
    Special Cases
    Case Type of Payment Transaction Code Additional Transaction Code
    1 IMF module — payment designated as an estimated payment (ES) TC 430  
    2 IMF or BMF module — with a restricted interest indicator (TC 340 or TC 341) TC 680 — to post the amount of accrued interest  
    3 IMF or BMF module — with a restricted FTP penalty indicator (TC 270 or TC 271) TC 670 — to post the remittance amount TC 270 — to post the amount of accrued penalty
    4 IMF, BMF, or civil penalty module — payment of sale and/or administrative costs TC 694

    Note:

    Use TC 360 to post the amount of the collection costs simultaneously with TC 694 if the collection costs have not yet been assessed.

    		TC 670 — to post any funds received in excess of the collection costs
    5 IMF, BMF, or civil penalty module — pre-assessed payment secured as an advanced payment of a deficiency TC 640 (Advance Payment of Determined Deficiency or Underreporter Proposal)
    Take the following action to create a module to post the pre-assessed payment to a civil penalty module:

    • Establish a name line .

    • See IRM 4.4.11.7, Civil Penalty Name Lines.

    		 
    6 IMF, BMF, or civil penalty module — payment designated for application to interest or penalty TC 680 — to post the amount of designated interest TC 690 — to post the amount of designated penalty other than the FTP penalty
    7 IMF, BMF, and civil penalty module — payment secured on a 6020(b) return which is not yet processed TC 640 — to post the remittance amount  
    8 IMF, BMF, or civil penalty module — payment received:

    • prior to Bal Due issuance

    • before the posting of TC 671 (Subsequent Payment Check Dishonored) (i.e., a pending TC 671 is reflected on IDRS)

    		TC 670 TC 570 ("Additional Liability Pending " )

    Note:

    Take the following action to ensure that the credit will not be refunded as an overpayment:

    • Request input of TC 570 as the secondary TC.
    9 BMF or NMF module — payment designated as an estimated payment (ES) for :

    • Estate Taxes — Form 706

    • Gift Taxes — Form 709

    		 TC 660  
    10 NMF module — payment of interest or penalty TC 680 — to post the amount of FTP TC 270 — for any unassessed amounts of FTP penalty included in the payment
    11 NMF module — payment of accrued interest TC 670 — to post the remittance amount TC 340 — for the amount of accrued interest
    12 NMF module — payment of accrued FTP penalty TC 670 — to post the remittance amount TC 270 — for the amount of accrued FTP penalty
    13 NMF module — full payment TC 670 — to post the remittance amount or other applicable TC per above
    Take the following action in addition to posting the payment:

    • request input of command code STAUP 12,

    • use a separate input document from the one used to input the transaction codes.

    Note:

    Use TC 670 to apply the excess to the earliest period if the NMF payment exceeds the total of assessed tax, interest, and penalty for all periods.

    		Other TC, if applicable, per above

5.1.2.5.2  (08-15-2008)
Unassigned Account or Module

  1. When accepting a tax payment for an account or module that is not on ICS, either:

    1. Create an ICS only account or module and post the payment through ICS, or

    2. Use the Form 3244macro process.

  2. If the "Taxpayer Name," "Name Control, " and "TIN" are pre-populated on the Form 3244(due to having the case open on ICS), select the CLEAR button. This will remove the pre-populated taxpayer data and allow manual entry of the correct taxpayer information on the Form 3244prior to printing the form.

    Note:

    If a payment is received from an unidentified taxpayer, include the payment on Form 795A on the day of receipt. Note the payment is "UNIDENTIFIED." The payment will be researched as well as processed at the destination SP center.

5.1.2.5.3  (08-15-2008)
Manual Federal Tax Lien Release

  1. There are certain conditions when a manual lien release is necessary after a liability is fully satisfied. Refer to paragraph (5) in IRM 5.12.3.2.1, Liability is Satisfied for these conditions.

  2. To request a timely manual lien release, contact the Centralized Lien Unit (CLU). The CLU contacts are posted on the IRWeb at: http://serp.enterprise.irs.gov/databases/who-where.dr/als.dr/case-processing-lien-units.htm.

    Note:

    An internal use only telephone number is provided along with the contact information on the CLU web site. Do not give this number to a taxpayer. Ensure all E-mail communications regarding liens are sent via secure E-mail.

    .

  3. Request the contact to prepare and process the manual lien release after you have posted the payment. See IRM 5.1.2.5.3.1 for specific posting procedures.

    Note:

    Employees of functions with access to the Automated Lien System (ALS) will input lien release requests in the situations described in IRM 5.12.3.2.1.

5.1.2.5.3.1  (08-15-2008)
Manual Lien Release Consideration - Timely Posting of Payments

  1. Payments must be posted timely in order to ensure lien releases are systemically issued in a timely manner. You must post the remittances on the day received.

  2. Determine if the payment is sufficient to cover the tax liability of the tax period specified on the payment. See IRM 5.1.2.8, Designated Payments, for procedures to follow if the payment is designated.

  3. Ensure interest and penalty calculations are computed as of the day of posting. This is particularly important for split payments.

    1. Provide the exact amount to post to each module on the posting document.

    2. Ensure that full payment also includes all appropriate accruals of penalty and interest since the date of any restricted assessments if there is restricted penalty or interest.

  4. Perform additional research and resolve any outstanding issues on the account, including determining if there are any freeze codes that will delay credit posting.

  5. Determine whether the taxpayer has outstanding balances in other tax periods.

  6. If a payment was received based on a levy, and all balances due (Bal Due) on the levy are fully paid, see IRM 5.11.2.2, Releasing Levies, to determine appropriate action.

  7. Apply available credits to satisfy the outstanding balances in other tax periods in the following order:

    1. Oldest tax

    2. Penalty

    3. Interest

    Note:

    This order of payment application is based on Rev. Proc. 2002-26, which provides the Service's position regarding payment application by the Service of a partial payment of tax, penalty, and interest for one or more taxable periods.

  8. Do not apply a payment to an assessment for which the collection statute expiration date (CSED) has expired i.e., when IDRS includes a Bal Due(s) with an expired CSED, unless permission is provided in the IRM. See IRM 5.16.1.2.2.1, Imminent Statute Expiration. Also see IRM 5.16.1.2.2.5, Report of Statute Expiration, regarding reporting accounts uncollectible when CSEDs expire.

  9. Check for multiple assessments and CSEDs:

    1. Determine if a situation exists where a lien needs to be released because the assessment for which the lien was filed is fully paid even if there is still a Bal Due on the tax period based on later assessment(s).

    2. Ensure penalty and interest based on the assessment on the lien is fully paid prior to requesting releases in these situations.

  10. Refer to paragraph (5) in IRM 5.12.3.2.1 for conditions requiring a manual lien release. See IRM 5.1.2.5.3 above for additional information.

5.1.2.5.4  (08-15-2008)
Inactive Account

  1. An inactive account is an account that is currently not collectible (CNC) or is a not on the Master File (NMF). Follow these procedures to process a payment on an inactive account.

    1. Forward any payment received for an account previously reported currently not collectible (CNC) by TC 530 (i.e., "53'd" ) or NMF account for input on Form 795/795A, Daily Report of Collection Activity.

    2. Annotate the posting document as shown in the table.

      Type Annotate Posting Document
      • CNC

      1. Payment pertains to a "53'd" module

      2. "53'd account"

      3. "Not on IDRS" if a "53'd" account is not on IDRS

      • NMF Not on IDRS

5.1.2.5.5  (08-15-2008)
Application of Proceeds in Certain Situations

  1. There are certain situations where you may receive funds that are not directly from a taxpayer or another source. In addition, certain types of accounts may require special payment application or types of processing. These situations include:

    • Levies, and

    • Offer in Compromise.

5.1.2.5.5.1  (08-15-2008)
Application of Proceeds from a Levy

  1. If the funds were the result of a levy and the levy has now been satisfied, a levy release must be prepared and issued to the applicable third party. See IRM 5.11.2.5, Serving Levies, Releasing Levies and Returning Property,Disposing of Surplus Proceeds.

  2. Also see IRM 5.10.6.1, Post Sale Actions and Responsibilities of Technical Support, Application of Proceeds of Levy and IRM 5.10.7.2, Acquired Property and Property Redeemed by the United States, Income from Acquired Property .

5.1.2.5.5.2  (08-15-2008)
Processing Offer in Compromise Receipts

  1. Funds submitted with an offer to compromise a liability or during the pendency of an offer to compromise are considered a non-refundable payment of tax, and are applied to the liability until a decision is made. The taxpayer may designate the payment(s) be applied to a specific tax period or liability during the consideration of the OIC; however, the request must be in writing.

  2. Collection Field function (CFf) (RO) employees should never process payments related to an offer. Ship all offers, secured by a CFf (RO) employee to the appropriate COIC site within 24 hours of receipt, which should include the Form 656, Form 657and all appropriate payments (Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) and application fee). See IRM 5.8.2.2 (3), Initial Offer Receipts for further direction.

5.1.2.6  (08-15-2008)
Forms of Remittances

  1. Certain forms of remittances require special handling. These include payments in the form of:

    • Large Dollar Remittances

    • Cash Payments

    • Payments by Check

5.1.2.6.1  (08-15-2008)
Large Dollar Remittances

  1. A large-dollar remittance requires special handling to ensure the earliest deposit to the Treasury so the government will enjoy the maximum availability of funds and earn interest at the earliest opportunity. A large-dollar remittance is:

    • a single remittance or aggregate remittances of $100,000 or more

    • a single remittance of $1 million or more

  2. Write LARGE on the envelope when preparing Form 795/795A including a remittance or remittances of $100,000 or more, (i.e., whether a single remittance or multiple remittances).

  3. Locate the large-dollar remittances mail stop on the Submission Processing Center Field Office Payment Processing web page http://hqnotes1.hq.irs.gov/SubmissionProcessing/SPWebPage.nsf/319d028917d59aa38525684b004cf7ba/72abd89f115b81338525734e005a4f67?OpenDocument. The large-dollar remittances mail stops are listed in the " Designated Addresses for Field Office Collected Remittances Only" column.

    Note:

    Some offices do not have a large-dollar remittances mail stop.

  4. Send the envelope containing a remittance(s) of $100,000 or more to the large-dollar remittances mail stop, if applicable.

5.1.2.6.1.1  (08-15-2008)
Remittance Over $1M

  1. The following additional actions are required upon receipt of a single remittance of $1 million or more.

    1. Locate the designated remittance liaison on the Submission Processing Center Field Office Payment Processing web page http://hqnotes1.hq.irs.gov/SubmissionProcessing/SPWebPage.nsf/319d028917d59aa38525684b004cf7ba/72abd89f115b81338525734e005a4f67?OpenDocument. Obtain the liaison's telephone number or E-mail address provided in the "Phone" column.

    2. Alert the liaison that you will be sending a single remittance of $1 million or more. E-mail or call the designated liaison upon receipt of a single remittance of $1 million or more. Contact the acting designated liaison (or their manager) if the designated liaison is unavailable when you call.

5.1.2.6.2  (08-15-2008)
Cash Payments

  1. Ensure that the money you accept is not counterfeit. Be aware of the techniques for detecting counterfeit money. For further information, obtain literature from the Secret Service field office or online.

    Note:

    Management can request the Secret Service field office to provide a lecture to a group of employees who receive cash payments, however, management must not request the Secret Service to instruct personnel on an individual basis.

  2. Issue Form 809, Receipt for Payment of Taxes, in every instance when cash is received. See IRM 5.1.2.7.5, Issuing Form 809.

  3. Convert a cash payment:

    1. to a check/bank draft or money order within 24 hours of receipt from the taxpayer before sending for processing.

    2. by the close of the business day on which it was collected, or as soon as possible on the next business day, to minimize the risk of loss and to ensure employee safety.

  4. Make the check/bank draft or money order payable to United States Treasury.

  5. Identify the bank draft or money order on Part 3 of Form 809 and record the following in the block provided:

    1. the name of the issuing financial institution or money order vendor,

    2. the serial number, and

    3. the date of conversion.

  6. Annotate Part 1 of Form 809, if applicable, that the payment relates to a Form 2209,Courtesy Investigation . See IRM 5.1.8, Courtesy Investigations.

  7. Prepare a posting document to apply the payment to the Bal Due and/or return.

  8. Follow the procedures for preparing a currency transaction report. See IRM 5.1.2.6.2.1.

5.1.2.6.2.1  (08-15-2008)
Currency Transaction Report (CTR)

  1. The Currency Transaction Report (CTR) came into existence with the passage of the Currency and Foreign Transactions Reporting Act, better known as the Bank Secrecy Act (BSA), in 1970.

  2. FinCEN Form 104, Currency Transaction Report, is required to be filed for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the financial institution which involves a transaction in currency of more than $10,000. However, the Treasury Regulations provide an exemption for filing a CTR: Treasury Regulation [31 CFR 103.22(d)(2)(ii)] provides, in pertinent part that:

    "No bank is required to file a report ... with respect to any transaction in currency between an exempt person and such bank" and " an exempt person is" ... "a department or agency of the United States."

  3. Point out the Treasury Regulation exemption if a financial institution asks you to complete a CTR when you need to convert more than $10,000.

    Note:

    Furnish your credentials to the financial institution upon request. (The procedures apply even if you use a pseudonym.)

  4. Complete a CTR when the financial institution insists that one be completed for a cash transaction of more than $10,000 if there is no other readily available depository.

    1. Use the consolidated EIN when you complete a CTR.

    2. See LEM 5.1.2.1, Consolidated IRS EIN for Currency Transaction Reports (CTR)s.

  5. Alternative cash payment arrangements may be made by Collection managers by following these steps:

    1. Contact the financial institution operations manager to request a blanket exemption for all revenue officers if a financial institution will not allow the exemption.

      Note:

      A revenue officer would have to present his/her commission to verify his/her identity to the financial institution if such a blanket exception was arranged.

    2. Make alternate cash conversion arrangements with another financial institution if the financial institution still does not allow the exemption.

      Note:

      Inform the revenue officers once the arrangement has been arranged.

    3. Determine whether to pursue the matter with the headquarters of the financial institution which refused to allow the exemption.

    4. Take any further appropriate action to attempt to make an arrangement with the financial institution.

5.1.2.6.2.2  (08-15-2008)
Property Appraisal and Liquidation Specialist Cash Procedures

  1. These additional procedures apply to Property Appraisal and Liquidation Specialist (PALS) employees.

    1. Use counterfeit detection pens on currency at the time it is received, when possible.

    2. Use a Standard Form 215-A (SF 215–A), Deposit Ticket . See IRM 5.10.5.17, Cash Conversion, for further information.

    3. Use the above cash deposit procedures when cash is received at a sale.

      Exception:

      Circumstances may prevent the use of SF 215–A, such as a sale held in a small rural community and access to a Treasury General Account Bank is not readily available.

  2. When access to a Treasury General Account Bank is not readily available, make arrangements to convert the cash at a local bank, in accordance with Treasury Regulation 31 CFR 103.22(d)(2)(ii). See IRM 5.10.4.14, Arrangements to Convert or Deposit Cash .

5.1.2.6.3  (08-15-2008)
Check or Money Order Payments

  1. Instruct taxpayers to make a check or money order payable to: United States Treasury.

  2. Accept a check or money order made payable to any of the following "acceptable" forms of payee (or some other form of payee clearly intended to conform to any of the following):

    • US Treasury

    • U.S. Treasury

    • Department of Treasury

    • Dept. of Treasury

    • Department of the Treasury

    • Dept. of the Treasury

    • Internal Revenue Service

  3. Prepare posting documents to apply the correct portion of the payment to each Bal Due and/or return if one payment is received for several Bal Dues and/or returns.

5.1.2.6.3.1  (08-15-2008)
Overstamping or Endorsing

  1. Accept a check or money order made payable to an "unacceptable " payee (i.e., other than to one of the payees listed in (2) above) or if the payee line is left blank and overstamp the payee with the words United States Treasury.

    Note:

    Local offices should procure a United States Treasury stamp if they do not already have one. The letters should be in a font that will produce a very legible stamp impression (e.g., 16-pitch Arial font). See IRM Exhibit 3.8.45–3, Overstamping Guidelines and Acceptable Payments.

5.1.2.6.3.1.1  (08-15-2008)
Payee is a Collection Employee

  1. If a check is made payable to a Collection employee, endorse the check or money order as follows:

    1. Write Pay to the order of the United States Treasury in the space provided for endorsement on the back of the check.

    2. Write your signature below the endorsement.

    3. Write Signature of Collection Employee below your signature.

5.1.2.6.3.1.2  (08-15-2008)
Payee is the Taxpayer (Levy Payment Payable to the Taxpayer)

  1. Treat a levy check made payable to the taxpayer as a seized check.

  2. Endorse the check as follows:

    1. Type or stamp this endorsement on the back of the check: This check (money order) and the proceeds thereof have been seized under authority of Title 26, United States Code, Section 6331, for application on the unpaid tax liability of (name of the taxpayer), and is herewith deposited to the credit of the Treasurer of the United States, (name of the area director), Area Director of Internal Revenue Service (Area Number).

      Note:

      Place the endorsement within the 1.5-inch area beginning at the leading edge of the check.

    2. Write your signature below the endorsement.

    3. Write Signature of Collection employee below your signature.

  3. For further information on seized checks see IRM 5.10.3.11.1, Checks and Money Orders.

5.1.2.6.3.1.3  (08-15-2008)
Restrictive Endorsement

  1. Accept a payment that is endorsed by the payee in such a manner that it is immediately negotiable.

  2. Restrictively endorse the check or money order immediately below the last endorsement by writing or stamping For Deposit Only - United States Treasury.

    Note:

    Local offices should procure a For Deposit Only - United States Treasury stamp if they do not already have one. The letters should be in a font that will produce a very legible stamp impression (e.g., 16-pitch Arial font).

5.1.2.6.3.2  (08-15-2008)
Property Appraisal and Liquidation Specialist Check Procedures

  1. A Property Appraisal and Liquidation Specialist (PALS) employee should endorse the check or money by writing or stamping For Credit to U.S. Treasury/ALC 20–09–2900–4 on the back of the check.

  2. Send this type of remittance to the Ogden Submission Processing Center.


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