3.17.10. Dishonored Check File (DCF) and Unidentified Remittance File (URF)

(1) These instructions are for employees in Submission Processing Accounting to add and apply dishonored checks to the Dishonored Check File and unidentified/unprocessable remittances to the Unidentified Remittance File.

(2) The extent of research conducted on both Dishonored Checks and Unidentified Remittances will not depend upon the dollar amount of the item. Both large and small cases are to receive equal attention, but large-dollar cases will be worked first.

(3) The Dishonored Check File is a separate file within the Integrated Data Retrieval System (IDRS) containing records of all remittances returned to IRS by depositaries upon which payment was refused.

1. A record of a check will remain on the DCF for 367 days (from the debit voucher/bank date) or until its entry has been voided or the amount of the check has been applied to the correct account.

2. Each DCF record within the file contains the Dishonored Check Number (DCN), reason code, amount of check, type of check, IRS received date and entity information (if known).

(4) The Unidentified Remittance File is separate file within IDRS containing all received remittances that cannot be immediately identified or applied.

1. Each URF record in the file represents a Revenue Receipt less than one year of the IRS received date.

2. Each URF record contains the Unidentified Remittance Number, amount of remittance, type of remittance, received date, taxpayer’s name and any other identifying information.

(1) New hire and annual refresher training are required for all Dishonored Check and Unidentified Remittance employees.

(2) The below training courses are available in the new learning plan, The Integrated Talent Management (ITM) System.

(3) All new hire DCF and URF clerks and technicians will complete the new hire training within 30 days of their start date.

(4) All DCF and URF clerks and technicians will annually complete the refresher training by January 31. Notification of scheduling/completion of the refresher training will be sent annually to HQ by the Friday of the first full working week in February.

(1) First line managers of personnel working Dishonored Check File (DCF) and Unidentified Remittance File (URF) cases will conduct periodic reviews of cases assigned to all employees. The purpose of the review process is to make certain that employees are properly closing cases in a timely manner, identifying Erroneous Refunds, and referring cases to the Erroneous Refund Unit. Managerial Reviews should be submitted to the DCF/URF headquarters analyst via e-mail by the 15th of the month following the month or quarter.

1. Reviews should be conducted, at least monthly, during January to June (quarterly for the remainder of the year) for DCF. Reviews should be conducted quarterly for URF.

2. DCF-Sample cases under 21 days old, including Bank Adjustments; review all cases over 21 days old.

3. URF-Sample cases under 10 months old. Review all cases over 10 months old.

4. All reviews will be documented.

Note: Additional IDRS training on how to identify and stop erroneous refunds, or counseling may be warranted if deficiencies are noted.

(2) In addition to the caseload reviews, samples of the following output listings shall be reviewed quarterly to ensure that all employees are taking adequate and proper actions.

1. DCF- Restricted Application Register (DCF03), Applications for IMF/BMF (DCF05), IMF Erroneous Refund Report (DCF25), BMF Erroneous Refund Report (DCF45) and Dropped Listing/Transfers to Unapplied Debits Account (DCF54).

Note: DCF25 and 45 currently list cycles for the previous 12 months. Research is only required on the current and previous cycle.

2. URF- Restricted Application Register (URF03) and Dropped Listing/Transfers to Excess Collections (URF50).

(3) First line managers of personnel working Dishonored Check File (DCF) must ensure that erroneous refunds caused by dishonored checks are properly identified and stopped. Management must ensure that tax examiners are trained to identify and intercept pending refund.

(1) The following table contains a glossary of terms:

(1) The following IRMs are referenced and may be required to research specific instructions or may be used as resources:

1. Document 12990, Records and Information Management Records Control Schedules

2. IRM 11.3.1, Introduction to Disclosure

3. IRM 11.3.3, Disclosure to Designees and Practitioners

4. IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria

5. IRM 2.3, IDRS Terminal Responses

6. IRM 2.4, IDRS Terminal Input

7. IRM 20.1, Penalty Handbook

8. IRM 20.2, Interest

9. IRM 21.1.1.4, Communication Skills

10. IRM 21.10, Quality Assurance

11. IRM 21.2.2, Research

12. IRM 21.3.3, Incoming and Outgoing Correspondence/Letters

13. IRM 21.4, Refund Inquires

14. IRM 21.4.5, Erroneous Refunds

15. IRM 21.5, Account Resolution

16. IRM 21.5.7, Payment Tracers

17. IRM 3.0.167, Losses and Shortages

18. IRM 3.12.32, General Unpostables

19. IRM 3.17.220, Excess Collections File

20. IRM 3.17.46, Automated Non-Master File Accounting

21. IRM 3.17.63, Redesign Revenue Accounting Control System

22. IRM 3.17.64, Accounting Control General Ledger Policies and Procedures

23. IRM 3.17.79, Accounting Refund Transactions

24. IRM 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations

25. IRM 3.30.123, Processing Timeliness: Cycles, Criteria, Critical Dates

26. IRM 3.8.45, Manual Deposit Process

27. IRM 5.1.19, Collection Statute Expiration

28. IRM 5.19.1, Balance Due

29. IRM 3.30.50, Project PCA Production Control Accounting

30. IRM 5.19.9, Automated Levy Programs

31. IRM 5.19.10, Collection Operations Transcript Processing

32. Document 6209, IRS Processing Codes and Information

(1) All employees must be aware of IDRS notice issuance criteria and the input of CC STAUP on a module if closing action cannot be accomplished before the next notice is issued.

(2) The number of cycles must be for a sufficient period to ensure that balance due notices will not be issued prematurely. It may be necessary to extend the previously input STAUP if the transfer procedure is lengthy.

(1) The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. TAS criteria include economic burden, systemic burden, best interest of the taxpayer, and public policy (as determined solely by the National Taxpayer Advocate (NTA)). TAS assists taxpayers who have unresolved problems with the IRS. See IRM 13.1.7 Taxpayer Advocacy Panel Program if more information is required. The Taxpayer Bill of Rights adopted by IRS in June 2014 provides taxpayers with ten rights.  For more information, refer to the Taxpayer Bill of Rights available at http://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights.

(2) While the Internal Revenue Service (IRS) is continually working to serve customers in a quality manner, some taxpayers still have difficulty getting solutions to their problems or getting timely and appropriate responses to their inquiries. Per IRC 7803(c), Congress established the office of the National Taxpayer Advocate (NTA) and its functions within the IRS to assist these taxpayers. TAS has identified criteria that qualify taxpayers for TAS assistance. The Case Advocate will conduct an independent review of actions that have been taken or need to be taken to resolve the problems taxpayers are experiencing.

(3) Employees should not view TAS Case Criteria as a means of excluding taxpayers from TAS, but rather, as a guide to TAS case acceptance. The criteria under which TAS accepts a case should not govern whether a taxpayer is entitled to relief.

(4) If the IRS employee can resolve a taxpayer’s inquiry or provide the relief requested, as outlined in IRM 13.1.7.4, Same Day Resolution by Operations, a referral to a TAS office is not necessary even if TAS case criteria are met. The definition of "same day resolution" is "within 24 hours." However, cases where the employee cannot completely resolve the issue within 24 hours but has taken steps within 24 hours to resolve the taxpayer’s issue, also meet the definition of "same day." Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

(5) An IRS employee should make a referral to a TAS office if the employee receives a taxpayer contact and cannot initiate action to resolve the inquiry or provide the relief requested. A taxpayer does not have to specifically request TAS assistance to be referred to TAS. IRS employees will advise taxpayers of the option to seek TAS assistance when appropriate. TAS will request documentation from the taxpayer if it is needed to support the requested relief or required by the IRM.

(6) TAS has Service Level Agreements (SLAs) with WI, SB/SE, LBI, TE/GE, CI and Appeals to ensure that standards are established within the business operating divisions/functions to process TAS casework when the authority to complete transactions rests with the division/function.

(7) The SLAs are located on the TAS intranet home page under the heading "Service Level Agreements."

(1) IRS has a specific office to collect and process all criminal restitution payments in which the IRS is the victim of a crime. These restitution payments should be processed by the Kansas City IRS Center only. See IRM 3.17.243, Miscellaneous Accounting, for further information regarding Criminal Restitution Payments and Department of Justice (DOJ) receipts.

(2) If criminal restitution payments are routed to an IRS office or campus other than Kansas City, per IRM 3.8.45.6.26, Department of Justice/Criminal Restitution Program Payments (KCSPC Only), they must be transshipped via overnight traceable method to:
IRS - ACO
Attn: DOJ/Criminal Restitution
Mail Stop 6261, P-6
333 W. Pershing Rd.
Kansas City MO 64108

(3) For any questions about the receipt and reconciliation of criminal restitution payments please contact Kansas City Accounting at internal IRS mailbox ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(1) Valid CC BDADD cases must be added to the DCF within one day of receipt of the debit voucher/SF 5515. Checks should be processed from addition to application within 21 days from the date the original debit voucher/SF 5515 was prepared.

(2) Encoding errors, piggy backs, and improper SF 5515 charge backs must be resolved within 45 calendar days of the date the discrepancy was identified.

(3) Single deposit shortages must be resolved within 90 days.

(4) Slipped blocks must have all avenues of research exhausted within 150 calendar days of the date the discrepancy was identified.

(5) All dishonored checks should be processed through their release from transcription or through application on IDRS within 21 days from the date on the Dishonored Check Number. This processing cycle starts on the date the original debit voucher/SF 5515 is prepared and continues until the account is closed by an application (CC BDAPL) or a void (CC BDOUT). See IRM 2.4.25, Command Codes BDADDR, BDADD, BDAPLR, BDAPL, BDOUTR, BDOUT, BDENT and BDINQ. Area Office Automated Lien Systems (ALS) Unit, Case Processing, must be notified immediately if certain dishonored checks cause the premature release of federal tax liens. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

(6) Should dishonored checks be frequently received by an incorrect agency, use of the Government On-Line Accounting Link System (GOALS) to IPAC to IRS should be encouraged, along with an immediate FAX of back-up material. The date of the original Debit Voucher must be used for control and aging of these items.

(7) Each record in the DCF will be analyzed DAILY, by the status code and age (Julian Date and year digit), for retention and/or necessary action.

1. A cumulative aged listing (Control D Report Name "DISHONORED CHK AGED") will be available daily of those OPEN records whose debit voucher date is 15 days old.

2. The listing will be by employee assignment number, area office, by date, bank, voucher, and serial-number.

3. This listing will be used to take appropriate follow-up or research action to meet the 21-day cycle and to identify possible erroneous refunds caused by a dishonored check.

Note: Management must ensure erroneous refunds caused by dishonored checks are properly identified and/or stopped.

4. Use the listing as a source to produce a memorandum to the Director for all checks which have not been applied within the 21-day required cycle. This memo will be generated at the Director's discretion, either based on time or on an inventory level that he or she deems appropriate. The Director may also ask that an early warning system be established before the threshold is reached.

   Exception: Missing checks and checks related to out-of-sequence encoding errors will not be expected to meet the 21-day requirement. See IRM 3.17.10.2.1.1, IRM 3.17.10.2.9, and IRM 3.17.10.4.1 Also excepted are shelved full-paid Forms 1040 received during peak. Peak is defined here as April 15 through the end of Cycle 33, at which time these returns have a Program Completion Date. Unless instructed, these items need not be included in the memo to the Director until the end of Cycle 34. These items are to be monitored on a weekly basis and should be completed as soon as they become eligible.

(8) All items written off to Account 1510, Other Receivables-Regular, at anytime, require prior approval from the Campus Director. When a record has aged 367 days from the debit voucher/bank date, the status of the record will automatically be changed to "Unprocessable". A listing and posting document will be generated to write the amount off to the 1510 Account, and the amount will be removed from the DCF total.

1. To write off the amount of a check before 367 days, forward the posting documents with the Director's approval to the RACS Unit.

2. If, however, the Director does not approve the write-off and would like the check to continue to be worked, remove the record from the DCF prior to the 367 days with CC BDOUTV. Annotate the Restricted Application Register and process the check using manual procedures.

3. If at anytime the item has rolled into the 1510 account, prepare a memo for the director signature, prepare Form 2424 and forward backup documentation with signed memo and Form 2424 to the RACS unit.

   Note: Once CC BDOUTV is input, the systemic dishonored check file (DCF) no longer controls the case. These cases will be subjected to manual internal controls and must be monitored on a regular basis until resolved or approved for write-off.

(1) Count checks with each debit voucher/SF 5515. Put total on the back of the debit voucher/SF 5515 and stamp today's date beside the volume.

(2) Balance the checks to the debit voucher/SF 5515 and attach the adding machine tape to the debit voucher/SF 5515 and the checks.

1. Account 1720 will be used to record any discrepancies between the debit voucher/SF 5515, and the total of the related dishonored checks associated with the debit voucher/SF 5515.

2. If the debit voucher/SF 5515 is overstated or understated, fill out a Form 2424, Account Adjustment Voucher, to debit or credit Account 1720, Dishonored Checks, Adjustments.

3. The Dishonored Check File Team contacts the bank for an adjustment.

4. Items in this account will be cleared upon receipt of a supplemental or adjusting DT or DV.

(3) If notification is received that an electronic fund transfer or automated clearing house payment is dishonored, all incoming information should be forwarded to Accounting Control for appropriate action.

(4) Some campuses have a person responsible for contacting the depository banks when there is a discrepancy between IRS and the depository bank. This person may also work with missing checks and other related problems that require contact with banks.

(5) Remittances (usually money orders) which are received without debit vouchers/SFs 5515 should be flagged for "special attention" to avoid applying the same credit twice.

(6) When an IRS campus' agency location code (ALC) is erroneously debited, the total debit should be added to the DCF rather than the individual returned items, pending return of the deposit ticket described below. A letter should immediately be sent to the initiating bank with:

1. The date the bank's action was taken

2. The amount

3. The correct and incorrect ALCs

4. Copies of the original debit voucher

5. The returned remittance(s)

6. A SF 215A deposit ticket with a blank date

(7) Forms 2424 prepared by the employees in accounting must be reviewed by the manager or their designee, before being sent through for processing.

(8) The manager, or their designee, must sign the Form 2424 and the history sheet if applicable to show that the case was reviewed. The signature can be a wet signature or a digital signature.

(1) These procedures are for the contingency purposes when the Dishonored Check processing sites shutdown due to local or national emergency.

(2) The Dishonored Checks will be pulled from the ECP database. The 5515 debit checks will be pulled from the date your campus shutdown. Review and separate the bank adjustments from dishonored checks. The DCF headquarters analyst will provide a list of the debit vouchers on a spreadsheet for each campus for balancing.

(3) Research and pull the following Control-D reports from the date your campus was shutdown. Save each report in the Portable Document Format (PDF) in the Dishonored Check Share Point - Home using the following naming convention: MM.DD.YYYY Control-D ???? report:

• DCF0140 (DISHONORED CHK ANALY) (save page 12)

• DCF0340 (1710 ACCT TRANS REG)

• DCF0341 (1710 ACCT REG-REST) (save 2 copies)

• DCF0540 (APPLIC IMF/BMF/IRAF)

• DCF0342 (TRANSACTION REGISTER) (KC only)

(4) The Clerk will:

1. Log into the ECP database. Pull the check images and check vouchers for each lockbox bank for your campus daily. Save the vouchers and checks to your desktop. Upload and save the vouchers and checks to the Dishonored Check SharePoint site in each individual bank folders. When saving use the naming convention: Lockbox name, Voucher number, MM.DD.YYYY).

2. Create a DCN and Tracer ID from BBTS and assign to each voucher.

3. Save the check images to your desktop to edit the DCN and Tracer ID numbers.

4. E-mail the DCN and Tracer ID information to the Work leader. You will then receive a list of assignments from the work leader. Start adding the checks. Once all the checks are added, send another secured e-mail to the Work leader to assign work to the TE’s.

5. Prepare Form 3210 and list all daily D/V/Z/T applies information.

6. Upload a PDF Form 3210 and URINQ/BDINQ information to ACO RRACS Sharedrive.

(5) The TE will:

1. Review the assigned cases in your TE’s folders on the Dishonored Check SharePoint Site daily. Verify all the information on the vouchers. If there is any discrepancy to inform the work leader. Use the pdf copies of the voucher and the checks to research, create Form 8252 (history sheet) and close the cases. Upload the completion of the folders to the Dishonored Check SharePoint Site. (When saving use naming convention: Voucher number, name control and MM.DD.YYYY). E-mail a list of closed cases to the work leader daily. So the work leader can balance for the next day.

(6) The Work Leader will:

1. Pull morning reports and add to the Dishonored Check SharePoint Site folders.

2. Assign work and send e-mail to the clerks to add the checks. Once clerks have completed adding the work. The workleader will upload assigned work in TE’s folders.

3. Balance previous day production.

4. Balance the MISTLE on Friday and other reports by Monday morning.

5. Prepare the necessary documents, Trace ID and DCN for RRACS journal you will upload them to the RRACS sharedrive.

Note: The Dishonored Check SharePoint migrated to the new M365 SharePoint online (SPO). The new SPO URL isDishonored Check Share Point - Home. Access to the Dishonored Check SharePoint site must be requested by a manager level employee and submitted to the Headquarters by close of business each Monday.

(1) Write a code for the reason the check was dishonored in upper left front of check. The following is a list of reason codes to use when determining reason codes; do not rely upon it when determining whether a penalty should be applied: (See IRM 3.17.10.2.20.2, for information on penalizing.)

(2) Underline Name Control. Determine name control as directed in Document 7071, Name Control Job Aid. If no name is available, put "UNKN".

(3) As a rule, ECP uses alphas as their returned reason codes. The below codes will need to be converted to IRS reason codes for input to the DCF. If you see a returned reason code that is not in the below list, check the Return Reason Code drop down menu in the Payment Query screen in ECP and convert it to the appropriate IRS Return Reason Code.

3.17.10.2.4.1 (01-01-2013)

Creating the Dishonored Check Number (DCN)

(1) Assign each check a Dishonored Check Number (DCN). The DCN is created from information on the debit voucher/SF 5515. See Figure 3.17.10-1a. and Figure 3.17.10-1b.

(2) DCN Element Description:

1. AREA: The SPC location determines the area number. Refer to Document 6209, IRS Processing Codes and Information, for list of area file location codes.

Note: If your campus is serviced by the same parent bank at different locations you may use different file location codes within your SPC codes to differentiate between them.

2. BANK DATE: Convert the Voucher Created Date to a Julian Date. For example, if the bank date is February 4, 2011, the Julian Date is "035". The bank date must be 001 -366 and cannot be greater than the current date.

3. BANK NUMBER: Each depositary bank has an ABA (American Bankers Association), or routing number.

   Note: Debits from ECP are sent through the Federal Reserve Bank of Cleveland. It is acceptable to use the FRB's routing number.

4. VOUCHER NUMBER: The last three digits in the voucher number box form the voucher number.

5. CHECK NUMBER: The checks in a batch will be numbered "000" through "099".

6. YEAR DIGIT: Always use the last digit of the current calendar year.

(3) List the DCNs in the Dishonored Check Log and the Bank Discrepancy Application when numbering the checks. See IRM 3.17.10.4.2.1.

(1) Enter checks on IDRS using CC BDADD (generated by CC BDADDR). See Exhibit 3.17.10-2 As you add the dishonored check on IDRS, you are establishing the check on the DC file. The BDADD format has a running total. This total must balance to the debit voucher/SF 5515. If the total does not balance, look at each check entered by using CC BDINQ. When you find your error, correct the erroneous BDADD by using CC BDOUTZ. See Exhibit 3.17.10-3. It is suggested the Dishonored Checks be input on IDRS in groups of 25. If an error is made, it will be easier to find it in a group of 25 than in a larger group.

(1) Create a worksheet using Form 8252, Dishonored Check Worksheet, for each check where a copy cannot be obtained on RTR and which cannot be easily applied through IDRS research. If the check is coded in the upper-left hand corner with Multiple/Split Remittance Indicator "S," indicating a split payment, make several copies of the check so each separate application of the check will have its own worksheet.

(2) At campus option, worksheets do not have to be prepared for ISRP encoded checks unless a conflict exists between IDRS research and information on the dishonored check. However, any dishonored check for which a worksheet is not made must have the taxpayer's full name and address input when the item is established on the DC file.

(3) Action taken on cases for which worksheets have been prepared will be appropriately recorded on the Forms 8252. Few cases will require research in all areas listed on Form 8252.

(1) Add money totals from all debit vouchers/SFs 5515 input through IDRS with CC BDADD from the previous work day. Balance to DCF 0340, 1710 Account Transaction Register (Dishonored Checks Added to DCF) daily.

(2) Add volume totals (number of checks) from all debit vouchers/SFs 5515 input through IDRS with CC BDADD the previous work day. Balance to DCF 0340.

(3) Subtract corrected money amounts (BDOUT "Z"s) from total on transaction register.

(4) Annotate on the DCF 0341, 1710 Account Transaction Register (Restricted Application From the DCF) any item which has been removed from the DC file using CC BDOUT.

(5) Send all debit vouchers/SFs 5515, transaction registers and analysis to the RRACS function. Attach a Form 2424, Account Adjustment Voucher, for each discrepancy and a Form 4830, IDRS Posting Document, for each NMF application.

(6) File a copy of the debit voucher/SF 5515 in the Accounting Control area by accounting station symbol and date for month-end reporting, and retain another copy of the debit voucher/SF 5515 in the permanent closed file.

(7) IDRS DCF will be received from the Accounting Control clerk daily.

1. The Balancing Function in Accounting Control will balance the daily and monthly DCF Analysis using the various transaction registers, vouchers and schedule of payments, the IDRS PJ Recap (for DCF) and the controls produced from the DCF Processing.

2. Monthly Dishonored Check File Analysis (DCF5040)-reports the prior balance, total items and amounts added this month, and items and amounts applied from the DCF. The report also contains a breakout reflecting current year revenue receipts. Forward the Monthly Dishonored Check File and Analysis to the RRACS function after it has been balanced by the Dishonored Check function.

(8) The DC records with a "closed" status for 3 months will be aged out of the DCF monthly Dishonored Check Records Dropped from the File (DCF54). This listing contains two parts. Part one (DCF 5403) contains complete documentation of each record dropped from the DCF in alpha sequence within area order. Part two (DCF 5404) is an abbreviated record of Part one. It is in DC control number sequence and contains DC control number, DC name control, original amount, IRS Received Date, Entry Date. These listings now become the permanent record of the DCF Dropped File. The DCF54 is viewable on Control D.

(1) The following are examples of checks that can be returned to the bank:

• Check with missing IRS endorsement.

• Uncollected funds (only if the check has not already been redeposited).

• Shares not held 15 days.

• Payee not endorsed.

• Payee missing.

• Guarantee of amount.

• Post-dated check.

(2) If the payee is missing, stamp "United States Treasury" in the appropriate line. Complete Form 8250, Request to Redeposit Checks. Make two photocopies of the front and back of check. Make two photocopies of debit voucher/SF 5515. Keep one copy of each and file in a deposit ticket file. Forward check and remaining copies to Receipt and Control to be redeposited. See Figure 3.17.10-2.

(3) If the check is returned because a signature is not present on the receipt or voucher that is attached to a check that has been previously endorsed by IRS, the designated space on the front of the receipt must be signed. A local decision will be made as to who will sign the receipt/voucher. Prepare Form 8250, Request to Redeposit Checks, to redeposit the check and proceed as outlined in (2) above.

(4) Redeposited checks are sent to the campus' bank even though they may have originally been deposited elsewhere.

(5) A copy of the Form 8250, a copy of the redeposited checks and the white copy of SF 5515 are returned to the DC Unit from Receipt and Control when checks are redeposited. When you receive this notification, use CC BDOUT plus code "R" to void these DCs from the Dishonored Check File. See Exhibit 3.17.10-3

(1) When a debit voucher/SF 5515 is overstated, contact the depositary bank. The bank will forward a Form 215 (credit voucher) to DC function which then forwards it to the RRACS function.

(2) When an error is found by the bank, the bank will forward a Form 215 with a copy of the check and a copy of Form 813, Document Register. For example, if a check was written for $2,000.00 and was encoded for $200.00, the Form 215 will indicate a credit for $1,800.00.

(3) When this type of Form 215 is received, research the account to determine if the taxpayer received the correct amount or if the credit is needed. Forward the credit to the RRACS function for input to Account 4620 (Unidentified Remittances) if the original IRS-received date is less than one year or to Account 6800 if the original IRS-received date is one year or more. If the proper application can be determined, apply the credit to the taxpayer's account using CC FMAPL if in URF or CC XSAPLR if in XSF.

(4) In some instances, your case work may require DLN assignment. Number Form 3244 using the following series of numbers and date of the Form 215.

(1) Examine each check to identify payments on offers in compromise. These checks may be processed as BMF, IMF or NMF payments.

1. OIC payments processed through BMF or IMF will be identified with DPC 09, Offer In Compromise, only if it is an accepted offer. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

   Note: Correspondence received to abate the dishonored check penalty will be forwarded to Accounting Operations.

2. The application fee payment processed through the Paper Check Conversion System (PCC) will originally be applied to Account 4710, Offers In Compromise. Under the Tax Increase Prevention and Reconciliation Act of 2006 (TIPRA), enacted on July 17, 2006, the $205.00 Application Fee for OICs will be applied as a payment to reduce the taxpayer's tax liability as well as serve as a user fee payment. Form 2424, Account Adjustment Voucher, will be prepared to move the payment from Account 4710 to the Master File with TC 670.

   Note: TIPRA COIC accepted payments can be identified by the presence of a TC 480 in the tax module and the DPC 09. TIPRA MOIC payments can be identified by the presence of a TC 780 in the tax module.

(2) OIC Payments applied to the Master File should be processed accordingly:

1. If a check is dishonored after the payment has been applied to the Master File, or if a subsequent installment payment becomes dishonored, the payment should be reversed with a TC 671. There may be a time delay on cases where the Form 2424 has been prepared to move the payment from Account 4710 to the Master File. The Form 2424 may be in the pipeline at the time the payment is dishonored. The dishonored check process will be suspended until the payment has posted.

   Note: If the TC 670 is pending, establish an IDRS control base with a history item of the dishonored payment pending.

2. Debit the taxpayer's account without assessing the penalty.

3. Send a copy of the dishonored check and Form 12993-A, Check for Offer In Compromise Payment Not Accepted by Bank, to COIC/MOIC for monitoring of the replacement payment. The location of the taxpayer's address determines whether the check should go to Brookhaven or Memphis.

If	Then
there is a TC 480 on the account	forward to COIC
there is a TC 780 on the account	forward to MOIC-see

Note: See the OIC web pages referenced above on SERP Who/What/Where for a listing of where to send the COIC/MOIC dishonored check.

4. Return the check to the taxpayer with Form 12993-A.

(3) NMF payments have:

1. Tax class 6 as the third digit of the DLN.

2. Document code 56 as the fourth and fifth digits of the DLN.

3. Blocking series 200–249 (ninth, tenth and eleventh digits of the DLN).

(4) NMF Payments identified as made on offers in compromise:

1. Must be voided from the DCF using CC BDOUTV.

2. Must be photocopied front and back and the copy hand carried to the RACS Unit for appropriate action on Account 4710 (Offers in Compromise).

3. The check may be hand carried or faxed to Campus Compliance as local procedures dictate.

4. COIC function will send a letter to the taxpayer informing them of the returned check.

5. The Dishonored Check function may return the check to the taxpayer with Form 12993-A.

(1) When researching and processing dishonored checks, the dishonored checks should never leave the DC function. If a photocopy is not made on the worksheet, make a photocopy of the check if there is a need to take the check's image to a different area. Secure all checks at the end of the day. This practice will help prevent the loss of a dishonored check.

(2) Transfer the DLN from the DC to the DC worksheet. See Figure 3.17.10-3.

(3) The DLN will be one of the following:

1. Manual Encoding DLN-located on the back of the check.

2. IDRS processed DLN-13-digit remittance sequence number stamped on face of check. See Figure 3.17.10-4.



3. Stamped "split" number. See Figure 3.17.10-5. It can be IMF, BMF or NMF.



4. In Figure 3.17.10-5 above, on the check, position 1 is the Area Number, position 2 is the Julian Date, and position 3 is the Sequence Number.

5. Area Office Remittance Number. See Figure 3.17.10-6



6. Compare the numbers on the check to the numbers in the box to see how this number is divided.

7. Match the number on the check to the number in the Area Office Remittance Register. Copy the information from the Area Office Remittance Register onto the DC worksheet. See Figure 3.17.10-7



8. DLN of remittance processed by Integrated Submission and Remittance Processing (ISRP) - located across middle of back of remittance. See Figure 3.17.10-8

(1) The sequence that should be used when researching Dishonored Checks for payment of IRS tax liabilities is outlined in 3.17.10.2.11(2) (Researching Dishonored Checks for Payment of IRS Tax Liability) through 3.17.10.2.11.1.1.2 (Research Other Areas) below.

(2) Examine the audit trail on the reverse of all Integrated Submission and Remittance Processing (ISRP) and Lockbox checks. Complete information to reverse a payment is printed on each check processed via ISRP. See Figure 3.17.10-8

3.17.10.2.12.1 (11-22-2017)

Command Codes to Research

(1) Research as many checks as possible on IDRS using the DCF Integrated Automation Technologies (IAT) tool. Below is a listing of command codes that can be used if the DCF IAT is not available.

Note: Refer to IRM 2.3, IDRS Terminal Responses, and 2.4, IDRS Terminal Input, for specific instructions in using these command codes.

1. NAMES to research a nationwide database (Name Search Facility (NSF) at ECC-MTB) of taxpayers' SSNs or NAMEE to research a nationwide database of EINs. NAMEI (IMF) and NAMEB access the NSF of names and addresses to locate an SSN or an EIN. NAMES and NAMEI search for both the primary and secondary filer names. The hardcopy options are NAMEIX and NAMEBX.

2. FINDE to research the NSF for the business' name and address information, using the EIN and FINDS to research for the taxpayer's name and address information, using the SSN.

3. AMDIS to list all records that are on AIMS under the TIN.

4. INTST to compute the correct outstanding balance, including interest and failure to pay accruals, to the date specified in the CC.

5. COMPA to compute interest or estimated tax penalty for a specific amount for a specific period of time.

6. COMPAF to compute failure to pay penalty.

7. COMPAD displays the detail used to compute the interest.

8. EFTPS to research all electronic payments made via EFTPS for the current and/or previous four years. Payment data will be available the day following the settlement date.

9. TDINQ requests display of entity and module data, if present, on the TIF account which is pertinent to delinquent return investigations.

10. STAUP is used to update the status of a module and may be used to accelerate, delay or skip routine notice issuance.

11. ACTON to establish case control and history of cases.

12. LEVYS to research levy source information on the TIF.

13. IADIS to display active or defaulted installment agreements.

14. SCFTR to research Campus Control File and overnight research of records that have been moved to the historical SCCF.

15. CFINK to research the Centralized Authorization File.

16. INOLE to research the National Account Profile (NAP). This CC is particularly helpful in locating information for all Master File accounts.

17. IRPTR (with definer L) to provide two payee addresses, if present; filing status; one payer name and address; cross reference information; and a summary of up to 36 IRP money amounts by income type.

18. IMFOL/BMFOL and RTVUE/BRTVU to do on-line research of master file account and return data.

19. PMFOL to research Form 1096s filed.

20. HCFOL (Help) and ICFOL (Information) to help utilize the CFOL CCs.

21. TXMOD to research specific tax modules which contain pending and posted transactions and to determine the status of an account.

22. SUMRY to review pending transactions and currently active tax modules under a specific TIN.

23. TPIIP searches for a primary or secondary SSN.

24. URINQ to research the Unidentified Remittance File (URF) for payments not yet applied to a tax module.

3.17.10.2.12.1.1 (01-01-2013)

Research NMF

(1) Research the NMF data base using procedures outlined in IRM 3.17.46, Automated Non-Master File Accounting, or request Non-Master File research on Form 4338, Information or Certified Transcript Request. See Figure 3.17.10-35.

3.17.10.2.12.1.1.1 (01-01-2013)

Research the Area Office Remittance Register

(1) Research the Area Office Remittance Register (AORR) or IDRS for information needed and a complete DLN for the area office checks. Match the area office number on the front of the check to the AORR to find information. See Figure 3.17.10-7. Copy information from the AORR onto the DC worksheet. The Julian Date is inflated by 400, i.e., if the Julian Date is 123, the DLN will show 523. Research for name and address on IDRS using CC INOLE or ENMOD. You may need to get the return for clarification and/or verification of information.

3.17.10.2.12.1.1.2 (08-04-2020)

Research Other Areas

(1) Research by Telephone-Telephone taxpayer if you need to verify information or get more information. Before contacting the taxpayer, always discuss the case with the lead. Be very careful not to make an unauthorized disclosure. Refer to IRM 11.3.1, Introduction to Disclosure and IRM 11.3.3, Disclosure to Designees and Practitioners, for more information.

(2) Research with the Return-If the return information cannot be found by regular research methods, you may wish to request the tax return from Files; use IDRS CCs RTVUE/BRTVUE or ESTAB.

Note: If SCCF shows the document was worked in ERS or Rejects, contact the Payment Tracer function to access the DLN with the Payment Tracer Tool.

(3) Research a "Cash Conversion" (CC)—A cash conversion is a check with a return or payment voucher taken in at an area office. This check will not have a DLN or any encoding for a DLN. There may be a stamped received date on the back of the check. There may also be a deposit ticket number. See Figure 3.17.10-9 The same deposit ticket number will be on the adding machine tape attached to the Form 783, Remittance Register for the date indicated on the back of the check. To find the Form 813 that matches a Cash Conversion:

1. Look for Forms 813 that are dated the same as the back of the check.

2. Look for "CC" on the bottom left portion of the Form 813.

3. If "CC" is present, match the money amounts.

4. If you can match all of the above, copy the DLN and research the document. If you cannot find the Form 813 with the money amount you are researching, go to the Receipt and Control Unit and use the Cash Conversion Book as a research tool.

5. Match the date on the back of the check to the date on the Form 783. Match the number on the back of the check to the adding machine tape for the date. The money amount will be on the adding machine tape attached to the Form 783 listed according to tax class.

6. After you match the money amount on the Form 783, go to the Numbering Unit in Receipt and Control Operation and ask for the DLNs for the date and tax class of the Form 783.

7. Batch the DLN and look on the Batch Profile to determine where the return is located.

8. Go to the area indicated on the Batch Profile and research the return for information.

9. At local option, Forms 813A may be retained in the Accounting function.

(4) Processing checks for erroneous refunds. Checks originally received for repayment of erroneous refunds may have been credited to a master file account or to Account 1510, Other Receivables, Regular. When such a check is returned as dishonored, you must first determine where the original credit was posted. If the credit was posted to a master file account, debit that account using TC 721. If the original credit is in Account 1510, take the following actions:

1. Input BDOUT "V" to remove the check from the DCF.

2. Prepare a Form 2287/ Form 2287 (SP). Hold the check with Form 2287/Form 2287 (SP) until the next day when the "Void" appears on the transaction register.

3. Attach the check to the Form 2287/Form 2287 (SP) to be mailed to the taxpayer.

4. Annotate a copy of Form 2287/Form 2287 (SP) in bold print DR 1510 A/C. This should be forwarded to the RACS Unit for input of the payment reversal.

5. Annotate the transaction register with the copy of the Form 2287/Form 2287 (SP), i.e., Form 2287(CG) DR 1510 A/C.

6. Forward a copy of Form 2287/Form 2287 (SP) with listing to the RACS Unit.

7. Input history item on IDRS, indicating Dishonored Check Debit to Account 1510.

8. Notify the erroneous refund function that the payment is dishonored, Form 2287/Form 2287 (SP) has been issued and the debit has been applied to Account 1510.

(5) Researching checks with an old dishonored check number. If you receive a check having an "old" DCN, IRS has had this check previously. Request master file account information for the taxpayer. If the old DCN has been debited, look for a new DLN for this transaction.

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(7) Researching unidentified checks. "009" as the 3rd, 4th and 5th numbers of a DLN, i.e., 8000924132600, indicates an unidentified check. Follow these steps when researching an unidentified check:

1. Use CC URINQ on IDRS to determine if this case is open or closed. See Exhibit 3.17.10-8 for CC URINQ.

2. If the case is closed, the information will be on IDRS for research.

3. If the case is open, take a copy of the check, front and back, and the worksheet to the Unidentified Remittance Unit. UR will close the case to DC. Void off the DCF with a BDOUT "D". This void must be done the same day UR closes the case to DC.

4. Mail Correspondex Letter 1687(C) or Letter 3064C and the check to the taxpayer.

5. If the check is a partial unidentified (i.e., part of the check is unidentified and the rest is to pay the taxpayer's Form 1040), apply the debit to the taxpayer's account for the identified parts, and UR will close their amount of the check to DC. Void the unidentified amount of the check with BDOUT "D". Mail the check, Form 2287/Form 2287 (SP) and Letter 6268/Letter 6268 (SP) or Letter 3064C to the taxpayer.

(8) Researching a "multiple" check.

1. A "multiple" check is one of two or more checks submitted to pay for one tax account and may be processed via IDRS, RPS or manually. A check of this type can be identified by a letter "M" and the number of checks received with one document in the upper left corner of the remittance. See Figure 3.17.10-10 for an example of one of three checks received with one return.



2. Obtain the DLN from the check.

3. Research the return by IDRS or other means. Verify that the check amount was one of two or more remittances submitted to pay one tax account. The largest remittance has been processed with the return (TC 610) and the smaller remittance(s) as subsequent payments (TC 670).

4. Follow the steps shown in Figure 3.17.10-11.

5. Checking RTR can also show this breakdown.

1	Compare the money amounts on the encoding tapes to the money amounts on the Form 813. Documents 00, 01, 02, and 03 match the first four money amounts on the encoding tape. Document 04 is for $1,725.90; and the encoding tape shows three amounts for $1000.67, $225.23, and $500.00 (which total to $1725.90). Document 05 on the Form 813 is for $87.00 and the new money amount on the encoding tape is $87.00.
2	List the money amounts from the encoding tape on the worksheet.
3	Line through the amounts that match on the Form 813 and the encoding tape. The tape shows the following amounts: 50.23. Line through this amount. 150.00. Line through this amount. 1834.57. Line through this amount. 300.00. Line through this amount. 1000.67. 225.23. 500.00. 87.00. Line through this amount. The remaining amounts are $1000.67, $225.23, and $500.00 (which total to $1725.90).
4	This proves that the amount of Document 04 as $1725.90.
5	A dishonored check for $225.23 was one of the payments made for Document 04.

(9) Researching a "split" check.

1. A "split" check is one remittance paying for two or more returns and is processed via ISRP or manually. A split check will have "S" and the number of documents received with the remittance in the upper left corner.

2. Obtain the DLNs from the check.

3. Research the returns by IDRS or other means.

4. Run an adding machine tape totaling the money amounts for all returns involved in the split. Balance the total of the worksheets to the amount of the check; the total of the worksheets and the amount of the check must balance exactly.

5. Information for applying all amounts to the various accounts must be accumulated before any debits are made.

(10) A multiple/split remittance indicator input via ISRP at the time the remittance was processed will appear in various research tools:

1. On transcripts between the money amount and the cycle number as "M" (multiple) or "S" (split). Refer to IRM 2.3, IDRS Terminal Responses.

2. On CC TXMOD on the line subsequent to the money amount following the literal "MSRI—" as "M" (multiple) or "S" (split).

(11) Researching Non-Master File (NMF) (KCSPC Only)

1. Research NMF from AORR, IDRS, etc. These NMF documents must have a new DLN before you can close your case. Obtain a new DLN to close your case. The new DLN must be a tax class 6 and document code 24.

2. For NMF not on IDRS, you will need a new DLN with a tax class 6 and document code 87.

3. Close the NMF on IDRS using the new DLN in the remarks area of the Dishonored Check Worksheet for Non-Master File.

4. Enter "N" (Non-Master File) for type of application.

5. Enter "N" after the TIN to indicate NMF.

6. Enter 1300 or 23C date or 53C and the new DLN received from Numbering.

7. Other sites should void debit and transfer to KCSPC via Form 2158.

(12) Other sites may research the Remittance Transaction Research (RTR) System. RTR is a database which stores information from the Remittance Register Report (F813) and the Endpoint Master Listing Report. This system replaces the printing process of these reports produced by ISRP and allows for research to be done on-line. Checks processed by Lockbox, EFTPS and RSPCC are also available for viewing on RTR.

3.17.10.2.12.1.1.3 (06-03-2019)

IMF Erroneous Refunds caused by Dishonored Checks

(1) Erroneous refunds occur when a second payment immediately follows a payment with a dishonored check or when a refund is generated before the Campus receives notification that a check has been dishonored. It is imperative that additional IDRS research be performed in every dishonored check case to identify any pending or posted TC 840 or TC 846 on Master File that was issued in error. If no pending or posted TC 840 or TC 846 has been issued, input IDRS CC NOREFP.

Note: Management must ensure that tax examiners are trained to identify and intercept pending refunds.

Note: If TC 841 is posted and the account shows a refund due to an overpayment of penalty and/or interest, release the P freeze code by inputting IDRS CC REQ54 with TC 290 and 0.00.

1. DCF IMF Erroneous Refund Report (DCF 25) should be researched weekly. The IMF DCF Erroneous Refund Report contains a listing of all taxpayer accounts that have a TC 280/286 and TC 840/846.

2. Tax Examiners should research IDRS with CC IMFOLT and CC TXMOD to identify and stop the release of erroneous refunds.

If	Then
No return is posted	input CC NOREFP with Reason Code 82
Refund hold and no control base	input CC NOREFP with Reason Code 82
Refund hold and control base	contact originator

3. Refer to IRM 2.4.37, CC NOREF Overview, for a complete description and input requirements. Cutoff times are outlined in IRM 21.4.1.5.10, Refund Intercept CC NOREF.

   Note: If CC IMFOLT shows TC 846 is posted, the refund cannot be stopped.

   
   

4. If the cutoff time to stop the refund has expired, issue Letter 510 C to the taxpayer to advise them of the dishonored check/erroneous refund situation. Letter 510 C is generated using CC LETER and is the way IRS "demands" the erroneous refund be repaid. The date of the letter is the Date of Demand.

(2) Tax Examiners must prepare and forward required documentation to the Erroneous Refund Team to initiate procedures to recover erroneously issued refunds. Erroneous Refund cases must be forwarded to the respective Submission Processing Campus Erroneous Refund function. The case must be documented and accurately prepared, as outlined in IRM 21.4.5, Refund Inquires - Erroneous Refunds.

1. The Category Type of Erroneous Refund must be identified. These cases have already been determined to be Category D (Unassessable) since we failed to stop the refund(s). The Erroneous Refund Categories are explained in IRM 21.4.5.4.1 through IRM 21.4.5.4.5, Erroneous Refund Categories and Procedures.

2. History Sheets must be prepared from the point of discovery.

3. Documentation of actions taken, pending actions, telephone calls, copies of letters, etc. must be annotated on the History Sheet and be retained in the case file.

(3) Detailed procedures for processing erroneous refunds are outlined in IRM 21.4.5, Refund Inquires and Erroneous Refunds, and IRM 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations.

3.17.10.2.12.1.1.4 (01-01-2013)

BMF Erroneous Refunds caused by Dishonored Checks

(1) Research and identify any pending or posted TC 840 and TC 846.

1. DCF BMF Erroneous Refund Report (DCF 45) should be researched weekly. The BMF DCF Erroneous Refund Report contains a listing of all taxpayer accounts that have a TC 280/286 and TC 840/846.

2. Tax Examiners should research IDRS with CC BMFOLT and CC TXMOD to identify and stop the release of erroneous refunds.

If	Then
Refund hold and no control base	input CC NOREF with Reason Code 82
Refund hold and control base	contact originator

3. Refer to IRM 2.4.37, Refund Intercept CC NOREF Overview, for a complete description and input requirements. Cutoff times are outlined in IRM 21.4.1.4.10, Refund Intercept CC NOREF.

Note: CC NOREF for BMF must be input by 4:00 p.m. EST the Friday after the cycle posted date.

4. If the cutoff time to stop the refund has expired, issue Letter 510 C to the taxpayer to advise them of the dishonored check/erroneous refund situation. Letter 510 C is generated using CC LETER and is the way IRS "demands" the erroneous refund be repaid. The date of the letter is considered to be the Date of Demand.

(2) Tax Examiners must prepare and forward required documentation to the Erroneous Refund Team to initiate procedures to recover erroneously issued refunds. Erroneous Refund cases must be forwarded to the respective Submission Processing Campus Erroneous Refund function. The case must be documented and accurately prepared, as outlined in IRM 21.4.5, Refund Inquires - Erroneous Refunds.

1. The Category Type of Erroneous Refund must be identified. These cases have already been determined to be Category D (Unassessable). The Erroneous Refund Categories are explained in IRM 21.4.5.4.1 through IRM 21.4.5.4.5, Erroneous Refund Categories and Procedures.

2. History Sheets must be prepared from the point of discovery.

3. Documentation of actions taken, pending actions, telephone calls, copies of letters, etc. must be annotated on the History Sheet and be retained in the case file.

(3) Detailed procedures for processing erroneous refunds are outlined in IRM 21.4.5, Refund Inquires and Erroneous Refunds, and IRM 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations.

(1) Processing Dishonored Checks Received for Shipment of Forms-If you receive any such checks, add these checks to DCF and return the check to the bank. On the Request to Redeposit, indicate the distribution center to which the check should be forwarded. When the SF 5515 is returned, void the checks off the DC file with BDOUT "R". All checks received for shipment of forms should have been forwarded to the National Distribution Center at the address below:
National Distribution Center
2402 E. Empire
Bloomington, IL 61799.

(2) Processing dishonored checks intended as voluntary contributions to reduce the public debt-Void check from DCF. Send copy of front and back to RACS Unit for journalization to Account 2350, Public Debt. Return check to the taxpayer with a brief explanation. Do not assess a bad check penalty.

(3) Processing dishonored checks intended to pay for a photocopy of a tax return.

1. Remittances will be manually deposited and encoded on the reverse as 4506. Void from DCF. Make two photocopies of the front and back of the check and forward one copy to the Photocopy Unit and one copy to the RACS Unit.

2. Return check to the taxpayer using Form 8157, Check for Copy of Tax Return Not Accepted by Bank. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ See Figure 3.17.10-12 Send Parts 1 and 2 to the taxpayer with the check.

(4) Processing a non-IRS check which was originally deposited by IRS-Void check from the DCF using CC BDOUT "I," when returned as "not payable to IRS." Prepare Form 2424, to credit Account 1710 (Dishonored Checks) and to debit the taxpayer account that received the credit when IRS processed the check. Return the check to the taxpayer with an explanatory letter containing an appropriate apology for processing the remittance in error.

(5) Processing a non-IRS check which was not originally deposited by IRS-Contact bank, explaining situation, and ask for the preferred procedure by which the bank will issue a confirmed Form 215 to reverse the SF 5515. Follow the procedure indicated. Void the item from the DCF using CC BDOUT "V," entering "Unprocessed non-IRS check" in Comments section. Prepare Form 8250 for Deposit function, explaining situation and describing bank procedure to be followed in "Reason" section. Annotate in red with "DO NOT ENDORSE." Flag the Form 8250 for special handling. Do not contact the payor.

(6) Processing checks intended to pay TE/GE user fees for letter rulings and for determination, notification, advisory and opinion letters. TE/GE user fees are deposited in Ogden.

1. Void check from the DCF using CC BDOUT "V."

2. Access and print the account on the Letter Information Network User Fee System (LINUS). LINUS will show what type of user fee was paid. Treasury fees are RRACS General Ledger account 2330, and IRS fees are RRACS General Ledger account 2335.

3. Photocopy the front and back of the check, forwarding copies with the DCF03, 1710 Account Transaction Register and the LINUS print, to the RACS Unit for journalization. Annotate the report to show the appropriate User Fee account.

   Note: Some LINUS accounts will contain both types of fees and the breakdown should be annotated.

4. Return copy of check, with transmittal, to the TE/GE area office that the original ruling, determination, notification, advisory or opinion letter request was sent. Email the information to the Adjustment unit at *tege.eo.adjustments@irs.gov.

(7) Processing checks intended to pay Examination and Chief Counsel. Processing checks intended to pay user fees for letter rulings and for determination and opinion letters.

1. Void check from the DCF using CC BDOUT "V".

2. Photocopy the front and back of the check, forwarding the copies with the DCF03, 1710 Account Transaction Register, to the RACS Unit for journalization. Annotate the report to show "User Fees."

3. Return the check to the taxpayer using Form 12993, sending Parts 1 and 2 to the taxpayer.

3.17.10.2.13.1 (01-01-2021)

Processing Dishonored Checks for Installment Agreement User Fees (IAUF)

(1) Since March 1,1995, taxpayers are charged a fee for establishing and monitoring Installment Agreements (IA). On January 1, 2017, these fees were increased. In addition to the increase, a new user fee was established for Direct Debit Installment Agreements (DDIA). A reduced fee was also established for taxpayers with income at or below certain U.S. Department of Health and Human Services poverty guidelines.

Note: The user fees, including the DDIA and reduced fee, were established on January 1, 2017.

Note: Both the old and new fee amounts are valid in 2017. If the installment agreement was made prior to January 1, 2017, the old user fee amount was valid if paid in 2017. Installment agreements made on or after January 1, 2017, were subject to the increased fee.

Note: Previously, taxpayers were required to submit a paper Form 13844 to request a reduced user fee. Now, a taxpayer may qualify for the reduced fee automatically if there is a Low Income Indicator on IDRS.

Note: On February 9, 2018, the President signed into law the Bipartisan Budget Act of 2018. The Act amended IRC 6159 to provide certain limitations to installment agreement user fees. The Act’s amendments to IRC 6159 apply to installment agreements entered on or after April 10,2018. User fees for IA may not exceed the amount of such fee as in effect on 2/9/2018. Installment agreement user fees will be waived for low-income taxpayers who agree to make electronic payments through a debt instrument. Installment agreement user fees will be reimbursed to low-income taxpayers that are unable to make electronic payments through a debit instrument upon completion of the installment agreement.

1. Designated Payment Code (DPC) 50 will be used to identify the origination fee.

2. If the taxpayer qualifies for a reduced IA user fee, DPC 47 will be used to identify the reduced fee.

3. If the taxpayer defaults on an Installment Agreement and applies for and is granted a reinstatement, DPC 51 will be used to identify the reinstatement fee.

4. DPC 49 will be used to identify the DDIA user fee.

5. If the taxpayer qualifies for the new reduced user fee for a DDIA, DPC 48 will be used.

6. The Treasury Accounting Symbol for Installment Agreement user fees (and DDIA origination fees) is 20X5432.1 and 20X5432.3 for reinstatement/restructure fees.

7. Dishonored checks for Installment Agreement user fees are returned to the campus via Debit Voucher/SF 5515.

8. The user fee transaction will post with TC 694 as the primary transaction code and TC 360 as the secondary transaction code.

   Note: User fees may be made as split/multiple payments and the total must be equal to the required fee.

   Example: A TC 694 for $25 and a TC 694 for $80, with the corresponding TC 360 amounts for $25 and $80, may be on the user fee module to cover the $105 fee.

9. To reverse the user fee transaction, use CC BDAPL with TC 695 and the appropriate DPC. TC 360 must be reversed using CC REQ54.

(2) Do not assess a bad check penalty against dishonored checks for user fees or portions of split payments representing user fees. Only the portion of the check representing tax payments may be subject to the dishonored check penalty. See IRM 3.17.10 below for more instructions.

Note: Correspondence received to abate the dishonored check penalty will be forwarded to Accounting Operations.

(3) Existing receipt, balancing and CC BDADD procedures should be followed when adding these checks to the DCF.

(4) Prepare Form 12993. See Figure 3.17.10-13 Mail Parts 1 and 2 of Form 12993 and the dishonored check to the taxpayer.

(5) If the dishonored check includes a tax payment(s) as well as Installment Agreement user fees, process the check as a split payment.

1. Additional research may be required to identify the portion of a payment received through the Lockbox that includes both taxes and user fees. The portion of a Lockbox payment representing a tax payment will automatically be posted to the taxpayer's account.

2. To determine the portion of the payment that represents tax payments, it may be necessary to review the taxpayer's account(s), to request the tax return(s), and/or to research the support listing which accompanies the SF 215A, Deposit Ticket.

3. The support listing is maintained in the Campus Accounting Operations and shows the individual TIN/Payment amount and provides a summary report showing the amount collected and deposited for each account. Payments received that contain both tax payments and user fees will be identified on the listings with an "F."

4. When researching payments and requesting returns, it is important to remember that the DLN assigned to a payment made through the Lockbox will not be the same as the DLN assigned to the return.

5. Debit the taxpayer's account(s) using CC BDAPL for the portion of the payment intended to satisfy the tax liability or liabilities. Compute dishonored check penalties on only the portion of the payment that represents taxes as outlined in IRM 3.17.10, Assessing a Dishonored Check Penalty. A Form 2287/Form 2287 (SP) will be generated for each account to which a debit has been applied.

6. Prepare Form 12993 for the amount of the payment representing user fees only.

7. Return the original check to the taxpayer along with Parts 1 and 2 of Form 12993 and the related Form 2287/Form 2287 (SP). If taxes for more than one account are included in the payment, also send the taxpayer Form 8269, Notice of Dishonored Check for More than One Tax Form. Form 8269 will reflect the amount of the dishonored check, penalties assessed, and the total taxes due with Form 2287/Form 2287 (SP) only. Do not include the amount of the payment representing user fees in the box labeled "Total due with Form 2287/Form 2287 (SP)". The total shown on Form 12993 added to the total shown on Form 2287/Form 2287 (SP) must equal the total amount of the check.

8. Dishonored checks for Installment Agreement user fees received by the campus will be researched per instructions outlined in IRM 3.17.10, Researching Dishonored Checks for Payment of IRS Tax Liability. It may be necessary to request the return(s) to determine the individual amounts comprising the total paid. Return the check to the taxpayer following either the Form 12993 or split payment procedures, as appropriate, outlined above.

(1) An Encoding Error is a check encoded for a money amount different than that for which the check was written. To process an Encoding Error type check, you will need to get "back-up" documentation. Back-up consists of a copy of the document, a copy of the Form 813 and a copy of the encoding tape, if the document is manually encoded. Obtain an IDRS printout of the tax module, using CC TXMODA, to see if the taxpayer was given the correct credit. If the module is not on IDRS, request information from the Master File using CCs IMFOL/BMFOL.

(2) Identifying an "Amounts Differ" Check-An "Amounts Differ" check occurs when the written amount differs from the numeric amount. Process amounts differ checks using the same procedures for Encoding Error. (Figure 3.17.10-14)

(3) A "guarantee amount" is an Amounts Differ check i.e., the written amount differs from the numeric amount. You can guarantee a check only if the written amount and the numeric amounts are different. Process Guarantee Amount checks as indicated for Encoding Error.

(4) After you research checks for encoding errors, amounts differ and guarantee amounts, take the cases to the work leader. Each case is different. In some instances, the taxpayer will have received the correct credit and you will not debit the account. Send these checks back to the bank on Form 8250, Request to Redeposit Checks. On other cases, the taxpayer's account did not receive the correct credit. Debit the taxpayer's account and prepare Form 3244, Payment Posting Voucher, and carry the Form 3244 and the check to Receipt and Control. List the check being redeposited in the redeposit book for our records and for Receipt and Control to initial.

(5) A mutilated Check will not be accepted by the bank because it has been partially destroyed. From what is left of the check, find the return and get "back-up" documentation. Debit the taxpayer's account and mail a letter of explanation to the taxpayer. Send Form 2287/Form 2287 (SP) and 8290, Returned Check Repayment Notice, to the taxpayer to request that a new check be mailed to IRS. Do not assess a bad check penalty.

(6) Identifying Form 941M and Form 720M-When you are researching CC INOLE or ENMOD, the filing requirements (FR) will show FR 941-09 or 10 or FR 720-09. This indicates the taxpayer is a monthly filer. When you see this, "flag" the check to indicate the taxpayer is a monthly filer. There will be no contact between taxpayer and campus at this point. Forward check and Form 2287 /Form 2287 (SP) to the Area Collection Office Function, on Form 3210, Document Transmittal. See Figure 3.17.10-15

(7) Processing Foreign Checks

1. Foreign remittances are deposited with:
   Bank of America
   Foreign Transit Items
   CA9-705-LA-17
   1000 W Temple St
   Los Angeles CA 90012

   Note: Bank of America Customer Service: Karen Delores at 888-715-1000 ext. 21600.

2. Dishonored foreign remittances made payable in foreign currency will be returned to the taxpayer with a request to resubmit the remittance in US dollars made payable through a US bank.

3. Any collection costs charged to process foreign remittances will be charged back on a SF 5515. Void the charges using CC BDOUT "V" and forward to RRACS.

4. Foreign checks made out in US dollars, but made payable through a foreign bank, will be debited against the taxpayer's module as any other dishonored check.

(8) Processing a Levy Check-A levy check will have the following endorsement on the back: "This check (money order, draft) and the proceeds thereof have been seized under authority of Title 26, United States Code, Section 6331, for application on the unpaid tax liability of (name of taxpayer), and is herewith deposited to the credit of the Treasurer of the United States (name of Area Director) Area Director of the Internal Revenue Service (City or State)".

1. If the check was returned for personal endorsement missing, although endorsed as above, telephone the bank and alert them to our authority. Whenever a check is stamped as above, the check does not need an endorsement for the bank to honor it.

2. Redeposit the check.

3. Void off DC file with CC BDOUT "R" when Form 215 is received.

4. When a cash register seizure is made, the Revenue Officer stamps each check with a levy endorsement stamp. If the stamp is missing, research further to make certain this is a seizure check. An indication would be if the check is made out to a business or an individual other than IRS. Handle as a check from other than the taxpayer (see 9. below).

5. Other levy checks may be submitted to IRS directly by a third party in response to a Notice of Levy; these remittances may not bear the endorsement described in a. above. ALL levy checks will, however, be identifiable by a designated payment code (DPC) on CC TXMOD. The DPC appears on the line following, TC 670, 680, 690, 694, or 700 as a literal followed by one of the following: 04, 05, or 06. If a third-party remittance carries a levy endorsement stamp OR if one of the above DPCs is present on CC TXMOD, do not assess a bad check penalty. Otherwise, handle as a check from other than the taxpayer. (See 9. below).

(9) A check submitted by one party to pay another taxpayer's liability or a third-party check (one originally written payable to someone other than IRS but endorsed "payable to IRS" by the taxpayer) are to be handled the same way. When one of these checks is received as dishonored, do not contact the original maker of the check. Such contact could have disclosure implications. Only the taxpayer should be contacted and asked to submit another remittance. Therefore, If the check was made out to the taxpayer and subsequently endorsed over to the IRS, send the check back to the taxpayer using Form 14219. Send the check back to the original maker using Form 14219 only if the check was made out to the IRS by the third party.

(10) If a check is returned for a missing date, enter the original deposit date (from the back of the check). These checks should then be promptly delivered to the Deposit Activity for redeposit.

(11) Deposit discrepancy situations described above differ from those described in IRM 3.17.10 in that these are errors on single payments which do not affect other payments in the block.

(12) If research of CC ENMOD/TXMOD indicates only check digits or no name control on the module, before using CC BDAPL, you must change the name control on the dummy module to correspond to that shown on the ACTRA hard copy transcript. To do this, use CC ACTON.

(13) If research indicates that a refund may be issued from the account before application of the dishonored check debit, follow the instructions in IRM 3.17.10.2.11.1.1.3 for IMF and the instructions in IRM 3.17.10.2.11.1.1.4 for BMF. See IRM 3.17.10.2.12.

3.17.10.2.14.1 (11-18-2015)

Processing Missing Checks

(1) A missing check is a check listed on the deposit ticket but is not in the batch of checks attached to the deposit ticket. It may have been lost by IRS or the bank. Take the following steps when processing Forms SF 5515 for missing checks:

1. Add items to the DCF using the name "Unknown".

2. Search for return reflecting the related credit to identify the taxpayer. Correct the name with CC BDENT.

(2) If the chargeback item is resolved quickly between IRS and the bank, it will not be necessary to debit the taxpayer's account. If the taxpayer must be contacted to resolve the problem, the taxpayer's account will be debited at the time the taxpayer correspondence or telephone contact is initiated as described in (7) below. This will preclude an erroneous refund if the taxpayer sends another remittance that posts to his/her account before IRS has reversed the previous credit.

(3) Initiate correspondence with the taxpayer advising him/her of the processing problem regarding a missing check and request that reply be made within 10 days to avoid interest and penalties.

1. Request a photocopy of the front and back of the check.

2. If the taxpayer has not received the cancelled check, request the taxpayer to reissue a new check.

3. Telephone the taxpayer if a reply is not received within 18 days of the initial correspondence date.

4. Send a follow-up letter to the taxpayer if telephone contact cannot be made.

5. Close case if no reply is received to the follow-up letter after 15 workdays of its sending.

(4) Upon receipt of the requested photocopies from the taxpayer, initiate correspondence with the IRS depositary bank to request the proper credit following the enclosed evidence submitted. Telephone the depositary bank if a reply is not received within 10 working days of the correspondence date.

(5) An unpaid missing bank money order may require an indemnity agreement. Refer to IRM 3.0.167, Losses and Shortages.

(6) Upon receipt of the requested credit from the depositary bank, remove it from the DCF with CC BDOUT "X" if the account has not been debited. If the account has been debited, credit the account using Form 3244 with the original received date.

(7) Missing checks will be included on the weekly report to the Director. (This memorandum will be generated at the Director's discretion, either based on time or on an inventory level that he or she deems appropriate.) They will not be expected to meet the 21-day cycle. They should be categorized by UNKNOWN, in correspondence with taxpayer, or in correspondence with the bank.

3.17.10.2.14.1.1 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(1) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

6. ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡"≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡

7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

10. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

≡ ≡

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

1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(4) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(5) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

≡ ≡ ≡

3.17.10.2.14.1.2 (11-22-2017)

External Bank Lead Check Returns

(1) The External Bank Leads Program (ELP) represents returned refunds from various banks. These payments are journalized into the 4971 account.

(2) These checks may have "AMTAP/IVO" somewhere on the front on the check. There will be no taxpayer information on the back of the check or DLN on the front of the check.

(3) Contact the group that maintains the 4971 account to determine if the credit has been applied to Master File or is still in the 4971 account.

(4) If the credit is in the 4971 account:

1. Void the debit out of the DCF.

2. Prepare a one-sided Form 3809 to debit the 4971 account.

3. Forward Form 3809 and the DCF 03 run to RACS.

(5) If the credit is on Master File, apply the debit.

(1) As of July 2, 2010, the penalty for dishonored payments applies to all forms of payment, including electronic payments.

(2) The penalty is systemically generated with Transaction Code 286.

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

(4) If the electronic payment unposts and needs to be transferred to Kansas City Non-Master File, the penalty will also need to be computed and transferred. Compute the penalty per instructions in 3.17.10.19.2, and then input the amount on Form 3465, Adjustment Request. Forward Form 3465 with the completed Form 2158, Credit Transfer Voucher, and backup to Kansas City.

(1) Take all the ISRP checks and researched worksheets to IDRS and verify entity and payment to ensure that the credit is still on the account which you are about to debit. An unpostable condition is created if a dishonored check debit (TCs 611, 621, 641, 661, 671, 681 or 691) attempts to post in the absence of a matching credit. Such unpostables will be returned to the DC function to be added back to the DCF and for reprocessing. Care should be taken when applying money orders to ensure that the same remittance is not debited twice.

(2) Input CC BDAPLR to request CC BDAPL. Transfer information from the worksheet to the IDRS screen. See Exhibit 3.17.10-4

(3) If you find when closing a case, the taxpayer used an incorrect TIN and you find the correct TIN, use the correct TIN for application. You may wish to enter in the Remarks area, "X-ref t/p used incorrect TIN". Ensure corrective action has been taken on the incorrect posting.

(4) If research indicates NMF account, void debit w CC BDOUT "V" and transfer debit to Kansas City via Form 2158.

(5) At the end of the fiscal year, if October 1 falls on a Monday thru Friday, do not input applies with a current Julian date until after the following Sunday. Applies with current Julian dates that are input before the first Sunday in October will be considered 'prior year' and will not appear on DCF0540 until the second working day following the first Sunday in October.

(1) Change entity information, the Employee Number or Trace ID Number of a record on the Dishonored Check File with CC BDENT. See Exhibit 3.17.10-5

(2) For Deceased taxpayers, see instructions in IRM 3.13.5.30, Individual Master File Account Numbers.

(1) Research for payments received for IRC 965 repatriation tax under Section 14103 of P.L. 115-97, Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017. Valid IMF MFTs are 30, 31 and 82, BMF MFTs are 02, 05, 06, 34, and 83. All section 965 tax payments will be posted to the tax module where the assessment posted. For example, if the section 965 tax assessment is posted on the 201712 tax module, all section 965 tax payments will be posted to the 201712 tax module, regardless of the year in which the payment is made based on the installment percentages in the subsequent years. Section 965 returns have a posted TC 766, credit reference number (CRN) 263. IMF returns are identified with return processing code (RPC) F, BMF with computer condition code (CCC) J. Taxpayers were instructed to send two checks, one for their non-965 tax liability and one for their section 965 tax liability. Apply the debit transaction to the module with DPC 64.

(1) The CC BDINQ format displays a specific record on the DCF. At times you may need to see how a check was added to the DCF or if a record has been closed. On splits, you may wish to make certain that you closed the case correctly. Personnel outside the unit may use CC BDINQ to ensure that a payment to be refunded has not been dishonored.

(2) Using CC BDINQ, the DCF can be researched by name control, DCN, or money amount. However, search of the file is narrowed by using as many of the three elements as possible. See Exhibit 3.17.10-6.

(1) Associating the DC Checks to the Form 2287/Form 2287 (SP) and the DC Worksheet—After checks have been debited on IDRS with CC BDAPL, an IDRS notice will generate. The notice is printed on Form 2287/Form 2287 (SP). This Form 2287/Form 2287 (SP) will be delivered to the DCU the next working day after the input is made. The date printed on the generated Form 2287/Form 2287 (SP) is that of the third business day after the CC BDAPL input; therefore, all pre-mail activity, including quality review, must be completed by COB that third business day.

(2) Match the check to the Form 2287/Form 2287 (SP) and the worksheet; pull the worksheet, the notice and check. Also review for received date, tax period, penalties, etc.

(3) Return check and separate Form 2287/Form 2287 (SP) to the taxpayer. If the payment was for multiple modules, staple all of the parts 2 together and attach a Form 8269 show the total amount due and request that all of the parts 2 be returned with the replacement remittance. Staple the check to the parts 1. See Figure 3.17.10-19 At local option, a cover Form 2287/Form 2287 (SP) may be prepared to indicate to the taxpayer the total amount due.

(4) Abating Penalties-If you find a penalty has been assessed when one is not required, abate the penalty by using CC REQ54 which generates the ADJ54 format. The incorrect penalty must be posted before it can be abated.

(5) Assessing Penalties-If no penalty was assessed and a penalty is justified, apply a penalty and retype Form 2287/Form 2287 (SP).

(6) Erasing the IRS Endorsement-Before mailing checks and Form 2287/Form 2287 (SP), erase the IRS endorsement and stamp the date of the debit voucher inside the erased endorsement stamp. Never erase endorsements on checks that can be redeposited.

(7) Resolving an Erroneous Application-If the debit was applied to the wrong taxpayer, send the case to Accounts Management or other designated areas for correction.

(8) If research or the check reveals a different taxpayer address than that shown on CC INOLE or ENMOD, include Form 8822, Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns), or Form 8822B, Change of Address or Responsible Party-Business, with the dishonored check and Form 2287/Form 2287 (SP) to be sent to the taxpayer.

(9) Take the check, notice, other inserts to be sent to the taxpayer, and worksheet to quality assurance for review.

(10) Filing the Dishonored Check Worksheets-File the DC worksheets in alphabetical order. At the discretion of the Director, the worksheets may be filed by TIN within the Julian Date week indicated by the DLN. Dispose of the file items following Document 12990, Records and Information Management Records Control Schedules.

(11) Mailing the Form 2287/Form 2287 (SP) and the Dishonored Checks-Send the Form 2287/Form 2287 (SP) and the dishonored checks and any inserts to Facilities for mailing. The Form 2287/Form 2287 (SP) and the dishonored check must be mailed to the taxpayer within 3 working days from the date of the debit.

(12) Mailing Checks and Notices for Form 941-M and Form 720-M- When a check has a note attached indicating a Form 941-M or a Form 720-M, pull the check and the Form 2287/Form 2287 (SP). Using Form 3210, mail the check and Form 2287/Form 2287 (SP) to the area office Collection function for timely collection of the account.

(13) Typing Form 2287/Form 2287 (SP) for misplaced notices-As the checks and the Form 2287/Form 2287 (SP) notices are being associated and there is a worksheet indicating the case is closed but no Form 2287/Form 2287 (SP) notice, go to IDRS using CC BDINQ to see if this case has been closed. If the case has been closed, type a Form 2287/Form 2287 (SP) notice and mail the check and the Form 2287/Form 2287 (SP) to the taxpayer. This should be checked each day to avoid missing the 3-day limit on mailing the DC and the Form 2287/Form 2287 (SP) notice to the taxpayer. If the case has not been closed, give the worksheet to the work leader to be completed.

(14) There may be some taxpayer correspondence received after issuance of Form 2287/Form 2287 (SP). Procedures should be developed to ensure that proper adjustments are made to the taxpayer's account. DC worksheets or drop listings may be useful in the research process.

(15) When correspondence concerning balance due accounts is received from a taxpayer stating that he/she refuses to pay, will pay the bill in the future, is unable to pay, or wishes to pay in installments, route the case to the Compliance Services Collection Operations.

(16) Taxpayer correspondence may likely contain requests for reasonable cause abatement of the dishonored check penalty. In addition to causes which are reasonable as described in IRM 20.1, Penalty Handbook, the following should be accepted as reasonable cause for dishonored checks:

1. The taxpayer furnished evidence that their bank account contained sufficient funds at the time the check was submitted.

2. the taxpayer had more than one bank account, and the check was inadvertently drawn on the wrong account.

3. Stop payment of a check was the recommendation of an IRS employee, or the taxpayer informed IRS of a stop payment order and the reason for the order was approved.

(17) If the request for penalty abatement is accepted, use CC REQ54 to input TC 281 as directed in IRM 2.4., IDRS Terminal Input. Be sure to properly notify the taxpayer of our response to his request.

(18) If the request for penalty abatement is denied, send Letter 854C to the taxpayer giving an explanation for not abating the penalty and input TC 290 with .00 as directed in IRM 20.1.1, Penalty Relief.

3.17.10.2.20.2 (08-04-2020)

Assessing a Dishonored Check Penalty

(1) Per IRC 6657, a penalty shall be imposed if any tax is paid with a bad check. The penalty varies according to the amount of the bad check:

FROM	TO	PENALTY
≡ ≡ ≡ ≡	≡ ≡ ≡ ≡ ≡	≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
$5.00	$24.99	Penalty equal to amount of remittance
$25.00	$1,249.99	Penalty charge is $25.00
$1,250.00	And over	Penalty charge is 2% of the amount of the remittance

Note: Rate for checks received after May 25, 2007.

(2) In addition to the causes which are reasonable as described in IRM 20.1, Penalty Handbook, the following should be accepted as reasonable cause when determining whether a dishonored check penalty should be assessed.

1. The check was not honored because of the death of the taxpayer after the date the check was issued.

2. The check showed an incorrect date or payee.

3. The amount shown in figures and in words on the check differ.

4. The check had no signature.

5. The check did not reflect the name and address of the bank on which it was drawn.

6. The check was prepared with multiple signature lines and at least one, but not all, signatures appear. (Return the check to the taxpayer for additional signature(s).)

7. There was a failure to sign voucher receipts or noncompliance with other requirements of the bank on which the check is drawn. Taxpayers who frequently submit incomplete or improperly drawn checks should be penalized.

8. The check is a third party check involved in cash register seizure by Collection.

9. The financial institution which issued the check or money order is now defunct.

10. There is a Combat Zone indicator of "1" (active).

11. The check is from a federal agency (US Treasury check) or has an employment code of "F".

(3) No penalty should be assessed when a taxpayer's funds are tied up in a financial institution which is not fully operational. The following instructions should be followed:

1. Dishonored checks will be held in the Dishonored Check Unit until they can be redeposited or returned to the taxpayer for substitute payment. Credit will not be reversed, and the bad check penalty will not be charged at this time.

2. Disposition of the check will be made upon official notification that the affected financial institution is either fully operational or defunct.

3. If the financial institution reopens, a check stamped "Unable to present/process at this time" should be redeposited. A check stamped "Return to Maker" must be returned to the taxpayer and a substitute remittance requested.

4. If the financial institution does not reopen, use the following procedures to debit the taxpayer's account, return the check to the taxpayer, and ensure that no penalty is assessed.
   If no penalty should be assessed, enter $.00 in the penalty box of Form 8252.
   Debit the taxpayer's account, being certain to input .00 on line 5 of CC BDAPL to ensure that no penalty is automatically computed.
   When the Form 2287/Form 2287 (SP) is generated, prepare Form 8290, Returned Check Repayment Notice, taking care to enter the same date as that on the Form 2287/Form 2287 (SP). See Figure 3.17.10-20



5. Send check, Form 2287/Form 2287 (SP) and Form 8290 to the taxpayer.

6. Record action taken in "Remarks" section of the Form 8252.

(4) Temporary Relief Period from assessing bad check penalties for Dishonored Checks

1. The Office of Servicewide Penalties has recommended the implementation of a temporary blanket relief policy period because of delays in IRS incoming mail receipt and check processing. SP HQ Accounting is approving a temporary blanket relief policy from assessing the bad check penalty during the processing of dishonored checks.

2. No bad check penalty should be assessed for any paper check that IRS attempted to deposit more than 30 days after the IRS received date falls in the range from March 1, 2020 to July 15, 2020.

Note: Any bad check penalties that have been assessed resulting from IRS attempting to deposit a paper check more than 30 days after the IRS received date, when that received date falls in the range from March 1, 2020 to July 15, 2020, should be abated. Abate the penalty with a TC 281, RC 062, and Penalty Reason Code (PRC) 30. Input the hold code “0” to generate the ADJ notice.

(5) Applying Penalties for Dishonored Checks

1. On split remittances of $1,249.99 and under, apply the penalty to the largest money amount. Apply $.00 on the smaller amounts of money. Let the computer generate a $25.00 penalty on the largest money amount.

2. On split remittances of $1,250.00 and over, you will figure the penalty and apply the penalty to the largest money amount. For example, if the check is for $1,600.00 and has 3 parts—on the 2 smaller amounts put $.00. On the largest money amount, apply $32.00. If you do not apply the correct penalty, the computer will generate only the penalty for the amount of the one document. The penalty must cover the entire total of the check.

3. On split remittance cases, send the check, Form 2287/Form 2287 (SP) and Form 8269 Notice of Dishonored Check for More than One Tax Form, to the taxpayer. See Figure 3.17.10-21

Note: PDF fillable Form 8269 will calculate Amount of check plus penalty equals Total due with Form 2287/Form 2287 (SP). When you enter amount of check and penalty in appropriate blocks the Total due block will calculate automatically.

(1) DCF01-Dishonored Check File Analysis

1. Daily inventory lists prior balance, new accounts added, adjustments, accounts closed and new balance by both count and dollar amount for each area processed by the campus.

2. Report also includes summary for the campus. See Figure 3.17.10-22.

(2) DCF03-Transaction Register

1. Non-Master File Applications from the DCF lists DC control number, taxpayer's name and address, TIN, tax period, 23C date, form number, employee number and other information, including "Remarks". The report ends with a campus summary showing counts and amounts for each transaction code for each area reporting activity. See Figure 3.17.10-23.



2. The 1710 Account Transaction Register is a daily report that shows the dishonored check control number and amount for each item added to the DCF by area. A later page summarizes each area's totals by count and dollar amount. See Figure 3.17.10-24



3. The 1710 Account Transaction Register is a daily report that lists restricted applications (CC BDOUT) from the DCF by type (for example, D, I) showing the DC control number, amount and employee number. A later page of this report summarizes activity for the various types of applications for each area processed by the campus. See Figure 3.17.10-25

(3) DCF05-DCF Applications for IMF/BMF/IRAF-Controls

1. Daily report lists completed BDAPL "Ms" in DCN order, and by money amount.

2. Summary breaks down total records input by IMF, BMF and IRAF showing the numbers of the records input and applications updated with money amounts applied. See Figure 3.17.10-26

(4) DCF09-Dishonored Checks Aged 15 Days List

1. Report shows DC control number, name control, original amount, balance amount, entry date, received date, age of item in number of days and employee assignment number.

2. The first report is in check age order. The second section is in employee number order.

3. Summary on later page lists count and balance amount of cases by area with the campus total of each. See Figure 3.17.10-27.



4. At campus option, DCF09 sorted by assignment code may be generated to aid in controlling workload.

(5) DCF50-Monthly Dishonored Check File Analysis summarizes activity for the fiscal month in the same format shown in (1) above.

(6) DCF54-Dishonored Check Records Dropped from the File

1. Part 1 allows research of cases dropped from the DCF alphabetically by taxpayer's name. See Figure 3.17.10-28 Dropped Lists are viewable on Control D.
   
   Refer to Document 12990, Records and Information Management Records Control Schedules.



2. Dropped List 2 allows research of dropped cases by DCN. See Figure 3.17.10-29 Dropped Lists are viewable on Control D.
   
   Refer to Document 12990, Records and Information Management Records Control Schedules.

(7) Upon receipt, reports should be balanced to employees' work records. Discrepancies should be resolved and reported to the manager and/or the RRACS Data Base Administrator.

(8) DCF60- Monthly Dishonored Check File Analysis. See Figure 3.17.10-30

1. Monthly inventory summarizes activity for the fiscal month in the same format used for the DCF50.

2. A separate report is generated for each campus and includes a National roll up.

3. The report is available at the Control D web site. See Figure 3.17.10-30

(1) Production data for the weekly WPC Managers Report should match the staff hour reporting period ending Friday or Saturday as directed in IRM 3.30.50, Performance Evaluation Reporting System.

(2) Monthly computer-generated reports showing campus totals for dishonored checks (DCF50) are to be used as the source data for input to the MISTLE report. Daily computer generated reports (DCF) should be used as the source data for reporting to the weekly MISTLE report.

(3) A report must be submitted showing the number of aged dishonored check cases. The report must be submitted monthly, January through December. In addition to the monthly reporting, weekly reports must be submitted beginning the first week in March through the end of May. The report should include the following:

1. The total number of ALL dishonored checks in the DCF inventory as of the end of the reporting period. This should include bank problems and manually deposited checks.

2. A count of ALL cases more than 21 days old by age: cases 22–65 days old, and 66 or more days old. This should include bank problems and manually deposited checks. As of January 1 ,2002, these items are no longer to be excluded but may be explained in comments.

3. Comments to explain why aged cases cannot be closed; an explanation of why inventory levels remain consistently high, if applicable; and the corrective actions being taken to resolve aged cases.

4. Monthly reports should reflect the inventory as of the last day of the month. Weekly reports should reflect the inventory as of close of business Thursday. As of January 1, 2002, the above aged information is reported to the MISTLE eliminating the need for a paper report.

(4) An weekly Inventory report, which is located on the Dishonored Check Share Point - Home, must be submitted by the close of business every Monday to the Dishonored Check Headquarters analyst.

(1) Each record within the URF contains the Unidentified Remittance (UR) control number and amount of remittance. Other record elements may include type of remittance, received date, check or money order number, telephone number, bank name, taxpayer's name and address, taxpayer's identifying number (if known), and available payment and follow-up information.

(2) URF provides a rapid research tool for payment tracing, which is available to all areas serviced by the campus. It provides registers and listings for controlling and balancing. Since the remittance is under the control of IDRS while it is unidentified, the unidentified portion of the Service Center Control File (SCCF) is no longer required. However, once the payment is applied, the account falls under regular SCCF control.

(3) Revenue Receipts information will be provided on a monthly basis from the monthly URF Analysis. See IRM 3.17.10.3.17, for description of available URF computer reports. The balancing operations will be performed by the Accounting Balancing function or by designated personnel within the Unidentified Remittance function. See IRM 3.17.10.3.18, for balancing within the function.

(4) UR records are established only by the Campus Cashier and Unidentified Remittance functions. There are a number of different types of Unidentified Cases: cases from Cashier function, UNKNOWN, Non-Master File, Rejects, Statutes and Unpostables.

(5) Using CC URAPL, application of UR credits may be made only by UR function personnel and only to the module or for the purpose indicated by the taxpayer. Personnel outside the UR function may complete Form 8765, IDRS Control File Application, to request application from the URF.

(6) Due to restrictions within the command codes, correction of erroneous records using CC UROUT and URENT are restricted to the terminals located in the UR functions located within Accounting. Instructions on the operation of IDRS and use of the CCs are in IRM 2.4, IDRS Terminal Input.

(7) The following steps must be taken in Receipt and Control Operations before a remittance is added to the URF:

1. Perform IDRS research to identify appropriate taxpayer account.

2. If IDRS is unavailable, retain work until research can be accomplished. Photocopy front and back of original for later research, depositing the original remittance.

3. Entity Control tax examiner will assign Employer Identification Numbers to BMF cases needing them.

4. If remittance cannot be identified through IDRS research and/or telephone call per IRM3.8.45.10.1, Manual Deposit Process, request master file transcript for use by the UR function.

(8) The IDRS URF contains four separate files on disk. They are the UR Name File, UR Amount File, UR TIN File and UR Control Number File. (NOTE: The UR TIN File stores data but cannot be used to retrieve information.) The paper file will contain history sheet, the document, correspondence, photocopy of remittance, etc. Subsequent IDRS activity with the URF is automatically recorded by the computer, and, if appropriate, balance amounts are also adjusted, thus becoming the official URF. A record will be removed from the open file at the time the case is closed on IDRS.

(9) Route closed cases to Files in folders other than IDRS source document folders. Frequency and manner of transfer may be arranged locally between the UR function and Files to ensure that records are retained as described in Document 12990, Records and Information Management Records Control Schedules.

(1) Receive Unidentified Remittance (UR) Cases and URADD Transaction Register (URF 03) from Perfection function. The UR cases will include letters, envelopes, and all case material received from the taxpayer (except the remittance), as well as copies of items such as money orders, cashier checks, government checks or illegible remittances. Other information hand copied from the remittance will be either the complete name and address or the check number in those cases in which the photocopy of the remittance is not included in the file.

Note: Beginning January 9, 2012, Lockbox incomplete remittance documents (also known as unprocessables) will no longer be routed to Receipt and Control Payment Perfection for resolution. These cases will be routed to Error Resolution (ERS) for research. If ERS is unable to resolve the payment, they will be routed through Rejects to URF. These receipts should include the same backup documentation information as above including letters, envelopes, and all case material received from the taxpayer if available.

1. On August 3, 2020, the new letter 6268 (formerly Form 3731C) and Spanish versions of forms and letters are available to print. The generation of the Spanish versions of letters is accomplished by the input of the new notice indicator "E".

2. When the Perfection function in Receipt and Control Operations adds the unidentified remittance to the URF, a three part letter (Letter 6268/Letter 6268 (SP)) can be generated to the taxpayer through IDRS. Parts 1 and 2 are mailed to the taxpayer; in every case, complete IDRS research must be performed in the Unidentified Remittance function before the Letter 6268/Letter 6268 (SP) is sent to the taxpayer. Part 3 is intended to be used as a history sheet. See Figure 3.17.10-31



3. UR cases received from Receipt and Control have been numbered with unique document locator numbers (DLNs) showing Tax Class "0" and Document Code "09". UR block numbers assigned in Receipt and Control are limited to 000 through 499. Figure 3.17.10-32 The campus number or a "dump" file location code should not be used to form the UR DLN.

4. Cases received with out of campus DLNs should not be transferred to the campus that received the payment. Add the credit to the URF using the "dump" file location code.

Unidentified Remittance DLN



5. Upon receipt of Unidentified Remittances annotated as "ACS" or "levy," research to identify and apply the credits to their correct accounts. Should research be unsuccessful or procedural questions arise on these or other cases resulting from Collection action, contact Compliance Services Collection Operations for assistance.

6. If the Perfection function is unable to locate a valid SSN to apply payments received with obsolete Form 942, Employer's Quarterly Federal Tax Return for Household Employees, the credits will be transferred to the URF. The UR function should not perform research on these cases and Letter 6268/Form 6268 (SP) should not be issued to the taxpayer. The Error Resolution function will correspond with the taxpayer to determine the disposition of the payment. Existing UR refund and application procedures should be followed.

(2) Receive "UNKNOWN" Cases from Cashier function. These cases are determined to be unknown (UNKN) when there is no taxpayer information, or the handwriting is illegible. All UNKNOWN cases should have copies of all documentation received. These cases have been numbered with a UR DLN of the type shown above. A history sheet will be attached to each of these cases before assignment to the UR technicians; a blank Part 3 of Form 3731/Form 3731 (SP) may be used for this purpose.

(3) Receive and process credits transferred from Nullified Unpostables and/or Reject functions to the URF. You will receive original documents together with the adding machine tape totaling dollar amount of each document attached. A Nullified Distribution Listing will be received in the unit for Unpostable Resolution Code 8, Nullify Area Code 40 cases; the listing includes the following information for each item shown: master file, DLN, TIN, name control, MFT, tax period, amount. See IRM 3.12.32, General Unpostables, for further description of GUF 55-47 listing. The unit is responsible for securing cases shown on the listing for input to URF.

(4) Receive and process transfers from IMF, BMF and NMF accounts to the URF using Form 2424, Account Adjustment Voucher. See Figure 3.17.10-33

(5) Cases will be received with complete documentation and back-up as follows: If incomplete documentation is received, return the case to the submitting unit.

1. A hard copy of the IMFOL or BMFOL screen showing the credit being transferred must be attached to Form 2424. The IMFOL or BMFOL data can be dated no more than seven days prior to the receipt date in the URF/XSF Unit.

2. Taxpayer's reply copy of the document ordered from Files and other pertinent information about the case.

3. Research history sheet indicating the research performed and the results, taxpayer contact and responses along with dates actions are taken. Statute credits are exempt from this requirement.

4. If available, attach a copy of the check.

5. The remarks section must indicate why the credit is being directed to URF. An IRM reference only, is not acceptable.

6. The payment DLN and the Trace ID must also be indicated in the remarks section.

(6) Undeliverable refund checks will be transferred to the Unidentified Remittance account when the undeliverable refund check cannot be released through research or correspondence with the taxpayer.

1. URF will search for a better address using various research tools. If a new address is located, update URF with the new address using CC URENT. Contact the taxpayer by letter.

2. If a reply is received, resolve the case according to the taxpayer’s request.

3. If the credit cannot be applied through research or correspondence, or if no reply, it will remain in the URF.

(7) Unapplied payments can be received from Entity Control function, either directly or through Rejects, which represent payments received from filers who are not liable.

1. The UR function will receive for each case: a copy of the return, if available; a copy of the FTD coupon (if applicable); and Form 3244 annotated that the taxpayer is not liable, and the credit is to be refunded.

   Note: The RTR print may be used in lieu of preparing Form 3244.

2. These cases must be added to the URF via CC URADD and manually refunded via CC URREF, see IRM 3.17.10.3.11, or applied via CC FMAPL/URAPL IRM 3.17.10.3.10, to any outstanding balances (OBL), found on IMFOL/BMFOL within seven workdays of their receipt. When applying to an OBL, use CC URAPL to generate Letter 2349/Letter 2349 (SP) to explain the disposition of the taxpayer's credit.

Note: For BMF not liable cases only, if the account has an outstanding balance (OBL) and -E Freeze, refund the payment and do not apply or offset unless the TC 150 amount is the exact amount of the credit in URF. See IRM 3.14.2.7.5.6, Rollback Freeze (-E), for additional information.

(8) The State Income Tax Levy Program (SITLP) is a Collection program which uses state income tax refunds as levy sources on delinquent taxpayers. If a state sends money to the IRS that was in error due to a tape problem that was not corrected upon receipt, the funds will be transferred to the Unidentified Remittance File for refunding to the state. Extensive documentation and supporting correspondence from the state should accompany the refund request (Form 8765) received from Collection. Any questions or problems concerning the refunding of SITLP monies should be directed to the initiator of the Form 8765.

(9) Occasional cases, particularly those received from Unpostables, may be too old to add to the URF. (See criteria in IRM 3.17.10). Exhibit 3.17.10-7 These cases must be added to Account 6800, Excess Collections, for accounting purposes. Return these documents to the originator with an explanation that they are to be added to the XSF using Form 8758, Excess Collections File Addition.

(10) Do not accept documents numbered with doc codes 48, 58 or 65, even with current year DLN. These credits belong in XSF. Return these documents to the originator with an explanation that they are to be added to XSF using Form 8758, Excess Collections File Addition.

(11) Do not accept pre-posted documents representing nullified unpostable or rejected, redeposited, undelivered refund checks or deposited cancelled refund checks (doc code 45, transaction codes 740 or 841). These credits belong in Account 4970, Unapplied Refund Reversal. Return these documents to the originator with an explanation that they are to be added to Account 4970 using Form 3809, Miscellaneous Adjustment Voucher.

(12) Cases will be received from Rejects which represent erroneously filed remittances on Form 8752, Required Payment or Refund under Section 7519. Unpostables will have determined that these taxpayers are not liable and will have notified them of that fact. These cases may represent erroneously filed remittances from personal service corporations; Form 1120 filers where a TC 090 is on the account, no TC 055 is present, and the taxpayer has not replied when asked for a copy of an approved Form 8716; or other like situations. These cases must be added to URF via CC URADD and manually refunded via CC URREF ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

(13) As of April 2000, cases are no longer received from Account Maintenance (AM) and Collection when taxpayers do not respond to requests for returns when only a payment/credit is present on the taxpayer's account unless the statute has expired for either assessment or credit/refund. This includes AM-12 and AM-18 transcripts only. Exception to AM-18: Accounts with a TC 594, TC 599 or credits with DPCs of 04, 05, 16, 18, 20, or 21. Collection should attempt to contact the taxpayer prior to any money being moved to URF.

(14) Cases will be received which represent remittances received with Form 1065B. These credits should be added to the URF without further research and no attempt should be made to contact the taxpayer.

(15) Cases should no longer be received which represent remittances received with Form 5329 (MFT 29) unless there is insufficient information to locate the taxpayer's account. Per IRM 3.8.45.6.6, Manual Deposit Process, these MFT 29 credits should be processed through RRPS/ISRP. If the taxpayer's account cannot be located, a Form 3244, Payment Posting Voucher, will be prepared with a copy of the Form 5329 to move the credit to URF.

(16) Cases will be received which represent erroneous refunds caused by misrouted direct deposits.

1. If the person who received the direct deposited refund provides the name of the person who should have received the refund, research for the TIN.

2. If the TIN is found, apply the payment to the correct taxpayer's account with TC 720 via Form 3245, Posting Voucher-Refund Cancellation or Repayment, to hold the credit.

   Note: TC 720 should create a P- freeze on the taxpayer's account. It will also generate a transcript to Refund Inquiry. The Refund Inquiry function will determine the cause of the Erroneous Direct Deposit Refund and issue the refund.

3. If the name is not provided or the TIN is not found, contact the taxpayer who sent the refund back for additional information. The name and TIN of the person who should have received the refund may have been listed on the bank statement of the person who received the refund. If the taxpayer responds with the name, follow 1. and 2. above.

4. If the credit cannot be applied through research or correspondence, or if no reply, it will remain in the URF.

(17) Cases will be received which represent returned refunds from the bank for Refund Anticipation Loans (RAL) or Refund Anticipation Checks (RAC).

1. If the bank sends a check to IRS to repay refunds sent to them for RAL or RAC, check the stub for the taxpayer's information.

2. If attached and the taxpayer's information is available, apply the payment to the correct taxpayer's account with TC 720 via Form 3245 to hold the credit.

   Note: TC 720 should create a P- freeze on the taxpayer's account. It will also generate a transcript to Refund Inquiry. The Refund Inquiry Unit will review the case and issue the refund.

3. When the bank returns a refund and a TC 841 has already posted to the SSN, check for an assigned Temp or IRSN number for the application.

4. If the taxpayer's identity is not known, contact the bank for taxpayer information. See Exhibit 21.4.1–3, Most Common Refund Anticipation Loan Banks in IRM 21.4.1, Refund Research. If the bank provides the name and TIN, follow 2 above.

5. If the credit cannot be applied through research or correspondence, or if no reply, it will remain in the URF.

(18) Fresno and Cincinnati URF received deposits dated December 1, 2011, through April 30, 2012, which represented returned refunds from various banks included in the IVO (Integrity Income Verification Operation, formerly AMTAP) External Bank Leads program. IVO employees performed research and bank contact to resolve the refunds. IVO used Form 3245 for application of the returned refunds.

1. If IVO was unable to identify and apply the credit from the original deposit, the case was routed to URF as External Leads Processing (ELP) on a Form 3244.

2. If conditions on the account prevented the posting of the credit from Form 3245, it should have been received in URF from Unpostables.

3. Contact IVO to resolve the Unpostable credit. If, after research, IVO says they are unable to identify and apply the credit through research with the bank, add the credit to the URF as IDEN.

4. The credit will remain in URF unless IVO reverses their entry.

5. If the deposit is dated after May 1, 2012, transfer the credit to the 4430/4971 account. The remarks should include "ELP deposited after May 1, 2012".

6. If the deposit is dated after December 1, 2012, transfer the credit to the 4971 account. The remarks should include "ELP deposited in error after December 1, 2012".

(19) Offshore Voluntary Disclosure Payments are consolidated to AUSC, but occasionally payments will be received at other SPC's. When a payment has been identified as OVDP, forward the payment to Austin Accounting, using Form 2158, Credit Transfer Voucher.

(20) Form 2424 will be received for Bankruptcy payments that the service is entitled to per IRM 5.9.15.2.2, Payments In Bankruptcy. Add the credit to URF with status “IDEN”. Remarks on Form 2424 will be annotated, "This credit is a bankruptcy payment and should not be refunded or applied." Also, the form must indicate, "No follow-up action with taxpayer is required", and a TC 520 must be posted to the account so the service will not attempt to contact the debtor. If the remarks do not state this, work case as an unidentified remittance. A hard copy of the TXMODA or IMFOLT/BMFOLT screen print showing the credit being transferred must be attached to the Form 2424. The TXMODA or IMFOLT/BMFOLT can be dated no more than seven days prior to the receipt date in the URF unit.

(21) No reply to Letter 18C cases will be received when a freeze is set for missing information on a refund claim on a decedent return. For information on Decedent returns, see IRM 21.6.6.4.22.2, Processing Decedent Account Refund.

(1) Cases added to the URF may have an IRS-received date no earlier than one calendar year before the current date. For example, on February 11, 2007, a credit other than doc codes 48, 58 or 65 and true statute cases, received by February 11, 2006, or later may be added to URF. The IRS-received date should be the Return Due Date (including any extensions of time to file) for Transaction Code 806 (withholding and excess FICA payments). Use the actual IRS received date, i.e., the earliest date recorded by any IRS office, for all other credits.

(2) CC URADD will show a generated running subtotal of items and total money being entered. After all cases have been added, compare the totals by verifying item count and amounts on the IDRS screen with those on the adding machine tape.

(3) If the amounts do not agree, locate the erroneous record using CC URINQ and correct it by using CC UROUT "Z". For an example of how to void a UR record see Exhibit 3.17.10-10.

(4) A history sheet will be attached to each case before assignment to the UR Technicians.

(5) Add cases to the URF by entering CC FMADD and transmitting. Input "C" in position 7 only to request a new CC URADD format when the running item count and dollar amount must be retained. The valid response is the CC URADD format. See Exhibit 3.17.10-7

(1) Verify the case count on URF03 listing.

(2) Large dollar cases will be worked first.

(3) Credits under $1.00 can be transferred to Account 6540, Small Debits and Credits Cleared. Use CC URAPL "T" to transfer credits under $1.00. See Exhibit 3.17.10-12 for an example of CC URAPL "T".

3.17.10.3.4.1 (01-01-2014)

Perform Initial IDRS Terminal Operations

(1) Research IDRS using all available Command Codes (CCs). IRM 3.17.10 lists CCs that might be helpful. See IRM 2.4, IDRS Terminal Inquiries. Documentation of actions taken, pending actions, telephone calls, copies of letters, IDRS employee number, case assignment/reassignment, etc. must be annotated on the History Sheet and be retained in the case file.

(2) When research reveals that a UR record has an erroneous name, use CC URENT to correct the name on the UR record. See Exhibit 3.17.10-9

(3) When taxpayer correspondence positively indicates an address change, use CC INOLE or ENMOD to research current entity information. If the address needs to be changed, use CC ENREQ with CC INCHG (IMF) or CC BNCHG (BMF) to record the updated information on master file. Update address on URF record using CC URENT.

(4) Close case by applying credit, if possible, and record this action on the history sheet. Determine the correct application to be made and input information on IDRS with CC FMAPL/URAPL. This information will become a part of the UR record. The record status will automatically be changed to CLOS when the entire credit has been applied. IRM 3.17.10.3.10, for complete instructions. See Exhibit 3.17.10-12 for CCs FMAPL and URAPL.

1. Use CC FMAPL to generate CC URAPL format.

2. Use CC URAPL "M" to apply credit to Master File accounts. Online credit posting will be computer-generated to the correct tax module.

3. Use CC URAPL "N" to apply credit to an NMF account.

4. Use CC URAPL "T" to make a transfer of fund application.

(5) Use the CC FRM77 format to input specified transactions to any file in IDRS. This may be used to input TC 570 to freeze credit which would be necessary if secondary transaction code TC 570 had been omitted when the credit was applied initially. TC 570 may also be used to correct an erroneous transaction. For example: If a TC 670 was used instead of a TC 640 on an Examination Case, you will need to input a TC 570 to freeze the credit so it will not refund. If TC 570 was input in error, a TC 571 should be input to release the freeze.

1. The input of CC REQ77 generates the CC FRM77 format. CC TXMOD for specific period needing TC 570 or TC 571 must precede CC REQ77. To request a CC FRM77 format, follow these steps:

2. Input CC TXMOD with definer, TIN, MFT, Tax Period and transmit.

3. The response is Page 1 of the TXMOD.

4. Input CC REQ77.

5. If CC TXMODA brings up the Information, then lines 2 and 3 are not necessary, only REQ77.

6. The valid response to CCs TXMOD and REQ77 is a display of the CC FRM77 format. The required data will be entered after the prompts in the CC FRM77 format.

7. Correspondence must be answered within 30 calendar days of the earliest "IRS-received" date, however, every effort should be made to provide quality responses in less time. If it is not possible to respond within this time period, send an appropriate interim response which includes the reason for the delay, when a final response may be expected, and an employee contact. See IRM 3.30.123, Processing Timeliness: Cycles, Criteria, Critical Dates. Record this action on the history sheet.

3.17.10.3.4.1.1 (08-04-2020)

Routing Attachments

(1) Mail Letter 6268/Letter 6268 (SP) or applicable Correspondex Letter on all cases with complete address information that cannot be closed by IDRS research or telephone contact. The IDRS system generates Letter 6268/Letter 6268 (SP) at the time the unidentified remittance is added to the URF by Receipt and Control. See Figure 3.17.10-34 Destroy the generated Letter 6268/Letter 6268 (SP) when such correspondence is not necessary, i.e., if information is obtained from the taxpayer by telephone or if the case is closed by IDRS research.

(2) On closed cases, route any documents and correspondence pertaining to inability to pay or requests for payment agreements to the Compliance Services Collection Operations.

1. If no action is required on the account by the UR Function, route all related correspondence to Collection.

2. If action is required on the part of the UR Function, route a copy of the correspondence to Collection. Ensure the IRS received date is legible.

3. When correspondence is routed to Collection, follow local procedures for sending an interim letter to the taxpayer.

(3) Route any loose pages of Forms 1040, U.S. Individual Income Tax Return, or related schedules to the Document Services (Adjustments First Read) function.

(4) Route all correspondence that cannot be appropriately answered by the Accounting function to the correct area per campus mail guide.

(5) Route all applications for extensions to Code and Edit function.

(6) The remaining open cases may be assigned to designated UR Technicians for more detailed research.

(1) Receive, count and record all new cases on desk inventory if cases have been reassigned for more detailed work.

(2) Review cases before they are filed in the open file.

1. Review for cases needing an interim reply to the taxpayer. Correspondence must be answered within 30 calendar days of the earliest "IRS-received" date, however, every effort should be made to provide quality responses in less time. If it is not possible to respond within this time limitation, you should send Letter 96C containing appropriate information as described in IRM 3.17.10. Also see IRM 3.30.123, Processing Timeliness: Cycles, Criteria, Critical Dates.

2. Review for cases that can be closed without more research. The Cashier function or the Preliminary Processing Clerks may have missed something that would allow immediate application.

3. Check for cases that can be identified as a payment for another government agency or other payee. See IRM 3.17.10.3.11, for further instructions.

4. Check for cases that can be identified as an Automated Underreporter payment, indicated by transaction code 922 for IMF and transaction code 925 for BMF.

(3) Review all other cases and determine, if possible, how to research each case.

(4) An in-depth review and analysis will be necessary before the payment can be applied accurately. Research all cases on IDRS using all available pertinent CCs. The correct TIN may be located, or a pattern of payments may be established using the various command codes for payment application. Research all cases on IDRS using all available pertinent CCs. IDRS is the place to begin your research. Command Codes which may be helpful are:

1. TXMOD to research specific tax modules which contain pending and posted transactions; and to determine the status of an account.

2. SUMRY to review pending transactions and currently active tax modules under a specific TIN

3. NAMES to research a nationwide database (Name Search Facility (NSF) at ECC-MTB) of taxpayers' SSNs or NAMEE to research a nationwide database of EINs. NAMEI (IMF) and NAMEB access the NSF of names and addresses to locate an SSN or an EIN. NAMES and NAMEI search for both the primary and secondary filer names. The hardcopy options are NAMEIX and NAMEBX.

4. FINDE to research the NSF for the business' name and address information, using the EIN and FINDS to research for the taxpayer's name and address information, using the SSN.

5. AMDIS to list all records that are on AIMS under the TIN.

6. INTST to compute the correct outstanding balance, including interest and failure to pay accruals, to the date specified in the command code.

7. COMPA to compute interest or estimated tax penalty for a specific amount for a specific period of time.

8. COMPAF to compute failure to pay penalty

9. COMPAD displays the detail used to compute the interest.

10. TDINQ requests display of entity and module data, if present, on the TIF account which is pertinent to delinquent return investigations.

11. STAUP is used to update the status of a module and may be used to accelerate, delay or skip routine notice issuance.

12. ACTON to establish case control and history of cases.

13. LEVYS to research levy source information on the TIF.

14. IADIS to display active or defaulted installment agreements.

15. SCFTR to research Campus Control File and overnight research of records that have been moved to the historical SCCF.

16. CFINK to research the Centralized Authorization File.

17. INOLE for researching the National Account Profile (NAP). This CC is particularly helpful in locating taxpayers outside of the campus' jurisdiction.

18. IRPTR (with definer L) to provide two payee addresses, if present; filing status; one payer name and address; cross reference information; and a summary of up to 36 IRP money amounts by income type.

19. IMFOL/BMFOL and RTVUE/BRTVU to do on-line research of master file account and return data.

20. PMFOL to research Forms 1096 filed.

21. HCFOL (Help) and ICFOL (Information) to help utilize the CFOL CCs.

22. TPIIP searches for the primary or secondary SSN.

(5) Research the Automated Non-Master File using the data base procedures and the query symbols for research shown in IRM 3.17.46, Automated Non-Master File. Non-Master File research can also be requested on Form 4338, Information or Certified Transcript Request. See Figure 3.17.10-35 Be certain to secure the DLN before making this request by calling the NMF Function in KCSPC.

(6) Research microfilm as needed.

1. Microfilm Replacement System (MRS) is an automated research system which eliminates most microfilm research done in IRS campuses and area offices. Account research requests are entered through IDRS terminals. Once a day, the requests are transmitted to ECC-MTB where the needed data is extracted from the master files and transmitted back to the requesting campus. The information is usually printed and distributed within the campus within 24 hours of the request.

2. All retention registers and archival microfilm

3. Partnership Name Directory

4. FTD microfilm

5. CAWR Module Register

6. SSA-produced W–2/W–3 CAWR microfilm

(7) Transcripts and IDRS now indicate whether a payment were part of a multiple/split remittance. See IRM 3.17.10.2.12.1.1.2, for information about the multiple/split remittance indicator.

(8) Use CC RTVUE/BRTVU or ESTAB whenever an original document is needed in your research.

(9) Obtain copies of source documents on nullified unpostable cases if unable to apply payment.

(10) Request original documents on all rejects if unable to research on IDRS. When you receive an original return, you must determine if it has posted to the taxpayer's account. It will be necessary to request a transcript from master file if this information is not on IDRS. Research the SCCF using CC SCFTR to determine the status of the document. If the return is open on SCCF as non-remit, the return may be reinput. If the return is not open on SCCF, do the following:

1. Make a copy of the return for your case.

2. Prepare a Form 3893, Re-Entry Document Control, and attach it to the original return to be input for processing, checking the "Reprocessable" box on Line 11 and "Corrected to original return" on line 19. See Figure 3.17.10-36

(11) Use CC EFTPS to research electronic payments made via EFTPS. The following types of payment methods are available: ACH Debit, ACH Credit, FR-ETA, Levy, EFTPS-Online, Credit Card, RRB Link, Government, E-File Debit (EFW) and Direct Pay. An EFT number is assigned to each payment. The second digit of the EFT number identifies the payment method used. Refer to IRM 3.17.277.4.3, Electronic Payments, for the configuration of the EFT Number and the payment method identification codes.

(12) Pull closed files on all cases rejected back to URF. Make a copy of this and refile original in closed file. The material on the closed case will provide information to begin your research.

(13) Research the Remittance Transaction Research (RTR) System. RTR is a database which stores information from the Remittance Register Report (F813) and the Endpoint Master Listing Report. This system replaces the printing process of these reports produced by ISRP and allows for research to be done on-line.

(14) Research IDRS for evidence of Underreporter indicators: For IMF, CP2000 Indicator TC 922, "F" Freeze code, and/or campus URP control number. For BMF, CP2030 Indicator, TC 925, F Freeze code, and/or campus BMF Automated Underreporter control number. If present on CC TXMODA or IMFOLT/BMFOLT, apply payment with TC 640. Also check for substitute return (SFR) indicators which vary at each SPC.

(15) ACCURINT is a research tool for front line employees that may be helpful in processing URF cases. Managerial approval is required, and it is the campus option to approve users to access ACCURINT. Information concerning ACCURINT can be found at Accurint (irsnet.gov).

(16) Research and copy manually deposited payments with US Bank via US BankSinglePoint System. Contact the HQ analyst for information on US Bank SinglePoint user access. The SinglePoint website address is https://singlepoint.usbank.com. The Commercial Customer Service telephone number is 866-483-3335, and their hours of operation are 6:00 a.m. EST to 7:00 p.m. EST.

(17) Research for payments for the Affordable Care Act (ACA) Individual Shared Responsibility Payment (SRP). Apply to MFT 35 with a TC 640. Use the DPC received with the payment, if no DPC is indicated use DPC 36.

(18) Research for payments for the ACA Employer Shared Responsibility Payment (ESRP). Apply to MFT 43 with DPC 43 with a TC 640.

(19) Research for payments received for IRC 965 repatriation tax under Section 14103 of P.L. 115-97, Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017. Valid IMF MFTs are 30, 31 and 82, BMF MFTs are 02, 05, 06, 34 and 83. All section 965 tax payments will be posted to the tax module where the assessment was posted. For example, if the section 965 tax assessment is posted on the 201712 tax module, all section 965 tax payments will be posted to the 201712 tax module, regardless of the year in which the payment is made based on the installment percentages in the subsequent years. Section 965 returns have a posted TC 766, credit reference number (CRN) 263. IMF returns are identified with return processing code (RPC) F, BMF with computer condition code (CCC) J. Taxpayers were instructed to send two checks, one for their non-965 tax liability and one for their section 965 tax liability. If taxpayer contact or research shows the payment was for section 965, apply as a TC 670, secondary TC 570 with DPC 64.

(20) Research no reply to 18C letters for estate refund information casefiles as below:

1. Check AMS for the missing information. If missing information is located, make a copy for the casefile.

2. If missing information is not located in AMS, send another Letter 18C to the taxpayer’s estate. Request a response within 30 days.

3. A refund will be made based on the receipt of the complete response. See IRM 3.11.3.10.3Documentary Evidence.

   Note: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4. If the refund should include interest or need penalties abated, apply to the taxpayer's account rather than manually refunding from the URF. See IRM 20.2.4.8.4, Unidentified Remittances, and IRM 21.4 Refund Inquiries Make a copy of the documentary evidence for the casefile and apply the funds to the taxpayer’s account with TC 570 and send the original documentary evidence along with Form 4442 to AM with an explanation the account is that of a decedent and a manual refund may be needed.

5. Issue a manual refund to the person claiming the refund as the payee using CC URREF if the refund should not include interest. See IRM 3.17.10.3.11, Manually Refunding from the URF.

6. Make a photocopy of the documentary evidence for the casefile and send the original information to files to associate with the return.

(1) Apply the payment as below when research or taxpayer correspondence indicates the payment was for other than an open liability.

(2) Conscience money: This is a remittance received to ease the taxpayer's conscience. Usually there will be a note attached indicating it is for the "conscience fund". For example: A taxpayer might write a note stating, "I will be able to sleep better now". Use CC URAPL "T" to transfer conscience funds to Account 2360, General Fund Receipts. (The Contra Account is 6400, Miscellaneous Fees). See Exhibit 3.17.10-12 for an example of CC URAPL "T".

(3) Photocopy Fee: The entire processing of requests for photocopies of tax returns or tax return information is handled by IRS. A taxpayer remittance could be placed in the URF. If a remittance was intended for a photocopy or return information, transfer the credit to Account 2340 (Photocopy Fee) using CC URAPL "T", and indicate in the remarks photocopy fee. Forward a copy of Form 4830 to the RACS Unit.

(4) Bulk Forms Fee: Remittance received from tax practitioners and other persons for shipment of bulk orders of tax forms should be refunded using CC FMREF/URREF; under no circumstances may these amounts be applied to outstanding tax liabilities. The remitter should be sent a note explaining that the Superintendent of Documents (part of the Government Printing Office) is the only government agency authorized to sell printed materials such as federal tax forms. Refer them to the practitioner gate at the toll-free number 800-829-3676 or send them a copy of Publication 1045, Information for Tax Practitioners.

(5) Voluntary Contributions to reduce the Public Debt: If taxpayer contact reveals that the remittance was intended as a contribution to reduce the public debt, transfer the credit to Account 2350 (Public Debt) on IDRS using CC URAPL "T", and indicate in the remarks as public debt. Forward a copy of Form 4830 to the RACS Unit. See Figure 3.17.10-37

(6) Payment other than the partial payments required under TIPRA received with Offer in Compromise: This is a remittance received with Form 656, Offer in Compromise other than the partial payments required under TIPRA and explained in IRM 5.8.1.9, Offer in Compromise. The payment may be received from a third party on behalf of the taxpayer making the offer. Compliance Operations can verify the payment. An OIC payment may be identified by:

• "-Y" freeze;

• TCs 480 or 780 on tax module; or,

• Status code 71.

(7) User fees for letter rulings and for determination and opinion letters: Contact the Tax Exempt and Government Entity (TE/GE) Unit in the Cincinnati Campus to have them determine which RRACS account these monies should be journaled to.

• Annotate "User Fees" on Form 4830.

• If the EIN, MFT, tax period and/or form type does not print on Form 4830, write the details in the remarks area.

• Forward 2 copies of Form 4830 along with a screenshot from the Letter Information Network User Fee System (LINUS) to RACS for journalization.

(8) Wrongful Levy Situations: These are credits received from attaching property belonging to a third party in which the taxpayer has no rights (for example, from a bank account other than the taxpayer's or from the sale of what appeared to be the taxpayer's property, or from attaching property over which the third party has a superior claim which would be destroyed by the levy. See IRC 6343(b) and Treas. Reg. § 301.6343-2. When a payment is identified as a wrongful levy situation, immediately hand carry supporting documentation and a print of the CC URINQ module to the Chief, Compliance Services Collection Operations. Collection personnel will follow their procedures for issuing an expedited manual refund. Upon assurance that the expedited manual refund procedures have been followed, annotate the worksheet showing action taken and remove credit from the URF using CC UROUT "V".

(9) Unclaimed Funds: These are credits returned to the IRS by a state and represent bank drafts and cashier's checks purchased by taxpayers which have never been cashed, but were made payable to "Internal Revenue Service". Research thoroughly to identify the taxpayer entitled to such a credit. A call to the state agency issuing the credit will identify the bank which forfeited the credit if the documentation attached to the incoming credit does not. Contacting the bank which forfeited the credit to the state often yields additional information since the forfeiture took place recently. However, if the taxpayer who bought the cashier's check or bank draft cannot be identified, the credit will remain in the URF.

(10) Preparer Taxpayer Identification Number (PTIN) Payments: PTIN remittances intended for processing by an outside vendor may be deposited in error by IRS. If the PTIN payment has not posted to a taxpayer's account, it may be refunded back to the taxpayer from the URF using CC FMREF/URREF. Prepare Letter 3064C with a statement requesting the taxpayer to send the payment to:
IRS Tax Pro PTIN Processing Center
1605 George Dieter PMB 678
El Paso TX 79936

(11) USDA Discrimination Settlement Payments - KCSPC only: The United States Department of Agriculture (USDA) paid cash settlement and granted loan cancellation to a limited number of farmers. The settlement resulted from a discrimination suit brought against the USDA by the farmers. Awards from the settlement are treated as taxable gross income. Poorman-Douglas Bankruptcy Services forwards to the Internal Revenue Service a list of recipients who received USDA settlement payments. Each claimant who received a $50,000 settlement from Poorman-Douglas is also entitled to receive $12,500 from the IRS to pay their taxes on this settlement. Exception: Cancellation of Debt may be a larger settlement amount in which case IRS pays taxes equal to 25% of the settlement amount.

• The $12,500 tax payment is received in Accounting via IPAC. When IPAC transmission is received, RRACS prepares Form 3244 for current year transactions and routes the Form 3244 with taxpayer data to the Unidentified Remittance Function.

• The Unidentified Remittance Function will add the total of the IPAC payment to the URF. The credits are then applied to the individual taxpayer's account with a TC 660 and a TC 570 to hold (freeze) the credit.

• Use program code 85390 when working these USDA cases.

(12) If unable to determine the application for Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, contact Employee Plans (EP) for a resolution.

(13) Health Care Tax Credit (HCTC) Program: this program is for individuals who have lost their jobs due to trade agreements. Payments are made directly to health insurance companies and COBRA administrators and then forwarded to a Lockbox bank. At times the payment is returned by the vendor to HCTC because the individual's insurance expires. The vendor may mistakenly send the payments to BFS or to an IRS office. Forms or correspondence that may be received include:

• Form 13560, Health Plan Administrator (HPA) Return of Funds Form

• Form 13642, Department of the Treasury-Internal Revenue Service Health Coverage Tax Credit Invoice

• Form 8885, Health Coverage Tax Credit

• Payments that reference HPA or COBRA

(1) CC URINQ researches the Unidentified Remittance File (URF) in three ways: by amount of remittance, by name control or by DLN. If the DLN isn't known, adding the area office number to one of the other data elements narrows the search. See Exhibit 3.17.10-8

(2) The URF Drop List may be used to research by Alpha (Part I), DLN (Part II) and Money Amount (Part III) all URF applications closed 4 months, or voids closed one month, prior to the list date. This list provides complete application information and can be used to determine payment application. (See Figures 3.17.10–54 through 57.)

(1) Use CC URENT to update the following elements of the URF record:

• First name line

• Second name line

• Street address

• City, state or ZIP Code

• Status code

• Narrative

• IRS-received date

• Taxpayer Identification Number

• Employee assignment number

• Trace ID Number

(2) CC URINQ history will contain a record of the data change.

(3) Use CC URENT to send Letter 6268/Letter 6268 (SP) to the taxpayer after the record has been added to the URF.

(4) See Exhibit 3.17.10-9 for CC URENT format and an example of a completed CC URENT sending a Form 3731/Form 3731 (SP) and changing the taxpayer's address.

(1) To correct or drop UR records before application has been made, use CC URAPL format and overlay with CC UROUT. See Exhibit 3.17.10-12 for CC URAPL formats. CC UROUT formats can be used only in the Accounting UR functions. This procedure is used to record a dishonored check, correct an erroneous UR amount or to void a record. The UR name control cannot be "UNKN".

(2) CC UROUT "Z" is used to correct an erroneous money amount. See Exhibit 3.17.10-10

(3) CC UROUT "V" is used to completely void the UR record from the Unidentified Remittance File.

(4) UROUT "D" records a dishonored check in whole or in part on the file. The information and a copy of the dishonored check are received from the Dishonored Check function. The dishonored check application updates the status from "OPEN" to "BDCK" and reduces the balance in the UR record. When the dishonored check has been recorded on the URF, make a copy of the URINQ response showing the completed action and forward to the Dishonored Check function.

(5) Should a DLN change, or correction be necessary, void the record from the system using CC UROUT "V," and re-add the record to the URF with the correct DLN using CC URADD.

(1) After researching for proper application utilizing the various command codes and taxpayer inquiries, determine the appropriate application to be made and input information on IDRS with CC FMAPL/URAPL. URF credits are to be applied only to the module which the taxpayer originally intended or subsequently directed. If the taxpayer has not clearly designated the application of the payment through inquiries and research did not indicate a pattern of payments, research for balance due modules and apply the payment to the earliest unexpired Collection Statute Expiration Date (CSED). If multiple periods have the same CSED, apply to the earliest tax period. See IRM 5.1.19.4, CSED Payment Application.

(2) Research for taxpayer directions and source documents. In general, the Service will apply voluntary partial payments as a taxpayer has designated in writing. See Rev. Proc. 2002-26, section 3.01. Certain payments may be limited to certain periods. For example, a levy is made for a certain period or periods’ liability; the period or periods covered by an installment agreement are listed on the Form 433-D; and an offer-in-compromise may provide for an allocation of payments on Form 656.

(3) Undesignated voluntary partial payments and involuntary partial payments are applied to periods in the order of priority that the Service determines will serve its best interest. Rev. Proc. 2002-26, section 3.02. Usually, the best interest of the Service is to satisfy the account with the earliest unexpired Collection Statute Expiration Date (CSED). If multiple periods have the same CSED, apply to the earliest tax period. See IRM 5.1.19.4, CSED Payment Application.

(4) If research does not produce written taxpayer directions or a source document for payments, but research indicates a payment is one of a pattern of payments (as required by an installment agreement or an offer, for example), it may be the interests of the Service to adhere to that pattern.

(5) Application of credits from the URF, using CCs FMAPL and URAPL, cannot be made by persons outside the UR Unit. Upon finding the credit using CC URINQ, personnel outside the UR Unit will submit Form 8765, IDRS Control File Credit Application, with attached documentation identifying the credit and indicating its proper application. See Figure 3.17.10-38

1. Source of Credit-select IDRS control file where credit is located (URF).

2. Application Type-use M when the credit is to be applied to a Master File account; N when the credit is to be applied to Non-Master File (including EPMF applications); or T when the credit is to be applied to a general account rather than to a taxpayer's account (including NMF and EPMF accounts held in other campuses.)

3. File Control Number-must match number shown on URF record.

4. Notice Indicator-check only if Letter 2349/Letter 2349 (SP) is to be sent to the taxpayer. See Figure 3.17.10-39

5. Date Return Filed-enter date return was filed if revealed by research.

6. File Name Control-enter 4-position name control as shown on URF. Circle with red pencil if name control on URF is UNKN which must be changed to the correct entry prior to application of the credit from the URF.

7. Application Name Control-enter 4-position name control of module to which credit is to be applied (if M application).

8. Transaction Code (1)- See Exhibit 3.17.10-11 for list of valid primary TCs to be used on M applications.

9. Transaction Code (1) Amount-amount of credit to be applied with 8).

10. Transaction Code (2)- See Exhibit 3.17.10-11 for list of valid secondary TCs to be used on M applications.

11. Transaction Code (2) Amount-amount of credit to be applied with 10). Field will be blank if 10) is 570.

12. Transaction Code (3)- See Exhibit 3.17.10-11 for list of valid tertiary TCs to be used on M applications.

13. Transaction Code (3) Amount-amount of credit to be applied with 12).

14. Taxpayer Identification Number - entry limited to nine numeric; M and N applies only.

15. Tax Period-enter tax period of account to which M or N application is to be made in YYMM format.

16. MFT-enter 2-digit Master File Tax Account code if application is M or N.

17. Remarks-required entry on all applies.

18. Preparer Name-required entry to include name of preparer of Form 8765.

19. Employee Number-required entry to include employee number of preparer of Form 8765.

20. Stop Number-required entry of the stop number of Form 8765 preparer.

21. Phone Number-required entry of the phone number of Form 8765 preparer.

22. Manager’s signature-required for Excess Collections refund requests. See IRM 3.17.220.

23. Date-Date signed by manager for Excess Collections refund requests.

24. Plan/Report Number-enter 3-digit plan/report number if MFT is 46, 74 or 76. If MFT is 46, valid Report Number range is 000, 100–199, 300–399, 500–599 and 700–799. If MFT is 74, valid PLAN-NUM range is 001–999. If MFT is 76, valid PLAN-NUM range is 000–499, 501–999.

25. Location Code or 23C Date-required only for N applies.

26. Tax Form-required only for N applies.

27. General Ledger Account Number-required for N applies.

(6) Form 8765 mirrors the CC URAPL (and CC XSAPL) format as closely as possible. All Forms 8765 submitted to the UR Unit should have documentation attached identifying the credit on the URF as well as justifying its requested application through correspondence, research performed, etc. Should Form 8765 be received without this documentation or without proper completion of all required entries, return to the requestor immediately. Use CC FMAPL to request the generated CC URAPL format on IDRS. CC URAPL cannot be input to the URF if the name control on the UR record is UNKN; the name must be changed with CC URENT. See Exhibit 3.17.10-12 for examples of CCs FMAPL and URAPL.

1. Use CC URAPL "M" to apply credit to Master File accounts. On-line credit posting will be computer-generated to the appropriate tax module.

Note: Estimated tax payments are to be input with TC 660 (current year) or TC 670 (prior year). For processing estimated payments, "current year" is the named calendar year and the next immediate calendar year through August 31. For example, a current year 2006 is calendar year 2006 through August 31, 2007.

Note: If the payment being applied was made via EFTPS, a "Y" must be entered in the electronic payment indicator field. Note: The system will automatically default to "N".

2. Use CC URAPL "N" to make application to NMF accounts.

3. Use CC URAPL "T" to make a transfer to Deposit or General Fund application.

(7) If the name control does not match that on the UR record, use CC URENT before using any CC URAPL format. CC URAPL cannot be input to the URF if the name control of the UR record is UNKN; use CC URENT to correct this before using CC URAPL. See Exhibit 3.17.10-9.

(8) Form 4830, IDRS Posting Document, will be generated for each "N" or"T" application.

(9) Should an "M" or "N" application not be based upon information received from the taxpayer, send Letter 2349/Letter 2349 (SP) to the taxpayer. See Figure 3.17.10-39

(10) Should the outstanding balance of the taxpayer's account be less than the amount of the payment being applied and where no Letter 2349/Letter 2349 (SP) has been sent, send the taxpayer Letter 3064C with an explanation. Should a credit be applied to a full-paid account pending additional liability, input TC 570 as a secondary transaction to hold the credit on the account and avoid additional work for Unpostables. Record the pending liability and amount as part of the history. All TCs 570 input must be monitored to determine appropriate release for refund (TC 571) when additional liability is no longer pending.

(1) Use CC FMREF/URREF to issue a manual refund from the Unidentified Remittance File. This type of application is restricted to the UR function and should be used sparingly. The UR record status must be OPEN or IDEN.

(2) A refund will be Issued based on the taxpayer's response. Some examples of refunds are: payment sent in error, payment intended for another agency or another payee, taxpayer paying interest on Form 1099, IRS test money, taxpayer having paid the same bill twice and having no outstanding balances, etc.

(3) If the taxpayer is to receive interest or needs penalties abated, apply to the taxpayer's account rather than manually refunding from the URF. See IRM 20.1, Penalty Handbook, and IRM 21.4, Refund Inquires, for additional instructions.

(4) Always check SUMRY or IMFOL/BMFOL to be certain there are no outstanding balances before manually refunding.

(5) Manually refund payments received from Entity for Forms 8752, Required Payments or Refund Under Section 7519, where the taxpayer did not file a Section 444. Do not offset to an outstanding balance due. See IRM 21.7.4.4.7.6, Form 8752 Overpayments.

(6) No remittance which the taxpayer intended for a non-IRS payee (i.e., utility company, state department of taxation) should be applied to an outstanding balance.

(7) On parent-subsidiary cases—

1. Research for open liabilities on the parent EIN only. On cases containing the Large Complex Corporation indicator (identified on IDRS and CC TXMOD as Large CORP CD followed by the campus code), contact the Technical Unit or the locally-designated function working these cases prior to any refund or offset action.

2. Large Corporation Indicator instructions for "L–coded" returns appear in IRM 21.2.2, Research.

3. Refer to IRM 3.17.79, Accounting Refund Transactions, and IRM 21.4.4, Manual Refunds, for further instructions in processing manual refunds in parent-subsidiary cases.

(8) All refunds from the URF will be reviewed by the manager or designate before application.

(9) Refund a UR credit by following these steps:

1. Use CC FMREF to request the generated CC URREF format. Input the refund data. See Exhibit 3.17.10-13

2. The valid response is a display of the generated URREF format.

3. Input the refund data.

(10) After applying the refund from URF, use CC URENT to add audit trail information to the permanent file, including the reason for the manual refund, ATAO case number or other identifying data.

(11) When refunding a payment for another agency or payee, send an explanatory letter to the taxpayer containing an appropriate apology for processing the remittance in error. Special IDRS Letter 3064C may be used.

(12) All manual refund requests require the use of Form 14031, Manual Refund Signature Form. See IRM 3.17.79.3.5.4, Form 14031 Processing Requirements for Unidentified/Excess Collections/Photocopy Fee Manual Refunds (Submission Processing ONLY). If your function uses the URF0340 report on Control D that lists the generated URF refunds, scan or save the first page listing the URF refund(s) as a pdf file. The Manual Refund approver will electronically sign the copy of the report being sent to be certified.

(13) Manual refunds may be subject to the Treasury Offset Program (TOP) per IRC 6402. See IRM 21.4.6. If a taxpayer mistakenly, but intentionally makes a payment to the IRS, any excess payment would be an overpayment. An over-stamped check by the IRS is an example of a payment which is not subject to TOP offset.

(14) If after contact with the taxpayer, a claim is made that the payment was for other than an IRS tax debt such as a state tax debt, it is not subject to TOP offset regardless of whether the payment was made electronically or by paper check.

(15) A TOP offset bypass indicator (BPI) is assigned to all manual and systemic refunds issued to BFS by the IRS. For URF manual refunds, the BPI is limited to Yes (allow TOP offset) or No (do not allow the TOP offset).

(16) Do not allow a TOP offset where Combat Zone -C freeze is set.

(17) On the URF 0303 report, notate to the right of each record whether or not a TOP offset is bypassed. Notate “Y” to allow for TOP offset, “N” for bypass of the TOP offset.

(18) Check IDRS for Debit indicator F, TOP offset. If present, inform the taxpayer they are still subject to TOP offsets by BFS.

(1) The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) provides for withholding of income tax on Individual Retirement Accounts (IRAs) and deferred compensation plans (pensions) unless the payee elects not to have withholding apply. The withheld income tax from these plans can be deposited and reported as follows:

1. The bank may report the withholding on their existing Form 941, Employer's Quarterly Federal Tax Return, along with income tax withheld from their employees.

2. A separate EIN could be obtained to report this type of withholding and a Form 945, Annual Return of Withheld Federal Income Tax, would subsequently be filed.

3. The bank or plan administrator could report the income tax withheld using the EIN of each specific plan. A Form 941 would then be filed.

4. In working these types of remittance, close contact should be maintained with the bank, financial institution or plan administrator to insure proper application of the remittance and the correct filing of tax returns. If an EIN assignment is required, contact Entity Control. After the EIN is assigned, Entity Control will notify the Unidentified Function so the remittance can be applied to the proper module.

(1) Review all correspondence to determine if you have sufficient information to close your case. It is recommended that correspondence be worked as you receive it.

(2) In cases in which the taxpayer indicates the remittance is for FTD penalty or Letter 1206C, use CC FMAPL/URAPL with TC 690 to make the appropriate application to close the case.

(3) For replies indicating the payment is for a Form 1096, failure to file a correct information return penalty:

1. Post the payment(s) to the TIN and tax period identified on the Form 1096 as a TC 670 with a secondary TC 570 to the civil penalty (MFT 13 BMF or MFT 55 IMF) module.

   Note: Research may be needed to see where the payer information is posted if there is both an SSN and EIN on Form 1096.

2. Fax the request for an assessment, including all documentation, to the IRP penalty unit at ≡ ≡ ≡ ≡ ≡ ≡ ≡.

Note: See IRM 20.1.7.1.5.2, Penalty Computation, for the penalty amount, which adjusted for inflation, and which may be reduced if a corrective filing is received by certain dates.

(4) Verify information received from the taxpayer on all cases that have already been closed.

1. Check the closure information on the URF to see if the case was closed as the taxpayer requested.

2. If the case has been closed incorrectly, pull the closed file since the credit will need to be transferred. See IRM 21.5.8, Credit Transfers, for instructions.

(5) Open File.

1. File incoming cases if not immediately identified.

2. Additional contacts with the taxpayer may be required if incomplete or no response to the initial Form 3731/Form 3731 (SP), correspondex letter or telephone contact is received. All appropriate steps should be taken to resolve unidentified remittance issues since if left unresolved, normal internal processing may cause the taxpayer to possibly receive an incorrect balance due notice or eventually create additional work and/or involvement from other IRS functions, including TAS. By taking the proper actions this will help to encourage voluntary compliance and ensure that IRS accounts receivable activity is not artificially inflated.

   Note: Internet research should be used in an attempt to locate taxpayers. Several sites (Google, SEC, ZABASearch, EDGAR, VIVISIMO and SWITCHBOARD) can be used to locate a phone number or address if one cannot be obtained through IDRS or Directory Assistance. Internet access may be provided to all employees or to specific delegated employees. Follow local procedures.

3. If a telephone number is available, telephone contact with the taxpayer should be made. The Internal Revenue Service Restructuring and Reform Act of 1998 (IRS RRA 98), Section 3705(2), provides identification requirements for all IRS employees working tax related matters. Information provided to communicate with a taxpayer is outlined in IRM 21.1.1.4, Communication Skills. Be very careful not to make an unauthorized disclosure. Refer to IRM 11.3.1, Introduction to Disclosure and IRM 11.3.3, Disclosure to Designees and Practitioners, for additional information.

Note: Do not use IRS jargon when communicating with the taxpayer. Do not leave confidential tax information on a voice mail message or an answering machine message.

4. If no telephone number is available, prepare Letter 6268/Letter 6268 (SP), or other applicable correspondex letter to secure complete information. Include your name, employee ID number and telephone number.

5. When the taxpayer says he/she has applied for an EIN but has not received it, contact the taxpayer. Secure all information concerning the new business. Usually, the new EIN is under a slightly different name or address. Check IDRS for a new EIN using this information. If unable to locate the new EIN, send a request to Entity Control function to expedite assignment of an EIN or call the Tele–TIN function to have one assigned. Monitor for the established entity to post and apply payment to account per taxpayer request.

6. When the taxpayer submits a cash payment at a TAC office and says he/she has received/applied for a new EIN, Form 2424 will be received indicating the new EIN information. Check IDRS for the EIN using this information. If unable to locate the EIN, send a request to Entity Control function to expedite assignment of the new or “applied for” EIN or call the Tele-Tin function to have one assigned. Monitor for the established entity to post and apply the payment to the account.

7. When the taxpayer says the payment should be applied to a valid SSN and CC INOLEX reflects "No Account on Master File", send request to Entity Control function to expedite "TC 000" to establish taxpayer account. Monitor for established entity to post and apply payment to account per taxpayer request.

8. When the taxpayer notates "Amish", "Exempt-Form 4029" or "4029" in the SSN area of the Form 1040, search for an assigned IRSN and if not located, contact Entity, per IRM 3.13.5.76, Special Requests for IRSNs, to assign an IRSN. Monitor for the established entity to post and apply the payment.

9. Use CC URENT to send a second Letter 6268/Letter 6268 (SP) or send applicable correspondex letter to the taxpayer if no response has been received to the first notice within 45 days.

10. It may be necessary to research Non-Master File. If so, request the information on Form 4338, Information or Certified Transcript Request, or research the Automated NMF data base using procedures outlined in IRM 3.17.46, Automated Non-Master File. See Figure 3.17.10-35 for an example of Form 4338.

11. If no response received to the last correspondence, review the case within an additional 120 days for new information that would lead to proper application such as a new address for correspondence, additional filings, x-ref details, new wage document information, other payment information.

(6) Applications received from Payment Tracers or other functions for action.

1. If Payment Tracer personnel locate a payment in the URF which has an UNKN name control, they will route the case to the UR function for action. A Form 8765, IDRS Control File Credit Application, will show the account to which the money is to be applied and have attached back-up documentation. See Figure 3.17.10-40



2. Thoroughly research to ensure that the identified account is correct.

3. If not correct, return package to the Payment Tracer Function with appropriate annotation.

4. If correct, apply payment using the appropriate CC URAPL format.

(7) Should taxpayer response indicate a claim of identity theft and there is no indication that the taxpayer has been provided with the ID Theft information, refer them to http://irs.gov/uac/Identity-Protection for more information. See IRM 25.23.1, Identity Theft Protection and Victim Assistance - Policy Guidance, and IRM 25.23.2, Identity Protection and Victim Assistance - General Case Processing.

(8) IRC 6311 states in the case of payment made by credit card or debit card transaction of an amount owed to a person as the result of the correction of an error under section 1666 or section 908 of the Electronic Fund Transfer Act (15 USC 1693f), the Secretary is authorized to provide such amount to such person as a credit to that person’s credit card or debit card account through the applicable credit card or debit card system. See IRM 21.4.4.7.2 for information on the procedures for working Credit Card Chargebacks. IRM 21.4.4.7.2.1(12) states the credit card company must submit the claim within 150 days from the date of the payment. If the taxpayer response indicates the credit/debit card payment was in error, and the Electronic Funds Transfer (EFT) number indicates the payment was from a credit card payment:

1. Search for the correct TIN in case of an error in submission.

2. Check for an open IDRS control base on Command Code TXMODA indicating the refund or chargeback claim has already been received. All claims for credit card refunds or chargebacks are worked in Ogden Accounts Management Campus, Taxpayer Relations Department.

If	Then
There is an open IDRS control base on Command Code TXMODA which indicates a refund or chargeback claim has been received:	Provide the information to the assigned control employee in the Ogden AM Campus, Taxpayer Relations Department. Apply the payment to the controlled tax account with TC 570 if the name and SSN match.
There is no open IDRS control base on Command Code TXMODA and the payment date is over 150 days:	Input a manual refund using CC URREF.
There is no open IDRS control base on Command Code TXMODA and the payment date is 150 days or less:	Send the taxpayer Letter 3064C using the open paragraph directing the taxpayer to initiate a credit card refund or chargeback to have the funds credited back to their credit or debit card Leave the funds in URF and wait for a response.
The taxpayer replies that the banking institution or credit card processor was unable to initiate the refund or chargeback due to issues such as the card no longer being active	Input a manual refund using CC URREF
The refund or chargeback claim is subsequently received from the processor:	Apply the funds as directed by the Ogden AM campus.
No chargeback or refund reversal is received from the banking institution or processor by 180 days from the payment date	Input a manual refund using CC URREF

(9) Send detailed information to the HQ CORs located in the EFPPS group if the taxpayer is experiencing issues obtaining the funds back from the processor under normal guidance.

(10) If the taxpayer responds they did not make the payment or there is an SSN, name mismatch:

1. Notify Ogden AM of the credit card payment.

2. Use CC URAPL "T" to transfer to Account 6910, Correction of Miscellaneous Revenue when notified that Ogden AM has received the credit card charge back.

3. Forward a copy of Form 4830 along with the documentation to the RACS function.

4. Fax a copy of Form 4830 to Ogden AM.

(1) Form 8288 will be processed to the Master File. The first valid tax period is 200512. The tax period is based on the "Date of Transfer" (DOT) of when the U.S. real property interest (USRPI) was sold. Payments for foreign withholding under Section 1445, Foreign Investment Real Property Tax Act (FIRPTA), remitted without Form 8288 should be processed to tax accounts in the same manner as if the form were submitted.

(2) A FIRPTA database is maintained to store information for Form 8288, Form 8288-A and Form 8288-B. Access can be gained by inputting a BEARS request.

(3) If Form 8288 is received, apply the payment to the month and year of the Date of Transfer on Line 3 unless a withholding certificate letter is attached. If a withholding certificate is attached, use the letter date (approved or rejected) as the new Date of Transfer. For example, the taxpayer can file a Form 8288 every other month for the U.S. Real Property Interest from a foreign person or entity (200701, 200703, 200705, 200707, 200709, etc.).

(4) If Form 8288 is received and the taxpayer does not have a TIN, forward the return to the Entity Function who will establish the SSN/ITIN/IRSN on the BMF MFT 17 with a TC 000. Include the following information:

1. Taxpayer name

2. Name control

3. Current home address

4. Filing status code (notate filing status code 1 if unknown)

(5) Monitor for the establishment of the TIN and apply the payment.

(6) If the response does not include Form 8288, request Form 8288 from the taxpayer using Letter 3064C or Letter 1687C.

(7) If there is no response, the funds will remain in the URF.

(1) Form W-7 is an application for an Individual Taxpayer Identification Number (ITIN). This form is also used to renew an existing ITIN. An ITIN is a 9-digit number issued by the IRS to individuals who are required for U.S. federal tax purposes to have a U.S. taxpayer identification number but who do not have and are not eligible to get a social security number (SSN). ITINs may not be issued without a return or some proof of a need for an ITIN. That means ITINs will not be issued for two to three weeks from receipt of the request. Remittances received with Form W-7 will be added to the Unidentified Remittance File (URF) at the receiving campus. Form W-7 with all documentation and a photocopy of the check should be routed to the Austin campus per IRM 3.8.45.4.16, Manual Deposit Process.

(2) All Form W-7 packages should have been forwarded from Receipt Control via Form 3210 to the ITIN Unit at the Austin Campus. If Form W-7 is received with a remittance, add the credit to the URF. Route Form W-7, attachments, and a photocopy of the check received with Form W-7 to the Austin address below. SeeIRM 3.8.45.4.16 Manual Deposit Process.

IRS-Austin Submission Processing Center (AUSPC)
3651 South Interregional Hwy 35
Austin, Texas 78741
Attn: ITIN Extraction Stop 6052

(3) Remittances received with original Form W-7 packages should remain in the receiving campus's URF inventory.

(4) AUSC ITIN Unit at the Austin Campus will research the package for assignment of an ITIN. Depending on the assignment, ITIN unit will edit the assignment information on the check copy and return to AUSC URF function. Follow the below instructions for processing per the edited check copy. If the payment is located in another campus URF, AUSC URF function will forward the edited copy to the receiving URF campus.

(5) For payments over six months old from received date of the payment where no information has been received from the ITIN or Entity units, research IDRS and the ITIN system for any newly posted information.

(1) When closing a case which needed research because the taxpayer failed to provide sufficient identifying information or the information provided was illegible, send Letter 2349/Letter 2349 (SP), as appropriate, to the taxpayer.

(2) Check all closed cases applied to IMF or BMF accounts against the URF Applications for IMF/BMF/IRAF Controls (URF 05), produced daily.

(3) Check all closed cases applied to NMF or cases that were refunded against the UR NMF Apply Register (URF03).

(4) All cases that have been on the URF for 10 months (aged cases) will appear on UR Aged 10 Month List (URF50).

1. Review these aged cases to determine if all possible research or taxpayer contact has been accomplished. Special effort should be made to identify these cases because they will automatically go to Excess Collections File (XSF) in two months.

2. Perform any further research.

(5) Cases that are still unidentified after 365 days, based on the IRS payment received date, will automatically be dropped from the URF. A status code of XCES will be generated to the URF. A posting document and Transaction Register—Excess Collections (URF50) will be generated.

1. At the end of the month, Form 4830, IDRS Posting Document, will be received to identify cases that have dropped to Excess.

2. Pull cases from open file, stamp "Excess Collections", and date. Move the case file to Excess Collections.

3. Cases that have dropped to Excess will be reviewed by your work leader to verify that all possible research has been accomplished. Do not transfer URF cases to Excess Collections before they are a year old unless research shows they belonged there originally, i.e., doc codes 48, 58 and 65 or "true" statute cases. Cases with received dates less than twelve months old should not generally be transferred to Account 6800, Excess Collections.

(6) If sufficient information is received to close a case after it has dropped to Excess, prepare a Form 8765, IDRS Control File Application, as directed in IRM 3.17.220, Excess Collections File. See Figure 3.17.10-41

(1) URF01—Unidentified Remittance File Analysis

1. Daily inventory lists prior balance, new accounts added, adjustments, accounts closed and new balance by both count and dollar amount for each area processed by the campus.

2. Report also includes summary for the campus. See Figure 3.17.10-42



3. Several specialized source codes are summarized toward the end of the URF01. EF records electronic fund transfers between the times they are received and applied. P1 and P2 may be used, at campus option, to keep track of sub-inventories within the URF such as deposit discrepancies.

4. As of January 2001, an alert line is displayed at the end of the URF01 when the new unidentified balance exceeds a specified amount. When the balance reaches $1,000,000 (one million dollars) an explanation of this balance should be included in the comments section of the MIR report as described in IRM 3.17.10, Reporting of Inventories.

(2) URF01-Monthly Unidentified Remittance File Analysis summarizes activity for the fiscal month in the same format described in (1) above.

(3) URF03-Transaction Register

1. URADD Register shows unidentified remittance control number and amount for each item added to the URF by area. The second page of this register summarizes the area totals of these items by tax class, count and amount in such categories as nullifies and rejects. See Figure 3.17.10-43

URF03 - URADD Register



2. URF03 NMF Apply Register lists UR control number, taxpayer's name and address, TIN, tax period, 23C date, form number, employee number and other information, including "Remarks". See Figure 3.17.10-44

URF03 - UR NMF Apply Register



3. URF03 Transfer Apply Register lists UR control number, taxpayer's name and address, employee number and other information. See Figure 3.17.10-45



URF03 — UR Transfer Apply Register

4. UR Restricted Apply Register shows type of application, UR control number, amount and employee number. A later page of this register summarizes the area totals. See Figure 3.17.10-46

URF03 — Restricted Apply Register



5. The URF Refund Voucher List reflects manual refunds and includes taxpayer's name and address, TIN (if available), amount of refund, control number, and employee number. A later page of this register summarizes the area totals.

6. URF03 is a daily report but will not be printed if no transactions occurred on the report date.

(4) URF05-URF Applications of IMF/BMF/IRAF-Controls

1. Daily report lists completed URAPL "M"s in DLN order.

2. Summary breaks down total records input by IMF, BMF and IRAF showing numbers of records input and applications updated with money amounts applied. See Figure 3.17.10-47

(5) URF07-Unidentified Remittance File Performance Indicator Analysis

1. Weekly inventory lists both dollar amount and count for prior balance, receipts, closures and new balance of each source code within the URF.

2. Totals of prior balance, receipts, closures and new balance agree with URF01 inventory report of the same date.

(6) URF45-Accounts Receivable URF Report

1. URF45 is a monthly report in two parts to aid in case management and to provide input to Headquarters.

2. The first section of URF45 lists large-dollar cases in descending order by money amount and shows their DLN, name control, IRS-received date, entry date to the URF, current amount of the credit and cumulative amount of the credit plus that of all others listed above it. See Figure 3.17.10-48

URF45 — Accounts Receivable URF Report



3. The second section of URF45 is an inventory printed in duplicate showing the volume and amount of the beginning total inventory, beginning inventory of $25,000+ credits, total receipts during the period, receipts of $25,000+ credits during the period, total closures during the period, closures of $25,000+ credits during the period, total ending inventory, and ending inventory of $25,000+. See Figure 3.17.10-49

URF45 — Summary Report



4. One copy of the second part of the URF45 is to be retained in unit records and the other, accompanied by any required narrative, should be sent to Planning and Analysis Staff.

(7) URF50-Transaction Register

1. Excess Collection lists UR cases which have dropped to excess collections in UR control number order and includes the amount of each item. See Figure 3.17.10-50

URF50 — Excess Collection, Transaction Register



2. Dropped List 1 allows research of dropped cases alphabetically by taxpayer's name and is viewable on Control D. See Figure 3.17.10-51

URF50 - Dropped List 1



3. Dropped List 2 allows research of dropped cases by DLN. Dropped Lists are viewable on Control D. See Figure 3.17.10-52



4. Dropped List 3 allows research of dropped cases by money amount. Dropped Lists are viewable on Control D. See Figure 3.17.10-53



5. UR50-Aged-10-Month–List shows all cases on the URF that are more than 10 months old. Elements of each case shown include UR control number, name control, original amount, balance amount, entry date and received date. See Figure 3.17.10-54

URF50- UR Aged 10 Month List



6. URF50-UR Case Assign List shows all cases on the URF by the employee number of the person who added a particular case to the file or the person to whom the case is assigned, if different from the employee who used CC URADD. The employee's list of cases is secondarily sorted by file entry date, earliest first. Other elements of each case shown are UR control number and balance amount. A new page begins whenever there is a change in employee number. This report has no summary. See Figure 3.17.10-55

URF50- UR Case Assign List

(8) URF60 - Monthly National Unidentified Remittance Analysis

1. Monthly inventory summarizes activity for the fiscal month in the same format used for the URF01. Also includes a File Source Code Report and File Apply Code Report.

2. A separate report is generated for each campus and includes a national roll up.

3. The report is available on the Control D web site. See Figure 3.17.10-56 and Figure 3.17.10-57a

(1) Upon receipt in the Unidentified Remittance Unit, computer-generated reports should be balanced to the employees' work records. Discrepancies should be resolved and reported to the manager and/or the RRACS Data Base Administrator.

(2) The extent of balancing performed will vary between individual Unidentified Remittance operations.

(3) The following is an example of daily balancing which will immediately reveal any imbalance or problem on the URF as well as facilitate production of a monthly trial balance:

(1) Production data for the weekly WPC Managers Report should match the staff hour reporting period ending Friday or Saturday as directed in IRM 3.30.50, Performance Evaluation Reporting System.

(2) The weekly miscellaneous inventory report (MISTLE) described in IRM 3.30.124, Campus Monitoring Reports, includes URF data.

1. Beginning Inventory, Weekly Receipts and Ending Inventory documents and dollars are derived by subtracting immediately prior week's Friday work daily URF01/URF Analysis (Service Center Totals) for Prior Balance; New Accounts Added and Increased Amounts; and New URF Balance, respectively, from corresponding fields of the current week's Friday work daily URF01/URF Analysis (Service Center Totals).

2. Weekly Closures documents and dollars are derived by subtracting the total of Accounts Closed, Partial Application, Closed Excess Collection, Dishonored Checks, Voided Accounts and Decreased Amounts of the immediately prior week's Friday work daily URF01/URF Analysis (Service Center Totals) from corresponding fields of the current week's Friday work daily URF01/URF Analysis (Service Center Totals.)

(1) Encoding errors, piggy backs and improper SF 5515 charge backs must be resolved within 45 calendar days of the date the discrepancy was identified.

(2) Slipped blocks must have all avenues of research exhausted within 150 calendar days of the date the discrepancy was identified.

(3) At the end of these periods, unresolved credits with IRS-received dates older than one year will be transferred into the 6800 Account, Excess Collections, and unresolved debits will be transferred into the 7650 Account, Deposit Discrepancies.

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(1) The entire block of payments containing multiple discrepancies should be worked as a unit to facilitate balancing.

(2) Cases in which the taxpayer has not received proper credit for his/her payment must be entered to either the Dishonored Check File (DCF) or Unidentified Remittance File (URF) as described in IRM 3.17.10 Deposit Discrepancies.

(1) Encoding is used to convert and print the amount of the payment shown on the remittance in a Magnetic Ink Character Recognition (MICR) font on the lower right side of the front of the check. An encoding error occurs when the operator misreads the numeric amount indicated on the remittance.

(2) If, for example, a check is written for $1,561.00 but encoded for $582.36 and is returned by the bank, take the following action:

1. Using CC BDADD, add the debit voucher for $582.36 to the DCF.

2. Using CC BDAPL, apply $582.36 to the taxpayer's account. These two actions clear the debit and reduce the credit on the taxpayer's module.

3. Prepare Form 3244, Payment Posting Voucher, for the correct amount, $1,561.00, using the transaction date of the original payment.

4. Send check and Form 3244 to Clearing and Deposit for processing.

(3) If a correction is not received from the bank for all the erroneously encoded items within the block contact the bank, working through them to resolve the discrepancy.

(4) IRM 3.17.10.2, for processing documentation needed. (i.e., copy of check, bank statements from taxpayer). As per local procedure, encoding errors may be routed to Accounting through Accounts Management after retrieving required documentation from the taxpayer. See IRM 21.5.7, Payment Tracers.

(5) Processing deposit discrepancy encoding errors is much like processing single encoding errors; however, correct amount of these multiple encoding errors is often assigned to an adjoining remittance in the block or the same error (i.e., moving decimal point one or more spaces) has been made in a number of remittances in the block.

(1) A slipped block occurs when an operator has transcribed the entity from one document and the remaining information from another document in the block.

(2) Receive debit and credit adjustments from the depositary to adjust encoding errors contained in a slipped block.

(3) Determine the extent of the slipped block condition.

(4) Establish a worksheet encompassing all items in the block. Form 813 may be photocopied, and the copy made into a worksheet similar to that shown in Figure 3.17.10–59.

(5) If the taxpayers each have received the correct credit, but the document number on MFTRA does not match the actual number on the document, renumber the documents. In this case, deposit balances.

(6) If the taxpayers have been credited with incorrect amounts and the deposit balances, transfer credits to the correct accounts as described in IRM 3.17.10, Encoding Error. In this case, taxpayer 30 received taxpayer 29's credit and taxpayer 31 received taxpayer 30’s credit. See Figure 3.17.10-58

(7) In the "true" slipped block, the taxpayer's account is usually credited properly, but the bank has improperly debited the taxpayer's checking account.

1. Assemble documentation to request proper debits and credits from the depositary. Annotated Form 813 with supporting checks and other materials will be necessary.

2. When a credit is received, place into the URF until the block is balanced.

3. When a debit is received, place into the DCF until the block is balanced. If the debit is added to the DCF with the last three digits of the slipped block DLN entered as the name control, it will appear on the Aged report which can be monitored daily.

(8) After all corrections have been received, the credits and debits should balance.

(9) If the debits and credits do not balance, search the taxpayers' accounts for duplicate credits or for accounts not receiving proper credit.

(1) Piggy Back remittances occur when more than one check stick together and are processed as one check, the top remittance being the only one really processed but not endorsed. The bottom payment is endorsed, but it and any other checks between it and the top remittance have not been included in the deposit ticket and are not processed (free items).

(2) Ensure that the taxpayer has not submitted a replacement check.

1. If a replacement check has not been submitted, prepare Form 3244 and Form 4287, listing the information for proper credit application and hand carry to the Deposit Activity.

2. If a replacement check has been processed, compare the payment dates of the original payment and replacement check. If not the same, a date change should be input so that it reflects the earliest received date. See IRM 21.5.8, Credit Transfers, for instructions. Return the piggy back remittance to the taxpayer with a brief note informing the taxpayer that the date will be changed so that they are given credit for the original received date.

(3) A listing of free items may be received from the depositary with an SF 215, Deposit Ticket.

1. Research taxpayer's account for an open module.

2. If a free item can be identified, prepare Form 3244 using the date of the original deposit ticket with which the check had been sent to the bank as the "Transaction Date" and the entity information of the module you identified.

3. If a free item cannot be identified, prepare Form 3244 using the date of the original deposit ticket with which the check had been sent to the bank as the "Transaction Date" and entering "URF" in "Remarks." Enter item to the URF and include copies of the Form 813, the remittance and MRS in the case file.

4. Hand-carry Forms 3244 and free items to the Deposit Activity.

(1) Contact the bank which generated the erroneous SF 5515, requesting DT 215 to "wash" erroneous debit voucher.

(2) Take no adjustment action to journalize until corrective documentation is received.

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(1) Beginning January 1, 2011, the Federal Tax deposit (FTD) PAYTAX system, was decommissioned. FTD payments must be made electronically and processed through EFTPS. Due to the decommissioning of PAYTAX, previously submitted FTD remittances may require adjustments due to bank or taxpayer error. Overpayment adjustments may require a manual refund from the URF back to the Financial Institution making the FTD payment.

(2) Beginning June 10, 2011, original requests for adjustments will be routed to or received by the FTD Point of Contact (POC) located in the Accounting function. The Accounting POC will forward the documentation to the Hardcore Payment Tracer function (HPTF), who will monitor all actions and notify the taxpayer if necessary. See IRM 3.17.5, Hardcore Payment Tracers. If the payment is less than 12 months old, HPTF will prepare Form 2424, with documentation, to move the overpayment to the URF to refund the overpayment to the Financial Institution.

• Copy of taxpayer's check

• Bank Statement

• Documentation of FTD block research

• TC 971, AC 296 on taxpayer's account

• Prints of all IDRS command codes utilized

• Letter from Financial Institution requesting the credit

• Form 2424 with remarks show "FTD Banking Error" or "Manually refunded from URF"

(3) Verify all documentation is complete. If not, reject back to the originator.

(4) Use IDRS Command Code FMREF/URREF to issue a manual refund from the URF to the Financial Institution. See IRM 3.17.10.3.11.

(5) Do not issue taxpayer an explanatory letter.

(6) Notify the HPTF of the completed action.

(1) Avoid contacting the taxpayer if the deposit discrepancy problem is internal to IRS, being certain to freeze notice issuance which would otherwise be generated by IRS error.

(2) No standard form letters are available for use in corresponding with the taxpayer since the letter contents can differ substantially with the particular situation.

(3) At campus option, Correspondex Letter 1687(C) may be used in encoding error cases if modified by adding a paragraph:

"Your check may have been processed for a different amount than that shown on your check. Please send us a photocopy of the front and back of your check plus a statement from your bank stating the date and amount actually withdrawn from your account. If an adjustment has already been made, please have your bank provide a copy of the adjustment document".

(1) If you have been identified as a OTCnet user, your Local Security Administrator (LSA) will need to create your profile for OTCnet. After completion of the online training course, each user must complete the OTCnet User Authorization Form.

• The OTCnet User Authorization Form captures information needed to set up an employee as an agency user in OTCnet. Original signature required on form.

• The OTCnet User Authorization and Rules of Behavior forms can be obtained from your Campus LSA.

• Your manager will submit your OTCnet User Authorization Form to your LSA to be granted access to OTCnet.

(2) Once you have been assigned OTCnet permission, you will receive three e-mails. The first e-mail will provide your user ID; the second will provide your temporary password and the last will provide your permission in OTCnet. After you receive a user ID and password, you must login to the Treasury Web Application Infrastructure (TWAI) to change your temporary password and provide answers to your secondary authentication questions.

(3) See Exhibit 3.17.10-16 OTCnet User Standard Operating Procedures (SOP), Agency Viewer, for specific guidance on the following procedures:

• All User Procedures

• Initial Sign In

• Password Maintenance

• Password Rules

• OTCnet Contingency

• Agency Viewer Procedures

• View Reports

(1) OTCnet may be accessed on a daily basis to search for adjustments under the Manage Deposit Menu. The following searches may be performed: Search Adjustments by Debit Adjustment, Credit Adjustment, Return Item Adjustment or Original Date of Deposit.

(2) A daily report of anticipated adjustment inventory may be viewed or printed by selecting the Adjustments by Agency Endpoint under the Business Reports Menu.

The source document will be sent to the campus for processing. Do not perform any activity on an adjustment prior to receiving the source document. Adjustments will be processed according to the procedures in IRM 3.17.10, Dishonored Check File and Unidentified Remittance File.