21.3.1. Taxpayer Contacts Resulting From Notice Issuance

(1) Employees in the Accounts Management (AM) organization respond to taxpayer inquiries and phone calls; as well as process claims and other internal adjustment requests. Notices provide general information, provide account updates, and relay requests for action to internal and external recipients.

(1) Refer to IRM 1.2.1.13, Policy Statements for Customer Account Services Activities, for the information.

(1) The Chief, Taxpayer Services has overall responsibility for the policy related to this IRM, which is published on a yearly basis.

(2) Accounts Management’s Policy and Program Management Section has responsibility for the information in this IRM. Information is published in this IRM on a yearly basis. Additional information is found in IRM 1.1.13.7.3, Accounts Management (AM), and IRM 21.1.1, Accounts Management and Compliance Services Overview.

(1) Program Reports: The program reports provided in this IRM are for identification purposes for the Accounts Management Contact Representatives (CRs) and Tax Examiners (TEs). For reports concerning quality, inventory, aged listing, refer to IRM 1.4.16, Accounts Management Guide for Managers. Age listings can also be viewed by accessing Control Data Analysis, on the Control-D /Web Access server, which has a login program control.

(2) Program Effectiveness: Program Effectiveness is determined by Account Management’s employee successfully using IRM guidance to perform necessary account actions and duties.

(3) Program Controls: Goals, measures and operating guidelines are listed in the yearly Program Letter. Quality data and guidelines for measurement are referenced in IRM 21.10.1, Embedded Quality (EQ) for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS) and Electronic Products and Service Support.

(1) The following table contains frequently used acronyms with their definitions.

(1) Refer to IRM 1.4.2.1.8, Related Resources, for information on related resources that impact internal controls.

(1) See IRM 25.13.1.3, TCS Services, paragraph 1, table, second row, for all erroneous notice issues, e.g., misspellings or bad grammar, incorrect IRS phone numbers, etc.

(2) See IRM 10.5.4.3.3, Inadvertent Unauthorized Disclosures and Losses or Thefts of IT Assets, BYOD Assets and Hardcopy Records/Documents, and the Report Losses, Thefts or Disclosures page, in the Disclosure and Privacy Knowledge Base Site, for information about how to report inadvertent unauthorized disclosures involving Sensitive But Unclassified (SBU) data, including Personally Identifiable Information (PII) and tax information, and additional incident and data breach reporting requirements.

(3) If a call or reply is received indicating an inadvertent unauthorized disclosure may have occurred in the mailing, faxing, or electronic transmission of a notice, letter, or correspondence, e.g., multiple notices or letters in a single envelope with another taxpayer's information, or the taxpayer states they received IRS mail, e-mail, or a fax belonging to another taxpayer, immediately report the disclosure to the Office of Privacy Governmental Liaison and Disclosure (PGLD) Incident Management Office (IM) using the PII Breach Reporting Form.

1. Ask the caller for the name(s) and tin(s) from the notice(s), letter(s), or correspondence. For both oral and written replies, notate the TIN(s) involved in the inadvertent unauthorized disclosure.

2. After the PII Breach Reporting Form has been submitted, an Excel spreadsheet will be sent to you (the reporting employee) to list the TIN(s) involved in the inadvertent unauthorized disclosure so that PGLD/IM can notify the potentially impacted individuals.

3. If the notice(s), letter(s), or correspondence was received by the caller via US mail, ask the caller to reseal the envelope and write “Not at this address” and “Return to Sender” on the envelope and place it in the mail.

4. If the caller refuses to comply with notating the envelope and placing it in the mail, ask the caller to destroy the notice, letter, or correspondence.

5. If the notice(s), letter(s), or correspondence was delivered via email, fax, EEFax, or other electronic transmission, ask the caller to delete the email or other electronic transmission, or destroy the notice(s), letter(s), or correspondence if printed.

6. Document the information obtained from the caller regarding the disposition of the notice, letter, or correspondence, i.e., is the notice, letter, or correspondence being returned to the IRS, or being destroyed by the caller, in the Detail Summary section on the PII Breach Reporting Form. Do not include PII on the PII Breach Reporting Form.

(1) Section 3201(d) of Reform and Restructuring Act of 1998 requires the IRS to (whenever practicable) mail duplicate notices separately to each individual filer of a joint tax return. This process is referred to as dual notice issuance.

(2) Dual notices are issued as follows:

1. All notices are sent dual if IRS records indicate filers live at different addresses.

2. If IRS records indicate filers live at the same address, then any notice required by statute are sent separately to each spouse. In addition, certain other notices that contain elements of notices required by statute are also sent separately. Refer to IRM 5.19.9.3.4, SITLP Notices.

(3) Notices that do not need to be sent separately include Submission Processing pipeline notices (including Math Error notices) and Collection installment agreement monthly reminder notices. Most of the dual notices include language to explain why the IRS is sending duplicate notices.

(1) If taxpayers have questions concerning notices of deficiency, direct them to call the number on the notice, or write to address shown. Advise of the following:

1. If they choose to petition the tax court, they have 90 days from the notice date and 150 days if the notice is addressed to a person outside the U.S.

2. A telephone call or written communication does not extend the time for filing a petition with the tax court.

3. The last date to file a petition is included in the header information of the notice.

(1) A CP 05, We're Holding Your Refund, or CP 05A, We’re Holding Your Refund Until We Finish Reviewing Your Tax Return, is issued to taxpayers.

(2) The notice informs the recipient their refund is being held pending additional review.

(3) Refer to IRM 21.5.6.4.35.3, -R Freeze Overview For Accounts With Return Integrity and Verification Operations (RIVO) Involvement, for additional information.

(4) Taxpayers who receive the CP 05A, Information Request Related to a Refund, can respond electronically by submitting their documentation online using the Document Upload Tool (DUT) accessed through IRS.gov. This secure step allows taxpayers or their tax professional to electronically upload documents rather than mailing them in, helping reduce time and effort resolving tax issues.

(5) When language on the notice informs the taxpayer to send documents using the Document Upload Tool, the notice will include a link and a unique access code. Taxpayers can open the link, enter their name and Tax Identification Number, then securely upload the requested documents. The taxpayer receives confirmation when their documents are successfully transmitted to the IRS.

(1) A CP 06, Request for Supporting Documentation, notifies the taxpayer that their refund will be held pending an examination. Exam needs supporting documentation concerning Premium Tax Credit (PTC). Form 14950, Premium Tax Credit Verification, is enclosed to request the appropriate documentation.

(2) A CP 06A, Request for Supporting Documentation, requests supporting documentation regarding the Premium Tax Credit (PTC) You Claimed - Balance Due/Even. Form 14950, Premium Tax Credit Verification, is enclosed to request the appropriate documentation.

(3) Taxpayers who receive the CP 06, Exam Initial Contact Letter - Premium Tax Credit (PTC), can respond electronically by submitting their documentation online using the Document Upload Tool (DUT) accessed through IRS.gov. This secure step allows taxpayers or their tax professional to electronically upload documents rather than mailing them in, helping reduce time and effort resolving tax issues.

(1) A CP 08, You May Qualify for Child Tax Credit (CTC), notifies the taxpayer of potential eligibility to claim Additional Child Tax Credit. The notice is issued when the taxpayer:

• Computes an amount for the Child Tax Credit, has zero tax liability, and fails to use the remaining portion of the credit to claim the Additional Child Tax Credit, or

• Indicates eligibility for the Child Tax Credit (by checking the boxes on line 6c) but does not claim the Child Tax Credit due to zero tax liability and does not claim the Additional Child Tax Credit.

(2) Refer to IRM 21.6.3.4.2.8.3, CP 08, Additional Child Tax Credit, for procedures on working CP 08 notices.

(3) Taxpayers who receive the CP 08, Additional Child Tax Credit, can respond electronically by submitting their documentation online using the Document Upload Tool (DUT) accessed through IRS.gov. This secure step allows taxpayers or their tax professional to electronically upload documents rather than mailing them in, helping reduce time and effort resolving tax issues.

(4) When language on the notice informs the taxpayer to send documents using the Document Upload Tool, the notice will include a link and a unique access code. Taxpayers can open the link, enter their name and Tax Identification Number, then securely upload the requested documents. The taxpayer receives confirmation when their documents are successfully transmitted to the IRS.

(1) A CP 09, Earned Income Credit - You May Be Entitled to EIC, notifies the taxpayer of potential eligibility for Earned Income Tax Credit (EITC).

1. Answer questions concerning eligibility and how to claim the credit. Refer to Publication 596, Earned Income Credit, for information and eligibility rules.

2. Inform the taxpayer that if the EITC is allowed and the taxpayer has more than three children, the Additional Child Tax Credit may be affected. Advise the taxpayer to complete Schedule 8812, Credits for Qualifying Children and Other Dependents.

3. Instruct the taxpayer to submit the completed and signed Form 15111, part of the CP 09, in the envelope provided.

(2) Refer to IRM 21.6.3.4.2.7.8, Earned Income Tax Credit (EITC) - CP 09 / CP 27.

(3) When language on the notice informs the taxpayer to send documents using the Document Upload Tool, the notice will include a link and a unique access code. Taxpayers can open the link, enter their name and Tax Identification Number, then securely upload the requested documents. The taxpayer receives confirmation when their documents are successfully transmitted to the IRS.

(1) A CP 10 notifies the taxpayer that an overpayment applied to the next year's tax as a credit elect was reduced due to an error on a Form 1040 series return.

(2) When responding to a CP 10, follow guidance in IRM 21.5.4, General Math Error Procedures.

(1) A CP 11, Math Error on Return - Balance Due, is issued as a first notice notifying the taxpayer of an error in the math on an individual return that results in a balance due.

(2) When responding to a CP 11 series notice, follow guidance in IRM 21.5.4, General Math Error Procedures.

(1) During original return processing, a Letter 12C, Individual Return Incomplete for Processing: Form 1040 and Form 1040-SR, is sent to IMF taxpayers requesting information missing from the return.

(2) Returns are not returned to the taxpayer. The return is suspended awaiting response from the taxpayer.

(1) A CP 12, Overpaid Math Error - Refund Due, is issued as a first notice to inform the taxpayer of an error in the math on an individual return that changes the refund amount.

(2) A refund hold is applied when the account meets Notice Review criteria. The account contains a Transaction Code (TC) 570 with blocking series "55555", indicating the refund hold has been applied, and a TC 971 AC 804 with the CP number in the miscellaneous field. The hold systemically expires 7 calendar days after the TC 971 AC 804 daily cycle. If both the AC 804 and AC 805 are present, the hold expires 7 calendar days from the TC 971 804 or 805 cycle date.

(3) There are different types of CP 12 notices:

• CP 12, Math Error, Overpayment of $1 or More

• CP 12E, Exam Coded Math Error Overpayment of $1 or More

(4) When responding to a CP 12 series notice, follow the table below:

(1) A CP 13, Math Error- Balance Due < $5, Overpayment < $1, notifies the taxpayer that:

1. An error occurred in the math on an individual return.

2. Payment is not required if the balance due on the notice is less than $5.00.

3. An overpayment of less than $1.00 is not refunded without a written request from the taxpayer.

(2) There are different types of CP 13 notices:

• CP 13, Math Error - Balance Due < $5, Overpayment < $

• CP 13A, EIC Math Error

• CP 13T, Math Error- Balance Due < $5, Overpayment < $1. This notice is generated from taxpayer notice codes (TPNCs) 250, 322, 414, 417, 730, and/or 731 (see Notices and Notice Codes for an explanation of these TPNCs). However, a CP 13 may be issued if another TPNC is used in conjunction with those listed.

(3) Follow the table below if the taxpayer disagrees with the notice.

(1) A CP 14, Balance Due $5 or More, No Math Error, is issued as a first notice to notify taxpayer of a balance due when no math error or Estimated Tax (ES) discrepancy exists. Do the following:

1. Research IDRS.

2. If taxpayer states that a payment is missing, research IDRS for payment (refer to IRM 21.5.7, Payment Tracers).

3. Explain reason for the balance due. It may be the result of a missing payment or the assessment of a penalty.

4. Refer to IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

   Note: Guidance for handling calls received for accounts in Status 22/26 has not changed - transfer using established procedures.

(1) A CP 15, Civil Penalty Notice, notifies the taxpayer a civil penalty was assessed and why it was assessed.

(1) A CP 16, Overpayment with Offset, is issued as a first notice to advise taxpayer of an error in the math on an individual return resulting in an overpayment that was applied to another IMF tax liability. A refund hold is applied when the account meets Notice Review criteria. The account contains a TC 570 with blocking series 55555, indicating the refund hold has been applied, and a TC 971 AC 804, and the miscellaneous field will reflect the CP number. The hold will systemically expire 7 calendar days after the TC 971 AC 804 daily cycle. If both the AC 804 and AC 805 are present, the hold will be for 7 calendar days from the TC 971 AC 804 or AC 805 cycle dates.

(2) There are different types of CP 16 notices:

• CP 16, Overpayment with Offset

• CP 16T, Tax Reform Overpayment with Offset. This notice is generated from taxpayer notice codes (TPNCs) 250, 322, 414, 417, 730, and/or 731 (see Notices and Notice Codes for an explanation of these TPNCs). However, a CP 16 may be issued if another TPNC is used in conjunction with those listed.

(3) When responding to notice inquiries:

1. Explain offset process if requested to do so. Refer to IRM 21.4.6, Refund Offset.

2. Refer to IRM 21.3.1.6.8, CP 12 Math Error, Overpayment of $1 or More, for resolution of math error notices.

(1) A CP 17, Refund of Unfrozen Excess ES Credits, notifies the taxpayer of a refund of unfrozen estimated credits.

1. Advise taxpayer no action is required.

2. Tell taxpayer they will receive a refund within 4 to 6 weeks of the notice date if no other Federal taxes or obligations are owed and a refund amount remains.

(1) A CP 21A, Data Processing Adjustment Notice, Balance Due of $5 or more, notifies the taxpayer of a data processing (DP) tax adjustment resulting in a balance due when account is in Taxpayer Delinquent Account (TDA) Status.

1. Research IDRS.

2. Explain the reason for the notice.

(2) For resolution, follow the table below:

(1) A CP 22A, Data Processing Adjustment Notice, Balance Due of $5 or more, notifies the taxpayer of a data processing (DP) tax adjustment resulting in a balance due of $5 or more when the account was not in Taxpayer Delinquent Account (TDA) status prior to the adjustment or when the account is going to TDA status in the current cycle.

(2) For resolution, follow the table below:

(1) A CP 23, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Balance Due, notifies the taxpayers of a discrepancy between estimated tax credits claimed on the return and credits posted to the account, resulting in a balance due of $1.00 or more.

(2) This notice also notify the taxpayer of a math error.

(3) Review payment amounts and dates.

(1) A CP 24, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account -You May Have a Credit or Overpayment, notifies the taxpayer of a discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of $1.00 or more. In addition to a discrepancy in estimated tax payments, a CP 24 may advise the taxpayer their return contained a math error or the statute for refund has expired.

(2) A TC 570 with blocking series “55555” holds the refund. If a TC 846 has not posted to the account, see IRM 21.5.6.4.35.4(5), Refund Holds, to determine when the refund will be released.

(3) There are different types of CP 24 notices:

• CP 24, Estimated Tax Discrepancy, Overpayment of $1 or More

• CP 24E, Estimated Tax Discrepancy - Return Changed to Match Payments and Credits IRS Received - Adjusted Refund, Potential Credit

(4) When responding to a CP 24 series notice, refer to the table below.

(1) A CP 25, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Even Balance, notifies the taxpayer of a discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of less than $1.00, or a balance due of less than $5.00.

(2) This notice also informs taxpayer that no refund is issued for less than $1.00 unless taxpayer requests it in writing, and no payment is necessary of a balance due less than $5.00.

(3) There are different types of CP 25 notices:

• CP 25, Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Even Balance

• CP 25T, Tax Reform Estimated Tax Discrepancy, Even Balance. This notice is generated from Taxpayer Notice Codes (TPNCs) 250, 322, 414, 417, 730, and/or 731 (see Notices and Notice Codes for an explanation of these TPNCs). However, a CP 25 may be issued if another TPNC is used in conjunction with those listed.

(4) Refer to table in IRM 21.3.1.6.16, CP 23 - Estimated Tax Credits Discrepancy - We Changed Your Return to Match Your Credits or Payments Posted to Your Account - Balance Due, if taxpayer wants to pay Balance Due < $5.

(1) A CP 27, EIC Potential for Taxpayer Without Qualifying Children, notifies the taxpayer without children of possible eligibility for the EITC. Refer to IRM 21.6.3.4.2.7.8, EITC CP 09 / CP 27.

(2) If trained,

1. Answer questions about eligibility.

2. Advise how to claim the credit.

3. If the taxpayer qualifies, advise taxpayer to sign the notice and return in the envelope provided.

(3) If not trained, transfer caller following the Telephone Transfer Guide (TTG).

(1) A CP 30, Estimated Tax Penalty Notice - Reduced Refund, notifies the taxpayer all or part of an overpayment has been applied to an estimated tax penalty. Advises taxpayer all or some of required estimated tax payments were not timely.

(1) The CP 32and CP 32A are issued when an original refund check is not cashed within one year.

1. The CP 32 notifies the taxpayer the refund was reissued.

2. The CP 32A notifies the taxpayer we will not reissue again without a request from the taxpayer.

(2) When the credit balance includes the Recovery Rebate Credit (RRC), refer to IRM 21.6.3.4.2.14, Recovery Rebate Credit, and IRM 21.6.3.4.2.13, Economic Impact Payments (EIP), to determine whether the account should be adjusted to allow a refund.

(1) A CP 39, Overpaid Taxes Applied to Your Balance Due from a Secondary Social Security Number (SSN), notifies the taxpayer an overpayment for a return on which the taxpayer is the secondary SSN has been applied to the balance due on a return for another year, which is the return identified in the heading of the notice. The notice explains that a joint filer is responsible for paying the tax due on the return as originally filed and any tax resulting from subsequent adjustment (e.g., an examination). Advise taxpayer this is an information notice and a response is not required.

(1) The CP 40, Overdue Account Sent to Private Collection Agency (IMF), notifies the taxpayer that their tax account has been assigned to a private collection agency (PCA) for collection.

(2) The CP 140, Overdue Account Sent to Private Collection Agency (BMF), notifies the business that their tax account has been assigned to a private collection agency (PCA) for collection.

(3) Both notices advise taxpayers and/or businesses to contact the PCA directly to resolve balance due issues. Refer to IRM 5.19.1.5.21, Private Debt Collection, for additional information.

(1) A CP 42, Overpaid Taxes Applied - Refund Reduced to Pay on a Secondary Social Security Number (SSN), notifies the taxpayer of an offset of an overpayment for the return that is the subject of the notice to satisfy a Federal tax obligation for a joint return for another tax year on which the taxpayer was the secondary SSN. Be aware of disclosure criteria. Refer to IRM 21.1.3.2, General Disclosure Guidelines.

(1) A CP 44, Credit Available For Application to Non-IMF Account, is issued when there is a refundable credit of ≡ ≡ ≡ ≡ ≡ ≡ ≡ on a tax module and there is a TC 130 present in the entity module. This is a three-part notice; Part 1 is sent to the taxpayer and Parts II and III are generated to the Atlanta CSCO.

1. Informs the campus that an IMF overpayment is available for application to a non-IMF outstanding liability, or of an overpayment available to use in an Offer-in-Compromise.

2. Informs taxpayer an available overpayment was applied to an outstanding balance on another account.

(2) After application of credit, remaining overpayment is refunded.

1. Advise taxpayer to allow six to eight weeks on a non-individual account for IRS to determine if a tax liability exists.

2. If more than 8 weeks have elapsed and taxpayer has not received any information, prepare Form 4442, Inquiry Referral, and send to Compliance Service Collection Operations, CSCO in the Atlanta campus. Include taxpayer's day and evening telephone numbers.

(1) A CP 49, Overpayment Adjustment - Refund Applied to Other Liabilities, notifies the taxpayer the overpayment on an individual return was applied to a prior year’s unpaid IMF liability.

(1) A CP 51A, We've Calculated Your Income Tax For You - Balance Due, notifies the taxpayer the IRS computed their tax and gives balance due. Interest or penalty for late payment is not charged if amount due is paid within 30 days of notice date or by due date of return.

(2) Use the chart below to assist in the working of CP 51A responses.

(1) A CP 53, Your Refund Check Will Be Sent to You by Mail - Failed Direct Deposit, Check in the Mail, notifies the taxpayer an electronic funds transfer was not honored.

1. No action is required. Because the financial institution could not accept direct deposit of the refund, IRS is issuing a paper check.

2. Taxpayer will receive a refund, within five weeks of the RFND-PAY-DATE of the original TC 846 if no other Federal taxes or obligations are owed and a refund amount remains.

3. If four weeks have passed, refer to IRM 21.4.1, Refund Research.

(1) There are four notices in the CP 54 series:

• CP 54B, Additional Information Needed Regarding Name and Social Security Number (SSN) - Refund Delayed,

• CP 54E, Discrepancy Between Name and Social Security Number (SSN) on Estimated Tax Payments,

• CP 54G, Discrepancy Between Name and Social Security Number (SSN) - Even/Balance Due, and

• CP 54Q, Discrepancy Between Name and Social Security Number (SSN) - Second Request.

(2) These notices are issued to a taxpayer when:

• A return with an invalid primary Social Security Number (SSN) posts. The taxpayer may receive a math error notice instead. Refer to IRM 21.5.4, General Math Error Procedures, for more information.

• The account is invalid (found on the invalid segment of MF). The CP 54x series of notices advise the taxpayer to compare the name and identifying number with the SSN on their most recent social security card so the IRS can release a refund. Refer to IRM 21.6.1.6.7, Resolving CP 54 Notices with Math Error Involvement, and IRM 3.13.5.129, CP 54 Notice Overview.

(3) Refer to IRM 3.13.5.20, IMF Taxpayer Identification Number (TINs) Format, for information on ITINs and IRM 21.5.6, Freeze Codes, for information on "I-" Freeze. Usually an account with an invalid SSN also has a "-G" Freeze (math error), refer to IRM 21.5.4, General Math Error Procedures.

(1) A CP 56V, Installment of CARES Act Deferred Social Security Taxes is Due (IMF), is the first courtesy notice to remind taxpayers that social security taxes deferred under the Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 2302 were due by December 31, 2021, and December 31, 2022. The CARES Act allowed employers and taxpayers to defer the payment and deposit of certain social security taxes incurred from March 27, 2020 to December 31, 2020.

• The amount due for December 31, 2021 is one-half of the amount they were eligible to defer, with the remainder due December 31, 2022.

• The amount eligible to defer is generally one-half of the employer share of social security taxes for employers and Schedule H filers, and/or one-half of the social security taxes due for the 2020 filing year for self-employed individuals.

(2) Refer to IRM 21.7.2.8, Deferred Payment of Social Security Taxes for Employers and Self-Employed Individuals, and IRM 21.6.4.4.8.5.2, Deferred Payment of Social Security Taxes for Employers and Self-Employed Individuals, for procedural guidance.

(3) When responding to balance due issues, refer to IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

(1) A CP 57, Electronic Fund Transfer - Notice of Insufficient Funds on a DDIA Payment (IMF), notifies the taxpayer that a direct debit installment agreement payment was not honored due to insufficient funds.

(2) For more information refer to IRM 20.1.10.7, IRC 6657 - Bad Checks (Dishonored Checks or Other Forms of Payment).

(1) A CP 60, We Removed a payment Erroneously Applied to Your Account. - Balance Due, notifies the taxpayer when a credit is transferred out creating a debit balance of $5.00 or more. Informs taxpayer of a credit reversal.

(1) A CP 62, Notice of Credit Transfer - We Credited Your Account, notifies the taxpayer of a payment they inquired about was located and applied to a specific account. The notice also advises of one of the following:

• A balance due

• An even balance/no tax owed

• A refund has been or will be issued subject to offset for any Federal tax or other obligations owed, such as a Treasury Offset Program (TOP) offset (see for child or spousal support, Federal non-tax debts, or state income tax).

(2) Research IDRS and explain the reason for the notice. Follow procedures in table below.

(1) A CP 71, Taxes Still Owed - Annual Reminder, is issued to a taxpayer once a year to remind taxpayer of a balance due, including penalty and interest. The notice is generated on accounts previously in a deferred Status (Status 23):

(1) A CP 75, Refund Hold - Return Being Examined Regarding Credits Claimed, Need More Information, notifies the taxpayer that their refund is held pending an examination. The case is open in the Audit Information Management System (AIMS) in Origination Code 5041, Project Code 0261, and source code 06. Refer to IRM 21.5.10.4.1, Earned Income Tax Credit (EITC) and Other Projects, for information on how to handle these cases.

(2) When language on the notice informs the taxpayer to send documents using the Document Upload Tool, the notice will include a link and a unique access code. Taxpayers can open the link, enter their name and Tax Identification Number, then securely upload the requested documents. The taxpayer receives confirmation when their documents are successfully transmitted to the IRS.

(1) A CP 81,Unfiled Tax Return - Credit About to Expire, We May Have a Refund for You, notifies the taxpayer when the refund statute is within six months of Refund Statute Expiration Date (RSED). The CP 81 informs the taxpayer "We May Have A Refund For You". The CP 81 is issued to coincide with news and press releases to remind taxpayers:

1. A return has not been filed.

2. The time to file a claim for a refund/overpayment is about to expire.

3. To claim the overpayment, the return/claim is filed before the RSED.

(2) Refer to the following references for additional information:

• IRM 25.6.1.6.17, CP 81/081

• IRM 25.12, Delinquent Return Refund Hold Program

• IRM 25.6.1.8.4, Processing Original Delinquent Returns.

(1) A CP 85, Exam EIC "Soft" Notice, and CP CP 87, Exam Dupe TIN Notice, are issued to taxpayer as soft notices by Examination. They are sent for information purposes only and inform the taxpayer they may have claimed one of several tax benefits in error.

(2) No adjustments are made to the return, nor will be made, unless the taxpayer initiates an adjustment. For additional information and adjustment procedures, refer to IRM 21.5.10.4.2, Exam Soft Notices CP 85A, CP 85B, CP 85C, CP 87A, CP 87B, CP 87C, and CP 87D.

(1) A CP 86, Restricted Interest/Penalty Conditions, generates a case in CII in the same cycle as the TC 150. Research the account to determine the reason for the restriction and compute the current amount of interest to assess or abate.

(2) Anytime debit interest is manually computed, it is necessary to recompute the entire tax module to ensure an accurate computation is made and attach a source document to the account. Refer to IRM 20.2.5.6.2, Manual Computations, and IRM 20.2.1.4.2.1, Manual Calculation of Interest - Documentation, for more information.

(3) Update interest from the last interest update on manually computed accounts. Request return and source documents if necessary.

(4) Refer to IRM 20.2, Interest, for interest computation.

(5) Refer to IRM 21.7.11.4.5.1, Routing of CP 186 Subsequent Payment Freeze, with Freeze Code U-, -V, -W, -Y, or TC 521 with Closing Codes 81.

(1) A CP 89, Annual Installment Agreement Statement - Payments Received and Where They Were Applied, is issued to taxpayer as an annual reminder notice sent on all accounts with installment agreement activity. This notice provides the following information:

• For your Records - This is not a Bill

• Provides a one-year accounting of all payments submitted

• Shows modules to which payments were applied

• Shows all balance due periods

(2) The notice instructs the taxpayer:

(1) An underreporter investigation begins when there is a discrepancy between the income reported to IRS by taxpayers on their personal income tax return, and the income documents, such as Form W-2, Wage and Tax Statement, and Form 1099 series.

(2) Process codes (PC) are used to provide an audit trail for Automated Underreporter (AUR) case processing.

(3) Underreporter uses letters to request and gather information. If taxpayer indicates they received these letters, explain based on the following:

• CP 2501, Initial Contact to resolve Discrepancy Between Income, Credits, and Deductions Claimed on Return & Those Reported by Payer. In certain situations, issuance of a CP 2501 provides better customer service since it is an inquiry instead of a proposal of assessment.

• CP 2000, Request for Verification of Unreported Income, Payments, and/or Credits, notifies the taxpayer of a proposed change to tax liability because of income that is not identifiable or apparently not fully reported on the return and/or credits and deductions that appear overstated. When a CP 2000 is issued, the AUR function opens a control base on the module. IDRS will show the following indicators]
  1. A TC 922,
  2. An open IDRS control Base established to XX88002000 (XX is the Campus Location Code) and,
  3. An underreporter process code of 55 or 57.

• Letter 1802-C — Used to provide information at the close of the underreporter case. Response may or may not be needed.

• Letter 2625-C — Used to correspond with an employer/payer to clarify income from Form W-2, Wage and Tax Statement, and the Form 1099 series. Ask employer/payer to complete form and return.

• Letter 2626-C — Used to correspond with taxpayer to obtain additional information or to provide further explanation subsequent to a CP 2000 or CP 250-1 notice. A response is usually expected.

• Letter 2627-C — Used to obtain missing information when an incomplete Power of Attorney (POA) is submitted by taxpayer. A response is expected.

• Letter 4314-C — Used to inform taxpayer the case is not yet resolved. This is issued from AUR when another action is being taken on a case at the same time (e.g., when a letter to validate income or additional research is being conducted).

• Letter 2893-C — Used to notify taxpayer of adjustment due to Underclaimed or Overclaimed Withholding, Excess Social Security Tax, or Additional Medicare Tax Withheld.

(4) AUR sends the CP 2005 to taxpayers to thank them for information and to inform them that AUR is closing the case with no change to the tax liability and/or refundable credits.

(5) When working accounts with Automated Underreporter (AUR) involvement, research the account to identify the AUR case status, Process Code, or AUR specific penalties. See IRM 21.3.1.6.41, Status of Individual Master File (IMF) Underreporter Cases, to determine if actions are required.

(1) Consider existing account conditions and determine when they take priority over an AUR response or may prevent you from inputting an adjustment. Examples include, but are not limited to:

1. Criminal Investigations (CI), see IRM 21.5.6.4.51, Z- Freeze, and IRM 21.5.6.4.52, -Z Freeze,

2. Frivolous Returns and Claims, see IRM 21.5.3.4.16.7, Identifying Returns/Correspondence and Responding to Frivolous Argument,

3. Return Integrity Verification Operations (RIVO), see: IRM 21.5.6.4.35.3.2, -R Freeze Paper Procedures for Accounts With Return Integrity Verification Operations (RIVO) Involvement.

(2) When working accounts with Automated Underreporter (AUR) involvement, research the account to identify the AUR case status, Process Code, or AUR specific penalties.

1. Identify the Underreporter process code (PC) listed under the Transaction Code (TC) 922 on the account. The status of an AUR case is determined by the last PC posted.

2. The definitions of AUR PC are found in Underreporter Process Codes and in IRM 4.19.3-4, AUR Process Codes

3. Refer to the table below to determine when Accounts Management should respond to the taxpayer’s inquiry or when a case should be referred to AUR. Refer the case/call to AUR only when the status allows for the referral and the case meets AUR criteria. Do not route cases or transfer calls to AUR that do not address the AUR assessment and/or request reconsideration of the assessment.

Note: If additional assistance is required, contact the appropriate Automated Underreporter (AUR) Coordinator. A listing is provided under the "Who/Where" tab AUR Coordinators on the Servicewide Electronic Research Program (SERP) home page. Do not share the telephone contact information with the taxpayer.

(3) Once the last process code is determined, use the following chart to determine the status of the AUR issue and the correct action to be taken:

(4) When language on the notice informs the taxpayer to send documents using the Document Upload Tool (DUT), the notice will include a link and a unique access code. Taxpayers can open the link, enter their name and Tax Identification Number, then securely upload the requested documents. The taxpayer receives confirmation when their documents are successfully transmitted to the IRS.

(1) The Form 9774, Annual Reminder Notice for Automated Non-Master File (ANMF) / Non-Master File (NMF), is sent to all Non-Master File (NMF) accounts, including Tax Delinquency Account (TDAs) and those in Status 53. Refer to IRM 21.3.1.8.1, Non-Master File (NMF) Notices, for more information.

(1) AM telephone assistors will address ITIN status and notice inquiries from applicants or their authorized representatives. General instructions for responding to ITIN notice inquiries can be found in IRM 3.21.263.8, Accounts Management (AM).

(2) Instructions for responding to inquiries on specific ITIN notices are in the following subsections.

(1) The Letter 6115-C is a soft notice that informs the taxpayer there appears to be a discrepancy with income reported by a third-party to the IRS. The notice provides information, such as, the name of the third-party and the address. The issuance of the Letter 6115-C is identified by Transaction Code 971 Action Code 123 with MISC field of “6115-C SENT” on Command Code TXMODA or IMFOLT. You can review CC IRPTR for the additional income information reported under the taxpayer's SSN.

(2) Letter 6115-C requests that the taxpayer review their records and if the income reported on their return is CORRECT to:

• Not contact the IRS about this notice.

• Contact the third-party if the income was incorrectly reported to the IRS and request that the third-party payer verify and correct their records.

Note: If no action is taken, the taxpayer should expect to continue to have reporting problems if the income is not corrected before filing future returns. In addition, the current return may be subject to additional examination which may result in the taxpayer owing additional tax and possibly being charged interest and penalties.

(3) Letter 6115-C requests that the taxpayer review their records and if the income reported on their return is NOT CORRECT to:

• File an amended return, Form 1040-X.

• Mail Form 1040-X to the address based upon the state they reside in, refer to the Instructions for Form 1040-X, Where To File.

(4) Refer to chart below for handling of calls received pertaining to the Letter 6115-C:

(1) IRC 965 imposes a transition tax on untaxed foreign earnings of foreign corporations with U.S shareholders. For more information, refer to IRM 21.5.13.3.6, IRC 965 CP Notices - IMF. The following section provides guidance for IMF CP notices that were created for IRC 965 processing and worked in the Brookhaven campus.

(2) The CP 47A, CP 47B, and CP 47C inform the taxpayer that the IRS has received and processed their income tax return and they elected to pay their IRC 965 net liability in installments.

• CP 47A, Tax Assessed - Notification of the Requested Credit Elect/Refund Being Applied to Section 965 Tax Liability, notifies the taxpayer that their requested credit elect or refund was applied to the 965 tax liability. We can only refund or apply credit elect payments or credits exceeding the full tax liability.

• CP 47B, Tax Assessed - Notification of a Credit Elect/Refund Being Applied to Section 965 Tax Liability, notifies the taxpayer that any payments or credits exceeding the installment amount due are applied to the next IRC 965 installment payment obligation.

• CP 47C, Tax Assessed-Included Section 965 Tax Liability, notifies the taxpayer that the IRC 965 tax has been assessed.

If the taxpayer agrees with the tax assessed, the Brookhaven employee advises that no action is required and to continue to make timely annual installment payments as required by IRC 965(h). If the taxpayer disagrees with the tax assessed, the Brookhaven employee explains the reason for the notice. For more information, refer to IRM 21.5.13.3.6.

(3) The CP 56, Annual Section 965(h) Installment Notice, is issued annually to notify taxpayers who made a 965(h) election of their IRC 965 installment payment amount and due date. The Brookhaven employee advises the taxpayer to follow the instructions on the notice and pay the amount due. Failure to pay by the due date may result in a penalty and the full amount of their net tax liability under IRC 965 may become due immediately. Refer to IRM 21.5.13.3.6.

(1) Several U.S. Tax Court decisions have confirmed that certain micro-captive arrangements are not eligible for claimed Federal tax benefits. Taxpayers who took a deduction or other tax benefit on a prior year return can amend their returns to remove these benefits.

(2) Letter 6336, Micro-Captive Insurance, Soft Notice, was previously sent to certain taxpayers that have taken a deduction or other tax benefit on a prior year tax return related to micro-captive insurance. The letter stated that the IRS had information that the taxpayer had taken a deduction or other tax benefit related to micro-captive insurance on a prior year tax return.

(3) The Soft Notice is now obsolete, however, there may still be amended returns that have not been processed that were previously filed in response to the Soft Notice.

(4) Taxpayers filing paper amended individual returns, in relation to micro-captive insurance (including those in response to the Soft Notice), must write “Microcaptive” at the top of the first page of the amended return and mail it to:
Internal Revenue Service
2970 Market Street
Philadelphia, PA 19104

(5) If the amended individual return was filed electronically, taxpayers include “Microcaptive” when explaining the reason(s) for change(s).

(6) Taxpayers filing amended business returns on paper in response to the Soft Notice, must write “Microcaptive” at the top of the first page of the amended return and mail to the address listed in the instructions for the amended return. Taxpayers filing amended business returns electronically include “Microcaptive” when explaining the reason(s) for change(s).

(7) For IMF amended returns received, AM centralized these claims in the Philadelphia Campus under IDRS Number 0543060816 for domestic claims and IDRS Number 0534180131 for international, and scanned in under CII Category code SPC0. In some instances, statutes may be extended as needed according to local procedures established between Philadelphia AM and LB&I.

(8) BMF amended returns are scanned into CII under category code SPC0, see IRM 21.7.4.4.4.20, Micro-Captive Insurance Amended Returns, for more information regarding BMF amended returns.

(9) For instructions on adjusting these cases, see IRM 21.5.3, General Claims Procedures.

(1) A CP 101, Math Error, Balance Due of $5 or More on Form 940, notifies the taxpayer of an error on Form 940 and Form 940–EZ, Employer’s Annual Federal Unemployment Tax (FUTA) Return, that resulted in a balance due.

(2) When responding to Balance Due issues, refer to IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

(3) When taxpayer indicates a payment was made and has not been credited to the account, refer to IRM 21.5.7.3, Missing Payments Research.

(4) For resolution of the error, refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

(1) A CP 102, Math Error, Balance Due of $5 or More on Form 941, Form 941SS, Form 943, Form 944, Form 944SS, Form 945, notifies the taxpayer of an error on Form 941, Employer’s Quarterly Federal Tax Return, Form 941SS, Employer’s Quarterly Federal Tax Return American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, Form 944, Employer’s Annual Federal Tax Return, Form 943, Employer’s Annual Tax Return for Agricultural Employees, or Form 945, Annual Return of Withheld Federal Income Tax Return, that results in a balance due.

(2) When responding to Balance Due issues, refer to IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

(3) When taxpayer indicates a payment was made and has not been credited to account, refer to IRM 21.5.7.3, Credit Transfers.

(4) For resolution of the CP 102, refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

(1) A CP 107, Math Error, Balance Due of $5 or More- Form 1042, notifies the taxpayer of an error on Form 1042. For more information concerning the CP 107, see IRM 3.14.2.9.24, CP 107, Balance Due Form 1042.

(1) A CP 108, Problem With Your Federal Tax Deposit (FTD), notifies the taxpayer when Service Center Recognition Image Processing System (SCRIPS) processing does not find the type of tax and/or tax period cannot be determined on an Electronic Federal Tax Payment System (EFTPS) payment.

(2) This notice advises taxpayer where the credit has been posted and provides a tear-off portion to be returned if payment was applied incorrectly. Refer to IRM 21.7.11.4.1, CP 108 - Problem With Your Federal Tax Deposit (FTD), for resolution.

(1) A CP 111, Math Error, Overpayment of $1 or More on Form 940, notifies the taxpayer of an error on the Form 940, Employer’s Annual Federal Unemployment Tax (FUTA) Return, resulting in a change in the amount of the refund.

(2) For resolution of the CP 111, refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

(1) A CP 112, Math Error, Overpayment of $1 or More on Form 941, Form 941-SS, Form 943, Form 944, Form 944-SS, and Form 945, notifies the taxpayer of an error on Form 941, Form 941-SS, Form 944, Form 943, or Form 945, resulting in a change in the amount of the refund.

(2) For resolution of the CP 112, refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

(1) A CP 117, Math Error, Overpayment of $1 on Form 1042, generates when the taxpayer makes an error in calculation resulting in the correction generating a refund. For more information see IRM 3.14.2.9.25, CP 117, Overpayment Form 1042.

(1) CP 130, Potential Exemption fromAlternative Minimum Tax (AMT), generates when the taxpayer completes Form 4626, Alternative Minimum Tax - Corporations, and it appears the taxpayer is not liable for AMT.

(2) Refer to IRM 21.7.4.4.4.7.3, CP 130 – Potential Exemption from Alternative Minimum Tax (AMT), for information on how to work this notice.

(1) A CP 134B, Federal Tax Deposit(s) (FTD) Discrepancy - Balance Due, notifies the taxpayer that the amount of Federal Tax Deposits (FTDs) or estimated tax payments credited differs from the amount reported resulting in a balance due.

(2) Notice generated on tax modules with a math error with math error notice codes 24, 26 or 39:

(1) A CP 134R, FTD Discrepancy - Refund, notifies the taxpayer that the amount of Federal Tax Deposits (FTDs) or estimated Tax payments credited differs from the amount reported resulting in an overpayment.

(2) Notice generated on tax modules with a math error notice code 24, 26 or 39:

(1) A CP 136, Annual Notification of FTD Deposit Requirements (941, 941SS), is issued yearly to filers of Form 941 and Form 941-SS to advise employers of which deposit method to use for the upcoming calendar year if different from the current deposit method.

(2) A CP 136B, Your Federal Tax Deposit Requirements for (Form 941) figured using the second preceding calendar year Form 944 as the Form 941 lookback period, is issued yearly to filers of Form 941 who filed Form 944 in the current or prior year, to advise employers of which deposit method to use for the upcoming calendar year.

(1) A CP 137, Annual Notification of FTD Deposit Requirements (Form 943), is issued yearly to filers of Form 943 to advise employers which deposit method to use for the upcoming calendar year if different from the current deposit method.

(2) A CP 137A, Annual Notification of FTD Deposit Requirements (Form CT-1), is issued yearly to filers of Form CT-1 to advise employers which deposit method to use for the upcoming calendar year if different from current deposit method.

(3) A CP 137B, Annual Notification of FTD Deposit Requirements (Form 945), is issued yearly to filers of Form 945 to advise employers which deposit method to use for the upcoming calendar year if different from the current deposit method.

(1) A CP 138, Notification That the Overpayment on the Return was Offset Against Another Tax Period with a Balance Due, notifies the taxpayer that an overpayment on a return has been offset to another tax period with a balance due. After researching IDRS, explain reason for the balance due. Refer to IRM 21.5.7, Payment Tracers, for information about locating missing payments. If the taxpayer has questions about the balance due, follow instructions in table below:

(1) There are three notices in the CP 141 series:

• CP 141C, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Filed Late and Incomplete,

• CP 141I, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Incomplete, and

• CP 141L, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Filed Late.

(2) The CP 141 series notices are generated when an Exempt Organization (EO) return is received late and/or has missing or incomplete information.

(3) Route all correspondence regarding CP 141 notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.6.23, Exempt Organization Penalties, for additional information.

(1) A CP 142, Tax Exempt Bonds, Late Filed Return, is generated when a Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues, or Form 8038-GC, Consolidated Information Return for Small Tax-Exempt Government Bond Issues, is filed late and a reason for the late filing is not provided.

(2) Route all correspondence regarding CP 142, Tax Exempt Bonds, Late Filed Return, notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.7.4.4, Tax Exempt Bond Correspondence and Processing Overview, for additional information.

(1) A CP 143, Tax Exempt Bonds, Late Filing Accepted, is a manually generated notice that informs the filer the response they provided to IRS for filing Form 8038, Information for Tax-Exempt Private Activity Bond Issues, Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues, or Form 8038-GC, Consolidated Information Return for Small Tax-Exempt Government Bond Issues, late was accepted.

(2) Route all correspondence regarding CP 143 notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.7.4.4, Tax Exempt Bond Correspondence and Processing Overview, for additional information.

(1) A CP 145, Notice Of Credit Elect on Forms 1120C, 1120F, 1120L, 1120M, 941, 943, 720, 1041, CT-1, notifies the taxpayer of the amount of credit applied to the next taxable period when the amount differs from the taxpayer's requested amount by $1.00 or more.

(2) This notice is issued when any of the following tax returns post with Computer Condition Code (CCC) E:

• Form 1120, Corporate Income Tax Return series

• Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

• Form CT-1, Employer’s Annual Railroad Retirement Tax Return

• Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return

• Form 941, Employer’s Quarterly Federal Tax Return

• Form 944, Employer’s Annual Federal Tax Return

• Form 943, Employer’s Annual Tax Return for Agricultural Employees

• Form 720, Quarterly Federal Excise Tax Return

(3) After researching IDRS, explain reduction in refund or credit-elect amount. Follow table below for resolution:

(1) A CP 160, Business (BMF) Balance Due - Annual Reminder Notice, is issued to remind taxpayer of a balance due on a deferred account (status 23):

(1) A CP 161, No Math Error, Balance Due, is issued to taxpayer as a first notice to notify them of tax, penalties, or interest due on any BMF return with a balance due of $1.00 or more and no math errors.

(2) After researching IDRS, explain reason for the balance due. It may result from a missing payment or the assessment of penalties such as failure to file (FTF), estimated tax (ES), or dishonored check penalties:

(1) A CP 162, Late or Incomplete Return Penalty - Partnership or S-Corporation, notifies the partnership that a penalty has been assessed for failure to timely file a complete Form 1065, U.S. Return of Partnership Income, or Form 1120S, U.S. Income Tax Return for an S Corporation. Refer to IRM 21.7.4.4.2.8.2, Small Partnership Penalty Abatement, and IRM 21.7.4.4.2.7, Partnership Penalties, for more information.

(2) If Form 1065 or Form 1120S was filed late, incomplete, or both, do the following:

(1) A CP 163, BMF Annual Reminder Notice - Overdue Taxes, is issued annually to remind the taxpayer of a balance due of Tax, Penalty and Interest on a module that has been in Currently Not Collectible (CNC) status (with closing code 12 or 24–32) for at least 65 cycles.

(1) A CP 165, Penalty Assessed for Dishonored Check, notifies the taxpayer that a check was not honored by their bank.

(2) Refer to IRM 20.1.10.7, IRC 6657 Bad checks (Dishonored Checks or Other Forms of Payment).

(1) A CP 166, Insufficient Funds on Direct Debit Installment Agreement, notifies the taxpayer that a direct debit installment agreement payment was dishonored due to insufficient funds.

(2) Refer to IRM 20.1.10.7, IRC 6657 - Bad Checks (Dishonored Checks or Other Forms of Payment).

(1) Letter 4010-C, Federal Unemployment Tax Act (FUTA) Certification - Proposed Increase to FUTA Tax, notifies the taxpayer of a proposed increase in tax to Form 940 based on state certification of credit information that differs from taxpayer's return.

(2) CSR should refer to IRM 4.19.5.4.13, Customer Service Representative (CSR) Information, to assist callers.

(3) Follow IRM 21.7.3.4, Unemployment Tax Procedures, when working CII cases.

(1) Letter 4011C, FUTA Certification - Proposed Decrease to FUTA Tax, notifies the taxpayer of a proposed decrease in tax to Form 940 based on state certification of credit information that differs from that on taxpayer's return.

(2) CSR should refer to IRM 4.19.5.4.13, Customer Service Representative (CSR) Information, to assist callers.

(3) Follow IRM 21.7.3.4, Unemployment Tax Procedures, when working CII cases.

(1) A CP 187, Annual Reminder Notice (Status 22 or 26 Accounts), is issued as an annual reminder notice of balance due BMF accounts in Status 22 and 26. A separate notice is issued on each module.

(2) Follow guidance provided in IRM 21.3.1.4, Notice Resolution Actions Research. Transfer the call to ACS according to the TTG after researching status and providing payoff amount, if requested.

(1) The CP 191 is an internal notification to the campus accounting to update the installment billing clerks file.

(2) If response received for Form 706, United States Estates (and Generation-Skipping Transfer) Tax Return, forward to Estate and Gift Tax Operations, KCSPC, Stop 6052, 333 W. Pershing Rd. Kansas City, MO 64108-4302

(1) CP 199, Clean Vehicle Registration Notification, is issued to dealers / specific sellers who registered in the Energy Credits Online (ECO) tool. The notice informs the taxpayer they have registered to either:

• Electronically submit "time of sale" seller reports, or

• Electronically submit "time of sale" seller report and also participate in the advance payment program

(2) The notice provides an internal IRS phone number to a pre-recorded message. Do Not advise the taxpayer to call that number. If the taxpayer did not register their business to utilize the clean vehicle seller reports found on ECO, advise them to follow the instructions in the letter.

(3) If the taxpayer is having trouble accessing their Business Tax Account, which is how the taxpayer accesses the ECO tool, seeIRM 21.2.1.64, Business Tax Account (BTA).

(1) CP 199A, Clean Energy Account Creation, is issued to certain business, tax exempt and government entities who successfully created a Clean Energy Account through the Energy Credits Online (ECO) tool. The notice informs the taxpayer to register their intention to make either of the following:

• An elective payment election under IRC 6417 or IRC 48D(d)

• A transfer election under IRC 6418

(2) The notice provides an internal IRS phone number to a pre-recorded message. Do Not advise the taxpayer to call that number. If the taxpayer did not create a Clean Energy Account through ECO, advise them to follow the instructions in the letter.

(3) If the taxpayer is having trouble accessing their Business Tax Account, which is how the taxpayer accesses the ECO tool, seeIRM 21.2.1.64, Business Tax Account (BTA).

(1) A CP 207, Proposed Averaged FTD Penalty (amounts less than $75,000), Request for Correct Record of Federal Tax Liability (ROFTL) Information, is generated on Form 940, Form 941, Form 943, Form 944, Form 945 and Form 1042 tax modules when the Record of Federal Tax Liability (ROFTL) section of the return is incomplete, illegible or the total tax liability reported on the ROFTL does not equal the net taxes on the return. The CP 207 notifies the taxpayer to complete and return a ROFTL or IRS systemically assesses an averaged FTD penalty. CP 207L is generated for averaged penalties of $75,000 or more.

(2) Advise the caller to complete a ROFTL for the appropriate form identified in the notice and to either fax or mail it. Follow procedures in IRM 20.1.4.18, CP 207 or CP 207L Notices.

(1) A CP 210, Examination (Audit) or Data Processing Tax Adjustment - Balance Due, Overpayment, or Even Balance, notifies the taxpayer of an Examination or Data Processing tax adjustment notice, resulting in overpayment of $1.00 or more or a zero balance. Also issued as a return settlement notice when penalties are assessed on overpaid modules. After researching IDRS, explain reason for the notice.

(1) A CP 215, Civil Penalty - 500 and 600 Series, notifies the taxpayer a civil penalty was assessed.

(2) Intentional Disregard Civil Penalty

(1) A CP 220, Examination (Audit) or Data Processing Tax Adjustment - Balance Due, Overpayment, or Even Balance, is an adjustment notice from Exam or Data Processing, resulting in balance due, overpayment, or a even balance. The CP 220 is also issued as a return settlement notice when penalties are assessed on overpaid modules. After researching IDRS, explain reason for the notice. For resolution, refer to table in IRM 21.3.1.7.31, CP 210 Examination (Audit) or Data Processing Tax Adjustment - Balance Due, Overpayment, or Even Balance.

(1) A CP 225, Missing Payment Applied, is issued to advise taxpayer that a tax payment inquired about was located and applied to a specific account. This letter also advises taxpayer of a remaining balance due, a zero-account balance, or a refund issued. After researching IDRS, explain reason for the notice.

(1) A CP 230, Combined Annual Wage Reporting - CAWR/DP Tax Adjustment Amended Return Filed, notifies the taxpayer of a determination of refund due, because of a Combined Annual Wage Reporting (CAWR) adjustment made due to the taxpayer's amended return being filed and processed.

(2) Advise taxpayer the refund amount is based on the response submitted to CAWR, amended return, and the comparison of the figures reported on employment tax return and information submitted on information returns. Figures were presented to taxpayer previously by the CAWR program via Letter 98-C, Wage Discrepancy per SSA; Information/Verification, or Letter 99-C, Letter of Employment Tax Problem (CAWR).

(3) If taxpayer does not agree with refund, advise them to contact the processing center at the address indicated on the notice. Assist taxpayer in preparing response to issuing center.

(1) A CP 238, Late Federal Tax Deposit (FTD) Educational Notice - No Penalty Charged, is issued to first time Form 941, Form 943, and Form 944 filers who did not deposit correctly. The CP 238 explains:

• One or more deposits were late or were not made according to the taxpayer's current deposit requirements.

• The IRS is not charging a federal tax deposit penalty because our records indicate this is the first time they have been liable for this type of tax return.

(2) A Notice 931 is enclosed to explain the deposit requirement for Form 941. Refer to IRM 20.1.4, Failure to Deposit Penalty, for more information on deposit requirements and penalties.

(1) A CP 240, Combined Annual Wage Reporting - CAWR/DP Discrepancy Tax Adjustment, notifies the taxpayer of an adjustment to the account when there is a discrepancy between information reported on the employment tax returns and the W–2, W–2G, or 1099–R forms submitted. This notice is a bill issued to taxpayer because of the Combined Annual Wage Reporting (CAWR) program.

(2) After researching IDRS (BMFOLU) explain reason for the notice. Advise taxpayer that amount due is based on a comparison of figures reported on employment tax return with information submitted on information returns. The figures were previously presented to taxpayer during CAWR program. The bill is generated whether or not the taxpayer responded to the CAWR notice or correspondence issued if a discrepancy still existed. Late replies to the CAWR notice or correspondence would not have prevented the notice from being issued.

(1) A Letter 99-C, Notice of Employment Tax Problem, is issued for an IRS-CAWR case to notify taxpayer of a discrepancy between information reported on the Federal employment tax returns Form 941, Employer’s Quarterly Federal Tax Return, Form 944, Employer’s Annual Federal Tax Return, Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, Form 945, Annual Return of Withheld Federal Income Tax, or Schedule H, Household Employment Taxes) and the Form W-2 submitted to SSA or the Form W-2 G, Certain Gambling Winnings or Form 1099–R, Distribution From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA, Insurance Contacts etc., submitted to the IRS. Refer to IRM 4.19.4.11, IRS-CAWR/SSA-CAWR - CSR Information.

(2) Do the following:

1. Advise taxpayer that Letter 99-C is not a bill, but a proposed increase or decrease in tax based on a comparison of figures reported on employment tax return and information submitted on information returns. The Letter 99-C can address either an increase or a decrease.

2. Ask taxpayer to compare totals on employment tax returns and information returns to their records with the figures shown on the Letter 99-C.

3. Assist taxpayer in identifying the error and reviewing filing requirements and tax computation on employment tax return.

4. Assist taxpayer in preparing a complete response to CAWR unit of the issuing center (e.g., missing Form 941, or Form W-2). Refer to IRM 4.19.4.11, IRS-CAWR/SSA-CAWR - CSR Information.

(1) A Letter 98-C, Wage Discrepancy per SSA; Information/Verification Requested, is issued on a SSA-CAWR case to notify taxpayer of a discrepancy between information reported on the employment tax returns and that reported on the Forms W-2 submitted to Social Security Administration (SSA), i.e., taxpayer is reporting more Social Security Wages, Medicare Wages and/or Federal Withholding tax on an employment tax return than is reported on Form W-2or Form W-3.

(2) Advise taxpayer:

1. Letter 98-C is a proposed penalty assessment and is a request for copies of Forms W-2 previously requested by SSA. It also notifies the taxpayer of a potential penalty assessment if forms are not submitted to the IRS to be forwarded to SSA.

2. IRS must receive copies of forms or proof of timely filing before the "due" date outlined in the notice to prevent a penalty assessment against the taxpayer. This occurs even if taxpayer insists they filed the forms with SSA previously. Advise taxpayer to respond to address on the notice.

3. It is extremely important that the taxpayer provide the forms or proof of timely filing directly to the IRS to prevent assessment of penalty for failing to file Form W-2.

4. If taxpayer does not respond to notice and provide a copy of the Form W-2 filed with SSA, they are assessed a penalty.

(3) Assist taxpayer in identifying the error (e.g., SSA did not receive all the Form W-2 and/or Form W-3, Transmittal of Wage and Tax Statements, for the EIN, taxpayer used two different TINs).

1. Ask taxpayer to compare their records with figures listed on Letter 98-C.

2. Determine whether taxpayer's total submission was received and processed by SSA. Ask taxpayer to compare submissions according to their records with figures on the Letter 98-C. You also may access BMFOLU for the W–2 or W–3 amounts.

(4) Assist taxpayer in preparing a response to CAWR unit of the issuing center. (Refer to IRM 4.19.4, CAWR Reconciliation Balancing, for more information on the CAWR program). Never transfer the taxpayer's call to the CAWR unit.

(1) A CP 256V, Installment of CARES Act Deferred Social Security Taxes is Due (BMF), is the first courtesy reminder that Social Security taxes deferred under the CARES Act Section 2302 are due by December 31, 2021 and December 31, 2022. Refer to IRM 21.7.2.8, Deferred Payment of Social Security Taxes for 2020, for additional information.

(2) The first installment amount, due December 31, 2021, is half the employer’s share of Social Security taxes that could have deferred, including any amount of the employee’s share of Social Security taxes deferred under Notice 2020-65 as modified by Notice 2021-11, minus all deposits and payments the IRS has received.

(3) The second installment, due December 31, 2022, is the remaining unpaid deferred taxes.

(1) CP 259 series notices (A - G) are issued from Master File on accounts that have not received a return to satisfy the filing requirement.

(2) Refer to IRM 21.7.7.6.26, CP 259, CP 42X & CP 249 Entity Notices, for more information for Exempt returns.

(1) A CP 260, Credit Reversal Adjustment, notifies the taxpayer of a credit reversal (e.g., erroneous payment posted and taken out, other credits allowed and then removed) or an adjustment to their account. After researching IDRS, explain reason for the notice.

(1) A CP 267, No Math Error - Credit Offset Notice, notifies the taxpayer of possible misapplied payments and allows taxpayer to advise IRS of their correct application.

(2) The CP 267 Notice requires a response and are worked on an expedited basis. After researching IDRS, explain tax deposit discrepancies and reason for overpayment. Refer to IRM 21.7.11.4.9, CP 267 or CP 268 - Notice of Excess Credit, for procedures.

(1) A CP 268, Math Error - Credit Offset Notice, notifies the taxpayer of an error on return and possible misapplied payments resulting in an overpayment. It allows taxpayer the opportunity to advise IRS of validity of math error and proper application of credits.

(2) Notice requires a response and are worked on an expedite basis. After researching IDRS, explain reason for the overpayment. Refer to IRM 21.7.11.4.9, CP 267 or CP 268 - Notice of Excess Credit, for procedures.

(1) A CP 282, Notification of Possible Filing Requirement, Form 1065 and Form 1065-B, notifies the taxpayer of a possible requirement to file information returns and withhold tax. This notice is generated when a filer of Form 1065, U.S. Return of Partnership Income, or Form 1065-B, U.S. Return of Income for Electing Large Partnerships, checks a box on Schedule B, indicating they had foreign partners during the year. Refer to IRM 21.7.4.4.2.11, CP 282 Notice, Notification of Possible Additional Partnership Filing Requirements (Withholding Tax on Foreign Partners), for additional information and procedures for responding to taxpayer inquiries. Refer to IRM 21.8.2.16.1, CP 282 - Form 1065 for international cases.

(1) A CP 289, Annual Installment Agreement Statement, is issued as an annual BMF notice. The notice shows all payments made for the year and an ending balance. It advises the taxpayer that this notice is not a bill. It also instructs the taxpayer to contact the IRS if:

1. There is restricted interest and/or penalty on the module and the taxpayer wants a balance due. After addressing account issues and verifying the payoff amount if requested, AM employees follow IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

   Note: Guidance for handling calls received for accounts in Status 22/26 has not changed - transfer using established procedures.

2. The taxpayer made a payment that is not shown on the notice.

(1) The CP 208, Potential Credit Transfer Action Form 1041, is an internal notice. When Form 1041 posts with credit shown on the election line and the credit has not been transferred, a -P freeze generates. The freeze is released when the module balance becomes zero or debit status.

(2) Refer to IRM 21.7.4.4.1.12.3, CP 208 Notice, Potential Credit Transfer Action Form 1041, for procedures.

(1) The CP 224, Potential Qualification as a Personal Service Corporation, is issued to businesses who, based on the business activity described on the Form 1120 they filed, may qualify as a personal service corporation.

(2) Refer to IRM 21.7.4.4.4.3.1, CP 224 Notice, Potential Qualification as a Personal Service Corporation, for procedures.

(1) The BMF Underreporter (BUR) program is designed to review Form 1120, U.S. Corporation Income Tax Return series, and Form 1041, U.S. Income tax return for Estates and Trusts series, for potential Underreported or missing income. BUR Operations is located in the Ogden Campus. The program compares the information reported on the Form 1120 and Form 1041 to the Information Return Master File (IRMF) which contains income documents, such as Form 1099, Schedule K-1, etc., submitted by payers.

(2) BUR sends letters (Formerly CP notices) to Form 1120 and Form 1041 filers notifying them of the discrepancy between the information documents and what is reported on the income tax return. These letters are:

1. Letter 2030, Initial Notice Issued to Request Verification for Unreported Income, Deductions, Payment and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents

2. Letter 2531, Initial Contact for Potential Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents

(3) Letter 2531 is sent to the taxpayer as an inquiry, not a proposal of assessment. The letter is sent to a taxpayer to obtain information prior to the issuance of the Letter 2030.

(4) The Letter 2030 is the BUR notice of proposed assessment relating to the underreporter issues on the Form 1120 and Form 1041.

(5) When the account has been selected to be worked by BUR, the account displays a TC 925. The process codes shown with the TC 925 provides the status of the case as it goes through BUR processing. BMF Underreporter Process Codes are located in the Document 6209.

PROCESS-CD>40304500

(6) When a letter is issued, the BUR function puts a control on the module. IDRS research shows:

1. An open IDRS control base with control category code "BUR0", "BUR1", "BURS" or "BURC" controlled to employee number, 048xxxxxxx.

2. An underreporter process code. The process codes update as the case progresses through the BUR process.

Note: The process codes may appear as history notes on CC TXMOD.

(7) When there is a TC 925 and/or an open BUR control on the tax module, the following taxpayer correspondence is routed to BMF-AUR to be worked:

• Letter 4550-C, BMF Underreporter (BUR) Additional Correspondence

• Letter 4551-C, BMF Underreporter (BUR) Closing

• Letter 4552-C, BMF Underreporter (BUR) Payer Inquiry / Nominee Recipient Inquiry

• Letter 2030, Initial Notice - Request Verification for Unreported Income, Deductions, Payments and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents

• Letter 2531, Initial Contact for Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents

• Letter 3219-B, BMF AUR Statutory Notice of Deficiency - 90 Day Letter

• Form 4089-B, Notice of Deficiency - Waiver

• Form 1120-X, Amended U.S. Corporation Income tax return

• Amended Form 1041, U.S. Income Tax return for Estates and Trusts

(8) BMF AUR tax assessment can be found on MFT 02 (Form 1120) or MFT 05 (Form 1041) accounts. A BUR assessment can be identified by reviewing the blocking series of the TC 290 adjustment. For Form 1120 the blocking series may be 55, 57, 58 or 59. For Form 1041 the blocking series is 64 or 89.

(9) If written correspondence, Form 1120-X or amended Form 1041 is received relating to a closed BUR assessment, take the following actions:

1. If the account is in status 58 input a STAUP 2209

2. For all other notice status, input nine-week STAUP to the next notice status.

3. If forwarding to BUR a Form 1120-X or amended Form 1041, input TC 971 AC 015. This leaves the appropriate audit trail for the amended returns.

4. Route Form 1120-X, or Form 1041 amended return and all correspondence to BUR: M/S 6663

(10) If TC 925 only shows Process Code 4030 on the account, do not refer case to BUR. Work the taxpayer’s issue following normal procedures.

(11) If the taxpayer calls and they didn’t receive the letter or is requesting a copy of any of the letter, transfer the call to Extension 1827. If the call cannot be transferred, provide the caller with the BMF-BUR phone number and hours of operation. The BUR number is 877-571-4712. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

(12) BUR may send several other notices. These include:

• Letter 2627-C - Used to obtain missing information when an incomplete Power of Attorney (POA) is submitted by taxpayer. A response is expected.

• Letter 2893-C - Used to notify taxpayer of adjustment.

• Letter 4314-C - Used to inform taxpayer the case is not yet resolved. This is issued from BUR when another action is being taken on a case at the same time (e.g., when a letter to validate income or additional research is being conducted).

• Letter 4550-C - Used to correspond with taxpayer to obtain additional information or to provide further explanation subsequent to a Letter 2030 or Letter 2531 notice. A response is usually expected.

• Letter 4551-C - Used to notify taxpayer of conclusion of their BUR case. No response is expected.

• Letter 4552-C - Used to correspond with an employer/payer to clarify income. Ask employer/payer to complete form and return.

(13) For additional information on the BUR Program, refer to IRM 4.119.4, BMF Underreporter (BUR) Program.

(1) IRC 965 imposes a transition tax on untaxed foreign earnings of foreign corporations with U.S. shareholders. For more information, refer to IRM 21.5.13.4.5, IRC 965 CP Notices - BMF. The following section provides guidance for BMF CP notices that were created for IRC 965 processing and worked in the Ogden campus.

(2) The CP 247A, CP 247B, and CP 247C inform the taxpayer that the IRS has received and processed their income tax return and they elected to pay their IRC 965 net liability in installments.

• CP 247A, Tax Assessed - Notification of the Requested Credit Elect/Refund Being Applied to Section 965 Tax Liability, notifies the person/entity that their requested credit elect or refund was applied to IRC 965 tax liability. We can only refund or apply credit elect payments or credits exceeding the full tax liability.

• CP 247B, Tax Assessed - Notification of a Credit Elect/Refund Being Applied to IRC 965 Tax Liability, notifies the person/entity that any payments or credits exceeding the installment amount due for the inclusion year, are applied to the next IRC 965 installment payment obligation.

• CP 247C, Tax Assessed-Included IRC 965 Tax Liability notifies the person/entity that their IRC 965 tax has been assessed.

If the taxpayer agrees with the tax assessed, the Ogden employee advises no action is required and to continue to make timely annual installment payments as required by IRC 965(h). If the taxpayer disagrees with the tax assessed, the Ogden employee explains the reason for the notice. For more information, refer to IRM 21.5.13.4.5, IRC 965 CP Notices - BMF.

(3) The CP 256, Annual IRC 965(h) Installment Notice, is issued annually to notify taxpayers who made a 965(h) election, of their IRC 965 installment payment amount and due date. The Ogden employee advises the taxpayer to follow the instructions on the notice and pay the amount due. Failure to pay by the due date may result in a penalty, and the full amount of their net tax liability under IRC 965 may become due immediately, refer to IRM 21.5.13.4.5, IRC 965 CP Notices- BMF.

(1) NMF notices provide the following telephone numbers for the taxpayer to contact the IRS:

• Within the US, call toll-free 833-972-8965

• Outside of the US, call 267-466-4777

(2) Notice numbers are shown in the bottom right-hand corner. The notice shows an "n" after the Taxpayer Identification Number (TIN).

• Form 6335, NMF First Notice NMF First Notice, is the first notice issued on a Non-Master File account.

• Form 4840, NMF Fourth Notice, is the next notice issued on a Non-Master file account. (NMF Notices 2 and 3 are no longer in use.)

• Form 9774, Annual Reminder Notice for ANMF/NMF, is the annual reminder notice.

• The address on the notice is the address where the taxpayer's NMF account resides.

(1) Notices CP 403, Form 5500, First Delinquency Notice, and CP 406, Form 5500, Second Delinquency Notice, are return delinquency notices. These notices are issued to taxpayers with a filing requirement for Form 5500, Annual Return/Report of Employee Benefit Plan, and inform the taxpayer of an overdue return.

(2) CP 403is the first notice and CP 406 is the final notice. A response is required.

(3) Delinquency cases are placed on the Taxpayer Information File (TIF). Each case is retained on this file for a period determined by the date the last tax module was satisfied in the entity. The TIF is updated weekly with any satisfying transaction input during the week.

(4) Resolve CP 403 and CP 406 issues as follows:

(5) Refer to IRM 3.13.36, EPMF Account Numbers, for more information on CP 403 and CP 406.

(1) The Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (collectively, the Affordable Care Act or ACA) has many key provisions including shared responsibility payments for certain employers.

(2) Employer Shared Responsibility Payment (ESRP). Beginning calendar year 2015 and after, employers employing an average of 50 full-time employees or combination of full-time and full-time equivalent employees on business days in the prior year (i.e., number of employees during 2014 is used to determine liability for calendar year 2015) are be subject to the Employer Shared Responsibility provisions under IRC 4980H (added to the Code by the ACA) Form 1094-C and Form 1095-C are used to report information about offers (or non-offers) of health coverage and enrollment in health coverage to an employee by the employer. ESRP is not be self-reported by the taxpayer. Instead, ESRP is assessed by an Exam function based on information reported to the IRS. Form 1094-C and Form 1095-C are used by Exam in determining whether an employer owes an ESRP.

(3) Master File Tax Code (MFT) has been established to record assessments, abatements, and other account actions. MFT 43, Employer Shared Responsibility, is processed to BMF.

(4) On MFT 43, the assessment posts as a TC 298 with a three-digit reference number of 240, which identifies the type of assessment. A TC 290 is input along with the TC 298. A TC 150 never posts to this module.

(5) Prior to an assessment by Exam, various notices/letters are sent to certain employers who have been identified as potentially being assessed an ESRP.

(6) See IRM 20.2.11.14(1), Affordable Care Act (ACA), and IRM 5.19.4.2.2, Affordable Care Act (ACA) - Employer Shared Responsibility Provision (ESRP)§4980H, for general information.

(1) The Letter 4912, Tax Compliance Notice of Proposed Escalation, notifies the taxpayer that they are not in compliance with their individual and/ or business federal tax filing and payment obligations. It advises the taxpayer that we are proposing to escalate their non-tax compliance case to the Office of Professional Responsibility. Advise the taxpayer to follow the instructions in the letter. To assist the taxpayer in resolving issues, refer to IRM 5.19.1, Balance Due to assist the taxpayer in resolving issues.

(2) The Letter 4912-A, Proposing Denial of Participation into Annual Filing Season Program, notifies the taxpayer that they are not in compliance with their personal federal tax filing and payment obligations. It advises the taxpayer that we are proposing to deny their participation in the Annual Filing Season Program. Advise the taxpayer to follow the instructions in the letter.

(3) Research the account to verify the true status/issue and provide the payoff if requested. For AM employees, see IRM 21.1.1.3.1, Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns.

(1) A digital asset is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. Examples include Bitcoin and E-gold. In some environments, it operates like "real" currency i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance. Virtual Currency may be used to pay for goods or services, or held for investment.

(2) The Letter 6173, Virtual Currency Soft Notice, was issued to taxpayers that have, or had, one or more transactions containing digital assets, and may not have met their tax filing and reporting requirements for the transactions. This includes transactions involving crypto-currency and non-crypto virtual currencies.

(3) The letter states that digital assets accounts and/or transactions may be taxable, and that the IRS has no record of receiving a return with digital assets information. It also advises taxpayers to file the applicable form or schedule to report digital assets accounts, or provide a statement of facts explaining why they  believe all tax and reporting requirements related to digital assets accounts have been met. It provides the taxpayer with a separate address for statements and/or correspondence and for returns/ amended returns.

(4) For statements and/or correspondence, the mailing address is:

Department of the Treasury, Internal Revenue Service, 3651 IH-35, Mail Stop: 4308 AUSC, Austin, TX 78741.

(5) The letter instructs the taxpayer to write the phrase “Letter 6173” at the top of the amended return and mail it to the following address:

Internal Revenue Service, 2970 Market Street, Philadelphia, PA. 19104

(6) The letter also provides a unique hot line number for taxpayers to call if they need to speak to someone concerning this letter. That hot line number is 737-880-7990.

(7) Amended returns are received and centralized at the Philadelphia Campus under IDRS Number 0543025331 for domestic claims and IDRS Number 0534026194 for international, and scanned in under CII Category code SPC 2. In some instances, statutes may be extended as needed according to local procedures established between Philadelphia AM and LB&I. For instructions on adjusting these cases, see IRM 21.5.3 General Claims Procedures for more information.

(8) If a call is received on the toll-free line, advise the caller to respond to the notice or provide the caller with the hot line number 737-880-7990. Advise the taxpayer that this is not a toll-free number.