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The sum is the amount of the TOP offset reversal to be input as a TC 766. 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. On all Forms 8379 (Rev. The late return received date, the date of the overpayment (as determined in the preceding table), or the return processable date. Additionally, normal injured spouse allocation rules apply if CTC is claimed on the 2021 return. Verify the Form 8379 has been processed in BS 920929. For all other programs, resolve the credit as appropriate for your case (e.g. Form 8379, Injured Spouse Allocation can be worked whether the Combat indicator is "1" or "2" . See IRM 25.15.5.2 Community Property States. If the taxpayers filing status is other than MFJ and filed a zero or $1 return, there is a credit on the account release the credit. 1. Use block series 9 and the appropriate BPI. See IRM 21.4.6.5.8.7, Incomplete Form 8379 Signed or Filed with Original Return for instructions and suspend the case for 40 days. If the research shows no Federal Outstanding Balance Liabilities (OBLs) or an agency refund, continue processing the Manual Refund according to normal procedures as outlined in IRM 21.4.4, Manual Refunds Also see IRM 21.4.4.5 Preparation of Manual Refund Forms. For more information on FTHBC, refer to, 9) Taxpayer's overpayment is being held by CI pending review of his/her tax return, There is a -Z or Z- Freeze on the account Questionable Refund Program (QRP). Please allow up to 180 days for the manual reversal to post. For such military personnel, Federal income tax refunds will not be offset to any Federal tax debt or TOP debt. BPI 5 and BPI 6 will generate on systemic refunds issued from modules with a combat zone C Freeze in effect. The original refund for $1,586, TC 846 dated 03/06/2009, was offset for $1,000, TC 898. When working Form 8379, Injured Spouse Allocation, ALWAYS reverse the Injured Spouse's share of the refund, if the Injured Spouse is not responsible for any part of the debt which offset. Satisfy a balance due that resulted from an amended return received after the due date on the module where the offset occurred. The IAT tool is designed to research CC INOLET when the invalid indicator is present. CC RFUND has a field entitled "BYPASS INDICATOR" . See paragraph (4) below. Satisfy a balance due on a tax return that posted after the return which created the offset; this includes multiple year filings where an overpaid return(s) posts before a balance due return(s). Therefore, this unpostable transaction must NEVER be deleted. exemptions and/or dependents not allocated correctly when first filed). DO NOT transfer the call if the taxpayer is simply asking about the status of their claim. . Injured Spouse Claim Eligible businesses can claim up to 70% back on up to $10,000 in wages paid to employees, or a maximum amount of $7,000 per employee for each quarter of the calendar year. You do not need to complete the Injured Spouse Allocation Worksheet when one of the shortcut methods apply. See IRM 21.4.6.5.10, Allocation of Injured Spouse Form 8379. Research CIS for an explanation of the no consideration and explain the reason for the no consideration to the taxpayer. When the injured spouse has none of the income or refundable credits, none of the overpayment is the injured spouse's. The Bureau of the Fiscal Service generates a notice on the day they process the payment. TC 150 is blocked 92 and Taxpayer Protection Program (TPP), issues have been resolved on the account and tax or TOP offset has not occurred. Form 3753 must be processed no later than the 43rd day. After deducting prior tax offsets and refunds, subtract from the remaining amount: Any injured spouse Treasury Offset Program offset, TC 898 (TOP offset) or TC 971 AC 598 (manual input of TOP offset). If an offset has occurred to a separate tax liability for which the injured spouse is not responsible, compare the injured spouse's allocation to the amount of offset. If a TC 898 appears on the account after the manual reversal request (MRR) has been submitted. Employees may be able to take up to an additional 40 hours as discussed in FAQ 4. Because the Service recognizes marriages that are validly entered under state law, couples in same-sex marriages must be treated the same as couples in opposite-sex marriages for federal tax purposes, including procedures for processing Form 8379. Determine if the injured spouse's share of the 2007 ESP was reversed in Cycle 200852 or the 2007 ESP was not received (return not filed or not eligible for some or all the ESP). The manual reversal request cannot be cancelled once initiated. TOP source and reason codes may not be used in combination with any other IMF source and reason codes. Form 8379 received with an electronically filed return: When the TC 150 posts, A CP 36D notice systemically generates through the Correspondence Imaging System (CIS) to AM; however, there is no image of the electronically filed return. Learn how you can keep yourself protected. Refer to IRM 21.4.1.2 (6) , Refund Research Overview, for information pertaining to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) Section 201. The timeframe for filing Form 8379 for Federal Tax Debts or TOP Debts is the same as the timeframe for filing the claim for refund (generally 3 years from the date the return was filed or 2 years from the date that the tax was paid, whichever is later, but there are numerous exceptions see IRC 6511 . Do not attempt to re-input the adjustment. TDD at 866-297 . For Form 8379, Injured Spouse Allocation, input RN 808/RN 810 or RN 809/RN 811 with a PDC for 2 cycles or issue a manual refund if applicable. See SBSE-05-1021-0063, Interim Guidance on Refund Recoupments. Calculate each spouse's share at a rate of 6.2 percent up to $400.00 for each spouse. You may not be provided with any tracking number as refund checks are sent via U.S. mail. If credit interest was allowed on the offset, the credit interest must also be reversed with TC 772. For each spouses allocation, you must manually transfer any overpayment amount above their allocated portion of the RRC to any tax debt(s) owed in earliest CSED order. Beginning in tax year 2018, Forms 1040A and 1040EZ will no longer be available. If the interest payment was not offset with TC 898, then the FROM date for the additional interest (TC 770) is the 23C date of the accrued interest (TC 776) that accompanied the interest payment.Example: Finishing with the example from 2) above, if the interest payment of $47.49 had not been offset with TC 898, meaning the TC 766 amount is $4,200, then the FROM date to calculate additional interest for the TC 766 of $4,200 is the 23C date of the accrued interest of $0.66 (August 31, 2020). Use the same column in the EITC table as used to determine the EITC on the original joint return. All manual refunds from IMF accounts require the input of the appropriate BPI, except as noted in paragraph (5) above. Transfer the credit to a liability of the injured spouse and/or issue a manual refund to prevent the credit from offsetting back to the same debt. There is an IRS obligation on the primary taxpayer's account, The injured spouse is the secondary taxpayer. See IRM 21.4.6.4.2.1, TOP Offset Bypass Indicator (BPI). See IRM 21.4.6.4.2.1, TOP Offset Bypass Indicator (BPI). UPC 342, RC 07, occurs when a TC 767 with OTN is greater than the net TC 76X with same OTN. A TC 766 Reject Listing is created weekly. Your TC 898 OTN may or may not match the posted 766 OTN. See IRM 21.6.6.2.20.2, Processing Decedent Account Refunds. If CP 21B, Data Processing Adjustment Notice, Overpayment of $1 or more, is not generated or Priority Refund Transcript criteria is not met, the back-off period is 18 calendar days. Prohibited credits include TC 670, 640, 700, etc. The debtor TIN (primary or secondary) will be shown as XREF-TIN. You can tell the taxpayer: The IRS no longer maintains child support or other TOP debts. If applicable, refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339 for offset information. 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. If the answer is yes, the taxpayer qualifies for injured spouse relief. Contact Insolvency at the Centralized Insolvency Operation (CIO) to determine if the Injured Spouse's refund can be issued. If, later, they file an amended return and a credit or overpayment is generated from the amended return, he/she could, at that time, file a new Form 8379, Injured Spouse Allocation. EITC, ACTC, and /or Adoption Credit) and a TC 811 is not present, do not consider the Form 8379 allocation. Refer to IRM 3.17.79.10.7, Incorrect Cancellation Amounts, for correcting UPC 138. See IRM 21.4.6.5.10.6, Issuing the Injured Spouse Refund. The 17 week timeframe includes the 9 week processing timeframe for a corrected TPP Unpostable 126-0. Check for TOP offset to a debt of the spouse. All Application 20 and Application 186 employees will answer procedural and Injured Spouse/Refund Offset inquiries for which they have been trained. IRM 3.12.179.54 (3), UPC 159 RC 0-1, Estimated Penalty/Duplicate Assessments/Abatements. If the taxpayer does not provide the missing information within 40 days, see IRM 21.4.6.5.8.9, Form 8379, No Consideration Procedures, for instructions. Under Internal Revenue Code IRC 6402(a), the IRS may apply a taxpayers overpayment to an outstanding federal tax debt. On all Forms 8379, issue the Injured Spouse's portion of the refund in "one name only" unless the revised Form 8379 (Rev. Verify the allocated items with Form(s) W-2 and/or CC IRPTR, IMFOL, RTVUE, TRDBV or Return Request Display. The priorities for offset are: Federal Tax, Primary Taxpayer Identification Number (TIN). Refer to IRM 21.5.1, General Adjustments, for tolerance considerations. The debt indicator on CC INOLE is updated daily. ", RC 091 - "based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.". 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. The term marriage also does not include a marriage entered under foreign law unless that marriage would be recognized in a state, possession, or territory of the United States. If there is no Form 8379 on file, the injured spouse must file Form 8379, to request their share of the EIP which offset. When working a Form 8379 and the debt indicator on CC INOLE is "N" for both taxpayers, do not release the overpayment with a TC 571. The following tables can assist you in resolving taxpayer inquiries related to TOP offsets, TC 898 (TOP offsets) or TC 971 AC 598 (manual input of TOP offset). In some instances, a TC 898 will unpost as UPC 151 RC 0 due to a name control mismatch when Bureau of the Fiscal Service returns the record to IRS. The taxable amount of Unemployment Compensation or Social Security Benefits shown on the joint return must be used when allocating the separate Adjusted Gross Income (AGI) for each spouse who received the benefit(s). Any amount remaining more than debt owed is credited as requested. When the I- freeze is unresolved, the Form 8379 cannot be processed. Determine if the refund that was offset posted to a different tax period. (03) Invalid Reversal Amount Amount is not equal to the TOP offset amount. If the Agency code is 1 or 2, the offset is for a delinquent child support debt and the 5 month limitation rule applies except for a Form 8379, Injured Spouse Allocation. is involved, refer to IRM 21.6.7.4.2.7.3 (1)(n), Incorrect Year Posted First. Close your case using Document Type-Internal Transcript, IDRS Cat Code IRRQ, Program Code 40000. 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. All refunds will be transferred back to the individual income tax year(s), unless the taxpayer responds in writing or verbally that they want the funds to remain on the LLC tax period(s). This type of refund is called an Offset Bypass Refund (OBR). If the injured spouse is not responsible for any part of the debt which offset, always reverse the injured spouse's share of the refund when working a Form 8379, Injured Spouse Allocation. (E - ) Unresolved TPP Issues. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. Your refund offset amount. The manual refund document must be received by Accounting no later than the Friday cut-off-time before the Assessment Document Date (23C Date, always a Monday) of the original return. 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. The debt indicators are: The (I) indicator is not always set for all Federal tax debts. See IRM 21.3.5.4.1, When to Prepare a Referral, for instructions. Invalid TINs (name control mismatch, etc.). If a refund was issued and Earned Income Tax Credit (EITC) is involved, refer to IRM 21.6.3.4.2.7, Earned Income Tax Credit (EITC). The IRS refund file transmitted to Bureau of the Fiscal Service contains both the primary and secondary Social Security Number (TIN) on a Filing Status 2 (FS2) joint refund. One adjustment will be for the original overpayment and the second adjustment will be for the ESP. If the jointly filed claim on Form 1040, U.S. If the case does not meet TAS criteria or the criteria above, prepare Form 4442/e4442, Inquiry Referral, and refer to the appropriate AM function where there is an open control. When working Injured Spouse Allocation Cases involving math errors with First-Time Homebuyer Credit, follow procedures in IRM 21.4.6.5.8.3(17)(c), Processing of Form 8379 Injured Spouse Allocation, and IRM 21.5.4.5.7, Math Error with Injured Spouse. There is an IRS obligation on the secondary taxpayer's account, The injured spouse is the primary taxpayer. Continue to adjust the account using normal Mixed Entity procedures as outlined in IRM 21.6.2.4.2., Mixed Entity Procedures. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. Form 8379, Injured Spouse Allocation, posts to wrong spouse's TIN (E- Freeze). Offsets due to delinquent child support prior to 2012 will not have any indicators identifying which agency the refund offset to. Subtract from the TC 898 all TC 766(s) with the same OTN. A review of their account shows a prior year tax liability of $500. UPC 168, RC 0, is an IMF unpostable code that occurs when TC 766 with OTN fails to find a previously posted TC 898 with the same OTN. Due date of return (determined without regard to any extension of time for filing). See, Continue computing the injured spouse's refund based on Tax offset instructions. Take the following actions: Research IDRS, if a deleted unpostable (DU) 898 or a TC 971 AC 598 is on the account, contact the TOP Liaison for the paperwork to begin the manual reversal process. Only the agency owed the debt can honor a hardship request to prevent a TOP offset or make a refund of the offset due to hardship circumstances. It must be input on all manual refunds resulting from an Injured Spouse Allocation form filed by the secondary taxpayer unless combat zone, BPI (5), applies. Hold until the -Q freeze is released with TC 572 by EXAM or IVO. See IRM 21.4.6.5.1, Taxpayer Inquiries on TOP Offset. A complaint form can be obtained at https://www.irs.gov/about-irs/your-civil-rights-are-protected. Prior to re-sequencing an account to a temporary number or different valid TIN, reverse any TC 898 on the "from" account if it is within 6 years from the date of original offset. Manual copying is not required in instances in which a correspondex letter would systemically be sent to both addresses. If separate returns were originally filed and now a joint return is filed reporting the recapture, the system should move the First-Time Home Buyer Credit entity from the secondary to the primary account and split the recapture based on the percentage. If the taxpayer is claiming the RRC on their 2008 return, you will need to look at the 2007 account. They file their 2020 tax return on April 15, 2021 showing a refund (overpayment). When issuing a manual refund, use the applicable BPI to assign ownership of the refund to the injured spouse. Bureau of the Fiscal Service will not provide the taxpayer with the amount of debt submitted to TOP by the creditor agency. 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. Use the appropriate HC. Both offsets must be subtracted from the original refund amount, TC 840/TC 846, to determine how much of the refund the taxpayers received. In community property states, all joint amounts are divided equally, with the exception of EITC. If the account requires the reversal of four or more TC 898s, and 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.