Research any cross-reference TINs along with CC IMFOL, CC BMFOL, CC TXMOD, MFT 29 and MFT 31, etc. To determine if there is an outstanding Federal tax debt, you must also research Command Code (CC) IMFOL, CC BMFOL, and/or CC TXMOD as well as CC INOLES even on "N" indicator cases. 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). Notice is sent as an attachment to paper refund. 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. Take necessary action if refund was not received and follow refund trace procedures. A letter is not needed for Community Property allocations when joint credits are involved. Annotate in Box 20, Remarks, Approved by Insolvency (or Technical, if applicable). The number is 1-800-304-3107. The refund generated from this reversal has a BPI of 1. But a tax refund offset reversal can take up to six months for a . ", RC 087 - "we have corrected a math or processing error on your return. It may be necessary to coordinate the release of freeze conditions and subsequent adjustments with another IRS function. When this occurs, you cannot do a TC 766 to reverse the offset systemically. See IRM 21.4.6.5.5, Hardship Refund Request, and IRM 21.4.6.5.11.1, Offset Bypass Refund (OBR). The TC 766 is a credit to the taxpayer's account and posts with an actual money amount. Refer taxpayer to TOP Call Center, they may provide a more helpful contact. Type 1 - Bureau of the Fiscal Service TOP offset reversal. 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. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines. . When working an injured spouse allocation for 2009 and 2010, each spouse is entitled to his/her share of the credit. 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. Advise the taxpayer to allow 30 days to process. The Agency and Sub Agency codes will also be shown on the taxpayers account. To determine the appropriate campus, use the 8th and 9th position of the RSN. If the taxpayer's Form 8379, Injured Spouse Allocation, can be processed with a faxed copy of Form 8379 request a copy and work the case. After preparing this form, per the instructions on the form, return it to the liaison and the procedures will be initiated. Estimated delivery time (date filed - receipt of tax refund) E-file with direct deposit. Effective January 1, 2014, IRC 5000A, Requirement to maintain minimum essential coverage, requires individuals to: have an exemption from the responsibility to maintain minimum essential coverage, or. There are no separate property items in the allocation. When the Standard Deduction is taken along with Charitable contributions allocate the Charitable contributions as entered on the Form 8379. 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. If calls are received or you have correspondence regarding an account with a TC 898 with an Agency ID of XX and an Agency Site ID DF or PF. Refer to IRM 21.5.4.5.7, Math Error with Injured Spouse. Annotate the taxpayer's account as follows: 14) Taxpayer says Form 8379 was filed after offset and no refund was received. In addition to the Making Work Pay Credit, certain government retirees also will be eligible for a credit beginning in 2009 in an amount equal to $250 ($500 in the case of a joint return where both spouses are eligible individuals). Reverse a TOP offset to the Office of Child Support Enforcement (Agency Code 2), over 5 months old (150 days) from the refund payment date unless for an injured spouse allocation. A request was previously submitted. The status of a debt at Bureau of the Fiscal Service may change daily and the debt indicator on CC INOLE is updated weekly. If an unpostable condition exists, the unpostable condition must be resolved and considered when netting the amount of the TOP offset reversal. Shared Responsibility Payment (SRP) see IRM 4.19.13.10.7 Shared Responsibility Payment (SRP). Offsets due to delinquent child support occurring during processing years 2012-2015 will be identified by the posting of Transaction Code (TC) 971 Action Code (AC) 126. If a TC 898 appears on the account after the manual reversal request (MRR) has been submitted. 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. 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. Bureau of the Fiscal Service Advise the taxpayer to allow up to 8 weeks from the time they re-file the Form 8379. For TOP offsets, BFS issues the Notification of Offset that provides the creditor agency contact information. The taxpayers divorce. Employees staffing Application 35 will not transfer calls to lower level account applications and must address all account issues in addition to the Injured Spouse inquiries listed below. A TC 899 Type 1 may not appear on the account. For overpayments becoming available prior to offer acceptance date (TC 780), in which the offset has not taken place, a taxpayer under certain hardship conditions may seek an Offset Bypass Refund. Form 8379 posted to the incorrect TIN, and the original Form 1040 is behind the Form 8379. Include taxpayer contact information and any details that the taxpayer gives which may help resolve the case. For community property states, you should follow the community property laws for each state. Due date of return (determined without regard to any extension of time for filing). The Recovery Rebate Credit was eligible to be paid as rounds of advance payments during 2020 and 2021. Use a TC 570 on the credit side of the ADC 24 to hold the credit. Congressional inquiries about an injured spouse claim for a specific taxpayer are referred to the appropriate Local Taxpayer Advocate Office (LTA) for control and assignment. The TC 898 Document Locator Number (DLN) is the same as the prior TC 840 from which it originated. If the case is assigned to a CSR and you do not have access to CIS, issue 4442/e4442 to the CSR. If using the IAT IS Results Allocation Worksheet and the base tax after non-refundable credits is zero, allocate the entire non-refundable credit to the injured spouse, regardless of who is claiming the credit or dependents on Form 8379. Reverse TOP offsets for the full amount available, prior to taking any further action on the account. Forms such as Form 1099-INT, reported under both names should be allocated to the spouse as entered on Form 8379. Use BPI 3 unless the Injured Spouse owes Child Support. Compare dates and DLNs and correct the tax period on CC UPRES, if necessary. It generates on systemic refunds issued from modules with a combat zone C Freeze in effect. Refund eligible for TOP offset to the Office of Child Support Enforcement and an automatic bankruptcy stay is in effect or when the creditor agency has obtained relief from the automatic stay. Advise the taxpayer to submit Form 8379 with signature, attach all Forms W-2, W-2G, or 1099 showing federal income tax withholding and send it to campus where the original return was filed. 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. 1. When inputting a TC 766, you can only input an adjustment to withholding or EITC. This allows for the Bypass Indicator (BPI) to be input and assigns ownership of the refund to the injured spouse for TOP offset purposes. For prior revisions of Form 8379, always issue the Injured Spouse's portion of the refund in "one name only" even if the one name only box on line 11 is not checked. Include taxpayer contact information and any details that the taxpayer gives that may help resolve the case. The following validity checks are made for BPI's on CC RFUND. The received date of the Form 8379 is used for the transaction date of the TC971 AC071. Refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339, for agency address and phone number. For other types of Congressional inquiries, refer to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines. We are responsible for correcting the taxpayer's account to reflect the correct information. IRM 21.4.6.5.8.4, Review the Form 8379 for Completeness, for further guidance. You may see a TC 971 AC 599 on the account representing a manual input of the TC 899 erroneously deleted. See IRM 21.4.6.5.10.6, Issuing the Injured Spouse Refund. TOP offsets on condition 1 scrambled SSN cases are reversed only if the wrong taxpayers money offset to the debt. You will work the injured spouse case and issue a refund to the injured spouse for his/her share of the overpayment. BPI (4) indicates that TOP should bypass all debts except child support for both the primary and secondary TIN. As a result, there can be one or two TC 898(s) for each refund issued. If CC INOLET does not display a debt indicator, then the IAT Results IS screen displays the "N" . This allows for manual verification of Combat Zone Status. Any refund under $25 is not offset by TOP. Research and consider the following transactions on the module before inputting any adjustment for a TOP offset on a taxpayer's account: If a TC 899 Type 2 (agency refund) is on the account, see IRM 21.4.5.6.1, Account Actions for Category D Erroneous Refunds. Any remaining overpayment will release to any outstanding debt. If an agency refund has occurred, see IRM 21.4.6.5.12.1, Input of TOP Offset Reversals Reference Number (RN) 766 with OTN. 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. If a hardship exists, refer to IRM 21.4.6.5.5, Hardship Refund Request. Input a Posting Delay Code for 1 cycle. Notate RRC 50/50 after the appropriate shortcut method used. Input a TC 290 for .00 with RN 808, RC 086, SC 7 and the dollar amount of the allocated refund. You will work the injured spouse case and issue a refund to the injured spouse for his/her share of the overpayment. Using the total reversal amount, the FROM date will be the posted TC 776 credit interest to date DB-CR-INT-TO-DT> found on TXMOD. This type of refund is called an Offset Bypass Refund (OBR). Purpose: This section covers processing related to Refund Offsets and Offset Reversals. ", RC 091 - "based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.". Update the entity, if necessary, and use CC ACTON to establish a "dummy account" . The Treasury Offset Program (TOP) collects past-due (delinquent) debts (for example, child support payments) that people owe to state and federal agencies. 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. The only purpose of this indicator is to provide necessary information for use in IRS automated telephone responses. The non-debtor spouse may submit Form 8379, Injured Spouse Allocation, to request the return of his/her share of the joint overpayment. Therefore, discrepancies may arise from one cycle to the next and IRS may not be aware of a TOP debt. A manual refund is required on a current tax year return with CCC "9" (spouse is deceased) and the second name line is not present. Tax offsets appear on a tax module as: Transaction Code (TC) 820, manual credit transfer, TC 896, computer-generated tax offset from IMF to BMF, Individual Retirement Account File (IRAF) or Shared Responsibility Payment (MFT 35) without an Agency/Sub-Agency (AG/SA) Code. The taxpayer must have specified that the payment is a cash bond. (03) Invalid Reversal Amount Amount is not equal to the TOP offset amount. Agency inquiries must be answered by the IRS campus or territory office receiving the correspondence. Indicate taxpayer's phone number and whether taxpayer can provide a copy of Form 8379. Refund offsets have also been halted in many jurisdictions. For returns previously closed by, Philadelphia, send 4442/e4442 to Memphis. Under IRC 6402 (a), the Service has discretion whether to offset an overpayment against a liability, but only when it is with respect to an internal revenue tax. Follow the chart below to determine how much each spouse is entitled to. If there is no TC 150 in the correct tax period: Reprocess the return to the correct tax module. Taxpayers may allocate SRP on Form 8379, Injured Spouse Allocation, however they choose. If the injured spouse is not entitled to any overpayment from tax year 20XX, the allocation should not be considered. See IRM 21.4.6.5.12.1, Input of TOP Offset Reversals TC 766 with OTN. If an active combat zone case involves a Federal tax debt. This indicator is normally set to "0" . Form 3753 must be processed no later than the 43rd day. TOP offsets occur after the IRS has certified a refund to Bureau of the Fiscal Service for payment (TC 840/TC 846 on account), but before Bureau of the Fiscal Service issues the refund. The purpose of the Agency/Sub Agency code is for internal use only. A TC 766 input for more than the net amount results in an UPC 189. A manual refund due to hardship with BPI 3 must not be used to bypass a TOP offset. Some freezes and the actions required to process the injured spouse allocation are: Invalid TIN entity freeze: Resolve problem with the TIN before processing the Form 8379. You do not need to complete the Injured Spouse Allocation Worksheet when one of the shortcut methods apply. Reverse a TOP offset to a creditor agency (other than the Office of Child Support Enforcement) that occurred after October 17, 2005 when the tax module contains an unreversed TC 520 with closing code 6067, 81, or 83-89. Use RC 087. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. Beginning in tax year 2018, Forms 1040A and 1040EZ will no longer be available. Refer taxpayer to agency on offset notice, or if unknown, to TOP Call Center above (agency must issue refund). Individual Income Tax Return, or Form 1040-X, Amended U.S. BPI 5 is required if a manual refund will be issued to an injured spouse who is secondary, from a module with a combat zone C Freeze. last updated 17 March 2021. . See SBSE-05-1021-0063, Interim Guidance on Refund Recoupments. If separate returns were originally filed and each person claimed part of the credit, each person should recapture 6 2/3 percent on their separate returns. This causes an UPC 134 RC 03. 9) Taxpayer says Form 8379 was filed with his/her original return and no refund was received. However, in some instances the recovery did not work. Because on their phone line it states if you received a treasury offset letter it takes 3 weeks to process to your account. Use the appropriate HC. If one of the shortcuts methods was used, send the taxpayer an explanation of how the refund was allocated. Page Last Reviewed or Updated: 07-Sep-2022, Request for Taxpayer Identification Number (TIN) and Certification, Employers engaged in a trade or business who pay compensation, Electronic Federal Tax Payment System (EFTPS), Related Resources, Taxpayer Bill of Rights (TBOR) and Civil Rights, TC 899, Reversal or Agency Refund of TOP Offset, TOP Offsets Involving ID Theft and ID Theft with Fraudulent Returns, Processing of Form 8379 Injured Spouse Allocation, Incomplete Form 8379 Signed or Filed with Original Return, Form 8379 Unsigned and Filed Without Original Return, Form 8379 Attached to Joint Form 1040/Form 1040-X, Form 8379 Not Attached to Joint Form 1040/Form 1040-X, Allocation of Earned Income Tax Credit (EITC), Input of TOP Offset Reversals Reference Number (RN) 766 with OTN, Input of Tax Offset Reversals, TC 821/TC 822, CP 29 E Freeze Injured Spouse Allocations, Injured Spouse Allocations/Telephone Excise Tax Refund (TETR), Injured Spouse Allocation/Stimulus Payment for 2008, Injured Spouse Allocation/Recovery Rebate Credit (RRC) for 2008, Making Work Pay and Government Retiree Credits - Schedule M, Excess Advance Premium Tax Credit Repayment, Erroneous Offset Overpayments to Limited Liability Companies (LLC), 2019 Pseudo TOP Debts TC 898 with Agency ID XX, Non-Filer Returns for Economic Impact Payments (EIPs), Injured Spouse Allocation/Recovery Rebate Credit (RRC), Unemployment Compensation Exclusion due to American Rescue Plan Act (ARPA) of 2021, https://www.irs.gov/about-irs/your-civil-rights-are-protected, Document 6209, Section 8 - Master File Codes, Treasury Inspector General for Tax Administration. 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