The presence of this indicator does not guarantee a TOP offset will occur. If a manual account transfer (TC 370/TC 400) is necessary, input the TOP offset reversal and transfer the credit to excess collections before moving the account. When married taxpayers file using the "married filing joint" status either taxpayer (or both) may have outstanding obligations that qualify for a TOP offset. A mixed entity case is a case involving the filing of a tax return by an individual who is using a TIN belonging to another individual. (F) Bureau of the Fiscal Service TOP Debt, (B) Both IRS and Bureau of the Fiscal Service TOP Debt. If PENDMRR or MRRTONHQ is not present in the IDRS case control activity, then the TC 899 Type 3 is a BFS/IRS correction. The question is only whether the taxpayer is legally married, i.e., was married in a state or other jurisdiction that recognizes same-sex marriage. Use the following chart to determine when it is necessary to do a TOP offset reversal: If the case meets "No Move" criteria, disregard any instructions to place the account in debit balance and only submit the manual reversal request to the TOP Liaison. Taxpayers may file Form 8379 with the return or as a standalone form. When issuing a hardship refund under any circumstance, inform the taxpayer that if he/she owes a child support or Federal agency debt submitted for tax refund offset, Bureau of the Fiscal Service may apply his/her refund to the debt through TOP. If the exemption portion is incomplete and the credits are not allocated, split the unallocated credits in half (50/50) and send Letter 3179C, Refund Offset to Treasury Offset Program (TOP) Nontax Obligation or Letter 285C, Refund/Overpayment Applied to Account. If there is a TC 971 AC 598 (manual input of Top offset record) on the account, you cannot input a TC 766 with an OTN to reverse the TOP offset. Inform the taxpayer of the actual amount offset from his/her refund and still outstanding. See exception below. Upon completion of the return, work your case. It generates on systemic refunds not eligible for TOP offset. You'll get an explanatory letter from the Bureau of the Fiscal Service if your refund is offset. Refer Taxpayer to TOP Call Center above for offset information. The agency is required to make the refund payable in the name or names that were on the IRS refund file at the time the original refund and TOP offset occurred. Review procedures in IRM 10.5.1.6.7.2 , Answering Machine or Voice Mail, before leaving a message on a taxpayer's or authorized representative's answering machine or voice mail. Adjust the account per income documents. When transferring the taxpayer to Application 35, provide the taxpayer with a 4-digit transfer personal identification number (PIN). Compute the injured spouse's share of tax liability by multiplying the injured spouse percentage of tax by the joint tax on the return before deducting credits and adding other taxes. Notate Non-Community Property (NCP) Short Cut (SC) 1 on CIS cases. Use CC UPCAS with Definer Z to input a message with the correct name control. Once Insolvency determines the offset is in violation of the automatic stay, Insolvency will contact the TOP Liaison for a copy of the Insolvency Special Procedures Referral Form. Send an explanation of the action taken to the taxpayers if applicable. Process the return with a new DLN, BS 920929, before working the allocation. Payments can be identified by a TC 290 .00 with CRN 272 on the tax year 2021 module. In community property states, all joint amounts are divided equally, with the exception of EITC. The repayment amount is reported on line 29 of Form 8962, Premium Tax Credit, and on: Taxpayers may allocate the excess advance premium tax credit repayment on Form 8379, any way they choose. Disregard the instructions in IRM 21.5.6.4.35.3, -R Freeze Modules with Integrity & Verification Operation (IVO) Involvement. Advise taxpayer to allow up to 11 weeks for ELF returns and up to 14 weeks for paper returns processing time from the time we receive their original return. See IRM 21.5.8.4(15), Credit Transfers Overview, for a listing of the Designated Payment Codes. Advise the taxpayer to allow 30 days to process. UPC 342, RC 06, occurs when a TC 766 with OTN is greater than the net TOP offset amount. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. You will work the injured spouse case and issue a refund to the injured spouse for his/her share of the overpayment. Use a manual refund to reissue a returned refund check. TC 150 is blocked 92 and Taxpayer Protection Program (TPP), issues have been resolved on the account and tax or TOP offset has not occurred. Effective January 1, 2009, all Limited Liability Companies (LLC) were recognized and treated as corporations that are separate and distinct from individual members for employment tax purposes. If the Agency code is 1 or 2, the offset is for a delinquent child support debt and the 5 month limitation rule applies except for a Form 8379, Injured Spouse Allocation. For all the above scenarios, you will deduct any Economic Recovery Payment (ERP) or Government Retiree Credit received from the spouse who received the prepayment. A Federal tax debt must not be bypassed if a TOP liability exists and a TOP offset will occur. AM Process and Program Management produces a Utility 50 Run in October of each year to determine the volume and money amount of unresolved Form 8379, Injured Spouse Allocations. Verify that the corrective action is accurate before closing, Close your case using Document Type-Internal Transcript, IDRS Cat Code IRRQ, Program Code 40000. This is required for injured spouse allocation processing. Treasury Offset Program offset (effective 01/11/1999). A community property state is entered and the address on ENMOD is a non-community property state. A letter is not needed for Community Property or Non-Community Property Short Cut (SC) 1. Use CC COMPA to compute the injured spouse's portion of the amount of credit interest based on the injured spouses reversal amount. You must input a History Item when you are referring the taxpayer to another agency for resolution. Refer to IRM 21.6.4.4.17.1, Recapture of First-Time Homebuyer Credit (FTHBC), for guidelines on the recapture. After 2018, the SRP is $0.. Taxpayers who file their tax return late will be subject to a late file penalty of 4.5 percent of the tax required to be shown on the return for each month or fraction of a month the return is late. Split the credit 50/50. BPI (6) indicates that TOP should bypass all debts for the secondary TIN and all debts except child support for the primary spouse. blocking series 00 if the original return is attached to the allocation or blocking series 05 if the original return is not attached), see IRM 21.5.3.4.6.3, No Consideration Procedures. Form 8379, Injured Spouse Allocation, are not sent to EXAM. Ensure there are no freeze codes on the account that would release by the input of a TC 290 other than the -R freeze. The RRC is worked using normal injured spouse procedures. It generates on the first refund (TC 846) issued after the reversal of a TOP offset to a primary TIN's debt. 3) Taxpayer claims debt was discharged in bankruptcy. Bypass TOP offset for all secondary TIN debts. There are instances in which one of the above is valid, however if the (I) indicator is not set, see IRM 21.4.6.4, Refund Offset Research, paragraph (2). Before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. For offsets involving child support, see IRM 21.4.6.4.2.4, Child Support TOP Offsets. If the Refund Statute Expiration Date (RSED) has expired, see IRM 21.4.6.5.12(4), TOP Offset Reversals. UPC 168, RC 0, also occurs when an RN 808/809/810/811 is input after a RN 808/809/810/811 was previously input, but the refund didnt release due to a hold code or TC 570. TC 898 ($1,500.00) TC 899 types 2 ($45.00) +TC 899 type 4 ($45.00), TC 899 type 1 ($1,500.00)= 0, TC 898 or TC 971 AC 598 TC 899 or TC 971 AC 599 types 1, 2, or 3 TC 766s + TC 899 or TC 971 AC 599 type 4 + TC 767s = Net TOP Offset Amount, Processing Form 8379, Injured Spouse Allocation, for Agency Code 1 or 2, The posted offset(s) is more than 5 months old for Agency Code 2, The posted offset(s) is 5 months old or less for Agency Code 2, The posted offset is more than 5 months old for Agency Code 1, The posted offset is 5 months old or less for Agency Code 1. If the Form 1040 or Form 1040X has been determined to have no overpayment available for credit or refund then a 916C letter must be sent to advise the taxpayer why the allocation is not being considered. If you do qualify for a tax refund offset hardship exception, you may not ever be able to get one again. To refer the taxpayers to TAS, use Form 911, or Form e-911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), if AMS is not available. Allocate any recovery rebate credit received for any children to the spouse who was allocated the qualifying child's exemption on Form 8379, Injured Spouse Allocation. If you are working a statute year injured spouse allocation, use the received date of the original return as the RFSCDT to prevent the credit from being held with a -D freeze. Employees staffing Application 35 will not transfer calls to lower level account applications and must address all account issues in addition to the Injured Spouse inquiries listed below. 31 CFR 285.3 (h). You may see a TC 971 AC 598 or a TC 971 AC 599 which represents the manual input of an erroneously deleted TC 898 or TC 899 transaction. You must take all transactions; posted or unposted, into consideration. The debt may be activated, inactivated or deleted within TOP before a refund is issued. Policy Statement P-21.3 (Formerly P-6-12) Exclusion List, when releasing the refund for either exception below. Be sure to check Box 23, Bankruptcy Code Case. The refund of tax year listed on Form 8379 for which community property laws may be applied if the tax year is: 1) Taxpayer's account has a -E freeze with a TC 971 AC 128 and a TC 810, refer to IRM 21.5.6.4.10 (3) -E Freeze, for a list of TC 810 conditions. There may be more than one on the account. Before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. Whether a State recognized same-sex marriage during the tax year on the Form 8379 does not affect if a taxpayer is entitled to injured spouse relief. This example shows a TOP offset to the primary spouse's debt for $1000. Analyze each inquiry carefully to determine the correct course of action. Notate RRC 50/50 after the appropriate shortcut method used. The short answers are: (1) the "normal" refund will probably be offset to pay down the prior-year tax debt, unless the family succeeds in securing a discretionary "pass" from the IRS, known as an offset bypass refund; and (2) the economic impact payment will probably still come, so long as there's no child support arrearage on the books for the family's taxpayers. If a credit balance remains on the module after the manual refund posts, release the remaining credit balance on the module by inputting a TC 290.00. The Agency Code, OTN, and offset amount will be identified in the TC 898, MISC field. TC 150 is not blocked 92 and a paper return was filed. When working an account that contains a C freeze, additional research is required to determine the taxpayer's CZ status. Otherwise, the computer will automatically offset the credit(s) back to pay the balance due. BPI (1) (2), (8) and (9) are not valid when the BPI was set to (4). Certain IDRS freeze conditions will hold the overpayment beyond the return posting date (Assessment Document Date or the 23C Date) of the original return (TC 150). Form 3753 must be processed no later than the 43rd day. Input a TOP offset reversal to reverse the net offset amount remaining on any/all tax modules. This is needed on Form 5792, Request for IDRS Generated Refund (IGR), and Form 3753, Manual Refund Posting Voucher. Prepare MRR for dishonored amount and submit to NHQ. The account does not have a XREF EIN/TIN. The OBR must be approved and processed prior to the freeze release, there are certain conditions in which a TC 840 will release the freeze code or condition. No other payments or credits are made to the 2011 MFJ account. 2) Processing any case other than injured spouse, The posted offset(s) is to Agency Code 02 and is more than 5 months old, 3) Processing any case other than injured spouse, The posted offset(s) is to Agency Code 02 and is 5 months old or less, Reverse the offset(s). The TC 898 or TC 971 AC 598 TOP offset is dated the same as the prior posted TC 840 from which it originated. Provide a transfer PIN per IRM 21.1.3.2.5, Initial Authentication Transfer Procedures/Transfer PIN. Annotate the taxpayers account with a Case Note with the information obtained. When the taxpayer calls concerning his/her injured spouse allocation, TC 150 with Blocking Series (BS) 92 or TC 971 Action Code (AC) 071, use the following chart: Do not make any changes to the account or release the refund without first contacting the area that worked the injured spouse allocation. If there are any result codes not listed in the table above, please contact the IRS Headquarters Analyst. BPI (1), (2), (5), (6), (8) and (9) are not valid unless block 9 (Injured Spouse) is used. Remarks must also reflect which tax module the TC 520 is on and No TC 521 is pending. If the injured spouse is not entitled to any overpayment from tax year 20XX, the allocation should not be considered. Provide the name and TIN of the taxpayer(s) and request confirmation of the existence of a debt, and the amount(s) owed, notate the information on your case history along with the name of the Bureau of the Fiscal Service CSR who provided it. Subtract from the TC 898 or TC 971 AC 598: all TC 899(s) or TC 971 AC 599(s), type 1, type 2, or type 3, with the same OTN. The Treasury Offset Program debt indicator (F) is set when Bureau of the Fiscal Service informs Internal Revenue Service (IRS) that at least one TOP debt exists and an offset may occur if a refund is authorized. Some modules appear to have a TOP offset and can be identified by the posting of a TC 898 with an Agency ID of XX and an Agency Site ID DF or PF. See paragraph (2) above. Under certain hardship circumstances, the IRS may issue manual refunds of excess credits without first satisfying an IRS Outstanding Balance Liability (OBL). Please allow up to 180 days for the manual reversal to post. Input 290 .00, RN 810 or RN 811, RC 086, SC 7 with the appropriate PDC or issue a manual refund if applicable. Send the taxpayer a copy of the Form 8379, Allocation Worksheet, only if they ask for it. If taxpayer is requesting an explanation of the allocation see paragraph (7) below. Contact Insolvency at the Centralized Insolvency Operation (CIO) or fax Form 4442, (see (1) above for faxing instructions) to determine if the Injured Spouse's refund can be issued. It should be everyone's offset then. 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