A manual refund is needed if the taxpayer owes a debt to an agency other than Child Support. exemptions and/or dependents not allocated correctly when first filed). IRS sent Letter 916C Claim Incomplete for Processing; No Consideration. Subtract from the TC 898 all TC 766(s) with the same OTN. For all of the Community Property Shortcut methods listed below, all conditions must be met before the shortcut can be used. Prepare Form 4442/e-4442 to forward case to the appropriate local Directorates AM Paper Function. Only the agency to which the debt is owed can honor a hardship request for a TOP offset. This section discusses procedures for refund offsets. The following Transaction Codes (TC) are used solely for TOP offsets: TC 898 (TOP offset record generated by Bureau of the Fiscal Service), TC 971 AC 598 (manual input of TOP offset record which is used when the TC 898 record, generated by Bureau of the Fiscal Service, is deleted in error), TC 766 with Offset Trace Number (OTN) (IRS reversal of TOP offset). California, for example, suspended refunds until July 2021. UPC 342, RC 06, occurs when a TC 766 with OTN is greater than the net TOP offset amount. You do not need to complete the Injured Spouse Allocation Worksheet when one of the shortcut methods apply. Refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339, for agency address and phone number. Any remaining overpayment will release to any outstanding debt. See IRM 21.4.6.5.11.1(11) below for conditions that will allow an OBR. The presence of a -Y freeze on one or more of the balance due accounts (unreversed TC 480 pending offer in compromise with no TC 780 in collection status 71) does not preclude an OBR even if some of the overpayment would otherwise be applied to this module. TC 899, type 1, with negative money amount, is used by Bureau of the Fiscal Service to report a TOP offset reversal. Advise the taxpayer to allow 30 days to process. Do not reverse any TC 898(s) on the "to" account unless other conditions allow for it. Your Form 8379 was submitted beyond the period when we will consider allocating a joint refund that was already paid or offset. If you receive a Form 8379 for both the regular refund on 2018 or 2019 and EIP, work the non-EIP portion on the 2018 or 2019 account and work the EIP portion on the 2020 account. Emergency refunds are those based on hardship where the taxpayer needs the refund in less than 5 days. Once the stimulus payment offsets to pay a Federal tax debt or TOP debt, it loses its identity as a stimulus payment. When a Form 8379, Injured Spouse Allocation, filed with the original return, is received in Accounts Management, it must be worked within the 45-day interest free period. See SERP, Who/Where, Offer-in-Compromise (OIC) Compliance Campus Locations, for more information. If the taxpayer claimed the PTC on their original return but did not allocate the credit on Form 8379, allocate one-half the PTC for each spouse (50/50). Room 556 C In limited circumstances involving a clerical error by the IRS or TAS that prevented processing of the OBR request, the IRS may reverse an offset that has already occurred and issue the taxpayer a refund. Suggested response: Our records show the Excess Advance Premium Tax Credit Repayment (APTC) was not allocated on Form 8379. See IF/AND/THEN Chart in paragraph (5) below. The debtor TIN (primary or secondary) will be shown as XREF-TIN. June 2021 Tax News Temporary Suspension of Offset Program until July 31, 2021 FTB has temporarily suspended the collection activities of the Interagency Intercept Collection (IIC) Program in keeping with the Governor's March 12, 2020, Executive Order. If credit interest was allowed on the offset, the credit interest must also be reversed with TC 772. Refer to IRM 5.1.12.11, Child Support Obligation, which provides additional information, including the NMF assessment and collection processes. How to stop a student loan tax garnishment. If the taxpayer claimed the TETR refund on their 2006 original return and allocated the TETR refund on Form 8379, Injured Spouse Allocation, follow the instructions on Line 11, of Form 8379. If all the offset is needed, reverse the entire amount. Pre-paid credits are considered paid as of the due date of the return determined without regard to extensions. The time limit for reversing an offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2) does not apply when processing Injured Spouse Allocation cases. A UPC 134, RC 03, is an IMF unpostable that occurs when an account containing a full or partially unreversed TC 898 (net offset amount greater than zero) attempts to merge with another account, and the 23C date of the TC 898 is within six years of the current date. A TC 899 Type 1 may not appear on the account. The IRS corrected the programming and issued Letter 3064C to advise the taxpayer that they have the option of leaving the transferred funds on the LLC tax period(s) and not having it transferred back to the individual income tax account(s) or transferring the funds back to the individual account(s). 18) Taxpayer says Form 8379, Injured Spouse Allocation was filed with or without original return. Research the CIS archived case files if necessary. See IRM 21.4.6.5.7, Reasons to Reverse TOP Offset. The husband files an income tax return for 2012 that claims a $300.00 overpayment. Resolve Combat Zone cases, see IRM 21.4.6.5.16, Combat Zone Cases. Include the taxpayer contact information and any details the taxpayer provides which may help resolve the case. The BPI 3 should be used on Form 5792 and Form 3753, when the taxpayer has both tax and TOP debts to be paid before a refund is issued. You can tell the taxpayer: The IRS no longer maintains child support or other TOP debts. 11-2016 (Mef) and Rev. (V) Bankruptcy Freeze: Contact Insolvency to determine if the injured spouses portion of the refund may be issued manually and whether a BPI 3 is necessary due to the bankruptcy. See IRM 21.4.6.4.2.1, TOP Offset Bypass Indicator (BPI). See IRM 21.4.6.4.2.4, Child Support TOP Offset, for a general overview of the new child support rule. The DLN of the TC 846 and the TC 898 will match the DLN of the original return. ", RC 087 - "we have corrected a math or processing error on your return. If you are not trained to work Injured Spouse Allocations and the case is assigned to a CSR or Clerical Unit and you have access to CIS, leave a Case Note for the CSR working the case and issue a 4442/e4442 to the CSR. These shortcuts are applicable to Nevada, New Mexico and Washington tax and TOP debt, all conditions must be met before the shortcut can be used. The following validity checks are made for BPI's on CC RFUND. If calls are received regarding an account with a TC 898 with an Agency ID of XX and an Agency Site ID DF or PF, take the following actions: DO NOT provide the currently posted or a recalculated amount. Only allow the TC 766 posting to generate the TC 846 when the injured spouse refund will be issued in both names. If the income data wages/withholding is not verifiable, submit an E4442 to RICS/IVO requesting a determination of the return. Additional research is needed if the secondary TIN is invalid. See IRM 21.4.6.5.15, Bankruptcy Cases Involving Tax Offset, for instructions. The additional PTC is reported on: Taxpayers may allocate the Premium Tax Credit any way they choose. Unpostable conditions must be resolved before inputting any TOP offset reversal. Follow normal IRM procedures to work the case. Do not transfer the call when a Form 4442/e4442 is required. The debt may be activated, inactivated or deleted within TOP before a refund is issued. (1) This transmits revised IRM 21.4.6, Refund Inquiries, Refund Offsets procedures. If the OBR is rejected, the OBR initiator must input on CC REQ77, TC 972, AC 036, to reverse TC 971, Input a history item on IDRS, "REJECT/OBR.". Use CC INOLE for cross- reference Taxpayer Identification Number (TIN) OBL checks. All TOP reversals must be input to the TIN from which the offset occurred, so that the correct debtors account can be updated with the agency. See IRM 21.4.6.5.12.3, TC 766 Reject Listing, for information on denied TOP reversal requests. Input TC 470 CC 90 and/or CC STAUP as necessary. If a Form 8379, Injured Spouse Allocation, is attached, input a TC 971, AC 071. TC 899 type 4 is netted against a prior TC 899, type 2, with same OTN, which is the true amount of the agency refund remaining. 11-2016) "Issue in both names" box on line 11 is checked. When the taxpayer disagrees, or does not understand the injured spouse allocation by the IRS: If you work injured spouse allocations, verify the Form 8379, Allocation Worksheet. A hardship request to expedite the injured spouse's portion of an overpayment, resulting from Form 8379, Injured Spouse Allocation, filed with an unprocessed original return, may be honored prior to the return posting and a TOP offset. RC 1 results from an attempt to post a TC 898 with document code 45 when it does not find a TC 840 with the same DLN after 10 cycles. See IRM 21.4.6.5.12.2, Manual Reversal of TOP Offset. Form 8379, Injured Spouse Allocation, should not be considered: If a Form 8379 is filed for any filing status except Married Filing Joint. If there is no tax and the taxpayer did not allocate the payments, the form is incomplete. The amount of any refund that will be issued which may be subject to offset for TOP debts he/she owes. We are responsible for correcting the taxpayer's account to reflect the correct information. If the taxpayer responds to a previous Letter 105C, Claim Disallowed, or Letter 106C, Claim Partially Disallowed, research CIS for an explanation of the previous denial and explain the reason for the denial to the taxpayer. Recover a refund issued because of a totally false return; (e.g., returns detected by the Questionable Refund Program, Criminal Investigation, Integrity & Verification Operation etc.). The following example illustrates a returned refund, TC 841, that posted for an amount less than the original refund that was offset. Two additional weeks should be added to cases that will require two TC 766s with OTN transactions. If a TC 898 posted with an invalid OTN and a TC 766 was input to reverse the invalid OTN. Insolvency will then complete and EEFax the form to the TOP Liaison Office . See IRM 21.4.6.5.10.5, Injured Spouse Refund - Tax Offset. Arizona, Idaho, Nevada, and Wisconsin recognized same-sex marriages starting in late 2014. Analyze each inquiry carefully to determine the correct course of action. The manual refund must also have a BPI applicable to the injured spouse to show ownership of the refund for TOP offset eligibility. EEFax the request to the TOP Liaison unless an e-mail address is provided by the Liaison. Additionally, normal injured spouse allocation rules apply if CTC is claimed on the 2021 return. Do not split the qualifying dependents between the spouses. The late return received date, the date of the overpayment (as determined in the preceding table), or the return processable date. Program Controls: Goals, measures and operating guidelines are listed in the yearly Program Letter. When RRC is involved and the overpayment for 2020 or 2021 is split between the injured spouse and other spouse and either spouse has a tax debt, you must issue manual refunds to both spouses. See paragraph (10) above. If the Form 1040 or Form 1040-X was not timely per IRC 6511(a) and a 105C, Claim Disallowed, letter was previously sent, send a 916C, Claim Incomplete for Processing; No Consideration, letter and advise the taxpayer that we cannot consider Form 8379, Injured Spouse Allocation, since the return was not timely filed. If the address on ENMOD is different than the address on the Form 8379 contact the taxpayer either by phone or correspondence to verify their address. BPI 5 and BPI 6 will generate on systemic refunds issued from modules with a combat zone C Freeze in effect. Legislative & Public Affairs Office If research indicates the correct taxpayer was offset, do not reverse the offset. If the injured spouse allocation cannot be allowed, do not send another disallowance letter. Individual Income Tax Return, was received. Refer taxpayer to agency that notified him/her of the debt, or if unknown, refer taxpayer to TOP Call Center at 800-304-3107, TDD 800-8778339. Consider the period of limitations for both Federal tax offset and TOP offset. Employees of the Taxpayer Advocate Service follow procedures in IRM 13.1, Taxpayer Advocate Case Procedures, unless referred to this section for specific instructions. Notate NCP SC 2 on CIS cases. Your TC 898 OTN may or may not match the posted 766 OTN. A TOP offset reduces the amount of the IRS refund by the amount of the TC 898 or TC 971 AC 598. If you cannot determine if the offset is child support and if it can be reversed, you may contact the TOP Liaison at . Contact the TOP Liaison at , if needed. Refer taxpayer to agency on notice. If a Letter 105C, Claim Disallowed was previously sent because the return was not timely filed, advise the taxpayer that we cannot consider Form 8379, Injured Spouse Allocation. If there are two or more offsets with different dates, consider each one separately when determining the six-year period for reversal. You will work the injured spouse case and issue a refund to the injured spouse for his/her share of the overpayment. Quality data and guidelines for measurement are referenced in IRM 21.10.1, Quality Assurance - Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, TEGE, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support. 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