21.4.1. Refund Research

(1) Employees in the Accounts Management (AM) organization respond to taxpayer inquiries and phone calls, and process claims and internal adjustment requests related to Refund Inquiry.

(1) The authorities for this IRM include:

• IRC 6402, Authority to Make Credits or Refunds

• Protecting Americans from Tax Hikes Act of 2015 (PATH Act) Section 201(b), which is codified at IRC 6402(m)

• Policy Statement 21-1, Service Commitment to Taxpayers Service Program

• Policy Statement 21-2, The public impact of clarity, consistency, and impartiality in dealing with tax problems must be given high priority

• Policy Statement 21-3, Timeliness and Quality of Taxpayer Correspondence

• Policy Statement 21-4, One-stop service defined

• Policy Statement 21-5, Assistance furnished to taxpayers in the correction of accounts

(1) The Taxpayer Services Commissioner oversees all policy related to this IRM, which is published on an annual basis.

(2) The Director of Accounts Management oversees the instructions to the employees contained in the IRM content.

(3) Accounts Management Policy and Procedures IMF (PPI) Tax Analyst(s) oversees the content in this IRM and acts as a point of contact for all Accounts Management sites.

(4) Managers and leads ensure compliance with the guidance and procedures in this IRM for Individual Retirement Accounts case resolution.

(5) Employees resolve Refund Inquiry requests following procedures in this IRM.

(1) Program Effectiveness: Program Effectiveness is measured and controlled through:

1. Managerial reviews

2. Quality reviews

3. Quarterly PPI reviews

(1) Program Goals are measured and controlled through:

• Quality data and guidelines for measurement are referenced in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support

• Campus Compliance

• Field Assistance

• Tax Exempt/Government Entities

• Return Integrity and Compliance Services (RICS) and Electronic Products and Services Support

• Goals, measures and operating guidelines are listed in the yearly Program Letter

(1) Common acronyms listed throughout IRM:

(1) Related resources for this IRM include (list is not all inclusive):

• Pub 1, Your Rights As A Taxpayer

• Pub 5033, IRS EXTERNAL LEADS PROGRAM: FACT SHEET ON SUBMITTING LEADS

(1) According to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) Section 201(b) which is codified at IRC 6402 (m), the IRS cannot issue refunds, including applying credit elects, before the 15th day of the second month following the close of the taxable year (February 15 for calendar year filers) for tax returns that claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). This applies to the entire refund, even the portion not associated with these credits. Taxpayers should not expect their refund to arrive in their bank accounts or debit cards until the first week of March, if there are no other processing issues.

(2) For taxpayers who meet PATH Act criteria, the following message is provided on the automated systems through the end of February, or until the refund is released. “According to the Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue these refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. This applies to the entire refund, even the portion not associated with these credits. Check Where's My Refund in mid- to late February for your personalized refund status. It's updated once a day and remains the best way to check the status of your refund.”

(3) Accounts meeting the PATH Act Section 201 criteria will have a C- freeze generated on the account and will carry an Indicator of 1, 2, or 8. See IRM 21.5.6.4.5.1, C- Freeze - Refund Holds, for additional information on PATH Act freeze. To identify PATH Act Section 201 returns, the following indicators will appear on IMFOLT under the new “FEB15 RFND FRZ” field:

• Indicator 0: No Freeze (Return did not claim EITC or ACTC)

• Indicator 1: Refund Frozen (Return filed before February 15th, claiming EITC and/or ACTC. Prevents offsets)

• Indicator 2: Historical setting (Set after February 15th to signify a return that had the indicator 1 set previously and is now after February 15th and Freeze was released)

• Indicator 8: IMF internal setting to indicate freeze occurred in the current cycle

  Exception: The C- freeze code (shows Path Indicator of “1”) is set to be released on February 15th, however, this is contingent on Daily or Weekly processing of the account, therefore, the release may occur after February 15th. Once the freeze is released, the account will reflect a Path Indicator of “2”. See IRM 3.11.10.3.1, CADE 2/ IMF Daily Processing, for information on daily and weekly processing.

(4) Beginning January 1, 2017, accounts with a C- freeze in which the original or amended tax return includes EITC and/or ACTC, will not be considered for TAS referral when the request is for the refund to be released prior to February 15th (15th day of the second month for fiscal year filers). These returns will only qualify for TAS criteria listed in IRM 13.1.7.3, TAS Case Criteria, when the qualifying criteria is unrelated to releasing the refund prior to February 15th. As a result, accounts with refunds that include EITC and/or ACTC referred and resolved by TAS will not be released until February 15th or later if there are processing issues. As of January 1, 2017, the IRS is restricted from releasing refunds that include EITC and/or ACTC until February 15, for current year tax returns that include EITC and/or ACTC, and

• Cannot perform a partial refund release such as the non-EITC or non-ACTC portions or withholding

• Cannot initiate an early refund release because filtering and income match is not completed prior to February 15

• Cannot prepare a manual or expedited refund for an exception process such as economic hardship

• Cannot perform a refund offset to pay for other IRS tax debt on another module or account

(1) The following table will assist in selecting the appropriate research command codes. For additional information on these CCs, see IRM 2.3.1, Section Titles and Command Codes for IDRS Terminal Responses. Research should be done for valid and invalid segments. This list is not all inclusive.

(2) You must first establish the Fact of Filing (FOF). Opening a control base will bring up a master file account in any campus or generate a TC 904 in 11 to 18 calendar days, depending upon the day of the week you input your request.

1. If a TC 904 is present or IDRS indicates no tax module, send a Letter 109C, Return Requesting Refund Can't be Located or Not Filed; Send Copy, to the taxpayer asking the taxpayer to file again.

2. Check CC "REINF" to see if the return posted after the TC 904.

(3) A TC 904 with the Document Code (DC) "99" will appear on IDRS if the master file does not contain the module requested but the TIN and Name Control (NC) match.

(4) A TC 904 with DC "79" will appear if the master file contains no such TIN or NC match.

(5) The exceptions to sending the Letter 109C, Return Requesting Refund Can't be Located or Not Filed; Send Copy, are:

1. When an inquiry shows a foreign address, research to determine where account is located. If account is located at another center send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to the taxpayer and forward the case to the appropriate campus.

2. If the inquiry is about an amended return, which has not posted, contact the taxpayer for information as to where and when the return was filed.

3. If the taxpayer indicates that correspondence has been received about the return, request a copy of the letter.

4. If the taxpayer indicates the return was filed in another center and this is verified through research.

5. CC TXMOD shows a TC 904 indicating return filed and moved to retention register. Use CC "IMFOLV" to obtain retention register information. If research shows that the account needs further processing, reinstate the retention register account. See IRM 21.5.2, Adjustment Guidelines. If the TC 904 indicates the taxpayer filed in another Customer Service Field Operations, request the information and continue to work the case.

(6) Returns filed electronically are identified by a unique Filing Location Code (FLC) shown as the first two digits in the Document Locator Number (DLN). Refer to Document 6209, for a list of FLCs.

(1) The return has been processed:

(2) Research CC IMFOLT, CC BMFOLT and CC TXMOD to determine whether a refund was issued systemically (TC 846) or manually (TC 840). A TC 846 will appear on CC IMFOLT approximately one cycle before CC TXMOD.

• I - Taxpayer owes an IRS debt or freeze

• F - Taxpayer owes a TOP debt, or

• B - Taxpayer owes an IRS debt and a TOP debt

(3) CC IMFOLT, CC BMFOLT and CC TXMOD will indicate when a refund (TC 846 only) is issued. For IMF accounts, the indicator DD:0 (paper check) or DD:9 (direct deposit) will appear near the right margin either on the same line as the TC 846 or the next line down. If the taxpayer requests their refund be deposited into more than one account, each deposit will reflect a TC 846 with a split refund indicator of 1, 2, or 3. If the taxpayer requests only one direct deposit or a paper check, the indicator will be 0. Below is an explanation of the indicators:

• 0 - One direct deposit refund or paper check

• 1 - First refund of multiple refunds

• 2 - Second refund of multiple refunds

• 3 - Third refund of multiple refunds

(4) For returns processed prior to January 2012, the literal CADE will appear in the upper right hand corner of CC IMFOLI and CC IMFOLT if the account is currently on CADE. However, the CADE literal is not an indicator that the refund was processed through Cade. This literal does not appear on returns processed after January 1, 2012, through CADE 2.

(5) Unlike IMF processing which occurred in weekly cycles, CADE/CADE 2 processing occurs on a daily basis (some CADE 2 accounts are processed on a weekly basis). CADE/CADE 2 cycle dates will carry an additional two digit field to indicate the day of the week processing occurred. The cycle date will post in a YYYYCCDD format. IMF accounts will be signified by a 08 in the DD field or the field will be blank.
CADE days of the week will be signified by:

• 01 = Monday

• 02 = Tuesday

• 03 = Wednesday

• 04 = Thursday

• 05 = Friday

• 06 = Saturday

• 07 = Sunday

• 08 or blank = IMF

• 01 = Friday

• 02 = Monday

• 03 = Tuesday

• 04 = Wednesday

• 05 = Thursday

(6) If research indicates the refund check was recently issued or scheduled to be issued, and the taxpayer indicates a change of address but does not meet oral statement criteria, advise the taxpayer to complete Form 8822, Change of Address. If the taxpayer requests that the telephone assistor send the form, offer the alternate methods for getting the form located in IRM 21.3.6.4.1, Ordering Forms and Publications. Inform the taxpayer they could save 7-15 days by downloading the form from IRS.gov since they would not have to wait for it to be delivered by mail. Also advise the taxpayer the check may be delivered to the old address and will be re-issued to the current address if it is returned to the IRS. If the taxpayer submitted a change of address to the U. S. Postal Service, the check should be delivered to the new address. For complete guidelines regarding oral statement address change, see IRM 21.1.3.20.1, IMF and BMF Oral Statement Address Changes. If the account has an S- freeze, follow procedures in IRM 21.4.3.5.3, Undeliverable Refund Checks.

(7) If research indicates the refund was issued, see IRM 21.4.1.4.4, Refund Issued, but Lost, Stolen, Destroyed or Not Received.

(1) Refunds can be issued to both spouses from the same module in the same cycle or a taxpayer can request their refund be deposited into more than one account. For more information on Split Refunds, see IRM 21.4.1.5.7, Direct Deposits - General Information.

(2) Injured spouse claims received with the original return can be adjusted at the same time using specific reference numbers. See IRM 21.4.6.5.8.3, Processing of Form 8379 Injured Spouse Allocation.

(3) TC 846 for primary and secondary social security numbers (SSN) will carry the same DLN, therefore both refunds will be stopped when intercepting with CC "NOREF".

(4) Except on split refunds, refund claims input using CC CHKCL on more than one refund issued in the same cycle often result in "OOPS". It may be necessary to submit the claim through Treasury Check Information System (TCIS).

(1) If the taxpayer states they received the check and the check was lost, stolen, or destroyed and a TC 840/846 is present on the module, refer to IRM 21.4.2, Refund Trace and Limited Payability.

(2) If research shows a refund has been generated and the taxpayer states they did not receive the check or direct deposit, use the following "If–And–Then" table to assist in resolving the issue:

(3) If refund trace action is required, follow procedures in IRM 21.4.2, Refund Trace and Limited Payability.

(4) If the issue involves a change of address, see IRM 21.4.1.4.2, Return/Refund Located, and IRM 21.4.3.5.3, Undeliverable Refund Checks, for additional information.

(1) When a return attempts to establish a module on master file without an address, the following occurs:

1. The return goes unpostable, see IRM 21.5.5, Unpostables.

   Note: If taxpayer calls concerning their refund and research indicates the return has gone unpostable due to an incorrect address, provide Unpostables with the taxpayer's current address. For further instructions regarding an oral address modification, see Rev. Proc. 2010-16. Advise the taxpayer of your actions and when to expect their refund.

2. The Unpostable function forces the return to post with the address of the Campus where the return was processed.

3. An "S-" Freeze generates instead of a refund.

   Note: This condition is identified with the posting of a "S-" freeze without a TC 740 posted to the account. This posting also generates a SCADDRESS (service center address) transcript.

   Reminder: If the taxpayer inquires on the status of their refund and CC ENMOD indicates SCADDRESS, Oral Statement Authority (OSA) does not apply, see IRM 25.23.2.3.7 (3), When to Update the Victim's Address. If it appears a hardship situation may exist, see IRM 21.4.1.2 (6), Refund Research Overview.

(2) For additional information, see IRM 21.4.3.5.3.1, Undelivered Refund Notices, or IRM 21.4.3.5.3.2, Local Undelivered Refund Check Listing (URCL).

(1) The External Leads Program is a voluntary program that allows participating financial institutions to refer to the IRS account deposits that may be questionable tax refunds. When a financial institution receives a Treasury check, refund anticipation loan or check, direct deposit, or pre-paid debit card from the Internal Revenue Service which they believe to be a questionable tax refund, the institution will issue a lead to the External Bank Leads Program. When External Leads receives the lead, they will determine if the funds should be returned to the IRS. If IRS requests that the bank return the funds, the account will be reviewed to determine if the refund should be re-issued. When the funds are returned to the IRS, this process can take several weeks. Although the lead process is in progress, you may not see a control base or credit on the account. When the External Leads employee does not request the funds be returned to the IRS, the bank will release the funds to the taxpayer and no lead will be opened. At no time during this process is the credibility of the financial institution called into question, the IRS is simply ensuring the correct refund is issued based on the tax return filed with the IRS.

(2) For external lead cases, if the caller states they have been told by their bank that their refund was returned to the IRS, follow the procedures in IRM 25.25.8.7, Responding to Taxpayer Inquiries. Review the account markers to determine refund status.

(3) When an External Bank Lead is in progress, a refund trace cannot be input because it negatively impacts our partnership with banks that have returned funds and our ability to protect revenue. A refund trace is for locating lost/stolen refunds. An External Bank Lead where the taxpayer was advised by the financial institution the refund was returned to the IRS does NOT meet refund trace criteria and a refund trace should NOT be started. If a Form 3911 is received, and the account meets the criteria described in IRM 25.25.8.7, Responding to Taxpayer Inquiries, then update AMS Notes with the following information if found on Form 3911: name and contact information of the taxpayer, name of the financial institution, and signature date of Form 3911. Do NOT input a refund trace, instead follow procedures in IRM 21.5.1.4.10, Classified Waste and destroy the Form 3911. The External Bank Leads program will notify the taxpayer when or if the refund is released.

(4) If Refund Inquiry determines a refund trace has been started and the account meets the criteria described in IRM 25.25.8.7, Responding to Taxpayer Inquiries, then update AMS Notes with the following information (if known): name and contact information of the taxpayer, name of the financial institution. Send the taxpayer a Letter 86C, refer to IRM 21.3.3.4.2.1, Use of 86C Letter- Referring Taxpayer Inquiry/Forms to Another Office. Advise the taxpayer: "The return or refund for which you requested a refund trace is currently under review. It may take up to 10 weeks to complete the review and for you to receive your refund or a letter regarding the review." Close the trace control base, use CLS2BNKLD in the activity field.

(5) Taxpayers may also call in regarding questionable refunds. If the taxpayer calls to report a questionable refund, and they have not filed a return, they may be a victim of fraudulent activity, such as a data breach, a possible scheme, or some other fraudulent activity.

(6) Ask the taxpayer for details and follow guidance based on the information provided. Different procedures apply, depending on the circumstances described by the taxpayer. Leave detailed notes in AMS. Refer to the following IRM’s for guidance (list is not all inclusive).

• IRM 21.1.3.23, Scams (Phishing) and Fraudulent Schemes

• IRM 25.23, Identity Protection and Victim Assistance

• IRM 25.25.6.1.7.1, Taxpayer Protection Program (TPP) Recovery Project, procedures for taxpayers impacted by a preparer data breach scheme are included in this section.

• IRM 25.23.1.7, Taxpayers Who Are Victims of a Data Breach

(7) If a representative from a financial institution calls regarding a suspicious refund, refer them to Pub 5033, IRS EXTERNAL LEADS PROGRAM: FACT SHEET ON SUBMITTING LEADS, for information about submitting an external lead to the IRS. If, after reviewing the publication, the representative still has questions, refer them to the contact information in the publication.

(1) If your research indicates that the return was processed but the refund was never issued, or the amount was not what the taxpayer expected, the problem may be due to tax offsets, math errors, freeze conditions, TOP offsets, invalid SSN or TIN, or credit elect, among other things.

(2) After completing the research, advise the taxpayer why the amount differed or why the refund was not sent.

(3) If the refund amount, TC 840/846 agrees with the amount shown on the taxpayer's return, but the taxpayer received less, a non-tax offset was made through the Treasury Offset Program (TOP).

1. TC 898 with the amount of the offset will appear on CC IMFOL the Monday following the direct deposit or check mailing date.

2. The Bureau of the Fiscal Service (BFS) sends an offset notice in the same envelope as a paper refund check or separately if a direct deposit was made or the entire amount was offset. If the notice was not received, have the taxpayer contact the TOP Help Desk at 800-304-3107. Refer to IRM 21.4.6, Refund Offset.

   Note: This is the only BFS number the taxpayer should call regarding their TOP issue. Do not provide the taxpayer with other BFS numbers to call.

(4) The following will assist you in responding to a taxpayer who received a refund, but had expected a different amount:

(1) For information regarding Debtor Master File (DMF), Treasury Offset Program (TOP) Offset Bypass Refund, Hardship and Injured Spouse, see IRM 21.4.6, Refund Offset.

(1) A taxpayer's refund may be less than expected or not received due to an error or an item being disallowed on the return. To identify and resolve math errors, see IRM 21.5.4, General Math Error Procedures.

(1) If the TIN on the return does not pass validity checks on IDRS, it is considered invalid.

(1) If your research shows that the account is in "Status 12" with a credit balance on the module, a freeze code will be on the account. This can be identified on CC IMFOL, CC BMFOL, CC TXMOD or CC SUMRY with an alpha character (A–Z). For information on resolving these accounts refer to IRM 21.5.6, Freeze Codes.

(1) A taxpayer may elect to have all, or a portion of an overpayment credited to the next year's estimated tax (ES). The "credit elect" can be recognized by TC 836 on the current year's module and TC 716 on the following year's module. Access CC REINF or CC IMFOL if there is no data on CC TXMOD.

(2) When a taxpayer inquires about a refund and research shows the overpayment was applied as a credit elect for the following year, the overpayment is only refundable if any of the following apply:

1. It was applied as a credit elect to the following year due to a processing error.

2. The taxpayer is not liable for ES, and they erred in entering the overpayment as a credit elect.

3. The taxpayer files a balance due superseding return and requests a credit elect reversal to satisfy the balance due. See IRM 21.4.1.5.6.1, Credit Elect Reversals, for additional information.

4. For an individual taxpayer, the taxpayer is liable for ES payments, but proof of hardship is provided. See IRM 21.4.4.3, Why Would A Manual Refund Be Needed?

Reminder: Refer to IRM 20.2.4.9.4, Credit Elect, for instructions on payment or nonpayment of credit interest on credit elect reversals.

Caution: If none of the instances in (2) above apply, the election to have the overpayment applied as a credit elect is binding and the credit cannot be reversed.

(1) Direct deposits are allowed on current and prior tax year returns, this includes IMF prior year original returns. As of February 2023, direct deposits are also available on tax year 2021 and subsequent electronically filed Form 1040-X, Amended U.S. Individual Income Tax Return. For more information, see IRM 21.5.3.4.18.1, Direct Deposit for Amended Returns.

(2) The Refund Product Code indicators, which include other Refund Advance Products (RAC/RAL), can be found on CC TRDBV under the attribute of Refund Anticipation Loan Code and on MeF Return Request Display (RRD) under Code and Edit values titled REF Anticipation Loan Ind. Treat Refund Product Codes 1-4 as a Refund Advance Product (RAL/RAC) and refer taxpayers to their tax return preparer or the financial institution. If there is no RAL/RAC code 1-4 present on CC TRDBV, the refund should not be considered a Refund Advance Product.

(3) If a taxpayer files their original or amended tax return and requests a direct deposit of their refund, and later requests to stop the direct deposit, the direct deposit may be stopped by inputting a TC 971 AC 850. Unless a freeze condition is holding the refund, this action must be done prior to the posting of the refund (TC 846) from either the original return (TC 150) or amended return adjustment on CC IMFOLT. Input of a TC 971 AC 850 will result in the issuance of a paper refund check to the address shown on the taxpayer's tax return. If the refund has posted, the direct deposit cannot be prevented by input of TC 971 AC 850, UNLESS the refund is frozen (e.g., -R, P- freeze, etc.). In the case of a freeze condition, the TC 971 AC 850 must post before, or in the same cycle as the refund. See IRM 21.4.1.5.7.1, Direct Deposit of Refunds, for further guidance.

(4) In 2010, taxpayers could elect to get their tax refund in the form of Series I U.S. Savings Bonds. In 2011, and on tax year 2010 and subsequent returns, taxpayers have more options available for purchasing savings bonds.

• Form 8888, Allocation of Refund (Including Savings Bond Purchases), will now give the taxpayer the option to designate up to 3 unique savings bond elections: 1 for the taxpayer themselves, and 2 designations can be as gift bonds to someone other than the taxpayer and/or as a purchase for a beneficiary.

• If the amount of the refund is increased because of a math error, the savings bonds will be issued, and the additional amount will be refunded in the form of a paper check or direct deposit if designated on the Form 8888. See Form 8888, Allocation of Refund (Including Savings Bond Purchases), for additional information.

• The purchase request must be in increments of $50 and may not exceed $5,000. If either of these conditions are not met, or if there was a math error on the return that reduces the amount of refund, or invalid information on the Form 8888, per IRM 21.4.1.5.7.1 (1), Direct Deposit of Refunds, the refund will be issued as a paper check.

  Note: The $5,000 limitation is for purchases of paper, I Series U.S. savings bonds in any calendar year. The only way to get paper savings bonds now is to use your IRS tax refund. In any one calendar year, the taxpayer may buy up to $10,000 in Series EE electronic savings bonds AND up to $10,000 in Series I electronic savings bonds for themselves as a direct purchase through the U.S. Treasury Department at Treasury Direct.

• Except in the case of a math error reduction, any amount over and above the $50 increment may be direct deposited into a savings, checking or IRA account, or refunded as a paper check.

  Example: For example, if the refund is $275, the taxpayer can choose to get paper I Series savings bonds in the amount of up to $250, and the remaining $25 can be direct deposited into a savings, checking or IRA account or refunded in the form of a paper check.

(5) On January 1, 2016, the Department of the Treasury launched a program called myRA, offering taxpayers the opportunity to receive their refund in the form of a starter retirement account. Treasury is now phasing out the myRA program and is no longer accepting new enrollments.

• The myRA type refund can be identified on CC TXMOD and CC IMFOL by a unique routing number (111925074).

• Taxpayers received their own account number when they signed up for myRA.

• If the taxpayer claims non-receipt, and IDRS indicates the refund was a myRA, provide the following appropriate phone number:
  855-406-6972
  855-408-6972 (TTY)
  414-365-9616 (International)

• See Form 8888, Allocation of Refund (Including Savings Bond Purchases), for additional information.

• The refund trace process will follow the same procedures as any other direct deposit.

(6) Various tax return preparers also offer non-Treasury prepaid debit cards as a method to receive tax refunds. Taxpayers who want to select this method for their refund should contact their preparer or the issuer of the debit card for information regarding the use of these cards for receiving refunds. This includes the routing transit number and account number, any fees associated with the card's use, how to enter the request on the tax return in the direct deposit section of the refund, and limits on the amount of deposits and withdrawals. Refund traces on these accounts will follow the same procedures as any other direct deposit. See IRM 21.4.1.5.7.4, Non-Receipt, Lost, Stolen or Destroyed Prepaid Debit Cards, for more information.

(7) There are also other prepaid reloadable debit cards offered by various vendors, such as department stores, etc. As in the case of the preparer debit cards, taxpayers inquiring about using a prepaid debit card to receive their tax refund should be directed to the vendor offering the card. The vendor will be able to provide information such as the routing transit number and account number, any fees associated with the card's use, how to enter the request on the tax return in the direct deposit section of the refund, and limits on the amount of deposits and withdrawals. Refund traces on these accounts will follow the same procedures as any other direct deposit. See IRM 21.4.1.5.7.4, Non-Receipt, Lost, Stolen or Destroyed Prepaid Debit Cards, for more information.

(8) Taxpayers can request their refund be deposited (split) into as many as three bank accounts/investment vehicles that are held in the taxpayer’s name; a combination of savings, checking, Individual Retirement Account (IRA), or Series I Savings Bonds. Split Refunds will be allowed on all Forms 1040 series (paper and electronic returns). Taxpayers who want their refund deposited into more than one account will be required to complete a Form 8888. The request for split refund will be honored if all of the following conditions are met:

• The return is for the current tax year.

• The refund is issued in the same cycle that the return is processed.

• The module does not contain any condition that would cause the refund to be frozen (e.g., Injured Spouse Claim).

• The bank account numbers on the Form 8888 are all valid (e.g., correct amount of numbers).

• The savings bond request is for tax year 2009 or subsequent and is in increments of $50 with a maximum of $5,000.

(9) A split refund indicator on IDRS will be used to identify refunds as follows:

• 0 - not a split refund (entire refund goes to one place). All paper refunds and direct deposited refunds to one account will have this indicator.

• 1 - Refund that appears 1st on Form 8888.

• 2 - Refund that appears 2nd on Form 8888.

• 3 - Refund that appears 3rd on Form 8888.

(10) Changes made by the IRS that increase or reduce the total refund will affect the amount identified with split refund code 3, then refund code 2, then 1, if relevant.

(11) Since the refunds at BFS will be sorted in ascending order by Routing Transit Numbers (RTN), offsets will be taken in RTN order, not by the split refund indicator. There are times when BFS transmits the information to the financial institution and the routing number is invalid or the bank account has been closed. When this occurs, part of the refund may be issued in a paper check and part may be direct deposit.

(12) As of 2015, the IRS now limits the number of refunds that can be electronically deposited into a single account or pre-paid debit card to three. Any additional refunds will be issued as a paper check. See Understanding Your CP53D Notice, and Direct Deposit Limits, on IRS.gov, for additional information regarding the limitation.

(13) If a taxpayer has not received their direct deposit, see IRM 21.4.1.5.7.1, Direct Deposit of Refunds.

(1) The Electronic Fund Transfer (EFT) indicator "0" is the standard indicator for all refunds. Regardless of whether the taxpayer requested direct deposit or not, the indicator reflects that the refund was processed as requested by the taxpayer. It includes direct deposits that have passed all validity checks and paper checks. For all acceptable direct deposits, the EFT indicator will be "0" followed by the EFT information. The EFT indicators are as follows:

(1) The following section contains procedures for resolving taxpayer refund inquiries.

(1) As of 2012, with the implementation of CADE 2 processing for all IMF accounts, CC NOREF, definer "P" can be used to stop a refund under the limited circumstances outlined below. See the charts below for CC NOREFP input time frames. Refunds on original returns can also be stopped by using CC NOREFP prior to the posting of the return on IDRS. See IRM 21.2.2-2, Accounts Management Mandated IAT Tools.

(2) CC NOREFP will resequence for 14 days for daily IMF accounts and, depending on the day of input, up to 20 days for weekly IMF accounts. Each day, CC NOREFP will look for a matching refund and, when a match is found, will stop the refund. If no match is found within these time frames, the CC NOREFP will be dropped from IMF processing.

(3) While an IDRS control base needs to be established for CC NOREFP, no systemic updates are received to indicate whether or not the input was successful at stopping the refund. Since the TC 846 will post on the module up to 5 business days before the TC 841, the account must be monitored for the TC 841 posting to determine if CC NOREFP was successful. See (10), (11) and (12) below for subsequent actions.

(4) The following chart is provided to clarify when CC NOREFP can be used to intercept a refund that will result from an adjustment input before 5:00 PM CT on an IMF WEEKLY account:

(5) The following chart is provided to clarify when CC NOREFP can be used to stop a refund resulting from a transaction (e.g., TC 290 .00, TC 571, etc.) input before 5:00 PM CT on an IMF DAILY account:

(6) CC NOREF is still available for use in stopping BMF refunds. For the cutoff days and time frames for BMF CC NOREF, see IRM 3.14.2.7.1 (2) and (6), Refund Intercept using Command Code (CC) NOREF.

(7) With Taxpayer Information File (TIF) centralization, it is no longer necessary to contact the issuing center or your local Notice Review to stop the refund. Input of CC NOREFP will stop a refund regardless of the Campus and will be evident when viewing the account. Use the CC "NOREFP" to intercept erroneous refunds and update the Refund Information File (RFIF). Refer to IRM 2.4.37, Command Code NOREF Overview, for a complete description and input requirements.

(8) CC "NOREF":

• Cannot be used to stop a refund during an accelerated cycle. See Exhibit 21.4.2-1 (11), Command Code (CC) "CHKCL" Input, for the BMF accelerated cycles.

• Can be used if there is a possibility a taxpayer may receive a second refund erroneously.

• Automatically establishes a control base.

• Must be input by 3:00 PM Central Time on Friday, the week prior to the TC 846 for Business Master File (BMF).

Note: To stop a direct deposit refund, use CC "NOREF" with definer "E". If CC "NOREF" with definer "E" is input on an account with a split refund, all portions of the split refund will be cancelled. A direct deposit refund must be stopped no later than the Friday, one week before the scheduled date of the direct deposit. If the TC 846 is posted on CC TXMOD, the direct deposit cannot be stopped. This type of stop is limited to internally identified erroneous or potentially erroneous refunds. The actual scheduled date of the direct deposit is the date as shown on CC IMFOLT on the line below the TC 846 as RFND-PAY-DATE, and on CC TXMOD on the line below the TC 846 as RFND-PYMT-DT.

Example: The direct deposit is scheduled for Friday, August 16, 2024. The CC "NOREFE" must be input no later than Friday, August 9, 2024.

(9) Refunds can be issued to both spouses from the same module in the same cycle. TC 846 for primary and secondary SSN will carry the same DLN; therefore, both refunds will be stopped when intercepting.

(10) Complete all account actions, except credit transfers, when requesting to stop a refund. Transfer a credit after the TC 841 posts. If the account action you are taking will result in a balance due, input TC 470 to hold any balance-due notices that may generate. It takes 4-6 weeks for the TC 841 to post.

(11) Employees stopping the refund will maintain an open control on all cases where a CC "NOREF" is input. The employee places the open control in "B" or "M" status (monitoring) using category code RFDL. The case can be closed when confirmation is received that the refund has been stopped.

(12) The controlling employee must monitor for the TC 841 and take appropriate action. If there is an adjustment on the module and the control is in background, the CSR should make the adjustment based on the information provided by the taxpayer.

(13) If the module contains a background control without an adjustment to the account, the controlling employee may be waiting for information from the taxpayer. If the information can be used to close the account, contact the controlling employee. Prepare a Form 4442/e-4442, Inquiry Referral, include all of the taxpayer information and forward the case to the controlling employee.

(14) When the TC 841 posts to the account, take the necessary action to release the "P" Freeze and close the control base.

(15) If the TC 841 does not post within 4-6 cycles:

1. Research for other adjustments, or unpostable conditions,

2. Refund Inquiry can research TCIS to determine if refund was cancelled,

3. Review account to determine whether or not an erroneous refund occurred. If an erroneous refund occurred, refer to IRM 21.4.5, Erroneous Refunds, to start procedures for return of the funds.

(1) The HAL Holds system can no longer be used to request an IMF or a BMF refund stop. Specialized functions like Criminal Investigation, RIVO, etc., will still be able to stop refunds using CC NOREF since they have access to the tax accounts before they appear on CC TXMOD.