CSCO works Individual Master File (IMF) accounts and Business Master File (BMF) accounts. Atlanta, Brookhaven and Memphis Campus Compliance works all Electronic Funds Transfer (EFT) Listings for IMF and BMF. IMF Installment Agreement Accounts List (IAAL) is worked in Atlanta and BMF IAAL is worked in Ogden. Balance Due Transcripts are worked in Andover, Atlanta, Brookhaven, Memphis and Philadelphia. Combat Zone Transcripts are worked in Kansas City.

Per Policy Statement 5-2: We will 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.

IRC 112 & 7508 provide certain tax benefits to individuals serving in a combat zone.

IRC 6502 provides procedures for ten year CSED.

Refer to IRM 5.19.1 for procedures to work Installment Agreements.

The Operations Manager is responsible for timely closures of all programs under their authority.

The team manager is responsible for monitoring timely closure of transcripts and listings received in the area, and updating the Operations Manager of any discrepancies.

The IRS Restructuring and Reform Act of 1998 (IRS RRA 98), Section 3705(a), provides identification requirements for all IRS employees working tax related matters.

Program Reports: Daily and weekly reports are performed by management. Headquarters gathers monthly data to complete the Monthly Monitoring Report (MMR).

Program Review: Operational and program reviews are conducted to ensure that case actions are in accordance with the procedures in this IRM.

Program Effectiveness: Cases are reviewed by management, quality review and during operational reviews. Program goals are measured in the Balance Due Transcript Overage Measure. The program results are housed on the Collection Program and Campus Reports SharePoint site in the Monthly Monitoring Report (MMR).

Program Goals: By following the procedures in this IRM section, employees will be able to appropriately handle CSCO transcript programs, Combat Zone cases and CSED verification and correction.

Atlanta CSCO has an inventory processing strategy that primarily focuses on the Balance Due and Installment Agreement Accounts List (IAAL) programs in making a determination on inventory priority processing. Brookhaven CSCO and Memphis CSCO assist in processing the IAAL. Ogden CSCO works BMF IAAL.

Balance Due Transcripts are worked in Atlanta, Andover, Brookhaven, Kansas City, Memphis and Philadelphia.

Daily and weekly reports are performed by management in all campuses working transcripts. PAS completes daily reviews on all programs.

The following table lists the various acronyms (abbreviations) which may be used in the processing of transcript inventories and used throughout this IRM:

While processing transcripts you may need to reference and use the following IRMs in conjunction with the procedures provided in this IRM:

Beginning June 17, 2013, the use of certain Integrated Automated Technologies (IAT) tools is mandatory for Compliance Campus employees when following procedures outlined in this IRM. Currently, the mandate is limited to the following tools:

If an IAT tool is not available, or an employee has a problem with the IAT Task Manager, the case should be processed through IDRS, without using the tool, by following established procedures. See the IAT Website for how to report/fix problems with IAT tools.

TC 130 is an entity transaction on Command Code (CC) ENMOD and will display the cross reference information and the campus (literal = SC>) that input the freeze.

The Treasury Offset Program (TOP) allows credits to be applied against delinquent child support obligations, non-tax debts owed to other Federal agencies, state income tax obligations and unemployment compensation debt. TOP TC 130s are systemically engaged and released by the agencies requesting these freezes. Refer to IRM 21.4.6, Refund Offset.

If a credit of ≡ ≡ ≡ ≡ or more becomes available and TC 130 is present, a CP 44 (IMF) is generated to the Atlanta campus and a CP 188 is generated to the Philadelphia campus.

On CC TXMOD the presence of a TC 130 can be identified by freeze code V−.

Requests for input of TC 130 may be received on the following:

The above forms, initiated by the field, should be processed through Centralized Case Processing (CCP) in Philadelphia. All other functions route the above forms to Atlanta CSCO for IMF accounts and Philadelphia CSCO for BMF accounts.

Examine the request to ensure that the following information is given for each debit (balance due) account:

If the information is incorrect or incomplete, you must contact the originator to secure the correct information or return the request for completion.

See IRM 5.19.10.3.3, Input of TC 130 on IMF Entity for Credit Offset and IRM 5.19.10.3.4, Input of TC 130 on BMF Entity for Credit Offset, to determine when a TC 130 is appropriate.

Input a TC 130 to the IMF entity when:

Input a TC 130 under the primary SSN when the secondary taxpayer owes either under a single liability or jointly with another primary taxpayer.

Input a TC 130 to the BMF entity when:

A TC 130 input on the IMF entity is required for all BMF accounts closed as hardship. The TC 130 on the IMF account will cause the BMF accounts to come out of CNC if the taxpayer files a personal return that shows the ability to pay the BMF obligation. This TC 130 must be input on all BMF accounts involving sole proprietors, general partners or sole members of an LLC (where the owner is identified as the liable taxpayer). See IRM 5.19.17.2.4(13), CNC Unable to Pay - Hardship.

The TC 130 input on the IMF entity is also required for BMF accounts on sole proprietorships and general partnerships closed UTL and UTC using closing code 03 or 12. See IRM 5.19.5.8.2.5, I4 - Closing the Case.

To input a TC 130 on CC ENMOD, use CC REQ77/FRM77 and input the following:

If the request lists more than one partner on the BMF account, input a TC 130 to each individual entity module.

After input, destroy the document. Retention of paper files is no longer required.

A TC 130 will be input when block 6b on Form 53, Part 3, is checked yes. Block 6b is for Input on IMF to Reactivate BMF. Form 53 is Report of Currently Not Collectible Taxes, and Part 3 is For Processing as Form 3177.

To input a TC 130 on CC ENMOD, use CC REQ77/FRM77 and input the following:

If the request lists more than one partner on the BMF account, input a TC 130 to each individual entity module.

After input, destroy the document. Retention of paper files is no longer required.

At the time an NMF assessment is made, Automated Non-Master File (ANMF) will not systemically post the TC 130 to Master File. Manual input of TC 130 may still be required. Use DLN code “002”.

The Automated Trust Fund Recovery System (ATFR) automatically uploads TC 130 to the responsible party's entity, to hold any refunds prior to the assessment posting on the taxpayer's account. Additional information will include the EIN of the corporation as cross reference and the TC 130 DLN code input to CC REQ77 will be "102" .

Taxpayers may agree to assessments made by the Underreporter (URP) and Examination functions by requesting that their anticipated refund be applied to the assessment. URP and Examination requests input of TC 130 on these accounts by forwarding a copy of the taxpayer's request to Atlanta CSCO for IMF cases and Philadelphia CSCO for BMF cases.

DLN code "004" should be used. If the amount held does not fully satisfy the assessment, apply all available credit and input a TC 131. Any future refunds will automatically offset to the liability.

Research for any outstanding liabilities on IDRS.

When a TC 130 is input, it will generate a V− freeze code for the account.

Follow these procedures when working all TC 130 follow up transcripts, AM07, NMFL, ST07 and X-07:

Close the CP 44/CP 188 per the table below when the account has certain conditions. For other conditions present on the credit module or cross reference module, see IRM 5.19.10.3.13, Research Prior to Transfer of Credits.

See IRM 5.19.10.3.14, Transfer of Credits for instructions on transferring the credit.

Follow the general procedures below when working CP 44/CP 188:

Research AMS history for any cross reference and balance due information provided by a previous employee.

Exercise caution if you are considering transferring an overpayment credit to another account to offset an outstanding tax liability. IRC 6402(a) allows an offset against any liability in respect of an internal revenue tax on the part of the person who made the overpayment. A credit from an entity with an individual filing requirement cannot be offset to an entity that has no individual filing requirements.

Under the authority of the Internal Revenue Code, IRC 6402(a), the entire credit on a joint return may be tentatively applied to one spouse's balance due if no statement is received from the taxpayer on the allocation of the credits:

If the cross reference TIN module has a posted TC 608, the collection statute expiration date (CSED) has expired and the balance will be ".00" . Credits cannot be transferred to a module where all CSEDs are expired. This is true even if the payment date or posting cycle of the credit is prior to the statute expiration date.

If the credit cannot be legally offset, input TC 131 to release it.

Prior to moving your credit, look for a Large/Corporation case indicator. If the indicator is present, contact the Large Corp Unit per IRM 21.7.1.4.11.4, Campus Contacts for Large Corp Cases. See IRM 21.7.1.4.11, Large Corp Unit, for Large Corp State Mapping.

If the cross reference TIN input with the TC 130 is an EIN or additional cross reference EINs are identified, research CC BMFOLE. See Document 6209, Section 8A - 6, Filing Requirement Codes (FR Codes):

The following table provides procedures on how to process accounts with certain conditions when they appear on the cross reference module. See IRM 5.19.10.3.12, Generation of CP 44 and CP 188, for other conditions not addressed here.

When transferring credits, refer to IRM 21.5.8.3, Credit Transfer Research, and Exhibit 21.5.8-1, Transaction Codes and Reversals.

If the credit can be transferred on IDRS, use CC ADD24 or ADC24.

Form 2424, Account Adjustment Voucher, must be prepared to transfer a credit to an NMF account. See IRM 5.19.10.3.13.3, Transfer Credits to Non-Master File.

Overpayment interest on an offset is usually allowed from the availability date of the overpayment to the due date of the outstanding liability to which it is applied.

The table below provides procedures for application of credits:

Send Letter 678-C, Refund/Overpayment Applied Elsewhere, when part or all of the overpayment is applied to another liability.

Once a determination is made about the liable taxpayer and case actions are taken, update AMS history and include the following:

If a liability remains after application of the available credit, close the control base, if applicable.

If the available credit is being transferred to an account with a TC 530 cc 03, change the address to the address shown on the CP 44, if different.

Count as follows:

In addition to Transaction Code (TC) 150, Tax Assessed, there are other TCs (some with specific reference numbers) that carry their own ten-year CSED.

There are no limits to the number of CSEDs that can appear on a tax module.

Full abatement of these TCs does not remove their associated CSED.

See IRM 5.1.19.2.1, Transaction Codes That Carry Their Own CSED.

There are also TCs that suspend or extend the CSED. See IRM 5.1.19.2.2, Integrated Data Retrieval System (IDRS) Transaction Codes (TC) That Suspend Or Extend A CSED.

Refer to the following for a discussion of specific actions that, when taken on an account, may suspend or extend the CSED:

See Exhibit 5.19.10-5, CSED Computation Reference Table, for details and a list of IRM references regarding each type of suspension/extension.

Each TC that has its own CSED (except TC 150) will show its corresponding CSED to the right on CC IMFOLT/BMFOLT.

The account will reflect the earliest CSED until that date has passed.

CC TXMOD and CC SUMRY reflect the CSED that is next due to expire. CC IMFOLT indicates the FIRST CSED, NEXT CSED and LAST CSED.

If there are more than three CSEDs present on the module, the NEXT CSED field shows the second CSED. When the second CSED expires, the NEXT CSED field updates with the third CSED, until all CSEDs are expired.

For CC BMFOLT, the fields are EARLIEST CSED DATE, IMMINENT CSED DATE and LATEST CSED DATE.

If the CSEDs are currently suspended by an unreversed TC 500, TC 520, TC 480, TC 470 CC 95 or TC 971 AC 065, all CSED fields will show blank. CSED fields will not show blank for TC 971 AC 043 or TC 971 AC 163.

When all CSEDs on the module are expired, a TC 608 generates to zero out the balance. Until all CSEDs are expired, the balance may consist of amounts associated with expired and unexpired CSEDs, unless expired balances were previously full paid or written off with TC 534.

When payments are applied to an expired module, Master File reverses the posted TC 608 with TC 609 in order to credit the payment and then generates another TC 608.

Control the module in "A" status with Category Code STAT, activity code "VERIFYCSED" . Update activity to "CSEDOK" when CSED is correct or "UPDATECSED" when the CSED must be corrected.

When the taxpayer has questions regarding the CSED, but the CSED is correct, provide an explanation of how the CSED was determined. Use Letter 672-C , Payment(s) Located and/or Applied or other appropriate letter.

If the case is not taxpayer initiated, suppress Letter 2645-C, Interim Letter, if the case is on AMS.

Discuss CSED related issues with other functional areas as necessary. If the case is being routed outside your campus and the case is taxpayer initiated, send Letter 86-C, Referring Taxpayer Inquiry/Forms to Another Office.

Route accounts with CSED issues in ST 22, 26, 71, 72 and 91 to the proper function using SERP Who/Where. For ST 26 modules, input TC 470 cc 90 to prevent any possible enforced collection. Leave a detailed explanation in AMS history including routing information. See IRM 5.19.10.4.7.1, MULTICSED Transcript and Listings, on how to address these statuses when it is a MULTICSED transcript or listing.

If a case is received that has additional issues unrelated to the CSED issue, resolve the CSED issue and return the case to the originator or other appropriate area to address the other issues.

For CSED issues on Estate Tax Liens (Form 706), contact the Advisory Estate Tax Group for assistance. Contact information can be found on the My SB/SE Website under Civil Enforcement Advice and Support Operations (CEASO).

If there is a problem with the CSED and the module had a TC 480, pending OIC, dated after the correct CSED expired:

Identified CSED issues must be reviewed and verified. If the manual CSED computation is within ≡ ≡ ≡ ≡ calendar days of the posted CSED, accept the posted CSED as correct. See IRM 5.19.10.4.5, Resolving a Module with CSED Problems for other CSED correction restrictions.

If a module has an incorrect CSED, verify and correct the CSED on it and on any surrounding balance due modules, if applicable.

Calculate the correct CSED date using the guidelines outline in this IRM and other IRMs. For assistance with CSED calculations, see:

See IRM 3.11.10-4, Julian Date Calendar, Perpetual and Leap Year, to obtain julian dates for your CSED computation.

Accept TC 520/521, TC 480/780 and other applicable TC dates as correct, except when:

Be aware of the following when computing a CSED:

When correcting the CSED, update AMS history with the transaction codes and dates used in the CSED computation and total days of suspension included in the CSED. Also provide an explanation as to why the CSED was incorrect.

Complete the "Monthly Recalculated CSED Report " and send to the SME at the end of each month. The SME will review the changes and will refer the issue to HQ if a systemic CSED issue not previously identified is found.

When a CSED is corrected with TC 550, input TC 290 .00 to file all source documents including any taxpayer correspondence, a copy of the CSED computation and any write-off. Also include any supporting documentation, such as prints of AMS history, that support your CSED computation.

Refer to IRM 5.19.10.4.4.1, CSED Considerations, for additional guidance.

A TC 550 is manually input to update or correct the CSED. The definer code will show the source/reason for the extension. See IRM 5.1.19.2.3, TC 550 Waiver Extension Definer Codes.

Input TC 550 per IRM 5.19.10.4.5.1, Correcting an Existing CSED, No TC 550 on Account or IRM 5.19.10.4.5.2, Correcting an Existing TC 550, if the existing CSED is incorrect.

Input of TC 550 will update all CSEDs on the module to the same date. Care must be taken when inputting a TC 550 to a module with multiple CSEDs. If correcting one CSED will cause the other CSEDs to be incorrect, then a TC 550 cannot be done. For modules with two CSEDs:

Generally modules with three or more CSEDs cannot be corrected with TC 550 unless the LAST CSED is the one being corrected and all previous CSEDs are expired. Input history to CC TXMOD and AMS to indicate the correct CSEDs.

Follow the table below to resolve other issues encountered when working CSED issues:

In some cases a module may have become frozen from update. Input of TC 550 or TC 534 will not update the CSED or force the balance to zero. To bring the balance to zero, an adjustment using CC ADJ 54 must be input.

If a voluntary payment, partially paying the account is received before the CSED, apply it to tax, penalty (with any FTP first), and interest, in that order until the amount is absorbed. Rev. Proc. 2002-26, at sec. 3.02.

For involuntary payments, payments are applied to interest first, then FTP, then other penalties and finally the tax.

Once a payment is used for a specific assessment with an expired CSED (either full or partially paid the assessment), it can’t be reallocated to apply to another assessment with an open CSED. When computing interest, payments and credits that were applied to the expired CSED need to be "excluded" from the computation along with the applicable tax and penalties.

On CC ADJ54 for IMF use Blocking Series 05, Source Code 0, Reason code (RC) 99 plus other applicable RCs and Hold Code 3.

For BMF use Blocking Series 15 and Hold Code 3.

If a TC 341 or TC 271 is not input, you must input a TC 340 and/or TC 270 for a zero amount to restrict additional assessments by IDRS.

Enter the date of claim or the IRS received date in the RFSCDT field and code “S” in the OVERRIDE-CD field.

Complete the "Monthly Recalculated CSED Report" and send to the SME at the end of each month. the SME will review the changes and will refer the issue to HQ if a systemic CSED issue not previously identified is found.

Resolve credits that posted after the correct CSED at the same time you are inputting TC 550 or a write-off.

If there is Federal Levy Payment Program (FPLP) or SITLP levy activity on the module and correction of the CSED will result in a full write-off to ST 12:

Transfer credits (TC 706) that are offset from other modules back to their original module. Input TC 570 followed by TC 572 with PDC 2 to prevent offset back to the expired CSED module. Allow the system to refund the credit, offset it to another liability or move it to Excess Collections.

A payment (voluntary and involuntary) made after the CSED is a statutory overpayment under IRC 6401(a). Transfer payments that cannot be timely applied to a module to the Excess Collection File (XSF) for further processing by the Statute Team. See IRM 5.19.10.5.1, General Procedures For All Transcripts and IRM 5.19.10.5.2.2, Processing Overpayments from a Module Time-Barred From Collection, for instructions and certain exceptions.

If other balance due modules are present for a single collection action, transfer payments that are not barred to the module with the shortest CSED.

If there are no other balances due, the amount is subject to refund:

For levy payments that posted after the CSED, research RTR to ensure that it is a true levy payment.

If all balances are full paid, an existing Continuous Wage Levy (CWL) must be released using Form 668-D, Release of Levy/Release of Property from Levy. Follow IRM 5.19.10.10.2.2 Figure 5.19.10-10, Full Paid Continuous Wage Levy Accounts. However, if the account was in ST 6X and your corrections caused it to update to full paid, the CWL will be released by employees working the IAAL.

Generally, a levy on a right to receive future payments that are "fixed and determinable" and that is served prior to the expiration of the collection period is enforceable and should not be released. In addition, a levy served after reducing a tax liability to a judgment (TC 550 dc 04) is valid. Allow these types of levy to remain on the expired CSED module, if the balance, including accruals, has not been fully paid.

Transfer excess levy payments:

Currently, Kansas City CSCO works lists of accounts where the earliest CSED has expired and a portion of the balance must be written off. Beginning in January 2013, a new MULTICSED transcript will issue in lieu of a listing. See IRM 5.19.10.4.7.1, MULTICSED Transcript and Listings. The IMF transcript will be worked by Kansas City and the BMF transcript by Philadelphia CSCO.

Write-offs that exceed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ must be approved by a manager.

When a tax module has multiple CSEDs and the earliest has expired, input a TC 534 to write-off any assessed balance associated with the expired statute. If no assessed balance remains from the expired CSED (accruals only), input a TC 534 with a zero amount.

The following transcripts are considered a "Priority Transcript" :

Verify the CSED on all modules where the CSED has been extended or suspended. See IRM 5.19.10.4.2, Transaction Codes and Case Actions that Suspend or Extend the CSED, and IRM 5.19.10.4, Collection Statute Expiration Date (CSED) Verification and Correction. The CSED can be verified using the Julian date calendar or the CCalc Tool found on CSED Helper - Julian Lookup

AMRH, Statute or Accounting may control a transcript to CSCO to resolve a levy payment. As of July 26, 2011, it is no longer necessary to refer these to CSCO. If a transcript of this type appears on the Aged Case Listing:

Atlanta CSCO does not work BMF transcripts (except for EFT Listings). Recontrol back to the originator any other BMF transcripts that are received.

If there is a TC 470 on the module, follow IRM 5.19.10.5.3, Accounts Maintenance Claim Pending (AM06W) Transcripts, to input a TC 472. Close the control with a history item relating to the action.

Research IDRS for any available credit(s). Document AMS with a history item XXXXXRSHRD (Xs identifies the type of transcript).

To transfer credit(s) to the URF or XSF, follow the procedures below.

To request a transfer from URF or XSF, follow the procedures below.

To request a manual refund, use Form 5792, Request for IDRS Generated Refund (IGR). The Manual Refund Tool is an IAT tool that is used to process and monitor manual refunds. As of July 17, 2013 use of this tool is mandatory.

If account is full paid and levy payments are still being applied, see IRM 5.19.10.5.2.1, General Instructions for PMTEXPCSED Cases.

If balance due notice or TDA processing is suspended for more than six months due to an IRS error, adjust any P&I per procedures in IRM 20.1.2, Failure to File/Failure to Pay Penalties and IRM 20.2, Interest.

If there is a TC 582 Federal Tax Lien on the module, verify the CSED. If the CSED is within 180 days of expiring, resolve any retention or freeze code. When the CSED expires, the lien is self-releasing.

If the available credit is less than the accrued penalty amount, then assess the total amount. EXCEPTION: if the additional accrued penalty amount exceeds available credit by ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, assess only the available credit amount. Do not assess zero balance account for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

Count each transcript received for each different MFT/TXPD, except where noted.

A Payment Expired CSED (PMTEXPCSED) Transcript generates once for each TC 610, TC 640 or TC 670, without Designated Payment Code (DPC) 05, 06, or 14, that is applied to a module after the CSED has expired.

The purpose of the transcript is to determine proper disposition of the payment, which may include one or more of the following:

See IRM 5.19.10.5.1, General Procedures for All Transcripts, for more information regarding the Unidentified File (URF), Excess Collection File (XSF) and manual refunds.

The 06W transcript will generate after twenty-two (22) cycles:

If the ASED has expired, an AM-X transcript will generate regardless of any posting in the module.

If the Assessment Statute Expiration Date (ASED) is imminent (within 180 days), a Statute (STAT) transcript will generate.

The AM07 transcript generates when there is a credit balance on an account that contains a TC 130 and TC 150 and the CP 44 Notice was not resolved in 16 cycles. A V− freeze appears on the transcript and the related module on IDRS. If the transcript is not resolved within 14 days from the computer notice date, a control base with Category Code AMRH is automatically established.

The following will explain the three statute transcripts that will generate for the AM07 if the module is open, regardless of any posting:

Follow IRM 5.19.10.3.12, Generation of CP 44 and CP 188, to resolve.

CSCO works both IMF and BMF accounts at various campuses.

A CSED Transcript (including SPC3 Transcripts) generates when:

There are several transaction codes or assessments that carry their own CSED. See IRM 25.6.1.12, Collection Statute Expiration Date (CSED), for a list.

SBSE CSCO works IMF and BMF accounts at various campuses.

The AM 23W transcript is generated to alert the campus of the W− freeze condition created by a TC 470 cc 90, 93, or 95 and the tax module is within 180 days of the CSED.

Reverse any TC 470 cc 90 or 93 with TC 472.

TC 470 cc 95 is input when a taxpayer files a Civil Penalty Appeal. It suspends the CSED until Appeals makes a decision regarding the taxpayer's personal liability for unpaid trust fund taxes. After Appeals' decision, a TC 550 is input to correct the CSED and TC 470 cc 95 is reversed. For TC 470 cc 95 see IRM 5.19.10.5.3, Accounts Maintenance Claim Pending (AM06W) Transcripts.

The CP 86/186 Notice generates when:

Collection Operations will only work collection related issues, all others should be routed to the appropriate operation.

Conditions which create restrictions are:

Verify the appropriate disaster declaration by accessing the Disaster Declarations/FEMA at IRS Disaster Assistance Program .

The Non-Master File Liability (NMFL) transcripts are generated when a second credit posts to a module after issuance of a CP 44 and the V− freeze created by the TC 130 remains on the taxpayer’s account. When a TC 740 posts to the transcript module and creates a credit balance, the NMFL transcript will generate.

If the transcript cannot be resolved within 14 days from the computer notice date, control the transcript using Category Code CP 44 and enter "NMFL" in the history section of the control base.

If the module contains a TC 608 process following IRM 5.19.10.5.2, PMTEXPCSED Transcripts. Do not process following normal NMFL Transcript procedures.

Follow IRM 5.19.10.3.12, Generation of CP 44 and CP 188, to work all others.

A VERFPYMT Transcript generates daily, if it qualifies for daily processing; otherwise it generates weekly, when a payment posts to a debit balance module and,

The module may also have a −B freeze created when a G− or −I freeze, penalty and/or interest condition, is present.

The VERFPYMT generate to AM and those currently in Collection Status. 6X, 22, 24, 26 or 53, should be reassigned to Atlanta CSCO, 0765500001, category code "VERF" .

An ELECSPPAY Transcript generates to Brookhaven CSCO AMS when an electronic payment posts to the secondary taxpayer’s account and the module meets certain conditions. The electronic payments include TC 670s with an EFT trace number beginning with 21, 22, 23, 26 and 27 (except paper checks converted for electronic processing (RS-PCC) and electronic levies.)

An ELECSPPAY Transcript generates when the following criteria is met:

Tax examiners working these transcripts will determine if the payment has posted to the correct account and resolve the payment through research or by contacting the taxpayer.

Refer to IRM 21.5.8.4, IDRS Guidelines for Credit Transfers, for procedures when moving credits.

A NOMRG-TDA (NM07) Transcript with No-Merge RC 03 for IMF and No-Merge RC 10 for BMF will generate when both accounts being merged contain the following conditions within the same tax period:

Refer to Document 6209, Section 8C, No Merge Reason Codes for a complete list.

In order to merge two related accounts, both BOD Codes must match.

Document your actions and contacts on AMS for both TIN.

The "No Merge" is a result of the revalidation of the SSN. A complete transcript of both the "FROM" and "TO" accounts will generate when the "FROM" account contains a Civil Penalty Name Line and the name control of the Civil Penalty Name Line does not match the "TO" account name control. This is a No-Merge RC 19.

Determine the correct name control through research of IDRS.

This section is obsolete. Refer to IRM 5.19.10.5.11.

For enlisted personnel, IRC 112 excludes from gross income certain pay an enlisted military member, warrant officer, or a commissioned warrant officer of the Armed Forces receives for active service:

For commissioned officers, the amount of pay excluded is limited to the maximum enlisted amount per month, plus imminent danger/hostile fire pay. For additional information, see Publication 3, Armed Forces' Tax Guide.

The exclusion from gross income is effective from the date of the CZ designation until the area is no longer designated as a CZ.

Certain members of the Armed Forces outside the designated CZ can qualify for the CZ exclusion of the income. To qualify, they must:

The exclusion for both enlisted personnel and commissioned officers is reflected on Form W-2, Wage and Tax Statement, prepared by the military member’s assigned Finance and Accounting Office.

The DoD determines who serves in direct support of the designated CZ military operation and issues a Form W-2 correctly reflecting taxable income.

Civilians may not exclude the income earned while working in a CZ unless they can qualify on Form 2555, Foreign Earned Income.

IRC 7508 postpones the time for performing time-sensitive acts, such as filing tax returns or paying tax. A deadline may be postponed for 180 days after the last day of service in the combat zone (or hazardous duty area) or participating in a contingency operation or hospitalization from such service or participation (except the collection period is not postponed for hospitalization). If the deadline includes a filing period, the postponement includes the number of days that were left in the period when the taxpayer entered the combat zone, the contingency operation or was hospitalized. See IRM 5.1.19.3.8(4), Combat Zone or Contingency Operation. The IRS will not assess income tax, unless initiated by the taxpayer or charge any penalty or interest during the postponement period. IRS ceases all enforcement activities during the postponement period. See IRM 20.2.7.11.1, Time Disregarded by Reason of Combat Zone Service, for more detail on RDDs for taxpayers in a Combat Zone.

IRC 7508 applies to individuals serving or working in one of the following:

Some areas include: Haiti: Executive Order number 13529 and the Secretary of Defense designated Haiti, a CO (Operation Unified Response) to provide relief in the wake of the earthquake of January 12, 2010. Effective dates for Operation Unified Response are January 13, 2010 through June 1, 2010. TC 500 closing codes are 52 and 53.

Afghanistan: Executive Order number 13239 designated Afghanistan, the water and the airspace above, as a CZ (Operation Enduring Freedom) on September 19, 2001. Personnel stationed in the areas listed are considered in direct support. TC 500 closing codes are 56 and 57.

Kosovo Area: Executive Order number 13119 designated the following areas as a CZ (Operation Allied Force) on March 24, 1999 and/or were designated a qualified QHDA by Public Laws 104–117 or 106–21, including air space above. TC 500 closing codes are 54 and 55.

Executive Order number 12744 designated the Arabian Peninsula areas as a CZ (Operation Desert Storm) on January 17, 1991. Military personnel serving in support of such allied forces are eligible for all CZ related tax benefits. TC 500 closing codes are 52 and 53, if entry date is prior to September 19, 2001. If entry date is September 19, 2001 and later, use TC closing codes 56 and 57.

Sinai Peninsula: Section 11026 of Public Law 115-97 designates the Sinai Peninsula of Egypt as a qualified hazardous duty area that is treated as if it were a combat zone. This designation generally applies for the period beginning June 9, 2015. For more information about amending prior year returns to take advantage of the benefits associated with this designation, see the instructions for Form 1040-X, Amended U.S. Individual Income Tax Return.

Beginning in 2012, military orders or other documentation are required for entry dates of 2010 and later. See below for exceptions. Documentation is not required for dates provided by the DoD.

When working taxpayer correspondence, telephone calls, e-mails and Combat Zone transcripts with entry dates of 2010 or later, follow procedures below for requesting documentation. For CP 04 responses follow IRM 5.19.10.6.5.5, Responses to CP 04 Notice.

Follow below for providing a mailing address to the taxpayer:

Follow below for taxpayer responses and no replies:

Documentation must indicate that the taxpayer served or worked in support of or was deployed to a current CZ, CO or QHDA and must show a qualified area.

Types of documents might include:

If documentation does not qualify the taxpayer:

The CZ –C freeze code is an entity freeze code that remains on the account for historical purposes, even with input of accurate entry and exit dates.

The −C freeze can be set by a TC 500 in the following ways:

DoD sends IRS a monthly listing of Combat Zone entry/exit dates for taxpayers who are deployed to a Combat Zone area. This is a systemic download by IT. If the taxpayer does not have an established Master File account, the TIN will fall-out to an error listing, which is stored on Control-D. Every six months the report must be retrieved from Control-D and run through a GII Tool. Kansas City Collections pulls the error listings to process. Beginning October 2021, IT runs the current monthly error listings, but Kansas City should continue running the GII Tool for listings received prior to October 2021.

The following chart lists TC 500 closing codes for entry date, closing codes for exit date and identifies the designated CZ:

There are two new closing codes for use with the TC 500 Military Deferment, and a new indicator code for IMFOLE. Specifically a CC 58 and CC 59 for the TC 500 and an indicator 3 for IMFOLE. The new TC 500 CC 58 will be used when a combat zone veteran has been hospitalized due to injuries sustained in a combat zone. Upon input of the TC 500 CC 58 an indicator 3 will systemically update to IMFOLE signifying that the taxpayer is hospitalized. Upon their exit from the hospital a new TC 500 CC 59 will be input, and IMFOLE will systemically update to an indicator 2 (no longer in a combat zone). The TC 500 CC 58 will mirror the existing functionality of the TC 500 CC 52/54/56 by extending the ASED, suspending interest and penalties, and preventing collection, however, it will not prevent the extension of the CSED for the duration of hospitalization. The new TC 500 CC 59 will mirror the existing functionality of the 53/55/57 and allow for the re-entry into active collection 180 days from posting.

See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas, for a detailed list of Presidentially Declared Combat Zones and Qualified Hazardous Duty Areas.

The CZ –C freeze and indicators are located on CC IMFOLE, Line 11.

Any balance due module will be in ST 43.

The –C freeze suspends the following:

For more information regarding the length of suspension, see IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period.

The start date of the CZ suspense period begins on the transaction date of the TC 500 Closing Code 52, 54, 56 or 58 (CZ entry date).

The ending date of the suspense period is calculated 180 days from the transaction date of the TC 500 Closing Code 53, 55, 57 or 59 (CZ). The 180 days begin on the day following the CZ exit date.

If a taxpayer serves multiple tours of duty in a CZ, and there are less than 180 days between the different tours, add the 180 days to the end of the last exit date.

Once the entry and exit dates are present, the balance due accounts systemically return to normal processing when the 180 day suspense period expires.

The CSED is suspended from the entry date to the exit date plus 180 days. No additional days are added to the CSED suspension for time served during a filing season.

The CSED is NOT suspended during any period of continuous qualified hospitalization as a result of injury received while serving in the combat zone or contingency operation and the following 180 days. Refer to IRC 7508(e)(3).

The RDD is extended by up to an additional 105 days (106 in a leap year) if the taxpayer was in the CZ during any part of the filing season. The RDD is calculated systemically. If the taxpayer was in the CZ more than one filing season, the RDD is calculated separately for each tax year. Applicable P&I charges are also determined based on the recomputed RDD.

See IRM 20.2.7.11.1, Time Disregarded by Reason of Combat Zone Service, for information on computing interest and FTP. For computing FTP penalty, see IRM 20.2.7.11, IRC 7508, Combat Zone.

This subsection has procedures for working taxpayer correspondence, e-mail and telephone calls when the taxpayer informs the IRS of their deployment to a CZ or CO.

It also provides direction for handling IA requests and payment proposals when research of the taxpayer's account reveals a CZ −C freeze.

A Notice CP 04 will issue when a taxpayer self-identifies on a tax return that they served in a CZ. Form 15109 Request for Tax Deferment is also sent. The form requests entry and exit dates for the qualified area and a copy of their military orders or a Letter of Authorization (LOA), for civilians. Procedures for working responses to Notice CP 04 are provided in this section.

Follow procedures below: