3.17.243. Miscellaneous Accounting

(1) The miscellaneous Accounting procedures are used by Submission Processing, Accounting Operations, to perform various processes for the programs covered within this IRM.

(1) The IRS mission is to provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

(2) The IRS frames internal controls by principles outlined in Standards for Internal Control in the Federal Government, GAO-14-704G. Internal control is a process used by management to help achieve its objective.

(3) 26 U.S. Code 6020 - Returns prepared for or executed by Secretary

(4) 26 U.S. Code 6201 - Assessment Authority

(5) 26 U.S. Code 7804 - Other personnel

(1) The team manager has the responsibility of ensuring all employees receive proper training to effectively process all requests and oversight of the various program listed within IRM 3.17.243, Miscellaneous Accounting.

(2) Employees within the Accounting operation have the responsibility of utilizing the procedures outlined in this IRM to accomplish completion of assigned tasks associated with processing the requests received.

(1) Service officials and managers must communicate privacy and security standards to subordinate employees and establish methods to enforce them. Employees are responsible for taking required precautions in providing privacy and security for the documentation, information, and property which they handle in performing official duties.

(2) When using IDRS, only access those tax modules required to accomplish your official duties. All IDRS accesses are recorded for immediate review and to determine the accuracy of an adjustment. Any unauthorized access or browsing of tax modules by employees to satisfy personal curiosity or for fraudulent reasons are prohibited by IRS and are subject to disciplinary actions and/or dismissal from the Service.

(3) If you access an account of an IRS employee that you know or someone that falls under a covered relationship such as a family member, friend or neighbor, refer the case to your lead or manager. Completing a Form 11377-E, Taxpayer Data Access, is voluntary but highly recommended. The purpose is to document the reason(s) the account was accessed. A Form 11377-Eshould also be completed when accessing an account of an IRS employee you do not know, without having to refer the case to management.

(4) While working assigned cases, SP employees may come across some that are blocked on IDRS. These cases can be identified by an IDRS security violation message, “Unauthorized Access to This Account”. If encountered, forward the case to your manager. Managers will notify the local Planning & Analysis Staff who will scan the case and send encrypted information to the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ mailbox to request access to the account. Mangers will retain the original case in a file awaiting access (can take up to five (5) business days). Once notified access has been granted, the case can be worked following applicable procedures.

(5) Sensitive But Unclassified (SBU) data including Personally Identifiable Information (PII) and tax information, must be protected with encryption and/or access controls, limiting access only to approved personnel with a need to know. Refer to IRM 10.5.1, Privacy and Information Protection, Privacy Policy for guidance on protecting and safeguarding the privacy of SBU data regardless of its format and when transmitting through email or Enterprise Electronic Fax (EEFax) system. If you suspect or know of a potential information loss, access the Report Losses, Thefts or Disclosures of Sensitive Data; Report Lost or Stolen IT Assets and BYOD Assets website for instructions to report the loss of sensitive information/PII.

(1) Program Reports: In accordance with management accountability review regulations, managers are responsible for ensuring that internal controls are effective and efficient in day to day operations.

(2) Program Effectiveness: Managers are responsible for conducting operational and/or managerial control reviews to identify weaknesses and mitigate known risks. Managers must perform program or spot reviews for accuracy and completeness.

(1) As there are various programs outlined in this IRM, the retention period for the records vary. Document 12990, Records Control Schedules, will be referenced for further clarification on retention periods.

(1) The following table list commonly used acronyms that are throughout the IRM.

(1) Throughout this section, references are made to other IRMs in relation to instructions necessary to properly perform tasks in this IRM 3.17.243, Miscellaneous Accounting. The following IRMs are used in conjunction with this IRM or may be used as resources:

• IRM 2.3, IDRS Terminal Response

• IRM 2.4, IDRS Terminal Input

• IRM 3.10.72, Receiving, Extracting, and Sorting

• IRM 3.11.10, Revenue Receipts

• IRM 3.17.46, Automated Non-Master File

• IRM 3.17.64, Accounting Control General Ledger Policies and Procedures

• IRM 5.19.23, Restitution - Based Assessments Processing

• IRM 11.3.6, Seals and Certifications

• IRM 25.3.8, TC 520 -W Freeze Servicewide Guide

• IRM 25.6.1, Statute of limitations Processes and Procedures

(1) Form 12810, Account Transfer Request Checklist, containing the following information:

1. Complete entity information of the account being transferred from the Master File (MF).

2. If the reversal request involves a MF account, a current MFTRA or account transcript showing the account balance as either a debit or zero must be included.

   Note: If the reversal request is for a Non-Master File (NMF) account, a current NMF transcript must be attached.

   
   

3. Reversal request listing the 23C date of the assessment being reinstated.

4. Transaction codes (TC) and amounts being reversed.

(2) Completed Form 3465, Adjustment Request, with TC 860, the reinstated 23C date and entity information of the taxpayer whose account will be established on Non-Masterfile (NMF). The information may not be the same as the MF account being transferred. If the reversal is for a NMF account, no account transfer is necessary.

1. Indication of either "Notice to Taxpayer" or "No Notice to Taxpayer".

2. If a credit is available, indicate where the credit is located.

(3) A memorandum (2-way memo) is signed by the Campus Compliance Official of the responsible team, addressed to the Accounting Official. This memorandum will set forth the conditions surrounding the erroneous abatement, the amount of tax considered still due, the type of tax, the tax period and taxpayer identification information. In addition, information must be included on how the reinstated liability will be handled, i.e., a credit is available for application and/or a notice will be issued to the taxpayer. Upon approval of the Statute Control Team and acceptance by the Accounting Official, this memorandum serves as authorization to process the requested action.

(4) If the original assessment documents cannot be obtained, a dummy documentwill be prepared and approved by the manager of the initiator, or at least 2 attempts to obtain the document must be provided (Form 4251 - Return Charge Out).

(5) A letter to the taxpayer explaining the action and the amount of tax, penalty, and/or interest being reversed will be included if a notice to the taxpayer is required. A 510C letter (Refund in Error; Return Check) is not appropriate for the TC 860 action. The letter to the taxpayer will accompany the first notice (Form 6335, NMF First Notice) to the taxpayer. The letter must be signed by the originating function's operation manager. The taxpayer will also be advised of their right to seek assistance from Taxpayer Advocate Service.

1. If taxpayer is not going to be billed, credit must be available in Excess Collections to full pay the account.

   Note: If the credit is located in another Campus, contact the requestor for Form 2158, Credit Transfer Voucher.

   
   

2. Form 8765 (IDRS Control File Credit Application), must be included with the accounting package.

3. This credit must be posted before the reversal request can be sent through Statute to NMF.

4. Once the account is loaded, the credit can be applied to Automated Non-Master File (ANMF) using Form 8765.

(6) RBA Cases:

• RBA cases will come to Accounting when a credit (TC 291) has been posted to the account erroneously.

• The 2-Way memo will have the subject line that reads, Reversal of Previously Posted RBA Credit.

• 2-Way memos received from the RBA teams are to be worked without having been reviewed by the Statute function.

(1) The reversal of erroneous abatement package, as described in (IRM 3.17.243.3.1, Reversal of Erroneous Abatements Checklist), will be forwarded to the Accounting Operation from the Statute Operation only. At the option of the Operation Manager, a preview of the package may be made to ensure all necessary documents are received. If items are missing, the request will be rejected back to the requestor through the Statute Function (See IRM 25.6.1.10.2.2.3, Correction of Erroneous Abatement cases by the Originating Function).

1. The review may also include an analysis of the integrity of the request to ensure proper administration of the Internal Revenue Code and Regulations.

2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

   Exception: If the taxpayer has submitted payment, the reversal must be processed.

3. The Accounting Operation Manager must sign approval on the memorandum indicated in (3) above when the request is accepted.

(2) The Account Transfer Team will input the TC 400 to the Master File (MF).

1. Individual Master File (IMF) accounts - Input TC 971 Action Code (AC) 045 using REQ77.

2. Business Master File (BMF) accounts - Prepare Form 514-B, Credit Transfer Voucher and Form 813, Document Register. (See IRM 3.17.243.3, Reversal of Erroneous Abatements for detailed instructions).

(3) The TC 400 will generate CP 96 (IMF) or CP 296 (BMF).

(4) The Account Transfer Team will edit CP 96, CP 296, or CP 396 and prepare the Reversal of Erroneous Abatement package for NMF processing.

(5) The Account Transfer Team will forward the Form 12810, original Form 3465, Operation Manager's approved memorandum, and the original letter for the taxpayer (when a notice is required) to the appropriate function.

(1) A taxpayer files a complaint in a suit for recovery of taxes. This is forwarded to the appropriate Submission Processing Center (SPC) by a United States Attorney or by the Tax Division of the Department of Justice.

(2) To assist the Service in expediting retrieval of the necessary files, telephone contact (follow up via memorandum) is made by the offices indicated above. These calls provide pertinent information on the taxpayer and the tax liability.

(3) Facsimiles (fax) and memorandums are received from Counsel.

(4) Instructions in this subsection referring to “Counsel” means either Area Counsel or Chief Counsel.

(5) The telephone call and a copy of the complaint should be received prior to the facsimiles or memo from Counsel requesting the files. Send the requested information to the requesting Counsel office using either certified or registered mail.

(1) The following contacts are to be contacted when there are questions related to cases that have been sent to the campus. These contacts are for internal use only. Refund Litigation contacts are only authorized to work with Counsel.

(1) Maintain a daily/monthly log, showing all new case requests processed during the month and the dates on which the telephone call, initial complaint and the e-fax/memo was received.

(2) Take the following action immediately upon receipt of the taxpayer’s complaint, telephone call or e-fax/memo:

1. Use command code ACTON to establish an open control base for all affected tax modules using category REFUNDLIT or COURTCASE.

2. Identify each tax period involved in a Refund Litigation case with a TC 520 freeze with closing code (CC) 73. If the TC 520 CC 73 is already present, there is no need to input a second one.

3. If the account has been moved to the retention register, use applicable procedures to reestablish the account. Input of IDRS command codes IMFOL or BMFOL with definer code B is used to bring an account out of retention.

(3) Research and secure the requested document(s) using expedite procedures.

• Use IDRS research capabilities to help locate needed returns.

• When documents are charged-out, contact the appropriate function to immediately obtain the required documents.

Note: Take this action regardless of where the documents are charged-out.

(4) If the documents are located at a campus other than where the case is being worked, send the Form 2275 to the Special Search function at the applicable campus. The campus contacts are listed below. A phone call to the POC below should be placed prior to sending the fax.

(5) If the memo is requesting a certified transcript in addition to returns, a Form 4338 is needed. If the originator has not submitted this form it can be prepared by the refund litigation coordinator at the campus. A copy of the memo must be attached to the Form 4338 as supporting documentation.

(1) If a facsimile/memo is not received within ten (10) calendar days from the receipt of the copy of the taxpayer’s complaint or the initial call from Counsel (whichever came first), the Refund Litigation Coordinator (RLC) must telephone the respective Counsel in the area office to request it.

(2) Associate all documents received with the related complaint and hold for receipt of the facsimile/memo from Counsel’s office.

• Review the case file for any indication that a statutory notice of claim disallowance has been sent to the taxpayer.

• If a statutory notice is needed by Counsel they will notify us. To obtain the notice, you will use the certified mailing number and date the notice was mailed to obtain the certified mailing documents from the mail room.

• Associate these documents with the case file.

(3) When the facsimile/memo is received from Counsel, associate and compare the fax/memo with the copy of the complaint to determine if the documents requested and those secured agree.

1. Resolve any discrepancies.

2. If any needed Revenue Agent Reports (RARs), appellate reports, etc., are attached to other returns, amend the facsimile/memo to include those returns and note the additions on the transmittal.

3. This comparison excludes any supplemental fax/memo from Counsel.

4. Perform the actions requested in the facsimile/memo.

5. The copy of the complaint (petition) can be made a part of any retained control file.

(4) When the facsimile/memo is received and all documents for the case have NOT been secured, the RLC must immediately contact District Counsel and give the status of the case. Counsel will advise whether to send what has been compiled or to hold until the entire case file has been secured.

(5) When all documents for a case are not located and the tax module is not present, notify Counsel.

(1) When the facsimile/memo has been received, prior to forwarding the assembled case file to Counsel, photocopy the file.

1. Do not delay transmitting the case file. Do not exceed 75 pages for the duplicate file

2. Copy priority items in this order: Transcripts, Claims for Refund, Revenue Agents Reports, Tax Returns, and Appellate Reports

3. If the requested administrative files are voluminous, call Counsel for permission to omit the duplicate file procedure.

(2) Send the copy to: Assistant Attorney General, Tax Division, Department of Justice, Washington, DC 20530 via certified or registered mail. Note the title of the case and court in which the case is pending and attach a copy of the facsimile/memo.

(3) Use a copy of the original facsimile/memo to set up a case file to control the receipt of each document or information received for the case.

(4) Ninety days (90) after receipt of the original facsimile/memo, forward a copy of the control file listing documents not secured. Include an explanation of the research that has been performed and indicate controls have been terminated.

(1) Take the following actions when the completed Refund Litigation case is returned to the SPC:

1. Check the case file to verify that all returns shown on the Form 3011-A, Transmittal Memorandum, are enclosed.

2. Indicate on Form 3011-A if returns or related materials are missing before returning the form to Counsel.

3. Examine the file to locate the Notice of Adjustment. Associate the Notice of Adjustment with the specific return and place the work papers with the current refile numbered return.

4. If the Form 3011-A indicates a settlement is to be paid by the Government or other adjustment is required but no evidence that adjustment has been input, route the file to the Examination Function.

5. Refile “Closed” case returns and work papers by the current refile (control) DLN. If more than one period is involved in the completed Return Litigation case, refile work papers with the most current tax period refile DLN.

(2) After Form 3011-A is received and verified, remove the TC 520 freeze by inputting a TC 521. Input a TC 521 for each module that has a TC 520 with CC73. Close all open control bases.

(1) On occasion Refund Litigation Coordinators may be contacted by Counsel or other Business Units via email or phone for assistance in gathering information for court proceedings or carrying out their functional duties.

(2) Some requests for assistance may include the following and may require use of various tools and applications.

• Decipher Transaction Codes (TC)

• Provide Literal and/or non-certified account transcripts

• Determine types of letters issued on a taxpayer account and obtain copies

• Assist in locating and verifying taxpayer information and/or employee information of actions taken on accounts

• Determine proper campus information for returning documentation

  Note: Requestors seeking assistance in obtaining returns, files, etc. where there is no Refund Litigation case involved will be referred to IRM 3.5.61, Files Management and Services.

(3) Refund Litigation Coordinators will serve as liaison with Counsel in determining if actions can be taken on accounts with open TC520 CC73, -W freezes.

(4) Additional information on other types of Litigation freezes can be found in IRM 25.3.8, TC 520 -W Freeze Servicewide Guide.

(5) For requests pertaining to Declarations, contact the HQ program analys.

(1) Refund Litigation Cases already in progress sometimes need expeditious handling of requests for more information from Counsel. Requests are via telephone.

• Counsel must furnish in writing the full name of the person(s) making the telephone request as soon as possible after the request.

• This information should also be included in the facsimile/memo.

  Note: It is not necessary to wait until receipt of a fax or memo before processing the request if Counsel provides the necessary information.

(2) Immediately upon receipt of the telephone request, begin securing the requested documents and/or information.

• Photocopy upon securing information

• Hold Department of Justice photocopy until written memo or facsimile is received.

(3) If a facsimile/memo is not received within five (5) days from the receipt of the telephone request, telephone Counsel in the appropriate office to request it.

(4) Maintain a daily/monthly log, exclusive of the log required in IRM 3.17.243.5.3, Processing Requests, showing all emergency telephone requests during the month and dates received.

(1) These cases were previously known as Refund Suits and Collection Suits in which a judgement is rendered to collect taxes.

1. Collection on these judgements requires Department of Justice to secure the current year returns. Requests for these returns come directly from the Department of Justice.

2. These requests will be via telephone and followed by a two-part memo; one part to be stamped “received” and returned to the Department of Justice immediately.

(2) Immediately upon receipt of the telephone request, begin securing the requested documents and/or information.

(3) If the memo has not been received within five (5) days from the receipt of the telephone request, telephone the requester to request it.

(1) The purpose of monitoring open TC 520 -W Freeze Codes is to ascertain whether the litigation freeze is legitimately open and to ensure no impact on revenue.

(2) The main responsibility for monitoring Refund Litigation cases falls on the Refund Litigation Coordinators (RLC).

(3) Open Refund Litigation cases will be reviewed as necessary, but no less than annually, until the litigation is concluded.

(4) Annual monitoring must include:

• Review of cases for possible 3011-A, if one is located refer to IRM 3.17.243.5.6

• Follow up with Counsel POC listed in casefile via email for status update

• Document case with results of follow up actions completed

(5) Since IDRS control bases are also opened, the team manager can utilize Control-D to pull reports for open employee control bases.

(1) Diagnostic (DIAG) Transcripts identify unresolved IDRS conditions. They may also identify operational problems in other functional areas.

(2) DIAG Q transcripts generate weekly when certain conditions are met. Transcripts are reviewed and routed by IDRS User Support Staff. More information on these transcripts can be found in IRM 2.9.1.18.3, DIAG-Q Transcripts.

(3) On occasion Collection Campus Operations Fresno activity routes DIAG Q transcripts to the RLC when:

1. There is an unreversed TC 520 or unpostable TC 521, or

2. No TC 520 but a -V or -W freeze and the closing code is 71 or 73 for all MFT’s except 13 or 55.

(4) These transcripts generate when the above condition has been present for at least one year, or the CSED (Collection Statute Expiration Date) has expired.

(5) The type of DIAG-Q transcript is indicated in the upper-right hand corner of the transcript. The codes and meanings are:

1. "DIAG-Q TYPE 1" Indicates one year since freeze was established. This number can be from 1 to 9. If the number “9” is present, check the transaction date to determine the number of years of inactivity.

2. "DIAG-Q TYPE C" -Indicates that the CSED has expired.

(6) Upon receipt of the DIAG-Q transcript, screen the transcript to ensure that it has not been misrouted.

• If the transcript is misrouted, contact the Service Center Collection Branch (SCCB).

• It the transcript was routed properly or because of an unpostable condition, complete research to resolve the condition.

(1) When the transcript generates due to an expired CSED or inactivity, check the case control card to determine the current status of the case, and take one of the following actions:

(2) When it's necessary to send notification to Counsel, notate the following information: "Attached is a DIAG-Q transcript and hardcopy of an ENMOD. The DIAG-Q indicates that the CSED has expired, or the TC 520 has been on the case for years and there has been no activity".
"Please take the appropriate actions on this case. If the case is closed and the TC 520 needs to be reversed, please provide us with a copy of the Form 3011-A (or a new Form 3011-A if the original Form 3011-A is not available). Send the Form 3011-A to the address shown below". Provide your office's street address.

(3) If there is no record of the case, contact Counsel to verify the status of the case.

(1) Use OFP XXX-37700 when processing certified documents or transcripts.

(2) Use Form 4340, Certificate of Assessments, Payments, Other Specified Matters, to certify extracts from the taxpayer’s account for legal purposes and court cases.

(3) The individual signing the Form 4340 may use a stamped or wet signature for certifying these documents. If the stamped signature is being used, it must be applied by the individual the signature belongs to.

(4) Use Form 4338, Information or Certified Transcript Request, for BMF and IMF certification of official records signed under seal.

(5) Use Form 3050, Certificate of Lack of Record when requested to certify that the service has no record of the transcript being requested.

(6) Use Form 2866, Certificate of Official Record as a cover sheet for all requests for certified documents, except for FOIA requests.

(7) When preparing the packages to be sent to the originator, refer to IRM 10.5.1.6.9.3, Shipping, for the proper procedures for shipping documents that contain Personally Identified Information (PII).

(1) IRS employees in Criminal Investigation, Compliance, Advisory, Insolvency, Appeals, Disclosure, Counsel, as well as Treasury Department employees in the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Office of the Treasury Inspector General for Tax Administration (TIGTA) are authorized to request preparation of Form 4340, Certificate of Assessments, Payments, Other Specified Matters. Employees within Submission Processing with responsibility of processing refund litigation cases may also submit requests for certified transcripts.

(2) These requests are made on a Form 4338, Information or Certified Transcript Request, and sent to the appropriate campus as shown below.

(3) When it’s determined that the Form 4338 can be processed, log into an inventory log for tracking purposes.

(4) Preparation of Form 4340 is limited to a few authorized campus employees only. At present, these employees are generally in the Compliance and Accounting Branch functions.

(5) The following information is required on Form 4338 to initiate a request forForm 4340:

1. Complete TIN information, including a validity indicator or NMF indicator (if applicable).

2. Complete name and address information (if applicable).

3. The Description for your type of request must be indicated.

Note: If Form 4340 is needed for other legal purposes, mark the "Certified" box.

4. The date the Form 4340 is needed (date should encompass two weeks preparation time). A request marked "ASAP" will be available in 30 days or less.

5. The reason for the request.

6. The type of transcript needed (usually "Specific"). If "Complete" is marked, specify the earliest tax period needed.

7. The MFT.

8. The period ending. Multiple periods can be on the same form. Add additional periods in the area above the Requester at the bottom of the page on Form 4338.

9. Any additional information that may assist in locating the account if the taxpayer's EIN, SSN, or complete name is not known.

10. The complete name and address of the requestor. If this is an expedited request, include a street address.

11. The title of the requestor.

12. The current date.

13. The complete telephone number of the requestor, including area code. If the telephone number is omitted or incomplete, Form 4338 may be returned to the requestor.

Note: When discrepancies that may exist between Form 4338 and IRM 3.17.243, IRM 3.17.243 will be your main source guidance and supersedes the Form 4338 instructions.

(6) If an incomplete Form 4338 is received, contact the requestor for the missing information. If unable to contact the requestor, return Form 4338 to the requestor with instructions to resubmit Form 4338, including the missing information. All requests being rejected must be documented either through use of a transmittal or via email.

(7) Processing instructions for Form 4338 follows:

1. All receipts that are being processed must be logged into an inventory control log.

2. If the taxpayer's account and tax period are located on Master File, input command code MFTRA with Request Type "J", EIN/SSN, MFT, and tax period. The terminal response with this definer will be the same as the other MFTRA command code definers. SeeIRM 2.3.2, IDRS Terminal Responses.

3. The day following the input request (if the input is before the campus cutoff time), Master File will generate a routing page for sorting and routing the transcript, a cover sheet to be associated with MFTRAJ Transcript, a report identifying all transaction codes that were on the Master File but not included on the MFTRAJ Transcript, and hard copy literal transcript entitled Form 4340, Certificate of Assessments, Payments, Other Specified Matters. This transcript will have entity and tax module data from the Master File associated with the input SSN/EIN.

   Note: If review of the report identifies a transaction that was not included on the MFTRA-J Transcript, andForm 4338 indicated transactions must be included on the transcript, use the NSA to produce Form 4340.

(8) If review of the information provided on Form 4338 indicated an automated Form 4340 could not be produced, e.g., Non-Master File Account, account on retention, additional steps will need to be taken.

(9) When transcripts are received, verify the information on Form 4338 and compare to the transcript received. If discrepancies are identified which cannot be resolved through research or contact with the requestor, return Form 4338 to the originator with a brief explanation of the problem.

(10) The following Command Codes can be used to verify the transcript information:

• INOLES—Verify name and TIN as shown on Form 4338

• ENMOD—Verify name and TIN as shown on Form 4338

• IMFOL/BMFOL—Display summary of tax periods on Master File

• SUMRY—Display summary of all available tax periods on active IDRS

• TXMOD—Display summary of specific tax periods on active IDRS

• IMFOLV/BMFOLV—Display tax periods on Retention File

(11) If the response to an IMF transcript request indicates the module was retired in cycle 199501 or later, and the request is not an expedited request, input command code IMFOLB to activate the register. After seven days, MFTRA-J or MFTRA Specific can be requested.

(12) If the response to a BMF transcript request indicates the module was retired in cycle 199501 or later, and the request is not an expedited request, input command code BMFOLB to activate the register. After seven days, MFTRA-J or MFTRA Specific can be requested.

(13) Obtain appropriate signatures onForm 4340 and/or Form 3050, Certification of Lack of Record, and Form 2866, refer to Delegation Order 11-5 as contained in IRM 1.2.2.11.5, Delegation Order 11-5. After signatures are obtained, prepare a complete photocopy of all documents to be maintained at your site. Forward the original document to the requestor.

(14) Form 2866 is present, attach to the corresponding Form 4340.

(15) Prepare a separate Form 4340 for each type of tax requested and each tax period.

(16) Requests for NMF Form 4340 - A Form 4340 (NMF), Certificate of Assessment, Payments, and Other Specified Matters, Certified Transcript can be requested via ANMF in place of the Form 4340 that was generated from the CERTS application.

• The Form 4340 (NMF) reflects an assessment and any subsequent transactions to the assessment and may not represent the entire liability for a particular tax period.

• The ANMF system is researched for all accounts that pertain to the requested tax period.

(1) This subsection contains procedures for preparing the original Form 2866.

(2) The Form 2866 must be prepared for all requests excluding Freedom of Information Act (FOIA) requests.

(1) There are situations which require the aid of the courts to collect or recover taxes. The U.S. Department of Justice (DOJ), Tax Division, represents the IRS in both civil and criminal litigation filed in federal district courts. U.S. Attorneys’ Offices may also represent the IRS in litigation.

(2) Monies collected through the Department of Justice (DOJ) in civil cases are electronically transferred to IRS via Intra-Governmental Payment and Collection (IPAC). See IRM 3.17.243.7.2, DOJ Payments Transferred via IPAC, for more information.

(3) Payments known as "Debt Management Payments" will also be received from DOJ. These payments are handled differently because they are not payments of tax liabilities. See IRM 3.17.243.7.6, Processing Debt Management Payments, for more information

(4) Monies may also be paid to the IRS as the result of a criminal case where the court orders the defendant to pay restitution. Criminal restitution payments may or may not be applied to taxpayers’ accounts, depending upon whether civil tax assessments have been made. See IRM 3.17.243.7.9, Court Ordered Criminal Restitution Payments, for more information regarding criminal restitution payments.

(1) Intra-Governmental Payment and Collection (IPAC) provides a standardized interagency fund transfer mechanism for federal program agencies. Monies received by DOJ because of civil litigation are transferred to the IRS via an IPAC 1081, Voucher and Schedule of Withdrawals and Credits. A detailed listing to support transfer of funds is emailed to IRS by DOJ along with the individual payments comprising the total amount transferred via IPAC 1081.

(2) Payments on the IPAC support listing may be from three different sources within the Department of Justice (Tax Division, US Attorneys and the Debt Management Section), each of which are to be researched and processed differently.

(3) The support listing shows the following information:

• Debtor Payment Information, reflects the total amount of each payment collected by DOJ; and

• Administrative Adjustments, lists those payments on which three percent has been withheld by DOJ and reflects the amount withheld on each payment.

(4) Payments from Tax Division have the legend "TAX DIVISION" and a telephone number in the far right-hand column. Those from the Debt Management Section show "Debt Accounting Operations group" along with a phone number.

(5) Procedures for the journalization of DOJ IPAC receipts are found in IRM 3.17.63, Redesigned Revenue Accounting Control System (RRACS). DOJ (IPAC) receipts are journalized to Account 4975, Liability DOJ Receipts, per IRM 3.17.50, Redesigned Revenue Accounting Control System (RRACS) Procedures.

(6) The following instructions are to be used by tax examiners working DOJ IPAC to research IDRS and apply credits to the proper tax modules. Every effort should be made to utilize in-house (IRS campus) resources and these instructions before calling other offices and agencies for assistance.

(7) By statute, DOJ may withhold three percent of all amounts collected pursuant to civil debt collection activities. Therefore, if a civil payment is received through IPAC for $100.00, DOJ will "hold-back" $3.00 and transfer the remaining $97.00 to the IRS.

1. The Detail Listing to Support Transfer of Funds shows the payments on which the three percent has been withheld by DOJ. The amount of each payment withheld by DOJ is provided.

2. A comparison must be made to determine the payments on which the three percent was withheld and to compute the actual amount transferred to IRS in those cases where the hold-back occurred. Taxpayers must, however, be given full credit for the total amount received by DOJ (see below, IRM 3.17.243.7.6, Processing Debt Management Payments, guidelines for processing civil payments on which three percent has been withheld by DOJ).

   Note: For Criminal Restitution, there is NO three percent charge

(8) The order of processing payments received through IPAC are:

• U.S. Attorney payment

• Tax Division payments

• Debt Management payments

(1) Four determinations must be made for all U.S. Attorney and Tax Division payments:

• Assessment Liability

• Taxpayer identification

• Module(s) to which payment is applied

• Assessment status.

Note: IPAC receipts must be journalized within two (2) days.

(1) The persons supplying this data on the listing attached to the SF 1081 are scattered throughout the United States. Information, particularly the "cause of action", received from U.S. Attorneys may be less standardized than from the other sources. Only U.S. Attorneys are involved in criminal cases.

(2) No supplemental worksheet will be received from DOJ for US Attorney payments.

(3) Taxpayer identification and verification - Contact the U.S. Attorney at the number shown on the IPAC support listing to verify the taxpayer found during research or to identify the taxpayer if the research is unsuccessful.

(4) Area office identification - From the case file, the U.S. Attorney can also tell the area office from which the case was referred. If prior research indicates the case is NMF, call the Kansas City campus’ NMF function for help in taxpayer and module identification. Secure IDRS transcripts for all NMF cases in Tax Delinquent Account (TDA) status and ANMF transcripts for all NMF accounts.

(5) Case type - See Exhibit 3.17.243-6 for a list of U.S. Attorney case types. While restitution payments in criminal tax cases are disbursed by the clerk of court offices, such payments may be included on IPAC from a U.S. Attorney’s Office. If it appears that a criminal restitution payment is being transferred via IPAC, follow the procedures set in IRM 3.17.243.7.8.

(6) Module verification - Depending upon the case type, and whether or not the liability has been assessed, contact the appropriate area office for verification of the module to which the payment should be posted (or assessed and posted). For bankruptcy cases, contact the Insolvency group at *SBSE Field Insolvency. For criminal restitution cases, contact the appropriate Advisory Probation Liaison, or the appropriate Special Agent in Criminal Investigation. See IRM 3.17.243.7.9, Court Ordered Criminal Restitution Payments, for more information regarding criminal restitution payments. For all other cases, contact the appropriate Collection Advisory Group. See Pub. 4235 for Collection Advisory Group contact information.

(1) Delay processing Tax Division payments for no longer than one week to allow supplemental log sheets prepared by Tax Division paralegal employees to arrive. These worksheets contain the TIN and type of liability involved in each case. If minimal IDRS research performed during this week reveals the taxpayer, ECC-MTB transcripts may be requested while awaiting the worksheets. If further assistance is needed, contact ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the DOJ collection paralegal responsible for the case or the area office.

(2) See Exhibit 3.17.243-7 for a list of judicial [case management] districts.

(3) Most states have more than one judicial district. With the exception of seven states, all judicial districts within the state are in the same IRS area. Exceptions (most likely IRS area listed first where there is a choice):

1. California - Northern: San Jose, Sacramento, San Francisco; Central: Los Angeles or San Jose; Eastern: San Jose or Sacramento; Southern: Laguna Niguel or Los Angeles.

2. Illinois - Northern: Chicago; Central and Southern: Springfield

3. Florida - Northern: Jacksonville; Middle: Jacksonville or Ft. Lauderdale; Southern: Ft. Lauderdale

4. New York - Northern: Albany or Buffalo; Eastern: Brooklyn; Southern: Manhattan or Albany; Western: Buffalo

5. Ohio - Northern: Cleveland or Cincinnati; Southern: Cincinnati

6. Pennsylvania - Eastern or Middle: Philadelphia; Western: Pittsburgh

7. Texas - Northern: Dallas; Southern: Austin or Houston; Eastern: Dallas or Houston; Western: Dallas or Austin

(4) When processing NMF cases, all judicial districts are serviced by the Kansas City campus.

(5) For DOJ collection paralegal contacts, see Exhibit 3.17.243-8.

(6) The case type or cause of action is shown on the supplemental worksheet under the column labeled "Type of Case/Attorney Assigned."

(7) See Exhibit 3.17.243-9 for a list of Tax Division civil case types giving rise to the litigation.

(8) Common NMF case types are:

1. 3204-Frivolous Return Penalty (IRC 6701 and IRC 6702)

2. 3205-Return Preparer Penalty (IRC 6694 and IRC 6695)

3. 3206-Abusive Tax Shelter Penalty (IRC 6700)

4. 3207-Windfall Profits Tax

(9) Case types not shown on the list in Exhibit 3.17.243-9 are criminal causes of action involving the U.S. Attorney. Payments received in criminal cases are restitution payments. Generally, criminal restitution payments made to the IRS are not included in IPAC, but are made through the clerk of court office. See IRM 3.17.243.7.9, Court Ordered Criminal Restitution Payments.

(10) Exhibit 3.17.243-10 shows common phrases used by the Department of Justice on IPAC 1081 when describing the cause of action. Narrative descriptions of each phrase are provided.

(11) Module verification - depending upon the type of case and whether or not the liability has been assessed, contact the appropriate area office function (Collection Advisory or Insolvency) for verification of the module to which the payment should be posted (or assessed and posted).

(1) No attempt will be made to post Debt Management payments to taxpayers' accounts as they are not payments of tax liabilities. Payments intended for other agencies will be returned to DOJ via IPAC. Only the actual amount received by Kansas City Submission Processing Campus (KCSPC) will be returned to DOJ. If DOJ withheld three percent of a payment, it will be necessary to compute the amount to be returned to DOJ. This is done by subtracting the amount withheld by DOJ from the amount of the payment shown on the IPAC support listing.

(2) All DOJ IPAC payments made to the IRS, along with the Detail Support List, will be sent to the Kansas City Submission Processing Center (KCSPC) using Agency Location Code (ALC) 20-09-0900 and address:

IRS DOJ/Criminal Restitution
333 W. Pershing Road
Kansas City, MO 64108
Attn: Mail Stop 6261, DOJ IPAC.

(3) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(4) Taxpayers must be given full credit for their payments in civil cases where DOJ has withheld three percent. To post the full amount to the taxpayers' accounts, the following steps must be taken.

1. Account 6950, DOJ Civil Debt Collection Hold-back, will be used to "offset" the amount of monies withheld by the Department of Justice on civil cases.

(5) Prepare Form 3809, Miscellaneous Adjustment Voucher, to:

• debit Account 6950 for the three percent withheld by DOJ, less any credits transferred to IRS in error;

• credit Account 4975 (liability, DOJ Receipts) for the same amount.

(6) Prepare Form 2424, Account Adjustment Voucher, to transfer the credit to the Master File or appropriate general ledger account:

• Debit Account 4975 for the full amount paid by the taxpayer as shown in Section I, Debtor Payment Information, of the IPAC support listing.

• Credit the Master File or general ledger account for the same amount using a Designated Payment Code as appropriate.

  Note: All Bankruptcy cases are input using DPC 03.

• In the explanation block on Form 2424 notate "Lockbox DOJ"

(7) Follow internal procedures for routing documents to RACS for journalization.

(1) In any case in which DOJ has secured a judgment, either at IRS' request or by counter-claim, the collection statute of limitations must be suspended for all affected modules. The office that is controlling the case, usually Collection or Exam, is responsible for requesting input of the proper controls. See IRM 25.3.6.6, Litigation and Judgments for actions to be taken by Collection Advisors, when assessments are reduced to judgment.

(2) As each item is identified for the specific taxpayer account or reversal to DOJ, it will be annotated on the IPAC Listing.

(3) If the account to which the payment is to be posted is a Non-Master File assessment, prepare Form 2424 and obtain an ANMF account transcript to include with application of the payment.

(4) When all possible research has been performed and the unresolved item in Account 4975 is more than two years old, associate the documentation supporting the unresolved item with a Form 8758, Excess Collections File Addition, to add the amount to Account 6800, Excess Collections File (XSF). See IRM 3.17.220, Excess Collections File, for completion and routing of Form 8758. Figure 3.17.243-2 is an example of a completed Form 8758.

(5) Payments which are relatively small and in even dollar amounts may represent installment payments on liabilities, because of a DOJ action.

(1) Upon receipt, the IPAC transaction sheet is journalized by the RACS Team into the 4975 Liability DOJ receipt Account and forwarded by email to the DOJ-IPAC lead.

(2) The DOJ-IPAC Lead will:

1. Log the IPAC data in the inventory control log

2. Log the IPAC receipt on the 4975 spreadsheet (to monitor processing time)

3. Assign IPAC to technician by email

(3) Within two weeks of receipt, the technician will create an electronic IPAC file labeled with the IPAC number within their SEID folder on the KC SPC Accounting DOJ Team SharePoint site.

(4) The IPAC file will contain the following:

1. IPAC billing and listing

2. Form 2747, History sheet

3. Form 3809, Miscellaneous Adjustment Voucher

4. Any email traffic/documentation pertaining to the IPAC

5. Subfolders for each type of application (MFT, Tax Class (TC), FBAR, NMF, etc.)

(5) Use all available resource tools, i.e., IDRS, Payment Log, Retention folder, emails and Automated Lien System (ALS), and if appropriate, initiate phone calls with DOJ or other IRM Business Units to determine the following;

1. Taxpayer’s identity

2. Where the payment is to be applied

(6) Civil payments can be applied in the following methods:

1. Apply to Taxpayer account: prepare Form 2424 to debit 4975, DOJ Liability account and credit taxpayer’s account 4220 (IMF), 4120 (BMF), or 4420 (NMF) as appropriate.

2. If a listing includes an FBAR (Foreign Bank Account Records) payment, it must be transferred to Ogden Accounting via Form 2158.

3. Apply to 6800, Excess Collection: prepare Form 2424 to debit 4975 DOJ Liability Account and credit 6800 Excess Collection. Prepare Form 8758 and Form 813 to add payment to the Excess Collection File. Make 2 copies of each.

4. Leave credit in 4975 DOJ Liability account.

(7) For payments determined to remain in the GL 4975 account, a copy of the listing page(s) showing the credit and related 3 percent will be added to the 4975 IPAC subfolder on SharePoint.

(8) Technicians will update the 4975 spreadsheet with the following:

1. Items remaining in the 4975 account

2. Date IPAC was sent to worklead for review

3. Date journaled documents were returned from RACS

4. Updated balance within two weeks of receiving the Form 8166 from RACS

(9) Actions to take for processing are:

1. Sort by MFT and create folders for each MFT bundle

2. Verify the posting documents balance to the Form 813 total

3. Verify all Form 813 and other forms prepared balance back to the IPAC document

(10) On the IPAC listing, label each payment with the appropriate MFT or TC for the classification of the payment. Ex: MFT 01 = TC 1, MFT 30 = TC 2, etc. Exceptions include; documents that are 4975 and 6800 Accounts, the account number will be used instead of a TC.

(11) On the last page of the listing notate the balance for each TC or MFT, NMF, FBAR, 6800 or 4975 that is being submitted and add them together. It must equal the Gross Payment, then subtract the 3% Fee and the difference will equal the Total Payments.

(12) Verify that the 3 percent amounts are correct by adding them up. This will balance back to the 3 percent fee indicated on the IPAC listing. Prepare Form 3809: debit 6950, DOJ Civil Debt Collection Hold-back and credit 4975, DOJ Liability account.

(13) Prepare folder for review by adding the week ending date to the IPAC file name and notify lead by email that it is ready for review. The folder must contain the following:

1. IPAC Billing and Listing

2. Form 2747 History Sheet

3. All Forms 813

4. Forms 2424 – 4220 (IMF), 4120 (BMF), 4420 posting documents, 6800 posting documents (Form 8758)

5. Form 3809 – 3 percent posting document

6. Form 8166 (if applicable)

7. Form 2158 Request sheet (if applicable)

   Note: Ensure IPAC is in balance before releasing for journalization.

(14) The lead will load the IPAC to RACS for journalization.

(15) When journalization is completed, the lead will email a copy of the document to the technician for them to place it in the SharePoint IPAC folder and monitor for posting to the account.

(16) Completed IPAC files are labeled with the IPAC number and closed date once all monies have been applied. The file will then be moved to the appropriate closed year within the FRC Retention folder on SharePoint.

(1) Restitution is a legal remedy that can be ordered by the court, in a criminal case. A restitution order requires the criminal defendant to pay money or render services to victims or to redress the loss the defendant has inflicted. Normally imposed during sentencing, it can be agreed to by the parties in a plea agreement or imposed as a condition of probation or supervised release.

(2) In a criminal tax case, the offense generally results in the loss of government property, e.g,., the money to which the government was entitled under the tax laws but which the defendant did not pay. Through a restitution order, a court can require a defendant to pay money to the IRS to redress the losses they inflicted on the federal treasury.

(3) In most criminal tax cases involving restitution, the amount of the tax loss is calculated from evidence admitted at trial or from information contained in the plea agreement and presented to the district court at sentencing.

(4) Since August 16, 2010, the IRS has authority to assess and collect restitution ordered in a tax case in the same way as if it were a tax.

(5) Restitution should not be confused with civil tax liability.

• The amount of the loss a defendant can be ordered to pay as restitution must result from the defendant’s criminal activity and that amount generally does not include civil tax penalties.

• A restitution order does not bar the IRS from determining civil tax liability in an amount greater than the amount ordered payable to the IRS as restitution.

• A restitution order also does not prevent a taxpayer from challenging the IRS’s determination that the civil liability exceeds the amount of the restitution order.

(6) Judgment and Commitment Orders (J & Cs) normally specify that defendants are to submit restitution payments to the office of the clerk of court in the district in which the defendant was sentenced. This includes restitution payments required to be paid to the IRS.

(7) The clerk of court has the responsibility for receiving, processing, and recording restitution payments made by defendants. The clerk of court will forward the money (Treasury checks, personal checks, and/or money order) to the victim(s) listed in the restitution order, which may include the IRS. Criminal restitution payments made to the IRS must be mailed to the address below.

(8) The clerk of court offices will disburse criminal restitution payments to the IRS by issuing Treasury checks to the IRS. Effective October 1, 2009, all criminal restitution payments to the IRS are being processed by Submission Processing at the Kansas City Campus, only. The clerk of court offices has been requested to send all criminal restitution payments to the following address:

• IRS-RACS

• Attn: Mail Stop 6261, Restitution

• 333 W Pershing Road

• Kansas City, MO 64108

Exception: If criminal restitution payments are routed to an IRS office or campus other than Kansas City, they must be transshipped via overnight traceable method per IRM 3.8.45.7.26, Department of Justice/Criminal Restitution Program Payments (KCSPC Only).

(9) The Special Agent has the responsibility of completing Form 14104 (Notification of Criminal Restitution or Court ordered payments payable to the IRS) and forwarding the completed form to the secure email account: *W&I Criminal Restitution.

(10) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(11) Personal checks and/or money orders received directly from the taxpayer and not through the ‘clerk of court' are still considered restitution payments if the payments are being made pursuant to a federal court order in a criminal case.

(12) There are other forms of credit that may be applied to decrease a restitution balance. When these credits appear on the restitution module, they must be added to the DOJ database as they will decrease the outstanding restitution debit.

• IDRS generating an offset of refund credits to decrease the Restitution Based Assessment (RBA) MFT 31 debit balances. Refer to IRM 3.17.243.7.9.7 for procedures pertaining to these credits.

• Levy, Offer In Compromise (OIC), and bankruptcy payments.

• State Income Tax Levy Program (SITLP), which are TC 670 payments with DPC 20.

(13) Payments and credits posted to a civil tax account may contribute toward reducing the amount of restitution assessed. A duplicate assessment is created when there is a Civil tax assessment in addition to the amount assessed as RBA, or when co-defendants are assessed restitution that relates to the same or similar tax issues. The duplicate assessment amounts may or may not be equal dollar amounts. Cross-referenced payments and credits can be identified on an RBA module by TC766 RC337. Refer to IRM 5.19.23.3.2 for more information on cross-referencing.

(14) United States v. Westbrooks, 858 F. 3d 317, 328 (5th Cir. 2017), vacated on other grounds by 138 S. Ct. 1323 (2018), Due to the Tax Division’s acquiescence to a Fifth Circuit case, restitution ordered solely as a condition of either supervised release or probation is only enforceable beginning with the first day of that period (the first day of supervised release following a prison term or the first day of probation, respectively) and ending with the last day of that conditional period as directed by the sentencing court. 

(15) Klein - As a result of the Klein v. Commissioner decision, the Service can only assess interest and or penalties if it is included in the restitution amount ordered by a federal district court. Prior to the Klein decision, the IRS was assessing non-court ordered interest and Failure to Pay (FTP) penalty on RBA. Only interest included with the restitution is deemed appropriate on RBA modules (MFT 31) and does not accrue. Klein decision cases can be identified by interest and/or penalty abatements where interest and/or penalties were not originally included in the J&C. Proper application of restitution funds according to the Form 14104 tax, penalty and interest amounts is key in avoiding payments from being transferred to Excess Collections File (XSF).

(1) The Department of Justice (DOJ) criminal restitution case files are to be maintained in alphabetical order by last name of defendant. The physical case files are organized in the following manner.

(2) The left side of the case file will contain:

• The Restitution Information Sheet (RIS) or the Form 14104, if not available, notate on history sheet

• Judgement and Commitment (J&C) order, if sealed or not available, notate on history sheet

• Miscellaneous items such as emails and all correspondence

• Complete and up to date history sheets

Note: History sheets must be prepared from receipt of the case and are to include documentation of all actions taken, any pending actions, and any communication/contacts that have been conducted. The most recent history sheet is filed on top.

(3) The right side of the case file will contain:

• IDRS IMFOLI print when setting up the case.

Note: Replace with IDRS IMFOLI print identifying assessment information when available.

• All payment supporting documentation (Form 3244, Form 2424, copies of checks, etc.).

• Current DOJ Summary Report. This is printed and filed on top.

(4) Beginning in June 2023, criminal restitution cases will be maintained digitally on the KC SPC Accounting DOJ Team SharePoint site. Digital case folders will contain the following:

• Complete and up to date history sheets

• J&C

• Form 14104 or RIS, if available

• IDRS IMFOLI print

• DOJ Summary Report

• Payment sub-folder containing Forms 3244, 2424 and check copies

• Miscellaneous items sub-folder containing emails and any correspondence (if applicable)

(1) To close a criminal restitution case one of the following conditions must be met:

1. Court ordered restitution is satisfied.

2. Twenty (20) years have passed since the filing date of the J&C order.

   Note: The time for the United States (Tax Division) to collect a criminal restitution judgment differs from the time for the IRS to collect it administratively. Typically, judgments are enforceable for 20 years and longer. When it comes to administrative collection of an RBA by the IRS, the CSED for restitution payments is 10 years or less depending upon the circumstances. See IRM 3.17.243.7.9 for information on Westbrooks cases. Restitution payments that continue to be received after the CSED has passed shall be kept in the GL 6400 account.

3. Taxpayer is deceased and at least two years have passed since their Date of Death (DOD) listed on INOLES.

   Note: In the event of the death of the person ordered to pay restitution, efforts can be made to collect from the estate. Keeping the case open for two years following their death will allow for possible collections to occur.

(2) When closing a case, contact the USDC to confirm closure and to ensure no further restitution payments are sent to IRS. If there is a discrepancy in restitution balances that needs to be reconciled, request a case inquiry and work with the court to resolve any issues.

(1) Criminal restitution in IRS employee embezzlement cases (7610 Account) – For posting assistance with unassessed cases, the accounting technician may call Refund Fraud and Investigative Support (RFIS) or Examination as indicated by case type in the correct area office. Both case type and area office identification instructions are in the procedures for the specific source of payment.

(2) The liability in any case of embezzlement by an IRS employee should be assessed as provided for in the IRC 7804(c) rather than treating it as a Judgment Receivable. Research may indicate that the assessment needs correction to agree with the court decision. These cases are transferred to the 7610 Account at the appropriate campus.

(3) When there is a court ordered restitution on an employee embezzlement case (7610 Account), a memorandum is sent to the Kansas City Loss/Shortage Coordinator. The memorandum provides the name and social security number (SSN) of all persons ordered to make restitution, amount of restitution payments and the case number.

(4) Employee embezzlement cases are monitored monthly by the Loss/Shortage Coordinator to ensure that payments are made:

• If payments are not received, contact the Treasury Inspector General for Tax Administration (TIGTA) Special Agent in Charge (SAC)

• If payments are made and not transferred from the Kansas City Loss/Shortage Coordinator, secure the payment information from the probation officer (use the TIGTA SAC) and contact the Kansas City Loss/Shortage Coordinator at 816-499-5949.

(5) Court ordered restitution payments received in Kansas City for employee embezzlement cases (7610 account) will be transferred to the appropriate campus, within two (2) days of receipt, via Form 2158.

(1) In accordance with Management Accountability Reviews regulations, managers are responsible for ensuring that internal controls are effective and efficient in day-to-day operations and safeguard against waste, fraud and abuse. This is accomplished by conducting operational or management control reviews to identify weaknesses and mitigate known risks within the managers’ realm of responsibility.

(2) Program or "spot" reviews must be performed for accuracy and completeness. Problems identified will be discussed with the appropriate functional area for corrective action.

(3) The front-line manager or lead of the area working the criminal restitution cases will conduct periodic reviews of cases throughout the month.

(4) The reviews must be documented and maintained for a one-year period.

(5) Review to ensure:

• Checks received from the clerk of courts with all required identifying information are processed timely.

• Notification Form 14104 are being received (via email "W&I Criminal Restitution") from the Special Agents assigned to the case and placed in the appropriate case file.

• Case folders are being prepared, as required by the IRM for each defendant.

• All actions taken on a case are documented and payments are correctly associated with an active case.

• Money received is being recorded in the DOJ Access database.

• All appropriate journal actions are being completed timely.

• Inquiries regarding the receipt and application of payments are being handled on a timely basis.

• History sheets are signed by the technician working the case, as well as anyone reviewing the case file (the initial reviewer, manager, etc.).

(6) At least one program review must be performed each quarter by the manager or lead. A copy of this report must be forwarded to the HQ Analyst with program responsibility.

(7) Quarterly reports are due Dec. 31, Mar 31, June 30, and Sep 30. The quarterly reports must capture:

1. Timely application of incoming checks.

2. Timely transfer of credits from the 6400 GL account to the MFT 31, Restitution Based Assessment (RBA) modules.

3. Case folders are complete with all required documentation.

4. Criminal Restitution database is updated with payments, case information, and other RBA information.

5. History sheets in the case files are completed and initialed.

Note: Corrective action taken for discrepancies must be indicated on the report.

(8) The Chief Financial Officer (CFO) function also performs regular balancing and reviews of the General Ledger (GL) 6400 (2355 sub-account) to identify discrepancies in account activity.

(1) The following procedures apply only to payments received prior to January 2013.

(2) Submission Processing P&A will review and then forward the listing of the taxpayers that are eligible for payment to the Entity function. Entity will validate the social security numbers (SSNs) and names on the listing of USDA Settlement Accounts. Entity will "000" all the MFT 30 accounts if a correct TIN is present. Entity will also research for cross reference TINs including EINs for estates or farms and spouse's SSNs. Entity will then notate the cross-referenced TIN(s) on the spreadsheet, so the payment is applied to the correct account. Any incorrect SSNs with no viable cross references will be notated on the lists. After Entity has completed the review and included notations about questionable entity cases, they will send the lists back to the Submission Processing P&A contact. Entity will set up Form 1041 Estates in certain situations. The P&A contact will return the lists to EPIQ, with a copy sent to Accounts Management P&A. The Submission Processing P&A contact will return a list of questionable entity cases and request further information on the claimant account. (estimated work time - seven (7) days)

Submission Processing P&A

(3) The Submission Processing P&A contact will forward the list of all cases to the Department of Justice (DOJ) requesting the total dollar amount present on the listing and provide the Agency Location Code (ALC) to transfer the funds (See Exhibit 3.17.243-11 for a list of USDA Contacts). The Submission Processing P&A contact will request that DOJ include an expedite request when requesting the funds to be transferred to the Internal Revenue Service (estimated time 24 -48 hours).

(4) The Submission Processing P&A contact will also inform the Accounting RACS Team that an IPAC has been ordered and provide the amount of the IPAC.

Accounting

(5) Accounting RACS Team will alert the Submission Processing P&A contact, and the contact in the team that's processing the cases, when the funds arrive via IPAC. (Estimated time 24–48 hours after BFS sends the payment).

(6) When IPAC transmission is received, the RRACS DBA prepares Form 3244 if current year transactions or Form 8758 if prior year transactions and hand carries to URF/XSF to be cleared. The RRACS DBA prepares Form 8166 and inputs to RRACS. A copy of Form 8166 together with Form 3244 or Form 8758 is hand carried to the team processing the cases for input of the credit to XSF. When the IPAC funds have been received and placed in the appropriate account (URF/XSF), there should be no delay in processing the credits to the claimant's account(s). Credits are applied to the accounts with a TC 670 and a TC 570 to hold (freeze) the credit. AM P&A Staff monitors the accounts and releases the freeze, if necessary.

(7) The USDA Project is reported under program code 85390 with appropriate function, i.e., 390, 710, etc.

(1) A DLN is a control number assigned to every return or document.

(2) Documents to be numbered are received directly from other operational areas within a campus or transferred in.

(3) Each document will be numbered with an 11 or 13 digit DLN.

(1) File Location Code - first and second digits

1. Indiana - 35

2. Michigan - 38

3. All other states, provinces or countries - 31

(2) Tax Class - third digit

1. NMF - always "6"

2. MF - MFT determines the tax class

(3) Document Code - fourth and fifth digits. All forms have a specific doc code (see chart for forms and doc codes listed).

(4) Julian Date - sixth, seventh, and eighth digits (3-digit number).

(5) Blocking series - ninth, tenth, and eleventh digits (3-digit number). See Exhibit 3.17.243-1.

(6) Item number - twelfth and thirteenth digits. The first document in a blocking series will always be "00".

(7) List Year

1. NMF - double digits (example: 08)

2. MF - single digit (example: 8)

(1) Each document is assigned a DLN.

1. The DLN is established on the SCCF when the document is being processed and remains on the SCCF until either accountability is transferred to Enterprise Computing Center or the document is deleted.

2. RACS sends Form 813 to the Data Conversion Function Unit to establish the DLN on SCCF.

3. When the document posts the Form 813 is sent to Data Control for balancing to SCCF on the SCF 11-42 CRL.

(2) For more procedures, refer to IRM 3.17.30.1.2, SCCF Control Concepts.

(1) 11 numbers in DLN on Form 813.

(2) 13 numbers in DLN on document.

(3) Do not mix MFTs when numbering.

(4) Do not mix accounts when numbering (e.g., 6550 and 6560).

(5) When preparing Form 813, debit amount goes on left side and credit amount goes on right side.

(6) Cross reference the DLNs on debit and credit side of the document.

(7) On Form 3210 to RACS, accounts cannot be mixed (e.g., 4620 cannot be placed on the same Form 3210 as 6550).

(8) On Form 3210 to RACS, Form 2424 and Form 3809 cannot be listed on the same Form 3210.

(9) 4430 Account cannot be mixed with anything.

(10) 4430, 6550, and 6560 Accounts do not get DLNs.

(11) Tapes must be attached to each Form 813 before work is accepted by the RACS Team.

(12) Tapes must be run from the document, not from the Form 813.

(13) Do not cross out information on Form 813. If a mistake is made, the entire Form 813 must be redone.

(14) Double check your work. Make sure you attach the correct Form 813 to the matching DLN.

(15) Never change money or post partial amount from any document (Form 2424, Form 2158, Form 3809, etc.).