21.6.1. Filing Status and Exemption/Dependent Adjustments

(1) Employees in the Accounts Management (AM) organization respond to the taxpayer inquiries and phone calls as well as process claims and other internal requests.

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

(2) Per Policy Statement 5-2: We actively assist taxpayers who try to comply with the law, and work to continually improve the quality of our systems and service to meet the needs of our customers. All taxpayers whether delinquent or fully compliant are entitled to prompt and professional service whenever they deal with IRS employees. The public is our customer, not just delinquent taxpayers. Our customers expect us to promote voluntary compliance by ensuring that all promptly pay their fair share. This information can be found in IRM 1.2.1.6.2, Policy Statement 5-2, Collecting Principles.

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

(2) Additional information is found in IRM 1.1.13.7.3, Accounts Management, 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 (CR) and Tax Examiners (TEs). For reports concerning quality, inventory, aged listing, refer to IRM 1.4.16, Accounts Management Guide for Managers. Aged listings can also be viewed by accessing Control Data Analysis, Project PCD, are on the Control-D/Web Access server, which has a login program control.

(2) Program Effectiveness: Program Effectiveness is determined by Accounts Management’s employees 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) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support.

(1) The information below is a list of commonly used acronyms used throughout this IRM:

• AMS - Account Management Services

• BMF - Business Master File

• CC - Command Code

• CII - Correspondence Imaging Inventory

• CP - Computer Paragraph

• DLN - Document Locator Number

• IAT - Integrated Automated Technologies

• IDRS - Integrated Data Retrieval System

• IMF - Individual Master File

• MFT - Master File Tax

• TC - Transaction Code

(2) For a comprehensive listing of any IRS acronyms, refer to the Acronym Database.

(1) Refer to IRM 1.4.16.1.6, Related Resources, for information on related resources that impact internal controls.

(2) The Internal Revenue Code (IRC) provides taxpayers specific rights. The Taxpayer Bill of Rights groups these rights into ten fundamental rights. See IRC 7803(a)(3). IRS employees are responsible for being familiar with and following these rights. For additional information about taxpayer rights, see Pub 1, Your Rights as a Taxpayer or visit irs.gov/taxpayer bill of rights.

(1) Married taxpayers who previously filed as Married Filing Separate (MFS), Single, or Head of Household (HOH) may file a married filing joint return within three years from the due date of the original return without regard to extensions, provided the IRS did not mail either spouse a notice of deficiency for which a petition was filed timely in the U.S. Tax Court, and neither spouse has commenced a suit for refund in any court, or entered into a closing agreement, or offer-in-compromise. If married taxpayers file a MFJ return after petitioning the Tax Court from a notice of deficiency, contact Chief Counsel via your Planning and Analyst contact.

(2) To establish a joint name line, a Taxpayer Identification Number (TIN) is needed for both spouses. Acceptable TINS include a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN) or Internal Revenue Service Number (IRSN). For information on establishing an Internal Revenue Service Number, refer to IRM 3.13.5.75, When Internal Revenue Service Numbers (IRSNs) are Needed.

(1) "No Consider" the change to married filing joint status:

(1) Return the claim to the taxpayer with the appropriate "C" letter, requesting the necessary information if:

• The amended return is not signed by both taxpayers

• Someone other than an executor, administrator, or surviving spouse files an amended married filing joint return for a deceased taxpayer

• Supporting forms, schedules, or documents are missing

(2) If there is a tax increase/credit decrease, adjust the account and send a letter to the taxpayer requesting the missing information. Refer to IRM 21.5.3.4.1, Tax Increase or Credit Decrease Processing, for additional guidance.

(1) Research for the filing of both returns. It is not necessary to request the returns if the married filing joint (MFJ) return information can be verified from research. To determine if the request for a joint election is valid, refer to IRM 25.6.1.9.4.4(1), Joint Return After Separate Return.

(2) If there is an open Transaction Code (TC) 420 or an open -L freeze on either spouse's account, follow IRM 21.5.3.4.7, Processing Claims and Amended Returns with Examination Involvement.

(3) If either account has unresolved Taxpayer Protection Program (TPP) and/or MFT 32 issues, refer to IRM 21.5.6.4.9.1, E- Freeze Procedures for Unresolved TPP Issues.

(4) Math verify the MFJ return and recompute the tax, if necessary. Assess or recompute the estimated tax penalty based on joint liability. Refer to IRM 20.1.3.3.1.1.2, Joint Return After Filing Separate Return(s).

(5) Domestic married filing separate to married filing joint claims are processed under category code "SPJT" and program code 40056. If the Separate to Joint claim is not scanned into CII as "SPJT", update the category code.

(6) Update the DUPOL database. Refer to IRM 21.6.1.7, Command Code DUPED and DDBCK, for additional information.

(7) Update the secondary taxpayer's address if there is a change on the joint return.

• The primary taxpayer filed a later return with a different spouse

• The primary taxpayer filed a later return with a filing status of single, head of household, qualifying surviving spouse, or married filing separate indicating a different spouse

• The secondary taxpayer has had an address update within the previous 52 cycles

(8) Consistent with Obergefell v. Hodges, 135 S. Ct. 2584, lawfully married same-sex couples filing joint or separate returns are married for all federal tax purposes.

(9) Registered Domestic Partnerships (RDPs), civil unions and other similar formal relationships not recognized as marriage under state law are not recognized as marriages for federal tax purposes.

(10) Legally married same-sex couples must generally file their returns with either the joint or separate filing status.

(11) All items required on an original return, amended return, adjusted return, or claim for credit or refund that are affected by the filing status must be adjusted consistent with the status reported on the return or claim. If the claim is incomplete or additional information is needed, refer to IRM 21.5.1.5.6, Incomplete CII Claims.

(12) For any statute related issues, refer to IRM 21.6.1.5.4, "Statute of Limitations" Procedures for Married Filing Separate, Single, or Head of Household to Married Filing Joint.

(13) Additional information is located on the IRS website.

(1) Care must be taken when processing statute year claims to prevent erroneous abatements and to prevent the generation of RSED-STAT transcripts. Refer to procedures in IRM 21.5.3.4.3, Tax Decrease and Statute Consideration. Substitute for Return (SFR), refer to IRM 21.5.3.4.10, Returns Prepared Under IRC 6020(b).

(2) The filing of a married filing joint return after separate return(s) may affect the Assessment Statute Expiration Date (ASED). The IRS has at least one year from the actual filing of a married filing joint return to make an assessment, per IRC 6013(b)(4).

(3) Determine if the extended ASED is imminent (within 90 days). Refer to IRM 25.6.1.9.4.4, Joint Return After Separate Return, for specific instructions on conditions which extend the ASED.

(4) For statute of limitations Issues refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues.

(1) Married taxpayers may file separate returns such as married filing separately, head of household, or single on or before the due date, or extended due date, of their originally filed married filing joint return. If a taxpayer changes filing status from Married Filing Joint (MFJ) to Married Filing Separate (MFS), Single (S) or Head of Household (HOH), the taxpayer MUST clearly be eligible, refer to Publication 501, Dependents, Standard Deduction, and Filing Information, and Publication 17, Your Federal Income Tax (For Individuals).

(2) Disallow all claims postmarked after the due date, or the extended due date, except:

• Items listed in IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status

• Taxpayers whose marriage was annulled or the subject of a court order holding that no valid marriage ever existed

Note: If the claim is unallowable and there is an E- freeze on the account, follow procedures in IRM 21.5.6.4.9(2), E- Freeze.

Note: Follow IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, for other disallowance scenarios.

(3) For claims that meet the exceptions in paragraph 2 above, if the taxpayer does not provide the proper documentation such as court documents showing the marriage was not valid, copy of divorce decree or separate maintenance, documents verifying the taxpayers did not live together during the last six months, such as a lease agreement, utility bills, etc., refer to IRM 21.5.3.4.6.3, No Consideration Procedures.

(4) If the taxpayer has not allocated a previously received refund, return the claim to the taxpayer, and request the allocation. The IRS cannot make the allocation determination of a previously received refund. See the Exception in paragraph 2 of IRM 21.6.1.5.8, Allocating Married Filing Joint Cases, for more information.

(5) When one spouse on a married filing joint return claims their signature was forged, refer the claim to Exam for deficiency procedures. Refer to IRM 21.5.1.5, Correspondence Imaging Inventory (CII) Procedures. ONLY refer claims to Exam when the additional assessment (net tax increase/credit decrease) is at least ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) has at least ≡ ≡ ≡ ≡ ≡ remaining. The net tax increase/credit decrease does not include withholding. Do not send tax decreases or credit increases to Exam, Accounts Management (AM) has the authority to work these cases. If the claim does not meet Exam criteria above, refer to IRM 21.6.1.5.7, Married Filing Joint or Married Filing Separate is Invalid or Filed with Incorrect Status.

(1) If only one taxpayer is requesting the change from married filing joint to married filing separate, single or head of household, and the other taxpayer has income and/or credit:

1. Prepare a return for the secondary taxpayer. Complete the entity, separate income, and tax information on Form 1040.

2. Edit the itemized or standard deduction to correspond with each spouse’s deduction. If one spouse itemizes, so must the other spouse.

3. Edit the withholding to reflect any previously refunded or offset amounts.

   Caution: You must back out offsets if prior to the Return Due Date (RDD).

4. Write the employee’s name and/or employee number on the signature line of the return being input. State the reason for the return (e.g., "Establish separate entity").

5. Forward the unnumbered Form 1040 to Submission Processing for input as an original return. Refer to IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns.

(1) The married filing joint election is potentially invalid if the individuals were not legally married, did not consent to the joint return, or if the return contains a forged signature.

(2) Allow claims if the marriage was not legal for federal tax purposes (even if the claim is received after the due date) if the following is present:

• Verification, such as court documents showing the marriage was not valid for the tax period involved: copy of divorce decree or separate maintenance; documents verifying that the taxpayers did not live together during the last six months of the tax year, such as a lease agreement, utility bills, etc.; or an affidavit, signed and sworn under penalty of perjury, stating the marriage does not exist.

• Allocation of all return income, credits, and payments, refer to IRM 21.6.1.5.8, Allocating Married Filing Joint Cases.

(3) When one spouse on a married filing joint return claims they did not consent to the joint filing, or their signature was forged, refer the claim to Exam for deficiency procedures. Refer to IRM 21.5.1.5.2(5), Cases Currently Assigned in CII. ONLY refer claims to Exam when the additional assessment (net tax increase/credit decrease) is at least ≡ ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) has at least ≡ ≡ ≡ ≡ ≡ ≡ ≡ remaining. The net tax increase/credit decrease does not include withholding. Do not send tax decreases or credit increases to Exam because, Accounts Management (AM) has the authority to work these cases. If the claim does not meet Exam criteria above, follow the If/Then chart below:

(4) If an Economic Impact Payment (EIP) refund was issued from the primary account and the secondary taxpayer is claiming that the return is invalid,

1. On the primary account, refer to IRM 21.6.3.4.2.13.3, Economic Impact Payments - Manual Adjustments, to correct the module.
   

2. On the secondary account, no action is needed. The taxpayer can claim the Recovery Rebate Credit on the tax return.

(5) If an EIP refund was issued from the primary account, the primary taxpayer is claiming that the return was invalid and the secondary taxpayer received and kept the entire EIP refund,

On the primary account, refer to IRM 21.6.3.4.2.13.3, Economic Impact Payments - Manual Adjustments, to correct the module.

(6) If the change from married filing separate to single is due to a clerical error and does not result in a change to tax, credits, etc., allow the change.

(1) Allocation means the taxpayer must designate/show which wages, deductions, withholding, EITC, tax liability, etc., belong to each taxpayer:

• The allocation is necessary to determine the amount of overpayment due each taxpayer

• Rev. Rul. 74-611 indicates married taxpayers (primary and secondary) who file a married filing joint return have a separate interest in the overpayment

(2) Return the claim to the taxpayer if a determination cannot be made because the taxpayer does not submit an allocation. Refer to IRM 21.5.1.4.3, Incomplete Inquiry.

(3) Accept the allocations as specified below:

(4) The separate tax method allocates liabilities by dividing the married filing joint liability into separate liabilities:

• Determine each taxpayer’s separate tax liability

• Divide one taxpayer’s separate tax liability by the sum of both separate liabilities to determine the ratio (xxx) attributable to each taxpayer

• Multiply one taxpayer’s ratio times the married filing joint tax to determine that spouse’s share of the joint liability

(5) Subtract the taxpayer’s share of the new married filing joint liability from the taxpayer’s separate payments to arrive at the overpayment amount:

• The refund from the claim is limited to this amount

• The overpayment is also limited to the amount of tax actually paid by the taxpayer

• Compute the tax at the MFS rate

• Payments and deductions may be allocated differently in community property states

(6) Manually refund the proportionate share of the overpayment to the spouse filing the claim.

(1) Using account indicators, route the claim to the Collection Operations when one spouse is discharged of a tax liability in a bankruptcy proceeding and a married filing joint return was filed.

(1) Registered Domestic Partners (RDPs) must each report half of their community income. A partner who amends a previously filed return to claim a credit or refund of tax paid must file the amended return before the Statute of limitations expires to receive the credit or refund. Refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues.

(2) Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States, is used to allocate income for community property states. The Form 8958 can be filed electronically.

(3) A RDP claim for refund must include:

• the Form 8958, or

• a copy of the partner's return showing the allocation, and

• a reference on the claim that the taxpayer is a RDP

(4) For a RDP claim with a tax increase/assessment without the documentation in (3) above, follow procedures in IRM 21.5.3.4.1, Tax Increase or Credit Decrease Processing.

(5) If a RDP files an amended return, there is no need to verify if the other domestic partner filed a claim to reduce or claim additional income.

(6) When adjusting the partner's account with a tax decrease, reducing withholding or previous credit claimed, input Transaction Code (TC) 170 for zero (.00) to restrict any erroneous Estimated Tax (ES) penalty assessment.

(7) Amended returns claiming a Net Operating Loss Carryback/Carryforward as Community Property Income, refer to IRM 21.5.9.5, Carryback Processing.

(1) For tax years 2017 and prior, a taxpayer is allowed only one exemption regardless of the number of returns on which they are listed. A dependent child may not claim their exemption when filing a return if claimed on the parent’s return. Refer to IRM 21.6.1.6, Exemption/Dependent Procedures, when working on tax years 2018-2025.

(2) A taxpayer must furnish a correct/valid Taxpayer Identification Number (TIN) for every exemption/dependent claimed. This number may be a Social Security Number (SSN), an Individual Taxpayer Identification Number (ITIN), or an Adoption Taxpayer Identification Number (ATIN). Refer to IRM 3.21.263, IRS Individual Taxpayer Identification Number (ITIN) Real-Time System (RTS), and IRM 3.13.5.74, Assignment of Internal Revenue Service Numbers (IRSNs), for additional information.

(3) Taxpayers are considered to have omitted a correct TIN if Social Security Administration (SSA) information indicates the social security number being used belongs to an individual who was deceased prior to the beginning of the tax year for which it is being used or if the social security number or ITIN being used does not match the name of the taxpayer based on SSA or IRS records.

(4) Dependents, such as children and other relatives, must meet certain eligibility criteria. A dependent is either a qualifying child or a qualifying relative. Refer to Publication 17, Your Federal Income Tax (For Individuals), Part One, Chapter Three, Dependents, for dependency qualifications.

(5) Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or similar statement must be attached to the taxpayer’s return when a non-custodial parent claims a child as a dependent because of the custodial parent’s release of claim to the child, or a custodial parent claims a child as a dependent as a result of a revocation of a release of claim to the child.

(6) The IRS allows primary, secondary, and dependent taxpayers identified as having a religious or conscience-based objection, even if the taxpayer fails to provide a valid TIN. If the taxpayer was NOT allowed during original processing, adjust the account.

(7) The IRS initially disallows any TIN related credits claimed on a return indicating a religious or conscience-based objection to providing TINs for the “qualifying” dependent(s). Beginning in TY 2018, this includes Amish, Mennonite, and Form 4029 filers claiming the Child Tax Credit. Taxpayers receive a math error notice stating their TIN related credit was not allowed because a TIN was not furnished.

(8) In some cases, taxpayers claiming a religious or conscience-based objection to obtaining a TIN are allowed the dependent/exemption or related credits when they provide specific documentation. Refer to IRM 21.6.3, Credits, for information on specific credits, when complete information is received (i.e., TINS and documentation requested in Letter 3050C, EIC/CTC/ODC/Dependent/Child & Dependent Care Credit - Math Error).

Note: Do not allow EITC unless the taxpayer(s) and qualifying dependent(s) have a valid SSN and all other qualifications are met. For Tax Years 2018-2025, do not allow the CTC unless the qualifying child(ren) has a required SSN, and all other qualifications are met.

1. If the taxpayer contacts IRS stating they have a religious or conscience-based objection to providing a TIN, follow the procedures listed below:

If contact is by	And	Then
Phone	Taxpayer inquires regarding TIN for dependent/exemption.	Inform the taxpayer they should receive a letter within 10 - 15 days instructing them to provide specific information. Taxpayer should provide the required documentation and respond using the enclosed envelope within 30 days of receipt of the letter. Initiate a Letter 3050C, include paragraph 9 and include the information in the Note below this table.
Walk In	Taxpayer inquires regarding TIN for dependent/exemption. The taxpayer is providing the information listed in the Letter 3050C. The information provided is incomplete.	Using the Letter 3050C include the information in the Note below this table and inform the taxpayer what is required for us to allow the dependent/exemption. Review the information for completeness and make the appropriate account adjustment (follow local procedures for account adjustment). Reiterate to the taxpayer what is required as listed in the Letter 3050C, paragraph 9.
Paper	The taxpayer is responding to a math error. The taxpayer is providing the information listed in the Letter 3050C, paragraph 9. The information provided by the taxpayer is incomplete.	Initiate a Letter 3050C and include the information in the Note below this table. Suspend the case following normal procedures. Review the information for completeness and make the appropriate account adjustment. Disallow the dependent/exemption following normal claim disallowance procedures.

Note: When initiating a Letter 3050C include the following, when applicable: "If you have a religious or conscience-based objection to securing a Taxpayer Identification Number for the dependents or exemptions, forward a statement outlining your objection and documentation from the following lists to verify the dependents."

(1) For tax years ending before Jan. 1, 2018, the taxpayer is allowed one exemption for each qualifying person listed on the return. Allow one exemption for:

• The primary taxpayer

• The secondary taxpayer

• Each qualifying child

• Each qualifying relative

(2) The exemption allowance is different for each year. Refer to the year of the tax return for the correct amount:

(3) There is no personal exemption deduction for the tax years 2018 to 2025. Due to the Tax Cuts and Jobs Act of 2017, this exemption is suspended for taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2026.

(1) The personal exemption deduction begins to phase out when the Adjusted Gross Income (AGI) exceeds the following amounts:

(2) For tax years 2017 and prior, the amount for each exemption is reduced by 2 percent for each $2,500 ($1,250 for MFS), or fraction thereof, more than of the applicable threshold.

(1) If a valid Taxpayer Identification Number (TIN) is not provided for the primary taxpayer, the secondary taxpayer, or the dependents, the exemption/dependent is disallowed for the person listed with no valid TIN. The IRS considers a TIN missing if it isn't provided or if it is obviously incorrect. If the exemption/dependent was disallowed during initial processing, a math error taxpayer notice code (TPNC) appears on the module.

(2) For tax year 2017 and prior, verify the exemption field on CC TXMOD, RTVUE, and IMFOL screens:

1. Verify the number of exemptions the taxpayer was allowed during original processing.

2. Divide the total exemption amount shown on RTVUE-PER COMPUTER by the exemption amount for the tax year in question.

Note: Does not apply to phase-out situations.

3. If an adjustment is made for exemptions, input Item Reference Number (IRN) 887 if the new total number of exemptions differ from the number shown in the exemption field on CC TXMOD/IMFOL.

(3) If the taxpayer submits correspondence indicating someone used their TIN or the TIN of a dependent, refer to IRM 25.23.4.4, Taxpayer Inquiries Involving Identity Theft (IDT).

(4) Taxpayers may call or correspond regarding Individual Taxpayer Identification Numbers (ITINs), refer to procedures in IRM 3.21.263.8, Accounts Management (AM). For ITIN math error procedures, refer to IRM 3.21.263.8.7, Math Errors. For invalid TIN, refer to IRM 21.4.1.5.4, Invalid Taxpayer Identification Number.

(5) When working math error returns processed by Austin Submission Processing ITIN unit indicating the valid/invalid ITIN(s), follow procedures above.

(6) If a Form W-7, Application for IRS Individual Taxpayer Identification Number, is attached to the Form 1040-X, or the taxpayer requests additional information to complete processing Form W-7, refer to the following address:
Austin Submission Processing Campus
ITIN Operation Stop: AUSC 6090 P.O. Box 149342
Austin, TX 78714-9342

(1) For tax years 2017 and prior, a taxpayer may respond to a math error concerning the number of exemptions allowed on the original return or the taxpayer may file a claim (amended/duplicate/informal) to request a change to exemptions. For tax years 2018-2025, refer to IRM 21.6.1.6, Exemption/Dependent Procedures.

(2) If taxpayer is adding or deleting an exemption/dependent, refer to IRM 21.6.3.4.2.12.6, Premium Tax Credit Amended Returns, to determine if there is a potential impact to the Premium Tax Credit (PTC).

(3) Verify the validity of the name(s) and TIN(s) submitted by the taxpayer. For a math error reply, the dependent with the missing/invalid TIN is recorded on RTVUE:

1. Use CC INOLE/NAMES to verify the SSN and name.

2. Use CC INOLE/NAMES or access ITIN RTS refer to IRM 3.21.263.9, General Instructions for ITIN Navigation (ITIN RTS), to verify ITIN and name.

3. Use CC ATINQ to verify the ATIN and name.

4. Verify the name and TIN (and date of birth for EITC and Child Tax Credit). For date of birth, ensure the information provided by the taxpayer is accurate. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

5. On RTVUE, the dependent field is followed by an indicator showing which dependent(s) was included in the math error condition:
   "2" means "account is not present on the NAP"; and,
   "9" means "invalid TIN".

6. Refer to IRM 3.13.5.19, Social Security Administration (SSA) Requirements, and IRM 3.13.5.16, Weekly NEW SSA Name Control (N/C) Indicator Files, for correction of entity issues involving missing/invalid TINs for the primary and/or secondary taxpayer.

(4) If taxpayer makes a statement, asks a question, or indicates a misunderstanding of an exemption/dependent math error notice:

• Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices

• Follow "no consideration" procedures in IRM 21.5.3.4.6, No Consideration and Disallowance of Claims and Amended Returns, if a claim or amended or duplicate return is included with statement

• Close the case with a Letter 3050C explaining the exemption/dependent requirements

(5) If taxpayer responds to a math error notice within 60 days, refuses to obtain/provide the correct information and requests the account adjustment be made (after a full explanation of the legislative provisions was given), follow unsubstantiated math error procedures in IRM 21.5.4.5.5, Math Error Unsubstantiated Protest Processing.

(6) When changing the exemptions/dependents (or adjusting credits requiring TIN validation for allowance), refer to IRM 21.6.1.7, Command Code DUPED and DDBCK, for more information.

(1) The Individual Taxpayer Identification Number (ITIN) is a nine-digit number issued by the Internal Revenue Service (IRS) to individuals who are required, for U.S. tax purposes, to have a U.S. taxpayer identification number, but who do not have, and are NOT eligible to obtain, a social security number (SSN) issued by the Social Security Administration (SSA).

(2) The ITIN is for federal tax purposes ONLY. It does NOT entitle the holder to social security benefits and does NOT change their immigration status or their right to work in the United States.

(3) An ITIN is formatted like an SSN. The ITIN begins with a "9" and has a unique identifying 4th and 5th digit range of:

• 50-65

• 70-88

• 90-92

• 94-99

(4) Income earned in the United States is taxable regardless of the individual’s immigration status. Individuals earning income in the United States and have NOT been granted work authorization by the United States Citizenship and Immigration Services (USCIS) must meet their tax obligations.

(5) To obtain an ITIN, an individual must complete the Form W-7, Application for IRS Individual Taxpayer Identification Number, or the Spanish version, Form W-7SP, and submit the required supporting identification documentation along with their valid U.S. Federal income tax return or exception documentation, as required. For assistance, applicants may make an appointment for their nearest TAC office or refer to IRS.gov for an IRS Certifying Acceptance Agent.

(6) ITIN applicants must show they need an ITIN for a Federal income tax purpose. A U.S. Federal income tax return must be attached to the ITIN application unless the applicant meets one of the five exceptions discussed in Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number (ITIN).

(7) All ITIN applicants must submit supporting identification documentation. The 13 acceptable identification documents are listed in the instructions for the Form W-7 and Form W-7SP, Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number (ITIN), and in IRM 3.21.263, IRS Individual Taxpayer Identification Number (ITIN) Real Time System (RTS).

(8) Follow ITIN procedures in IRM 3.21.263.8, Accounts Management (AM). Expired ITINs refer to procedures in IRM 3.21.263.8.2, Inquiries Regarding Expiration of ITIN/Letter 5821 or CP 48, or IRM 3.21.263.2.3, Request to Reactivate an ITIN, if ITIN was deactivated/expired in error. Status of application refer to IRM 3.21.263.8.3, Inquiries Regarding Status of Application.

(1) When the primary taxpayer’s TIN is invalid, the taxpayer may receive a CP 54 notice (see descriptions in 2 below), and/or a math error notice. Written responses to CP 54 notices that do not involve Earned Income Tax Credit (EITC) math errors are worked in Entity. If taxpayer attaches correspondence in response to a math error notice or attaches correspondence inquiring about a math error issue, Accounts Management works the response.

(2) There are four CP 54 notices:

1. CP 54B, Additional Information Needed Regarding Name and Social Security Number - Refund Delayed

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

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

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

(3) Process CP 54 responses with math error involvement as follows:

(4) Taxpayer may provide a different name or primary TIN:

• Research CC INOLE/NAMES if the number is an SSN/ITIN

• Research CC ATINQ if the number is an ATIN

(1) To change the exemptions/dependents, the taxpayer must:

1. Meet the dependency test for the change.

2. Submit a valid SSN, ITIN, or ATIN for each exemption/dependent.

3. Provide the exemption/dependent information.

(2) Changes to the exemptions/dependents change the taxable income:

1. For tax years 2018-2025, refer to IRM 21.6.1.6, Exemption/Dependent Procedures. To change the dependents, an adjustment may be needed to tax, taxable income, credits, and CC DDBCK or CC DUPED.

   Example: Joe Moss, Jr. filed the original Form 1040, U.S. Individual Income Tax Return, for tax year 2018 and did not check the box to indicate that they were a dependent of another taxpayer. Their parents also filed their original Form 1040 claiming Joe, Jr. so that they could get the Child Tax Credit. Joe, Jr. qualifies as their dependent because they are 16, lived at home for the full year of 2018, and their parents provided more than 50 percent of their support. Joe, Jr. must file a Form 1040-X to amend the original return. Joe, Jr. uses the Standard Deduction Worksheet for Dependents that is included in the instructions for the Form 1040 to compute the standard deduction. To process the Form 1040-X, input a TC 290 for the amount of tax change and IRN 886 for the amount of taxable income change with RC 075. IRN 887 is NOT used for 2018-2025 adjustments. Update the Dependent Status Indicator on CC DUPED as needed, see IRM 21.6.1.7.1, Command Code DUPED, for instructions.

2. For tax years 2017 and prior, change the exemptions as follows:

• Adjust the number of exemptions with IRN 887.

  Note: Do not reduce the exemptions below zero.

• Decrease the exemptions with (-).

• Adjust the taxable income with IRN 886.

  Note: Do not decrease the taxable income below zero (00).

• Use RC 006 and the appropriate SC and blocking series. See IRM 21.6.7.4.1, Source and Reason Codes - CP 21/CP 22A Notices, for more information.

(3) Review the claim for Examination criteria:

1. Refer to Examination for Category-A (CAT-A) review, if necessary.

2. Refer to IRM 21.5.3, General Claims Procedures, for CAT-A criteria.

(4) When changing the number of exemptions/dependents, refer to IRM 21.6.1.7, Command Code DUPED and DDBCK, for procedures on updating the Duplicate TIN database (DUPOL).

(5) Refer to IRM 21.5.3.4.6, No Consideration and Disallowance of Claims and Amended Returns, for claim rejection and disallowance information.

(1) For tax years 2018-2025, due to TCJA, Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, is used for dependent credit documentation. For tax years ending on or before Dec. 31, 2017, the form is used for exemption documentation.

(2) A custodial parent may release their claim to a child’s exemption/dependent credit. The custodial parent:

1. Completes and signs Form 8332, or similar statement.

   Note: Per Treasury Regulation Section 1.152-4(e)(1)(ii), a written declaration not on Form 8332 must conform to the substance of that form. A court order or decree or separation agreement may not substitute for a Form 8332. If the divorce decree or separation agreement went into effect after 1984 and before 2009, the non-custodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Refer to Publication 501, Dependents, Standard Deduction, and Filing Information.

2. Gives the form to the non-custodial parent to claim the exemption/dependent.

3. Releases the exemption/dependent for a single year, a specified number of years, or all future years.

(3) The non-custodial parent must attach a copy of the Form 8332 to the return for each year the non-custodial parent claims the child as a dependent.

(4) Upon receipt of a math error notice response concerning a missing or incomplete Form 8332 (or similar statement) take the following actions:

1. Review Command Code (CC) RTVUE to determine if sufficient information is available to adjust the account.

2. Secure the related return, if needed, to determine the reason for issuance of the notice.

3. Correspond with the non-custodial parent, enclose a blank Form 8332.

4. Request taxpayer to complete and return the Form 8332, signed by the custodial parent.

5. Tell the taxpayer that the IRS reconsiders the request when the appropriate information is provided. Refer to IRM 21.5.3.4.6, No Consideration and Disallowance of Claims and Amended Returns.

(5) Upon receipt of the completed Form 8332:

1. Reopen the case if not assigned on CII. If not on CII, follow procedures to scan the Form 8332; create a new CII case if necessary. For instructions, see the CIS CSR User Guide.

2. Secure the return, if needed, to verify taxpayer submitted the appropriate information.

3. If the response does not clearly show the non-custodial parent is entitled to the exemption/dependent, send the correspondence and tax return to Examination.

(6) If taxpayer provides the appropriate documentation, and the tax year is prior to 2018, allow the exemption as follows:

1. Decrease the tax (Transaction Code 291), but not below zero.

2. Decrease the taxable income (item reference number 886), but not below zero.

3. Increase the exemptions (item reference number 887).

4. Input Reason Code 006 and the appropriate blocking series and source code. See IRM 21.6.7.4.1, Source and Reason Codes - CP 21A/CP 22A, for more information.

5. Update the Return Processable Date (RPD) if the Form 8332 is a late reply to a "U" coded return (RPD 99999). Refer to IRM 21.5.1.4.2.10, Late Replies.

(7) If the taxpayer provides the appropriate documentation, and the tax year is 2018-2025, input the adjustment to correct tax and dependent credits, if needed. Update the Return Processable Date (RPD) if the Form 8332 is a late reply to a U coded return (RPD 99999). Refer to IRM 21.5.1.4.2.10, Late Replies.

(1) CC DUPED is used to update dependent credit(s) in the Duplicate TIN database (CC DUPOL) for current processing year returns for:

• CP 09 responses

• Responses (via correspondence, amended return, or by phone) to TIN related math errors when CC DDBCK cannot be used. Refer to IRM 21.6.1.7.2, Command Code DDBCK, for the list of exceptions of when CC DDBCK cannot be used.

• Claims (amended return/Form 8862, Information to Claim Earned Income Credit After Disallowance), when CC DDBCK cannot be used

(2) CC DUPED should not be used to update CC DUPOL if the taxpayer is:

• Claiming EITC for self/spouse only, or

• Requesting a filing status change which does not affect credit allowance

  Note: If EITC was disallowed during original processing but other credit amounts were not addressed due to no effect upon taxable income or total tax, determine if the TIN was used for these allowances and update CC DUPOL accordingly.

(3) CC DUPED does not replace masterfile account action. Appropriate account transactions are still required.

(4) Do not disclose CC DUPED data. Taxpayers are not entitled to know who else has claimed the dependent for credits.

(5) Refer to IRM 2.4.53, Command Code DUPED, for information on the input of the command code.

(1) Dependent credit(s) are updated in CC DDBCK for the current processing year and two years prior. Use CC DDBCK/DUPED to validate the spousal TIN when a credit is claimed for the spouse; it is not needed when the ONLY change is for a filing status change.

(2) Instructions for additional action are given by CC DDBCK after it is input for the following:

• Amended returns when credits for dependents requiring TIN validation are being allowed/removed.

  Note: Enter only the ACTC and/or AOTC amounts that may be included on Line 15, Form 1040-X in the CC DDBCK Input Screen for RefCR (L15).

• Responses (via correspondence, amended return, or by phone) to TIN related math errors.

• Responses to math error 653, 814-816, or 819-824, whether a Form 8862 is attached to a Form 1040-X or is filed alone. Refer to IRM 21.6.3.5, Credit Recertification, for more information.

(3) Always use CC INOLES to verify the TIN/NAME/DOB and TIN assignment date before using CC DDBCK. Even though CC DDBCK validates age, TIN, and name information when the taxpayer is claiming additional dependents and/or credits requiring TIN validation, it will not provide an error message unless ACTC, AOTC, CTC, or EITC is involved and then only if one of the math errors listed above is present or the taxpayer is claiming one of those credits for the first time. If EITC is claimed and TIN issue date is after the RDD, refer to IRM 21.6.3.4.2.7.10, Earned Income Tax Credit (EITC) - Claims.

(4) When processing an amended return/Form 8862 and ACTC, AOTC, CDCC, CTC, and/or EITC, is being increased, CC DDBCK identifies account conditions which require Exam involvement. If credit recertification is required, see IRM 21.6.3.5, Credit Recertification.

(5) Exceptions for when CC DDBCK cannot be used:

(6) CC DDBCK does not update CC DUPOL on cases when the response includes "Follow IRM", "Selected", or "Send as CAT-A".

1. If working a current processing year claim and CC DDBCK's response includes "Follow IRM" and following the applicable IRM procedures results in the adjustment being made, CC DUPED must be used to update CC DUPOL. Example of a CC DDBCK response "ITIN - Follow IRM", refer to IRM 21.6.1.6.4, Missing or Invalid Exemption/Dependent TINs Procedures.

2. If working a current processing year claim and CC DDBCK's response is "Selected", do not use CC DUPED to update CC DUPOL. The claim is being referred to Examination for further review.

3. If working a current processing year claim and CC DDBCK's response is "Send as CAT-A" and the claim is later returned by Examination "accepted as filed", CC DUPED must be used to update CC DUPOL.

4. If working a current processing year claim that is timely filed prior to April 15 and CC DDBCK's response is "Date Cannot be a Future Date", or “Date Earlier Than Return”, use the current date for the input.

(7) Input Category Code "EICN" in the category code field when working a case and:

• EITC is not involved (amended return/CP 36/DUPF)

• EITC is decreased (amended return/CP 36/DUPF)

• Correcting Non-EITC TIN related math error based on taxpayer correspondence, phone call, or amended return

• Claim Amount "0"

• Schedule C (SCHED-C) indicator "N"

• AGI (L1) INC/DEC "0"

• EIC (L13) INC/DEC "0"

• RefCR (L15) Amount of ACTC and/or AOTC

(8) For cases involving an increase to EITC, refer to IRM 21.6.3.4.2.7.14, EITC and Command Code DDBCK, for information on the appropriate "Category Code", "Claim Amount", and "SCHED-C" indicator to enter.

(9) Take the following account action per CC DDBCK:

(10) Response screens addressing the action to be taken displays after the appropriate data is input. For CC DDBCK input, refer to IRM 2.4.58, Command Code DDBCK/DDBCV/DDBCS, for additional information.