5.9.14. Automated Proofs of Claim (APOC)

AIS

Automated Insolvency System

ALS

Automated Lien System

APOC

Automated Proofs of Claim

BAPCPA

Bankruptcy Abuse Prevention and Consumer Protection Act

CIO

Centralized Insolvency Operation

CPM

Confirmed Plan Monitoring

EPOC

Electronic Proofs of Claim

FI

Field Insolvency

PACER

Public Access to Court Electronic Records

POC

Proof of Claim

NFTL

Notice of Federal Tax Lien

SCI

Specialty Collection Insolvency

SOFA

Statement of Financial Affairs

TIN

Taxpayer Identification Number

Open Cases

Includes all cases that have been selected by the APOC process but have not completed the process. Open Cases are cases that encounter flag conditions that require interaction by the assigned employee. Additional actions will be required on these cases by the employee.

Completed Cases

Includes all cases that have completed the APOC process. The list includes cases that went through the APOC process and did not require manual intervention. It also includes cases that were originally flagged in APOC and were resolved by the caseworker. To identify which cases have completed the APOC processes caseworkers can generate the following reports through Business Objects:
• The Cleared Flag Case Report - which identifies cases that had flags which were resolved.
• The No Liability Report - which identifies cases with no balances due, and no unfiled returns. It also identifies if there is a Debtor Master File (DMF) indicator on the case.

• The Non-Flagged Case Report - lists all cases processed through APOC that did not encounter a flag condition.

• The Terminated Cases Report - which identifies cases terminated in APOC.

Open/Closed Amendment Cases

Includes cases where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC Amends processes the new assessment periods where an estimate exists.

AGI Report

The Adjusted Gross Income (AGI) report identifies those Chapter 7A cases that have computed AGI greater than $10,000 based on the user input parameters.

All Cases Report

The All Cases Report lists all cases assigned to a specific caseworker, for a specific date or date range and were processed by APOC.

Below Tolerance Report

The Below Tolerance Report identifies cases where the total claim balance is below the minimum amount established for filing proofs of claim based on the From /To Dates entered by the user.

Case Detail Flag Report

The Case Detail Flag Report identifies issues at the Case level based on the user’s flag selection and date parameters.

Cash Collateral Report.

The Cash Collateral Report identifies all Chapter 11 cases with secured claims. A manual case review is needed to determine if adequate protection or a cash collateral agreement is needed.

Cleared Flagged Cases Report

The Cleared Flagged Cases Report lists all cases that have had the flag(s) resolved and cleared.

Completed Amend Report

The Completed Amend Report lists all cases processed through APOC Amends. Caseworkers should use the Completed Amend Report to conduct a review of the claim filed dates to ensure the amended proofs of claim are filed after they have been amended.

Estimated Return Report

The Estimated Return Report lists all cases that have periods with estimates.

Flagged Cases Report

The Flagged Cases Report lists all cases that have encountered a flag which has not yet been resolved. These cases require manual intervention by the user.

Limit File Bankruptcy Report

The Limit File Report lists all cases that were large dollar cases during the time frame specified by the From/To Dates entered by the user.

No Liability Report

The No Liability Report identifies cases with no balances due, and no unfiled returns. It also identifies if there is a debt indicator on the case. APOC closes all no liability cases except all Chapter 11 and 12 cases, and cases of all chapters with a debtor master file (DMF) indicator.

Non-Flagged Cases Report

The Non-Flagged Cases Report lists all cases processed through APOC that did not encounter a flag condition. Since APOC processes are initiated on a daily basis, plans and schedules may not be available when this report is generated.

Open Amend Report

The Open Amend Report lists all cases with an amended period that has not yet been resolved. These cases require manual intervention by the user.

Period Detail Flag Report

The Period Detail Flag Report identifies issues at the Period level. IT lists all cases that encountered a period flag and are not yet resolved. These cases will require manual intervention by the user before they can be completed in APOC.

Summary Report

The Summary Report lists different statistics for the user's specific territories. This is a Managers Only report.

Terminated Amend Report

The Terminated Amend Report lists all cases that were terminated in APOC Amends.

Terminated Cases Report

The Terminated Cases Report lists all cases that were terminated in APOC.

X/Z Cases Report

The X Cases are those cases that were APOC ready but did not make it through the APOC process. The Z Cases are those cases where there is a problem with the APOC records which is not allowing the claim records to move to the AIS Proof of Claim screen. The X/Z Report lists all X/Z cases during the time frame specified by the user.

Amended IRPTRL Flag

This flag is issued when the IRPTRL information on IDRS has been amended. APOC alerts the caseworker of additional IRPTRL pages which APOC cannot read. Review IRPTRO and other sources to determine if an estimated liability is necessary.

• If an estimated tax liability is necessary, then create the period, compute the estimate, input the estimate and update the flag.

• If an estimate is not necessary, close the filing requirements on IDRS and clear the flag.

Available Credit Flag

This flag is issued when APOC identifies an available credit greater than $25. Follow local procedures to resolve the credit and clear the flag.

BMF Compliance Flag

This flag is issued when APOC identifies an EIN (cross referenced on INOLES), but does not locate a record on BMFOLI. Users must determine if the Entity should have a BMF estimate.

• If the BMF estimate is not necessary, then clear the flag.

• If the BMF estimate is necessary and IMF Period Detail records do not exist, then compute the estimate, create a period detail record, input the estimate and clear the flag.

• If the BMF estimate is necessary and IMF Period Detail records exist, then compute the estimate(s), insert a Period Detail Record, input the estimate, and clear the flag.

CID Freeze Flag

This flag is issued when a -Z freeze exists on a period on the TIN. Contact Criminal Investigation (CI) before proceeding with the filing of a proof of claim. APOC will include all liabilities on the claim but gives the caseworker an opportunity to change the claim as needed.

• If CI states a claim can be filed, clear the flag.

• If CI states a claim should not be filed, terminate the case and follow the procedures outlined in IRM 5.9.13.16, Criminal Investigation Involvement.

• If a specific period should not be on a claim, remove the period and clear the flag.

Debtor TIN with an Asterisk Flag

This flag is issued when the debtor TIN ends with an asterisk. APOC processes the TIN as if the asterisk is not present. Review APOC determinations on this TIN, make any additions or deletions to the records and then clear the flag.

Discharged, Dismissed, or Closed Date on AIS Flag

This flag is issued when there is a date in the dismissed, discharged, or closed fields on the AIS Taxpayer screen. Review IDRS for abated liabilities.

• If there is no liability, clear the flag.

• If the case was originally filed as a Chapter 7 No Asset and converted to a Chapter 7 Asset, then identify the discharged liabilities and include them on the claim.

• If a case was originally filed as a Chapter 7 No Asset and converted to a Chapter 7 Asset and liabilities were not abated, clear the flag.

• If it appears a discharged Chapter 7 No Asset was converted to a Chapter 13 proceeding, then check the court's electronic records to verify the discharge was vacated. Remove the discharge date on AIS, if necessary. Identify all periods to be included on the claim. Calculate, classify and insert each period and clear the flag.

Estimate with -L Freeze Flag

This flag is issued when APOC identifies an open TC 420 on the TXMODA indicating a Substitute for Return (SFR) has been initiated on a period that has not been filed and an assessment has not posted. Follow local procedures to determine the tax, interest and penalty amounts as needed and clear the flag.

Late Filed Claim Flag

A late filed claim flag is issued on a case that has an APOC processing date which is more than 180 days after the petition date. Determine if a claim should be filed. See IRM 5.9.13.7.1, Late Filed Claims.

• If a claim should be filed, then calculate and classify each period, create or insert periods as needed, ensure all periods needed on the claim have been added to APOC and clear the flag.

• If the claim should not be filed, then terminate the case.

LLC Flag

This flag is issued when an entity has "LLC "in any name line field on the AIS Taxpayer record. Manual intervention is required to determine the basis of the liability and accuracy of the claim. IRM 5.9.13.14, Limited Liability Companies, provides guidance on proper preparation of LLC claims. Counsel input may also be required.

• If a claim is not necessary, then terminate the case.

• If the claim is necessary, then ensure all appropriate periods are included on the claim, create, insert or remove periods as needed and clear the flag.

MFT = 14 or 60 Flag

This flag is issued when APOC identifies an open filing requirement on INOLES for MFT 60, Form 2290, Heavy Highway Vehicle Use Tax Return, or for MFT 14, Form 944, Employer's ANNUAL Federal Tax Return. APOC cannot do a compliance check on these MFTs. Review bankruptcy schedules and other sources to determine if an estimated liability is necessary.

• If an estimate is not necessary, then clear the flag.

• If an estimate is necessary, then calculate and classify each period, create a period detail for each estimate and then the flag.

Multiple ACA for Different TINs with Same Period Flag

This flag is issued to alert the caseworker that the AIS freeze table contains the Shared Responsibility Payment (SRP) assessed under MFT 65 on the same period for both debtors in a joint bankruptcy. APOC will list the liability under both debtors but will allow the caseworker to remove one of the APOC records, if appropriate. Review the SRP liabilities to determine if they are from the same jointly filed Form 1040. If the SRP assessments are for separately filed Forms 1040, then update the flag. If the SRP assessments are for the jointly filed Form 1040, then either:
• Remove one of the MFT 65 periods, insert the proper clarifying proof of claim statement and update the flag, or
• Leave both periods on the claim, insert the proper clarifying proof of claim statement and update the flag.
If the SRP assessments are for separately filed Forms 1040, then the flag. See IRM 5.9.13.18.4, Duplicate and Mirror Assessments and NMF Periods, for guidance.

Pending Additional Assessment on a TXMOD Flag

This flag is issued when APOC identifies the existence of a pending tax assessment on TXMODA that has not posted to IMFOL or BMFOL. Insert a period, calculate and classify the liability and clear the flag.

Potential Missed BAL Due Flag

This flag is issued when a balance due period, greater than $25 is on IDRS but the period is not present in the AIS freeze tables. Decide if the period should be included on the proof of claim.

• If the period should not be included on the claim, then clear the flag.

• If the period should be included on the claim, then calculate and classify each period, create a period detail for each estimate and clear the flag.

• If this is a pre-petition module and a decision is made to not include this liability on the proof of claim, then manually input the TC 520 on this module and add the TC 520 to the Freeze screen on AIS.

Section 965 Flag

This flag is issued to alert the caseworker of a possible Section 965 liability. The caseworker must manually review the account to determine if there is a Section 965 liability that needs to be added to the claim. See IRM 5.9.13.18.7, Section 965 Transition Tax.

• If a claim is necessary, the caseworker will update the record with the amount and clear the flag.

• If the claim is not necessary, the period can be removed and the flag cleared.

TFRP for Multiple SSNs in the Same Period Flag

This flag is issued to alert the caseworker that the AIS freeze table contains an MFT 55 assessment on the same period for both debtors in a joint bankruptcy. APOC will list the liability under both debtors but will allow the caseworker to delete one of the assessments, if appropriate. Review the liabilities to determine if they are for the same business entity. See IRM 5.9.13.13(4), Duplicate Spousal Trust Fund Assessments, for guidance.

• If the caseworker determines the assessments are for the same underlying business entity’s liability, the claim should be filed according to local procedures. See IRM 5.9.13.18.4(2), Duplicate Spousal MFT 31, MFT 65, and Trust Fund Recovery Penalty (TFRP) Assessments. The appropriate proof of claim statement(s) should be added to the claim.

• If the MFT 55 assessments are for different business entities, then clear the flag.

CARES Act TC 766 CRN 280 Flag

This flag is issued when APOC identifies a TC 766 Credit Reference Number (CRN) 280 on IDRS. APOC creates a claim record for MFT 01, MFT 11, MFT 14, MFT 09, and MFT 30 with a TC 766 CRN 280 in tax periods 202006, 202009, and 202012.

• If the period should remain on the claim, then calculate the liability manually by following the procedures outlined in IRM 5.9.13.18.8(4) , Proof of Claim, update the APOC record as necessary, and clear the flag.

• If the period should not remain on the claim, then remove the period.

Credits Posted After Petition Date Flag

This flag is issued when APOC identifies a credit that may have been received after the petition date in violation of the stay. This flag should be worked within five calendar days of APOC identifying the flagged condition. APOC has created a claim record for this MFT and Period with amounts for Tax, Penalty, or Interest. Determine if the credit is in violation of the automatic stay.

• If the credit is NOT in violation of the automatic stay, then clear the flag.

• If the credit is in violation of the automatic stay and cannot be kept, then manually calculate the period without including the credit, update the APOC record with the new figures, clear the flag and prepare a manual refund or credit transfer.

• If the tax period should not be included on the claim, then remove the period.

Error Condition - APOC Program Problem Flag

One of the three flag conditions below is issued when APOC encounters a processing problem on a specific tax period, but is still able to continue processing the case. The conditions are displayed as individual Period Flags within APOC; however, they are all lumped together under the title of Error Condition - APOC Program Problem for purposes of the individual Period Detail Flag reports.

• TXMODA Fault Flag. This flag is issued when APOC encounters a dummy module, for example cases in status 23, 53, etc. If the period should remain on the claim, then use command code MFREQ or RECON to bring the period to IDRS and request INTSTB. If a TXMOD has a dummy module or no module, then enter MFREQC. If an item of information is posted to IMFOLT but not to TXMOD, then request RECON. With this information in hand, calculate and classify the period manually, update the APOC record, and clear the flag. If the period should not remain on the claim, then remove the period.

• Potential Reversed Credit with MF-STS 10 or 12 Flag. This flag is issued when APOC attempts calculation of a balance due, but encounters an error. APOC may or may not provide dollar amounts in the Tax, Penalty or Interest field. The APOC calculation provided cannot be relied upon. If the period should remain on the claim, then calculate the assessment manually, update the APOC record, as necessary and clear the flag. If the period should not remain on the claim, then remove the period.

• Calculation Error: Credits Paid Off All Assessmts Flag. This flag is issued when APOC attempts calculation of a balance due, but encounters an error with the application of credits. APOC may or may not provide dollar amounts in the Tax, Penalty, or Interest field. The APOC calculation provided cannot be relied upon. If the period should remain on the claim, then calculate the assessment manually, update the APOC record, as necessary and clear the flag. If the period should not remain on the claim, then remove the period.

Exam Freeze Flag

This flag is issued when APOC identifies the existence of a -L Freeze on IDRS for an MFT and Period which has a balance due or which was for one of the periods within the time frame checked for compliance (TC 420 on a TXMODA). APOC creates a claim record for this MFT and Period with no amounts for the tax, penalty or interest. Refer to AMDISA on IDRS and contact the appropriate Examination unit to determine if an additional assessment will be proposed.

• If Exam indicates an additional assessment will be proposed, then ask for the amount of the proposed assessment and compute interest on that amount from the due date of the return to the petition date. If Exam proposes a failure to file penalty, then compute interest on that penalty from the due date of the return to the petition date and add that amount to the penalty. Update the APOC record with the proposed tax, interest on tax, and any penalty amount(s) Exam may give and clear the flag.

• If Exam is not going to make an additional assessment and the period is otherwise full paid, then remove the period and clear the flag.

• If Exam is not going to make an additional assessment but the period still has a liability, the flag should be cleared.

IRPTR Not Filed Flag

This flag is issued when APOC attempts to calculate an estimate using IRPTRL information, however that information results in a balance due of equal to or less than zero. APOC will input a $100 estimate and issue the flag.

• Change the amount, if information warrants, and clear the flag.

• If no change to the estimate is warranted, then clear the flag.

• If the tax period should not be included on the claim, then remove the period.

IRPTRL Greater than One Million Flag

This flag is issued when APOC identifies an IRPTRL entry that is equal to $999,999*. This flag alerts the user that an entry is actually greater than one million. (The maximum value of the field is six characters).

• Review IRPTRO, update the period with the estimated tax calculated using the actual amounts and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Last Return Not Filed Flag

This flag is issued when APOC attempts to calculate an estimate using Last Filed Return (LFR) information; however, that information results in a balance due of equal to or less than zero. APOC will input a $100 estimate and issue the flag.

• Change the amount, if information warrants, and clear the flag.

• If no change to the estimate is warranted, then clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Letter 226-J Issued for ESRP Flag

This flag is issued to alert the caseworker that the government issued Letter 226-J, ESRP Preliminary Contact, to the debtor. This letter explains the proposed amount the IRS will assess unless further information is provided by the debtor, to change or nullify the amount. The flag indicates an assessment is not yet made due to the debtor’s response time not expiring prior to the bankruptcy filing. The caseworker will need to contact the ESRP unit, to determine the amount on the Letter 226-J, ESRP Preliminary Contact, and determine whether a protective claim is necessary.

• If a protective claim is necessary, the caseworker will update the record with the amount and clear the flag.

• If the protective claim is not necessary, the period can be removed and the flag cleared.

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Lien Recorded Date Blank or Greater Than The Petition Date Flag

This flag is issued when the recording date of the NFTL is not on AIS, or the date recorded is greater than the petition date. This flag should be worked within five calendar days of APOC identifying the flagged condition.

• If the petition date is within 30 days of the TC 582 date, then call the recorder where the NFTL was filed and ask for the recorded date to determine if the NFTL was filed prior to the petition date.

• If the NFTL was recorded prior to the petition date, then verify the period has the correct assessment date, update the APOC record with the NFTL date and clear the flag.

• If the NFTL was recorded after the petition date (in violation of the automatic stay), then reclassify the period as appropriate, clear the flag, and request a withdrawal of the NFTL. Managerial approval is required for a NFTL withdrawal.

• If the NFTL has been received but not recorded, then schedule a follow-up to re-contact the recorder prior to the earliest of: 341 Hearing, Confirmation Date, or Bar Date. If the recorder has not received the NFTL request, then reclassify the period as appropriate and clear the flag.

• If the petition date is more than 30 days from the TC 582 date, then update the APOC record with the TC 582 date and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Mortgage Interest Greater Than 50% of Income Flag

This flag is issued when APOC identifies that the mortgage interest field on IRPTRL is greater than 50% of the total amount of the taxable income. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The caseworker should make any needed adjustments to the claim based on their initial case review for all cases. If the case meets the streamlined criteria, the caseworker is required to review IDRS and other sources to determine if an estimate is necessary for this period.

• If an estimate is NOT necessary, then clear the flag, remove the period, and close the filing requirements on IDRS.

• If an estimate is necessary, then update the period and clear the flag.

Negative Tax, Interest, or Penalty Flag

This flag is issued when APOC identifies a credit balance on the tax, penalty, or interest. The total balance due on the Period Detail Screen will be correct.

• Pull TXMODA and INTSTB to correct the tax, penalty, and interest figures, update the APOC record to reflect the correct figures and clear the flag.

• If the period should be removed from the claim, then remove the period.

Not Filed Flag

This flag is issued when APOC is unable to compute an estimate after trying to utilize both IRP and LFR information. APOC will input a $100 estimate and issue the flag.

• Change the amount, if information warrants and clear the flag.

• If no change to the estimate is warranted, then clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Potential Missed BAL Due Flag

This flag is issued when a balance due period, greater than $25 is on IDRS but the period is not present in the AIS freeze tables. Decide if the period should be included on the proof of claim. APOC calculates the amount owed.

• If the period should be included on the claim, then clear the flag.

• If the period should not be included on the claim, then remove the period.

Possible Error in Interest Calculation Flag

This flag is issued when APOC attempts calculation of a balance due, but encounters an error. APOC may or may not provide dollar amounts in the Tax, Penalty, or Interest field. The APOC calculation provided cannot be relied upon.

• If the period should remain on the claim, then calculate the assessment manually, update the APOC record as necessary and clear the flag.

• If the period should not remain on the claim, then remove the period.

Restricted Interest or FTP Flag

This flag is issued when APOC identifies a TC 270 or a TC 340 with a TC amount greater than zero. APOC creates a record for this MFT and Period with amounts for tax, penalty, or interest. Review INTSTB to determine if the message Computation Hold on Interest/FTP appears at the bottom of the screen.

• If that statement does not appear, then update the flag. If the statement does appear, then calculate the period manually, update the APOC record and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Secured Period Flag

APOC issues this flag when it identifies that a Notice of Federal Tax Lien was recorded on a specific period. This flag should be worked within 10 calendar days of APOC identifying the flagged condition for all Chapter 11 and 12 cases. The Secured Period flag indicates the Service may be entitled to an adequate protection or cash collateral agreement. APOC calculates the period as fully secured by default. Determine, by reviewing the NFTL, schedules, or other sources if the period should remain fully secured.

• If the entire amount of the period should remain secured, then clear the flag.

• If the period should be partially secured, then determine the correct secured amount, update the APOC record, insert a period for the remaining amount, reclassify the period, and clear the flag.

• If the period should not be secured, then reclassify the period, and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

Split Period Flag

This flag is issued when APOC identifies an assessed balance due on MFT of 01, 03, 04, 09, 11, 16 and a period where the Return Due Date greater than the Petition Date. A claim record will have been created for this MFT and Period by APOC with no amounts for tax, penalty, and interest. Decide if there are any pre-petition amounts that should be included on the proof of claim. Calculate the pre-petition and post-petition liability for tax, penalty, and interest.

• If there is pre-petition liability, then update the period record with the pre-petition tax, penalty and interest amounts and clear the flag.

• If there is no pre-petition liability and the tax period should not be included on the claim, then remove the period.

TC 922 Flag.

This flag is issued when APOC identifies a TC 922 on IDRS for an MFT and period which has a balance due or which was for one of the periods within the time frame for compliance. APOC creates a claim record for this MFT and period with NO amounts for tax, penalty, or interest. Check AMS for the CP2000.

• If one is available, then update the claim with the additional tax assessment amount shown on the CP2000. Include interest and any penalty applicable up to the petition date. Clear the flag.

• If there is no CP2000 on AMS, then contact the appropriate Campus Automated Underreporter Unit to determine if a proposed additional assessment is planned. If an additional tax assessment is planned, then compute the liability, update the APOC record with the proposed tax, interest, and any penalty and clear the flag. If AUR proposes a failure to file penalty, then compute interest on that penalty from the due date of the return to the petition date and add that amount to the penalty total. If no additional assessment is planned, then remove the period. See Exhibit 4.19.3-4, ,AUR Process Codes.

TF/NTF with Multiple Assessments Flag

This flag is issued when APOC identifies multiple assessments on a single tax period where the due date of the return is more than three years prior to the petition date. The tax assessment will need to have a split classification (unsecured priority and general). Follow procedures outlined in IRM 5.9.13.20, Claim Calculations.

• Clear the period for the unsecured general amount, insert period if necessary, with priority classification and amount and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

TXMODA ST 10/12 Credit Flag

This flag is issued when APOC identifies a credit balance on a period that is identified as Status 10 or 12 on TXMODA Master File History Section. APOC will process the proof of claim calculations as if the credit does not exist. Review INTSTB to determine if the claim calculations are correct.

• If the calculations are correct, then clear the flag.

• If the calculations are not correct, then recompute the liability, update the APOC record and clear the flag.

• If this assessment should not remain on the claim, then remove the period.

Unable to Determine PBE Flag

APOC issues this flag when the system cannot calculate the prior bankruptcy extension (PBE) for a specific tax period.

• If the period should remain on the claim, then pull TXMOD, calculate the extension and determine the correct claim classification, update the APOC record and clear the flag.

• If the period should not be on the claim, then remove the period.

Unagreed Assessment Flag

This flag is issued when an unagreed assessment posted with a date that is after the petition date. Determine if this assessment should remain or needs to be abated, and whether or not the assessment can be included on the proof of claim.

Contact Exam or AUR, provide them with the petition date and request they determine if the assessment was made in violation of IRC 6213.

• If the assessment was not made in violation of IRC 6213 and the period should remain on the claim, then clear the flag.

• If the assessment was made in violation of IRC 6213, but the amounts should remain on the claim, then tell Exam/AUR they need to abate the liability, monitor the case and reassess after dismissal or discharge. Update the APOC record to reflect the correct estimated paragraph, remove the assessment date and clear the flag.

• If the period should not be included on the claim, then remove the period. Add applicable case classification ex. URP/IRP or EXAM, . See IRM 5.9.5.4.1, Case Classifications.

Wrong Tax Assessment Date on Lien Flag

This flag is issued when the assessment date on the NFTL record on AIS does not exactly match the assessment date on IDRS. APOC creates a claim record and classifies it as secured. Determine if the NFTL applies to the assessment in question, and if the assessment should remain as secured.

• If the assessment date on the AIS NFTL record does not match the assessment date on IDRS for this assessment, but the IDRS assessment date and the NFTL date match, then update the AIS Assessed field with the correct assessment date and follow the instructions for Secured Period Flag.

  Caution: An amended NFTL should NOT be requested during the time the taxpayer is in bankruptcy.

• If the IDRS assessment date does not match the NFTL assessment date and it is not secured by any other NFTL, then reclassify the period to priority or general, add a history record to document the activity, and clear the flag.

• If the tax period should not be included on the claim, then remove the period.

the case is filed on or after October 17, 2005,

compliance is checked for six years, unless the case has a prior bankruptcy extension (PBE). A compliance check is then conducted for unfiled returns for eight years prior to the petition date.

the debtors have previously filed joint returns and a tax year has moved to the IDRS retention register under the NPS,

APOC is unable to check the tax year and will assume the period is satisfied for the debtor.

the estimated period is not necessary,

remove the period.

a joint return was filed with the debtor and the X-TIN is not present,

the debtor’s TIN is the primary for that year.

a joint return was filed with the debtor and the X-TIN (Non Petitioning Spouse (NPS) TIN) is primary on IDRS

the X-Ref TIN (NPS TIN) will be displayed.

the case is filed on or after October 17, 2005,

compliance is checked for 24 periods for quarterly returns and 6 periods for annual returns unless the case has a prior bankruptcy extension (PBE). A compliance check is then conducted for unfiled returns for 8 years prior to the petition date.

the established date for the BMF entity is less than eight years prior to the petition date,

APOC will only address compliance starting with the established date.

the filing requirements have been closed prior to the petition date,

APOC will do a compliance check to the closure period instead of to the petition date.

1

Take total NEC x .9235 = Net Earnings from Self employment

2

Net Earnings from Self employment x .153 = SE tax

3

SE tax x 50% = ½ SE tax

4

Add all other taxable income to the NEC income = Total taxable income

5

Total taxable income -1/2 SE tax =Adjusted Gross Income

6

Adjusted gross income - $5000 (standard deduction) - $3000 (personal exemption) = Taxable income

7

Taxable income x .2 (20% tax rate) = Income tax

IRPTRL is available and Mortgage Interest is more than 50% of the total income,

APOC:
• Issues a period flag,
• Creates a claim record, and
• Classifies this claim record.

IRPTRL is not available,

APOC goes to LFR to compute an estimate:
• The tax on the LFR is increased by 5% per year to the year being estimated.
• The withholding figure on the current year credits (credit elect or estimated tax payments) are deducted from the estimated amount.
• The resulting amount is used to create a claim record.

IRPTRL and LFR do not exist for that period and there is a prior estimated tax period based on IRPTRL

APOC:
• Deducts the withholding figure on the current year credits (credit elect or estimated tax payment) from the estimated amount.
•Creates a claim record.

IRPTRL and LFR do not exist for that period and there is not a prior estimated tax period based on IRPTRL

APOC:
• Creates a claim record,
• Inputs a $100.00 estimate, and
• Issues a flag.

An estimate cannot be computed and the MFT is 01, 03, 11, 16, or 19,

APOC:
• Creates a claim record,
• Inputs a $100.00 estimate,
• Classifies the record as P (Priority), and
• Issues a flag.

TC 150 Zero Module Balance – Possible Offset

APOC Amends will select a New TC 150 Zero Balance transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a zero balance. APOC provides a zero dollar calculation of the period based on the filed return. The caseworker will need to review the Litigation Transcript for this particular period flag to determine if an offset occurred and to which period the offset was applied. If an offset occurred, the caseworker will process the offset on the appropriate APOC record and then clear the flag. If there was no offset, but the claim still needs amending to reflect the filing of the return, the caseworker can update the claim. If the claim no longer needs amendment, the caseworker can terminate the amends process.

TC 150 LT Credit Module Balance

APOC Amends will select a TC 150 Credit Module Balance transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a credit balance. APOC provides a zero dollar calculation of the period based on the filed return. The caseworker will need to review the Litigation Transcript for this particular period flag to determine if an offset should take place and to which period the offset should be applied. If an offset is required, the caseworker will process the offset on the appropriate APOC record and then clear the flag.

If there is no need for offset, but the claim still needs amending to reflect the filing of the return, the caseworker can update the claim. When the claim is processed IIP will input a new 520 with the closing code used by the territory. If that closing code allows systemic refunds and a manual refund will not be issued, update the AIS Refund Screen to "Never Process". If the closing code does not allow systemic refund, prepare manual refund.
If the claim no longer needs amending, the caseworker can terminate the amends process.

TC 150 LT Balance Due

APOC Amends will select a New Assessment Transaction Code 150 Found transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a balance due and issues this flag. Users must decide if the period that was previously estimated should be amended to reflect the new balance due. APOC calculates the new amount owed. If the period should be amended the caseworker can clear the flag. If the period should not be included on the claim, the caseworker can terminate the amends process.