20) Taxpayer filed Form 8379 in any manner. For Federal tax debts, The IRS will issue a CP 49 notice advising the taxpayer to which account the overpayment was applied. You must complete Form 8379 Allocation Worksheet and attach the Form 8379 Allocation Worksheet to the CIS case. To refer the taxpayers to TAS, use Form 911, or Form e-911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), if AMS is not available. A request for an OBR must be worked immediately upon receipt. See IRM 21.4.6.4.2.1, TOP Offset Bypass Indicator (BPI), for more information. NEVER input TC 767 with the OTN for any reason other than to correct a reject on the TC 766 reject listing. To reverse TOP offsets for mixed entity cases: Research to determine which taxpayer's refund was offset. 5) Taxpayer says Form 8379 was filed with his/her original return and no refund was received. Input the Form 5792, Request for IDRS Generated Refund (IGR), manual refund on CC RFUNDR with BPI 0. Do not change your control base for (B) debts which are both tax and TOP. A true scrambled SSN case occurs when the Social Security Administration assigns the same SSN to more than one taxpayer. The notice of offset informs the taxpayer that his/her Federal tax refund was offset for a debt owed to an agency(s). 11-2016 (MeF) and Rev. Bypass TOP offset for all primary TIN debts. Reverse a TOP offset to the Office of Child Support Enforcement that occurred after October 17, 2005 due to an automatic stay for bankruptcy. However, a debt may exist at Bureau of the Fiscal Service, see IRM 21.4.6.5.8.3, Processing of Form 8379 Injured Spouse Allocation, for instructions. Because all four requirements in paragraph (1) above are met move the $100.00 credit that results from the partial abatement back to the wife's 2012 account to prevent the credit from refunding from the 2011 MFJ account. Master File reversed $550, TC 766, and the agency refunded $450, TC 899 type 2, leaving only $586 for Bureau of the Fiscal Service to return. Do not send a letter to the taxpayer. An indicator of "N" means no debt. The use of the shortcut methods is optional, see paragraphs (4), (5) and (6) below. Any notices received by IRS from an agency must be returned to that agency. Allocate any recovery rebate credit received for any children to the spouse who was allocated the qualifying child's exemption on Form 8379, Injured Spouse Allocation. Hiring someone to help with your tax return? Adjust the account per income documents. Community Property Worksheets are located within the Accounts Management (AM) tab. When the overpayment consists of Premium Tax Credit (PTC) only or other various audit combinations (i.e. Any amount remaining more than debt owed is credited as requested. DO NOT transfer the call if the taxpayer is simply asking about the status of their claim. Per Document 12990, Records and Information Management Record Control Schedules, we are maintaining all paper and electronic records accordingly. The order in which they are input does not matter. Compare the Injured Spouse's refund allocation with the TC 898 on the module and reverse only the net amount needed for the injured spouse's refund. When the original Form 1040, U.S. You must take all transactions; posted or unposted, into consideration. A subsequent transaction with CRNs 808/809 is not needed to issue the refund in both names. If the above timeframes have passed, and the case has not been worked, is assigned to a CSR, and you have access to CIS, leave a Case Note for the CSR working the case. Consider all unpostable conditions before reversing TOP offsets. Contact the TOP Liaison or EEFax the request . When the overpayment has not offset and there is an IRS obligation, follow the IF/AND/THEN Chart below: The following is a list of conditions when the remaining overpayment will not offset if the secondary taxpayer owes a Federal tax debt. If you need to reverse a TC 898/TC 896 that is over six years contact the TOP Liaison , for a manual reversal. If EITC is not shown on the joint return, do not figure EITC on the allocation. if your input is on 6/3/XXXX, adding two days will move your Cutoff for Release of Transactions date to 6/10/XXXX. See IRM 21.4.6.5.8.9, Form 8379, No Consideration Procedures. For people who receive a paycheck and are subject to withholding, the credit was typically handled by their employers through automated withholding changes made in early spring. If the tax module shows a Project Code of 0173, 0263, 0390, 0584, 0603 or 0611, these QRP cases are under the control of CI SDC and notice has been sent to the taxpayer. Because on their phone line it states if you received a treasury offset letter it takes 3 weeks to process to your account. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward it to TAS. See IRM 21.4.6.4.2.9, TC 766 With OTN TOP Offset Reversal, and IRM 21.4.6.5.12.1, Input of TOP Offset Reversals Reference Number (RN) 766 with OTN, for more information. A refund offset to an outstanding IMF, BMF, or NMF tax debt is referred to as a tax offset. Before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. (09) Valid Request Bureau of the Fiscal Service considers the TC 766 request as valid but for a lesser amount. When this occurs, you cannot do a TC 766 to reverse the offset systemically. Refer to IRM 5.1.12.11, Child Support Obligation, which provides additional information, including the NMF assessment and collection processes. (Y) Offer in Compromise (OIC): - Follow instructions in IRM 21.5.6.4.50, -Y Freeze, and contact OIC to determine if the injured spouse's portion of the refund can be issued manually. OBR requests should generally not be referred to the Taxpayer Advocate Service. If there is no Form 8379 on file, the injured spouse must file Form 8379, to request their share of the EIP which offset. The injured spouse's refund could be equal to or less than the amount that offset to the debt. There are no separate property items in the allocation, including EITC. Bureau of the Fiscal Service will not provide the taxpayer with the amount of debt submitted to TOP by the creditor agency. If the Form 8379 has exemptions listed, follow normal procedures. Taxpayers may file an Injured Spouse Allocation by attaching a Form 8379, Injured Spouse Allocation, to their tax return and noting Injured Spouse in the upper left corner of the Form 1040 series. If the Form 8379 is not attached to the joint Form 1040 or Form 1040X, but is instead filed separately (after offset), and is received after the time allowed, See IRM 21.4.6.5.8.10, Time Period for Submitting Form 8379. If no other action is required and you are closing the case with a Letter 3179C or 285C, input a TC 290 .00, SC 7, RC 086. Only allow the TC 766 posting to generate the TC 846 when the injured spouse refund will be issued in both names. Audience: The primary users of the IRM are all IRS employees in Business Operating Divisions (BODs) who are in contact with taxpayers by telephone, correspondence, or in person. If the Form 8379, Injured Spouse Allocation, is filed with the original return and the account is in zero or debit balance with no math error, do not consider the Form 8379. Taxpayers who file their tax return late will be subject to a late file penalty of 4.5 percent of the tax required to be shown on the return for each month or fraction of a month the return is late. If there is a return attached to Form 8379 and research indicates that there is no TC 150 on the account, see IRM 21.6.7.4.2.5, TC 150 Not Located Duplicate or Amended Return Obtained, to process the return. If the amount of the taxpayer's overpayment exceeds the total of the Federal tax liability and the TOP debt, a manual refund may be issued with a BPI (3) for the amount by which the refund exceeds both debts. Taxpayers may allocate SRP on Form 8379, Injured Spouse Allocation, however they choose. There will not be a corresponding TC 700 with this type of reversal. See IRM 25.23.4.9.1.4, Moving Specific Year Account Information. Bureau of the Fiscal Service Late filed (i.e., return not received by the original or extended due date). Refer to IRM 3.17.79.3.3, Issuing Hardship Refunds. A surviving spouse is entitled to file a Form 8379 and receive a refund on behalf of the deceased injured spouse even though the surviving spouse owes the obligation. Include a blank Form 8379 with instructions. A request was previously submitted. BPI (5) indicates that TOP should bypass all debts for the primary TIN and all debts except child support for the secondary spouse. $1,586.00 (TC 846) $450.00 (TC 899 type 2) $550.00 (TC 76X) = $586.00. Do not transfer if the letter is a Bureau of the Fiscal Service letter. Please see IRM 21.4.1.4.1.2, Return Found/Not Processed, for the timeframe. You must take into consideration all TOP transaction codes with the same OTNs to determine the TOP offset amount available to be reversed. The SD documentation must include all the following: Taxpayer must confirm that they would like the funds to remain on the LLC account. If there are no IRS debts, which must be by-passed and the address on ENMOD is not different than the address on the Form 8379, refer to paragraph (1) above to input the adjustment for the injured spouses portion of the overpayment. The notice details are as follows: Address and phone number of the agency(s), Bureau of the Fiscal Service offset trace number (this is not the same as the offset trace number posted with TC 898), Phone number of the TOP Call Center at Bureau of the Fiscal Service. The only debt owed is a Federal tax debt owed by the other spouse. Close your case using Document Type-Internal Transcript, IDRS Cat Code IRRQ, Program Code 40000. In these instances, the refund will be sent as a paper check. 1) Taxpayer indicates Form 8379, Injured Spouse Allocation, was filed, Initiate procedures to verify offset and receipt of Form 8379. The rules for applying state community property laws for injured spouse allocations differ from non-community because the state law determines whether the couple is subject to community or non-community property laws. 11-2016), input a TC 290 for .00 with RN 811, RC 086, SC 7 and the dollar amount of the allocated refund. exemptions and/or dependents not allocated correctly when first filed). Withholding credit is less than reported on the joint return, is greater than tolerance, and the income has been reported on the joint return. TPT Forms. If preliminary research does not indicate an agency refund, follow Scrambled SSN Procedures in IRM 21.6.2.4.3, Scrambled SSN Case Procedures. Generally, credit interest is allowed from the availability date of the overpayment to the refund schedule date (less the applicable back-off period). The purpose of the Agency/Sub Agency code is for internal use only. The Transaction Code (TC) 899 is generated by input from Bureau of the Fiscal Service (BFS) and the participating agencies to report an action taken on an offset. This example shows a TOP offset to the primary spouse's debt for $1000. Review Injured Spouse Allocation Worksheet Instruction on SERP to ensure proper input of the items required on the worksheets. If the taxpayer claimed the TETR refund on their original return but did not allocate the credit on Form 8379 allocate the TETR refund 50/50, one-half for each spouse, split any interest 50/50. See IRM 21.4.6.5.12.3, TC 766 Reject Listing, for information on denied TOP reversal requests. If the account requires the reversal of three or more TC 898s, you must issue a manual., See IRM 21.4.6.5.10.6 (2) e), Issuing the Injured Spouse Refund. To prevent an erroneous refund on an OBR, allow posting of the manual refund to release a freeze instead of manually inputting an action on IDRS to release the freeze. In all instances related to injured spouse if you are unable to determine the actual received date of the return use the TRDBV date. The IRS has no discretion to determine whether an offset to a past-due child support or other Federal agency non-tax debt under the Treasury Offset Program should occur. If the account requires the reversal of four or more TC 898s, and the refund will be issued in both names input all the required TOP offset reversals (TC 766) using HC 3 with the appropriate blocking series, SC 7, RC 086 and PC 8. BPI (1) indicates that any refund should bypass offsets to debts owed by the primary spouse and may offset to any debts owed by the secondary spouse. Refer to Document 6209, Section 5 - Debtor Master File (DMF), for agency listing. Request the original return from Files, if it was not received with Form 8379 and the TC 150 is blocked 92. Compute the injured spouse share of the joint overpayment by subtracting the injured spouse's share of the joint tax liability, as well as any previous refunds or offsets to other IRS obligations, from the injured spouse's contribution toward the joint liability. A letter is not needed for Community Property allocations when joint credits are involved. 7) Taxpayer is aware of offset made, but claims the remainder of the refund not received. 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. Often, the spouse is aware that an offset will take place and wants to know how to get his/her share of the refund. If you do not have access to CIS, refer to 21.3.5.4.1, When to prepare a referral. We are recalculating the EIP and, if applicable, refunding the recalculated EIP. A TC 766 Reject Listing is created weekly. If only one taxpayer owes a Federal tax debt and the remaining overpayment will full pay the debt(s). This application of a tax overpayment is called a refund offset. See criteria listed in IRM 13.1.7.2, TAS Case Criteria, follow procedures outlined in IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines. A reversal of a TOP offset can be done to: Correct IRS initiated procedural or pipeline processing errors such as math errors, data input errors, or misapplied payments. A TC 898 with document code 45, TOP offset of manual refund, re-sequences for 10 cycles, if TC 840 with the same DLN is not posted. If Insolvency does not provide a specific name and number for the injured spouse to contact include the Philadelphia CIO telephone number 800-973-0424 in the Letter 3179C. The state where same-sex couple resided during the tax year listed on Form 8379" is. Compute normal interest on manual refunds resulting from offset reversals. BPI 8 generates on the first refund, TC 846, issued after the reversal of a TOP offset to a primary TIN's debt. For tax years 2009 and 2010, the Making Work Pay Credit provides a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns. A TOP offset appears on Command Code (CC) TXMOD as a Transaction Code (TC) 898 with an Offset Trace Number (OTN), the offset amount is shown as OFFST-AMT. Refer to IRM 21.4.4.5, Preparation of Manual Refund Form. Form 8379, Injured Spouse Allocation, should not be considered: If a Form 8379 is filed for any filing status except Married Filing Joint. Offsets will only occur on child support obligations. For all shortcut methods, if the Recovery Rebate Credit (RRC) is claimed and the injured spouse is entitled to half of the RRC. Paper file with direct deposit. We allocated the repayment for you, giving each spouse one half of the excess APTC repayment. After 10 cycles it unpost as Unpostable Code (UPC) 137 or UPC 437, RC 1. If the Premium Tax Credit (PTC) is claimed and the PTC is split 50/50 you do not need to complete the Injured Spouse Allocation Worksheet. Refer to IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals, to determine the amount of offset available for reversal prior to processing a full account back out to put the account into debit balance. The TOP Liaison will confirm the manual reversal process is warranted and provide the Manual Reversal Request to be completed. See IRM 21.3.5.4.1, When to Prepare a Referral, for instructions. Follow up with the TOP Liaison if you have not received a response after 5 business days. See IRM 21.4.6.5.12.2, Manual Reversal of TOP Offset, for additional instructions. The IRS also has information on this issue at IRS.gov/newsroom and IRS.gov/refunds. For the X-REF, input the TIN of the person whose name is on the refund. Advise the taxpayer to resubmit a signed Form 8379. Bypass TOP offset for primary Taxpayer Identification Number (TIN) debts. Do not reverse any TC 898(s) on the "to" account unless other conditions allow for it. The priority of offsets within Treasury Offset Program are: Office of Child Support Enforcement Notice is sent as an attachment to paper refund. Send the letter to the address on the Form 8379. In the case of partial abatements, all TC 706 credits transferred from the same person. As of March 18, 2021, the 2020 RRC amount will no longer be applied to past due federal income tax debts. Follow instructions in IRM 21.5.6.4.9.1 E- Freeze Procedures for Unresolved TPP Issues. Inform the taxpayer we have added a note to their case and allow 30 days to process. If you cannot determine if the offset is child support and if it can be reversed, you may contact the TOP Liaison at . Forward to the Non-Master File unit. The husband files an income tax return for 2012 that claims a $300.00 overpayment. Refund offsets have also been halted in many jurisdictions. 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