25.25.9. Revenue Protection Prisoner Lead Procedures

(1) Purpose and Program Goals: This IRM section provides guidance for Return Integrity Verification Operations (RIVO) employees when in receipt of prisoner correspondence/returns/checks received through the Blue Bag Program from participating institutions.

(2) Audience: The audience intended in this IRM is RIVO employees.

(3) Policy Owner: The Return Integrity Verification Program Management (RIVPM) is the policy owner of this program.

(4) Program Owner: RIVPM is the program office responsible for oversight over this program.

(5) Primary Stakeholders: The primary stakeholders are RIVO, and organizations that collaborate with RIVO, such as: Submission Processing, Account Management, and Field Assistance.

(6) Program Goals: Program goals for the program are in the Operation Guidelines as well as IRM 1.4.10, Return Integrity & Verification Operation Managers Guide.

(1) Non-RIVO functions will route all items as appropriate based on existing IRM guidance and procedures. Non-RIVO functions must not route to the address below, unless specifically instructed to by another IRM.

(2) Items received in RIVO through the Blue Bag Program from participating institutions will be date stamped by the receiving office, sorted into the following categories and routed as appropriate:

• Brookhaven RIVO only - Tax returns - any Form 1040, U.S. Individual Income Tax Return, series (including copies and unsigned returns), received from participating correctional institutions, - route returns to MS 6575 Prisoner Return KCSC, 333 Pershing Rd., Kansas City, MO 64108.

  Exception: Route Tax returns claiming Economic Impact Payments (EIP)/Recovery Rebate Credits (RRC) only to Austin . These returns do not meet Blue Bag criteria.

• Brookhaven RIVO Only - Amended tax returns - Any Form 1040X, Amended U.S. Individual Income Tax Return, does not meet Blue Bag criteria. Route all amended returns to your local Imaging Control Team (ICT).

• Checks
  Treasury checks - IRS refund check - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd., Kansas City, MO 64108.

  Exception: Do not route EIP/RRC refund checks to Kansas City, instead route them to Submission Processing for posting. EIP can usually be identified in the memo section of the check.

  
  All Non-Treasury checks and all other Treasury checks (excluding IRS refund check) - Route to Submission Processing for posting to taxpayer’s account.

• All Third-Party checks - see IRM 25.25.8.11, Centralized Check Process (CCP), for routing procedures.

Reminder: Correspondence and loose forms are not worked in the Blue Bag Program.

• E-mails received in RIVO through the Blue Bag Program (BBP) from participating institutions will receive one of the following responses from the designated point of contact (POC):
  BBP Lead Acknowledgement E-mail which informs the sender that the BBP received their email inquiry and/or a
  BBP General Acknowledgement Referral E-mail which informs the sender that the BBP does not handle that inquiry and provides them with the Customer Service telephone number and IRS website.

• The designated POC will create and populate all required lead folders and add the case record to the Lead Management - Blue Bag (LMBB) system, IRM 25.25.9.2.1, Prisoner Lead Mailbox Procedures.

(1) The Unit Control Clerk (UC) will date stamp and bundle all items received into the Operation, including undeliverable and non-delivered mail. Each bundle must contain a cover sheet.

(2) Returns received must be re-routed as shown below.

(3)

• Brookhaven RIVO only -Tax returns - any Form 1040, U.S. Individual Income Tax Return, series (including copies and unsigned returns) received from the participating correctional institutions- route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd., Kansas City, MO 64108.

  Exception: Route Tax returns claiming EIP/RRC only to Austin . These returns do not meet Blue Bag criteria.

  Exception: Form 1040-X , Amended U.S. Individual Income Tax Return, filings currently under Examination (including copies and unsigned returns) are routed to the appropriate exam campus using IRM 3.10.72-1, Routing Guide/Local Maildex. .

(4) Treasury checks - IRS refund checks - route to MS 6575 Prisoner Return KCSC, 333 Pershing Rd., Kansas City, MO 64108.

(5) Not all prisoners/inmates had indicators placed on their account to stop the Advance Child Tax Credit (ACTC) payments. If you receive an inquiry from the Correctional Institutions regarding these payments, please do the following:

• Review the incarceration dates provided by the Correctional Institution, see IRM 25.25.2.14, Prisoner Leads.

• Determine if the inmate was or will be incarcerated for more than half the year in 2021.

• If the inmate was or will be incarcerated for more than half the year in 2021, advise the Correctional Institution to return the check to: Internal Revenue Service, MS 6575 Prisoner Check KCSC, 333 W. Pershing Rd., Kansas City, MO 64108.

• If the inmate has not or will not be incarcerated for more than half the year in 2021, advise the Correctional Institution that the check does not need to be returned to the IRS.

(6) Checks will be processed as follows:

1. All Non-Treasury checks and all other Treasury checks (excluding IRS refund check) - Route to Submission Processing for posting to taxpayer’s account.

2. If a live personal check is received take the following actions:

• Complete Form 4287, Record of Discovered Remittance.

• Attach a photocopy of the personal check and any pertinent information to the Form 4287.

• Notate any essential information on the check such as the taxpayer’s Social Security number (SSN), tax period, and form number for correct processing.

• Route the check to Campus Support to be processed, see IRM 3.8.46.4, Remittance Discovered at a Campus Support Site.

(1) Legislation in 1994 implementing part of the General Agreement on Tariffs and Trade (GATT) (IRC §32(c)(2)(B)(iv)), excluded amounts received for services provided by an inmate at a penal institution from the definition of earned income for the earned income tax credit (EITC) and credits which utilize the EITC definition of earned income. GATT returns are identified when a filer claims EITC (or a refundable credit that uses the EITC definition of earned income) based on valid income and withholding earned while an inmate. Tax Return filed with schedule C income are not eligible for EITC or ACTC while an inmate.

(2) Generally, most prisoners who file returns containing income earned while incarcerated, regardless of filing status, are not entitled to the following refundable credits:

• Earned Income Tax Credit (EITC)

• Additional Child Tax Credit (ACTC)

• Making Work Pay Credit (MWPC)

(3) If you receive a prisoner checks meeting the above criteria, please forward to Kansas City, Return Integrity Verification Operations (RIVO).

• MS 6575 Prisoner Check KCSC, 333 Pershing Rd., Kansas City, MO 64108.

(1) Log the receipt of all Prisoner Returns in LMBB database.

(2) Tax examiners will research the account to determine if the case meets identity theft (IDT) scheme characteristics or RIVO interest. Examples of some IDT scheme characteristics can be found in IRM 25.25.2.12, Identity Theft Scheme Criteria.

(3) When researching/reviewing paper returns to be sent to processing, follow the If/And/Then chart below for the appropriate action.

(1) Leads are received in Kansas City from prisons regarding tax refund checks issued by the Department of Treasury. The assigned team is to research the taxpayer’s account to determine if the refund check is valid. A Blue Bag Acknowledgement e-mail (see the RIVO BB SERP Portal) will be sent to the Correctional Facility Official within 10 days upon receipt of the prison lead inquiry.

(2) All prisoner checks received in RIVO will be sent to Kansas City.
Mailing Address is, Internal Revenue Service, MS 6575 Prisoner Check KCSC, 333 W Pershing Rd., Kansas City, MO 64108.

(3) The BBP UC will log receipt of all prisoner checks in LMBB.