Do not input a TC 571 as it will create an UPC 168 RC 0. A manual refund is needed if a debt is owed to an agency other than Child Support. The Injured Spouse's share of the refund was processed as filed and the taxpayer is now requesting to change their allocation (e.g. 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. RNs 808/809 will generate the refund in both names. To locate . Injured spouses MFS tax Both spouses' MFS tax. This occurs when an input TC 766 reverses a TC 898 with a debtor TIN. Research to resolve the discrepancy (processing error, math errors, or other tax or TOP offset). The Agency Code, OTN, and offset amount will be identified in the TC 898, MISC field. CC RFUND has a field entitled "BYPASS INDICATOR" . A manual reversal is required. The Recovery Rebate Credit was eligible to be paid as rounds of advance payments during 2020 and 2021. Input a TC 290 .00 with a Hold Code 4 to hold the credit when sending a no consideration letter. 13) Taxpayer says Form 8379 was filed after offset and no refund was received. See IRM 21.4.6.5.12.2, Manual Reversal of TOP Offset. See paragraphs (9) and (10) below for additional details. Issue a manual refund using BPI 1 and BS 9. See IRM 21.6.6.2.20.2, Processing Decedent Account Refunds. A TC 898 may consist of two or more offsets to different agencies. The federal administrative offset fee will remain at $14.83 per offset. DO NOT transfer the call if the taxpayer is simply asking about the status of their claim. Primary Stakeholders: The primary stakeholders are Management Officials who rely on accurate data, reports and quality information to ensure there are no gaps in efficiencies. It generates on systemic refunds issued from modules with a combat zone C Freeze in effect. After 2018, the SRP is $0.. If the taxpayers live in a Community Property State see Note below. Offsets that occur during processing year 2016 and beyond will post with the Agency and Sub-Agency Code at the beginning of the Offset Trace Number (OTN). If a TC 899 is not reflected on the account, contact Bureau of the Fiscal Service to verify the transactions that transpired before any adjustment is made. 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. For any ID Theft case that cannot be reversed, refer to IRM 21.4.6.4.2.12. Prepare Manual Reversal Request supplied by the TOP Liaison. AM Process and Program Management produces a Utility 50 Run in October of each year to determine the volume and money amount of unresolved Form 8379, Injured Spouse Allocations. If you do not have the stamped received date use the TRDBV date. When a manual reversal request is submitted (identified as PNDMRR in the IDRS control base activity), you must wait for the TC 700 credit to post to the account when a TC 899 Type 3 is present, see IRM 21.4.6.4.2.10, TC 899, Reversal or Agency Refund of TOP Offset. The Bureau of Fiscal Services will send you a notice if there's a refund offset. The IAT Results IS screen may respond with a debt indicator "N" when an invalid TIN indicator follows the TIN. When transferring the taxpayer to Application 35, provide the taxpayer with a 4-digit transfer personal identification number (PIN). 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. Refer to IRM 21.4.4.5, Preparation of Manual Refund Form. The wife later files an income tax return for 2012 that claims a $500.00 overpayment. (Example: NCP SC1 RRC 50/50). Issue a letter to the taxpayer informing him/her that the allocation of Form 8379 will be computed after the examination is completed. If the Form 8379 has exemptions listed, follow normal procedures. If BFS cannot recover the offset, the TOP Liaison Office will contact the initiator of the reversal request within 4-6 weeks of input. Do not change the address on CC ENMOD. The American Recovery and Reinvestment Tax Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009 extended the first-time homebuyer credit and provided a waiver of the requirement to repay the credit, except when taxpayers dispose of the new residence within 36 months of purchase. 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. See IRM 21.4.6.5.10, Allocation of Injured Spouse Form 8379. Type 1 - Bureau of the Fiscal Service TOP offset reversal. When a manual reversal request is submitted (identified as PNDMRR in the IDRS control base activity), you must wait for the TC 700 credit to post to the account when a TC 899 Type 3 is present, see IRM 21.4.6.4.2.10, Reversal or Agency Refund of TOP Offset. Monitor the account until the completion of the Manual Reversal Request (the posting of the TC 700 credit). The systems are updated once every 24 hours. The creditor agency may have obtained relief from the automatic stay. If the taxpayer qualifies to use their 2007 earned income, you will determine the EITC allocation based on the 2007 income not the 2008 income. See IRM 21.4.6.5.9, Community Property Allocation. A TC 971 AC 037 is not required when the refund is being issued to a surviving spouse, an executor, or an appointed administrator of a decedent account. See IRM 21.6.7.4.1, Source and Reason Codes CP 21/CP 22A Notices, for conditions when a notice will/will not generate. EITC, ACTC, and /or Adoption Credit) and a TC 811 is not present, do not consider the Form 8379 allocation. Therefore, discrepancies may arise from one cycle to the next and IRS may not be aware of a TOP debt. Each payments DLN will contain a unique sequence number to identify the month for which the payment was issued. A tax offset reversal may be required if the taxpayer's response to the tax assessment results in either a full or partial abatement on a married filing joint (MFJ) account. Notate, on the CIS case notes, the shortcut method used. The calculation below provides the amount of interest related to the portion of the refund that was canceled. Also covered is the processing of Form 8379, Injured Spouse Allocation, and Offset Bypass Indicator (BPI), and processes for reversing offsets when Mixed Entity, Mixed Period, ID Theft, Hardship and Offset Bypass Refunds, and First-Time Homebuyer Credit Recapture is involved. Individual Income Tax Return. 18) Taxpayer says Form 8379, Injured Spouse Allocation was filed with or without original return. Once the condition creating the TC 766 reject is identified, use the IF/THEN chart above to resolve the TC 766 Reject. Application 35, an Injured Spouse Allocation (ISA) telephone application, enables CSRs who are fully trained in Injured Spouse Allocation processing to assist taxpayers. Injured Spouse cases originally worked and closed in Philadelphia, send the Form 4442 to Memphis Accounts Management. 1. Input a TC 570 to stop any erroneous refund from occurring prior to the posting of the adjustments. If all the offset is needed, reverse the entire amount. Notate on CIS that Insolvency did not give approval for a refund and that the injured spouse has been instructed to contact Insolvency. "O" code the return for processing to prevent an erroneous refund. If there is a TC 150 on the correct year, adjust and work the return/form for the correct tax period. Levy proceeds that result in offsets are not considered misapplied payments. Input a TC 971, AC 036, via CC REQ77, on the credit module to identify that an offset liability was bypassed prior to the TC 840 manual refund. Advise the taxpayer we are returning their Form 8379, because they did not respond to the authentication letter we previously sent. The DLN of the TC 846 and the TC 898 will match the DLN of the original return. 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). Review the form for the signature of the injured spouse, unless it was filed with an original signed return. Adjust the account per income documents. 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. Use line number 1 or 2 as appropriate. If the Form 8379 is attached to the joint Form 1040 or Form 1040X and the Form 1040 or Form 1040X is timely under IRC 6511, the Form 8379 is timely for any refund requested on Form 1040 or Form 1040X. On all Forms 8379, issue the Injured Spouse's portion of the refund in "one name only" unless the revised Form 8379 (Rev. The account may contain a credit balance due to the undeliverable or cancelled check TC 740/TC 841), see IRM 21.4.6.5.22, Returned Refund Check. 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. The Treasury Offset Program debt indicator (F) is set when Bureau of the Fiscal Service informs Internal Revenue Service (IRS) that at least one TOP debt exists and an offset may occur if a refund is authorized. TOP offsets are made against any refund issued from MFT 02, 03, 08, 07, 10, 13, 34, 43, 44, 46 (Doc Code 88 only) , 52, 60, 63, 64, 77, 78 and 79, unless a BPI is systemically generated on the refund or input on a manual refund. Research CC IMFOLF to determine if both spouses on the joint return are liable for the repayment of the recapture tax. See, Continue computing the injured spouse's refund based on Tax offset instructions. If a taxpayer believes they have been discriminated against on the basis of sex, race, color, national origin (including limited English proficiency), disability, reprisal, religion, or age, advise the taxpayer that he/she can forward an email to *EDI.Civil.Rights.Division@irs.gov, or send a written complaint to: Internal Revenue Service, Office of Equity, Diversity and Inclusion, CRU , 1111 Constitution, NW, Room 2413, Washington, DC 20224. The Bureau of the Fiscal Service issues a TOP offset notice when a taxpayer's refund is offset for child support, Federal non-tax debt, a state tax debt, or unemployment compensation debt. The OTN field is 10 characters that includes a hyphen (-), e.g. An error was made when calculating the EIP, and we are working to correct the impacted accounts. For telephone inquiries, see IRM 21.4.6.5.1 Taxpayer Inquiries on TOP Offsets. The state where same-sex couple resided during the tax year listed on Form 8379" is. However, these are not true TOP offsets. See IRM 20.2.4, Overpayment Interest. 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. Evidence may be either a copy of the unfiled tax return (including all forms and W-2s) or an IDRS print showing the amount of the overpayment available for refund. 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. TDD at 866-297 . He/she may contact the TOP Call Center at 800-304-3107, TDD 8008778339 to determine if a debt is owed and whether an offset will occur. We are recalculating the EIP and, if applicable, refunding the recalculated EIP. This prevents a TOP offset to any debts owed by the secondary filer. Verify the allocated items with Form(s) W-2 and/or CC IRPTR, IMFOL, RTVUE, TRDBV or Return Request Display. Handle each OBR on a case by-case basis. If you intend to honor a hardship and a tax debt exists, See IRM 21.4.6.5.11.1, Offset Bypass Refund (OBR), before taking any action. Whether a State recognized same-sex marriage during the tax year on the Form 8379 does not affect if a taxpayer is entitled to injured spouse relief. Contact the TOP Liaison at , if needed. A manual refund is needed if CCC "L" or "W" is present and ANY of the conditions listed in IRM 21.6.6.2.20.2(3) Processing Decedent Account Refunds are not met. The purpose of the Agency/Sub Agency code is for internal use only. Locate a refund on the other TIN that has the same dates and DLN and correct the TIN on CC UPRES, if necessary. Use HC 2 for Injured Spouse cases. See IRM 21.4.6.5.12, TOP Offset Reversals. Agency receiving the payment. The TO date will be the 23C Date (assessment date) of the adjustment releasing the overpayment minus 18 calendar days. Offsets due to delinquent child support prior to 2012 will not have any indicators identifying which agency the refund offset to. 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. 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). Command Code (CC) INOLE contains debt liability indicators based on information received from the Bureau of the Fiscal Service. Compute normal interest on manual refunds resulting from offset reversals. If a manual account transfer (TC 370/TC 400) is necessary, input the TOP offset reversal and transfer the credit to excess collections before moving the account. On manual refunds resulting from a TOP offset reversal, the "FROM" date is based on the refund that was offset. If an offset occurs after Form 3753 has been issued, a Transaction Code (TC) 898 will not post to the account. Insolvency will then complete and EEFax the form to the TOP Liaison Office . TC 150 is blocked 92, a TOP offset has or has not occurred, and Form 8379 was not worked and the case is closed. BPI 7 generates on all refunds when no other condition or manual input results in the use of another BPI and the creditor agency has obtained relief from the automatic bankruptcy stay. If part of the RRC payment was offset and part was refunded to the taxpayers, deduct the refunded amount from the credit amount to determine if the injured spouse is entitled to any additional refund. Reasons for this include refund checks that are undeliverable, returned, uncashed after 13 months, lost, or stolen and require re-issuance. If the answer is yes, the taxpayer qualifies for injured spouse relief. Taxpayers will not report SRP on returns for tax years 2019 and subsequent. Be sure to include BMF screens when there is a X-REF EIN. Review the return and determine if the taxpayer can get relief as an "Injured Spouse" and refer them to Form 8379, Instructions. IRS sent Letter 916C Claim Incomplete for Processing; No Consideration. If the taxpayer states they filed the Form 8379 in error or no longer wants the Form 8379, Injured Spouse Allocation, to be considered: Verify the request is from the injured spouse who filed the allocation. Unpostable conditions must be resolved before inputting any TOP offset reversal. 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. 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 21.4.6.4.2.11, Netting TOP Offsets and Reversals. Payments can be identified by a TC 290 .00 with CRN 272 on the tax year 2021 module. For TOP Offset (TC 898) and Agency Reversal (TC 899), UPC 151 RC 0 occurs when the TC 898/TC 899 transaction returned by Bureau of the Fiscal Service has a different name control than the one used by IRS. If research shows that the TOP offset is available for reversal, immediately call the Centralized Insolvency Operation (CIO) or fax Form 4442, Inquiry Referral, clearly labeled "Expedite" to the CIO before making any account adjustments so the potential stay violation may be resolved within 48 hours. (F) Bureau of the Fiscal Service TOP Debt, (B) Both IRS and Bureau of the Fiscal Service TOP Debt. 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. Use appropriate Priority Code when adjusting accounts with an open -L freeze. For community property states, you should follow the community property laws for each state. TC 150 is not blocked 92 and a paper return was filed. Typically, a mixed entity case involves the filing of returns by both the owner of the TIN and the non-owner. When the CP 36D, Injured Spouse Claims Notice, is received in the AM Function, use Command Code (CC) RTVUE, (CC) TRDBV or Return Request Display (RRD) to view the return on-line and work the Form 8379. Input a TC 767 with the OTN for the full amount of the TC 766 and re-input the TC 766 with the correct information. Reprocess the return with a new DLN, BS 920929, before working the allocation. Consider whether the taxpayer contact should be referred to Taxpayer Advocate Service (TAS). It does not matter where a taxpayer resides. BPI 9 is required input on all manual refunds resulting from an injured spouse allocation form filed by the primary taxpayer unless combat zone, BPI (6) applies. When the interest payment is present on a tax module, including its associated accrued interest amount (also posted as TC 776), and the sum was offset with TC 898, compute TC 766 as follows: Compare the injured spouses share of the joint return overpayment with the total return overpayment, determining its percentage rounded to the fifth decimal point.Example: The total of the 2019 joint return overpayment for the taxpayers is $9,500, of which $4,200 is the injured spouses share. If the non-debtor spouse resubmits the Form 8379 with required documentation for Appeals consideration during this period, AM may reconsider its rejection of the allocation before forwarding the new Form 8379 to Appeals. Bureau of the Fiscal Service maintains these debts and makes offsets through TOP. A letter is not needed for NCP SC-1, NCP SC-3 or Community Property allocations. If the injured spouse is the secondary taxpayer and Part II, line 11, is not checked on Form 8379 (Rev. 11-2016 (Mef) and Rev. For all Form 8379 revisions prior to 11-2014, issue the Injured Spouse's portion of the refund in "one name only" even if line 11, one name only box is not checked. A review of their account shows a prior year tax liability of $500. Base tax is the tax from the tax tables, less any non-refundable credits, prior to the addition of any other taxes. Withholding credit is less than reported on the joint return, is greater than tolerance, and the income has been reported on the joint return. SC 7 results in the following statement on the notice: "All or a portion of your Federal Income Tax Refund offset which was previously applied to an outstanding child support or federal agency debt is now being reversed because".