3.28.4. Identity Theft Returns for Submission Processing

(1) Confirmed Identity Theft victims are provided an Identity Protection PIN (IP PIN) to use when filing their future returns. If a paper return is filed without the required IP PIN, the return unposts UPC 147 RC 0. The unpostable returns are routed and maintained in the Generalized Unpostable Framework (GUF) system. After research, unpostable resolution codes (URC) are input to resolve the unpostable condition.

(2) Situations occur where a return needs to be moved (reversed) from MFT 32 to MFT 30 in order for a refund to be processed. The SP IDT function processes requests for reversal only when the return was originally moved by SP IDT or the ERS/Rejects function input special processing code (SPC) "T".

(1) Authority for these procedures is found in the following sections of the Internal Revenue Code (IRC) and their corresponding Treasury regulations:

• IRC 6201(a)

• IRC 6402(a)

(2) All Policy Statements for Submission Processing are contained in IRM 1.2.1, Servicewide Policies and Authorities, Servicewide Policy Statements.

(1) The Director of Submission Processing is responsible for policy related to this IRM.

(2) The Submission Processing Input Corrections Operations Manager is responsible for monitoring operational performance for their operation.

(3) The Manager/Team Lead is responsible for performance monitoring and ensuring employees have the tools to perform their duties.

(4) The tax examiners are responsible for following the instructions contained in this IRM and maintain updated IRM procedures.

(1) Program Goals: Review unpostable returns and ensure that the valid returns are posted to the taxpayer’s account and the fraudulent returns are posted to MFT 32.

(2) Program Reports: Generalized Unpostable Framework (GUF) reports are used for inventory management, work assignment and follow-up. These reports are stored on the Control-D system. Information about specific reports is found in IRM 3.12.32.20, GUF Listings and Reports - General Information and Distribution.

(3) Program Effectiveness: The examiners’ case work is subject to Quality Review conducted using the Embedded Quality for Submission Processing (EQSP) System and Measured Employee Performance System (MEPS).

(4) Annual Review: Annually review the processes outlined in this IRM to ensure accuracy and promote consistent tax administration.

(1) The table lists commonly used acronyms.Acronyms

(1) The following websites and electronic tools are used to resolve the UPC 147 cases:

• Integrated Automation Technologies (IAT)

• Integrated Data Retrieval System (IDRS)

• Servicewide Electronic Research Program (SERP)

• Accounts Management Services (AMS)

(2) The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Pub 5170, Taxpayer Bill of Rights and TBOR link https://irssource.web.irs.gov/Lists/General%20News/DispItemForm.aspx?ID=126.

(1) Service center directors, headquarter branch chiefs, and headquarter analysts do not have the authority to approve deviations from IRM procedures. Any request for an exception to, or deviation from, an IRM procedure must be elevated through appropriate channels for executive approval. This ensures other functional areas are not adversely affected by the change, and that it does not result in disparate treatment of taxpayers.

(2) See specific guidelines in IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process. Submit IRM deviation requests in writing, following instructions in IRM 1.11.2.2.4, When Procedures Deviate from the IRM.

(3) The Field Director must sign the request, submit the request through headquarters IRM Coordinator for executive level program owner review and approval. Deviations may begin after the request is approved.

(1) While working assigned cases, SP employees may come across some accounts that are blocked on IDRS. These accounts can be identified by an IDRS security violation message: "Unauthorized Access to This Account". When employees attempt to access a blocked case using the Corresponding Imaging Inventory (CII) the error message , "You are not authorized to access this case" will display. Forward the case (e.g., UPTIN screens, correspondence, etc.) to your manager to elevate to Planning & Analysis (P&A) staff. P&A scans the encrypted case to the "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" mailbox to request access to the account. Managers retain the original case in a file awaiting access (can take up to five business days). Once notified access has been granted, the case can be processed following applicable procedures.

(1) The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers whose problems with the IRS are causing financial difficulties for the taxpayer, their family, or their business; who have tried but haven’t been able to resolve their problems with the IRS; and those who believe an IRS system or procedure isn’t working as it should.

(2) Taxpayers have the right to a fair and just tax system, which includes the right to assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels. Information on TAS case acceptance criteria and how and when to refer a taxpayer to TAS is available in IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria. TAS criteria includes economic burden, systemic burden, best interest of the taxpayer, and public policy (as determined solely by the National Taxpayer Advocate (NTA).

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

(1) Refer taxpayers to the Taxpayer Advocate Service (TAS) when the contact meets TAS criteria, see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, and you can’t resolve the taxpayer’s issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. The taxpayer should be advised that TAS is available if the taxpayer is not satisfied with the service he or she received. Provide the taxpayer with the number for the NTA toll-free case intake line, 1-877-777-4778 or TTY/TDD 1-800-829-4059. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.5, Same-Day Resolution by Operations.

(2) An IRS employee should make a referral to a TAS office if the employee receives a taxpayer contact and cannot initiate action to resolve the inquiry or provide the relief requested. A taxpayer does not have to specifically request TAS assistance to be referred to TAS. When appropriate, IRS employees advise taxpayers of the option to seek TAS assistance. It is important that all IRS employees handle potential TAS cases with the taxpayer's best interest in mind. Refer also to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for more information.

(3) When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward it to TAS in accordance with your local procedures. Check the TAS box on AMS, if applicable.

(4) Do not refer the following types of cases to TAS:

1. Cases where the taxpayer’s complaint or inquiry only questions the constitutionality of the tax system; or

2. Cases where the focus of the taxpayer's inquiry is solely to employ frivolous tax strategies to avoid or delay filing or paying federal taxes

Note: TAS Case criteria is defined in IRM 13.1.7.2, Introduction to TAS Case Criteria.

(1) Each case referred by Unpostables may contain a UPC 147 RC 0 Comparison Checklist,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) For paper returns, Unpostables forwards the entire return with any attachments, the Form 4251, Return Charge-Out, and the checklist to SP IDT.

(3) For unpostable 147 RC 0 cases received without a return, SP IDT will review the unpostable without the return. SP IDT will determine and initiate any document requests in order to resolve the unpostable condition. Refer to IRM 3.12.179.8.

(4) Do not detach any identity theft substantiation documentation received with UPC 147 RC 0. Review the documentation to make a determination of the true owner of the social security number. Substantiation documentation includes Form 14039, Identity Theft Affidavit, police reports, copies of identification cards, etc.

(1) Use the following OFP when working UPC 147 RC 0 cases:

• 290 -40012 for research, review and resolution of open UPC 147 RC 0 cases

• 550-40012 for clerical activities related to open 147 RC 0 cases

• 710-40000 for referrals on closed UPC 147 RC 0 cases (e.g., MFT 32 reversals)

• 290-36720 for working OARS.

(1) The following command codes (CCs) are used for closing unpostable cases.

1. Use CC UPTIN to display all open unpostable cases for a specific taxpayer identification number (TIN). CC UPTIN is used to get the cycle sequence number for a case.

2. Use CC UPDIS to display unpostable records. When CC UPDIS is input with cycle sequence number, the response screen display shown will be CC UPRES.

3. Use CC UPRES to close the unpostable case. CC UPRES is displayed when CC UPDIS is input.

4. Use CC UPCASZ to enter remarks. Overlay CC UPRES with CC UPCAS using Definer “Z”.

(2) For more information on the General Unpostables refer to IRM 3.12.32.

(1) Make the determination of whether the unpostable return was filed by the owner of the SSN or not. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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(2) Research using CC ENMOD, IMFOL, TRDBV, DDBKD, RTVUE, NAMES, INOLE, DUPOL, FFINQ, REINF, IRPTR, etc., as applicable. See the IDRS Command Code Job Aid for more information on each Command Code.

(3) Research for Statute Criteria. IRM 25.6, Statute of Limitations, provides guidelines for the clearing and processing of Statute-imminent cases. Different methods are used to determine the Assessment (ASED), Refund (RSED), or Collection (CSED) Statute expiration dates. The Unpostable functions should familiarize themselves with the information that relates to an Unpostable condition. However, the Unpostables function must clear all statute-imminent cases other than Transaction Code (TC) 291/TC 301 decreases through the Statute function. Decreases should be forwarded to the Accounts Management Correspondence section whether the statute is imminent or expired.

(4) Compare data from the return and attachments to prior years posted return history to determine if the return was submitted by the SSN owner. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(5) Review the account and the returns to determine what information matches the previous year's identity theft return and what matches the return filed by the SSN owner.

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(6) Check CC IRPTR (if available) to verify if the information on the return matches IRP documents. Take the following into consideration:

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(10) All the information gathered through the above research should be weighed, to determine whether the return was filed by the SSN owner or not. Follow the procedures in IRM 3.28.4.4.5, Determination and Closure Instructions, to close the unpostable according to the determination.

(11) MFT 32 has been established to contain tax returns that have been identified as identity theft or possible identity theft. Input TC 971 AC 111 on MFT 30 with the document locator number (DLN) of the identity theft or possible identity theft return in the MISC field to move to MFT 32. Only TC 976 posts to MFT 32. A return moved to MFT 32 can be viewed using CC TRDBV..

(1) A control base is input when the taxpayer goes through the Taxpayer Protection Program (TPP) authentication process. Review the unpostable module for a control base (open or closed) to determine the appropriate resolution action.

1. If IDRS number "1487333333", in "M" status, with activity code "NONIDT" and category code "MISC", is present follow IRM 3.28.4.4.5 Determination and Closure Instructions.

2. If IDRS number "1487311111", in "M" status, with activity code "IDT" and category code "MISC" is present follow IRM 3.28.4.4.5 Determination and Closure Instructions.

(2) Follow the steps below when it is determined that the return was filed by the true SSN owner to close the unpostable.

(3) Follow the steps in the table below to close the unpostable when it is determined the return was not filed by the actual SSN owner.

(1) Input TC 971 AC 506 when the UPC 147 resolution resulted in determination of identity theft. For more information, see IRM 25.23.2-8, IMF Only TC 971 AC 506 – IRS Determined Tax-Related Identity Theft Case Closure.

(2) Prior to marking the taxpayer's account with a TC 971 AC 506 the function MUST ensure all corrective actions have been taken. Use the following If and Then chart to take the appropriate corrective action.

(3)

(4)

(1) Send various documents received to Files, including responses to correspondence and duplicate returns.

(2) Use the documents to determine the identity of the return filer. Once the case is resolved, attach the documents to the return and send to Files.

(3) If the return was e-filed, follow the instructions in paragraph four below for sending the documents to Files.

(4) Use the IAT tool, REQ54 Tool-Adjustment Calculator to input the TC 290 on IDRS. This generates a non-refile DLN and creates Form 12249, Adjustment Document, to attach to the documents. Use the following information to complete fields on the tool.

1. Blocking Series (BLK) as "05"

2. Category Code “”MISC”.

3. IRS Received Date (IRS-RCVD-DT) as stamped on the document. Use due date of return if no date stamp.

4. Transaction Code (TC) as "290"

5. Transaction amount (AMT) as "00"

6. Hold-CD as "3"

7. SOURCE-DOCUMENT-ATTACHED as "Y"

8. REMARKS as "Attachment only"

(5) Prepare a routing form and send the documents with the Form 12249 to Files within 5 days of input. Monitor the TC 290 until posted.

(1) Taxpayer Advocate Service (TAS) Operations Assistance Requests (OARs) may be received on closed UPC 147 RC 0 cases that have a -R freeze input by the SP IDT function (return was not moved to MFT 32).

(2) Review the return and account information again. Re-check CC IRPTR to see if any wages, withholding(s), Form 1099s, Form 1042-S, etc., has been added since the case was closed. Use the new information in making a determination.

(3)

(1) For cases where the return originally unposted as UPC 147 RC 0 on MFT 30, research to verify whether the return was filed by the social security number (SSN) owner or not. Review any information included with the referral or OAR and check AMS or CII for relevant notes and documents.

(2) Take the following actions to move the return to MFT 30:

(3) If the return unposts on MFT 30 take the following steps:

(4) Take the following action once the return has posted to MFT 30.

(1) ERS/Rejects moves the current year returns to MFT 32 with SPC" T" when a filer does not reply timely to correspondence or the taxpayer responds that the return does not belong to them when corresponded for Error Code (EC) 029. SPIDT may receive requests to reverse the MFT 32 when the taxpayer responds saying that the return was actually filed by them. Operations Assistance Requests (OARs) or Form 4442, Inquiry Referrals, may also be submitted to SP IDT for a return moved to MFT 32 with SPC "T".

(2) Review the documentation provided for information that verifies that the return was filed by the taxpayer. If estimated payments were not reported, verify whether the taxpayer made the payments or whether the payments were applied to the correct tax period or account. Research using RTR, IMFOL, IRPTR, etc. See IRM 3.12.3.5.9.4, Reply to Correspondence (EC 029) for more information on reviewing the reply to correspondence. If you determine that the payment does not belong to the taxpayer, but you can determine where the payment should be posted, transfer the misapplied credit to the correct account.

(3) If you cannot determine the correct payer, transfer the payment to the Unidentified Remittance File (URF) or the Excess Collection File (XSF). Use Form 2424, Account Adjustment Voucher to send a payment less than twelve months old to URF. See IRM 3.17.10.3.2, Receiving Unidentified Remittance Cases for instructions on filing out Form 2424, Account Adjustment Voucher. UseForm 8758, Excess Collections File Addition to send a payment older than twelve months to XSF. SeeIRM 3.17.220.2.2.1, Preparation of Form 8758 for instructions on preparing Form 8758.

(1) There are times when a return cannot be systemically moved from MFT 32 to MFT 30: Manually reprocess the return in the following circumstances:

• TC 971 AC 111 continues to unpost

• The return is for tax period 2020 or earlier

(2) Obtain a paper version of the return for reprocessing.

(3) Prepare the return for processing as follows:

1. Do not send Form 1040A, U.S. Individual Income Tax Return or Form 1040-EZ, Income Tax Return for Single and Joint Filers With No Dependents through processing. Convert forms using Form 6114, Prior Year and Conversion Form 1040 Edit Sheet. Staple Form 6114 beneath the PECF areas of the Form 1040A or Form 1040EZ. For more information on conversions, refer to IRM 3.11.3-19, Conversion of TY 2017 - TY 2014 Forms 1040, 1040A, and 1040EZ, Using 2021 Form 6114 and Schedules.

2. Use red ink to edit the return.

3. Identify any posted ES payments not claimed on the return. Determine if the ES payments belong to the return filer.

4. If it is determined the ES payments are misapplied, initiate a credit transfer to post to the correct account/module.

5. If it is determined the ES payments belong to the return filer, edit missing estimated payments on the appropriate line(s) of the return. For TY 2020 returns, Schedule 3, Part II line 9. Form 2019 returns, Schedule 3 line 8.

6. Edit special processing code "SPC B" on the return and edit out SPC “T”, if present.

7. Line through the document locator number (DLN) if present.

8. Edit "SP IDT" in the upper left-hand corner of the return. Do not write "copy" on the return and circle out "copy" or "duplicate" if present.

9. Write - "Do Not Correspond For Signature" at the bottom of the return.

10. Determine the received date using IRM 3.28.4.5, Processable / Unprocessable Returns.

11. When the RPD is required, edit the RPD using Form 3471,in Edit Sheet, MMDDYY format. Staple Form 3471 to the left side margin of page 1.

    Note: If original return was unprocessable because of missing information, use the reply date from letter 12C, 4087C, 2894C/SP or OAR/referral date for the RPD.

12. Include with the return, all documentation and correspondence replies used to verify the missing information and determine the return processable date.

13. Route to Batching for expedited processing.

14. Monitor the return to post. Open an SP IDT control base using activity "MFT32REV", status "M", and category code "MISC".

15. Reverse any TC 971 AC 506 that was input when the return was moved to MFT 32.

    Note: The date of the TC 972 AC 506 must match the original transaction date. See IRM 25.23.2-9, IMF Only TC 972 AC 506 Tax-Related, Reversal of Identity Theft Case Closure, IRS Identified.

16. Update AMS history of action taken.

(1) If determined that the return was not filed by the SSN owner a closing letter must be sent to inform the taxpayer of the actions taken on the account. Update CC ENMOD as needed, to the confirmed good address and send Letter 4310C, IRS ID Theft Post-Adjustment Letter. See IRM 25.23.2.3.7, When to Update the Victim’s Address, for more information. If a confirmed good address cannot be located, update the address to the Service Center address and do not send Letter 4310C. See IRM 3.13.5.66(2), Campus Address Used Only When Taxpayer Address is Unavailable, for the appropriate campus address format.

(2) If the letter is returned as undeliverable, research to see if there was a typographical error or omission in the address or whether the letter was sent to appropriate address. If the address can be corrected, resend the letter, otherwise destroy as classified waste.

(1) A TAS Operations Assistance Request (OAR) may request authority to process a manual refund for a hardship case related to a return incorrectly moved to MFT 32. If it is determined that the return is still in the extended process of posting back to the MFT 30 when the refund should be released, TAS must be delegated with the authority to issue a manual refund. Permission for a manual refund should be issued, only when there is an unreversed TC 971 AC 052 present on MFT 30 with a "blank" MISC field or a TC 971 AC 052 with a MISC field of "RRPNONIDT", indicating that the income and/or wages require further verification by RIVO.