Employees in the Accounts Management (AM) organization respond to taxpayer inquiries, phone calls, process claims and other internal adjustment request related to Returned Refunds/Releases.

The authorities for this IRM include:

In addition to established IRM guidance, consider the Bureau of the Fiscal Service (BFS) regulations when issuing a check in another name. These regulations include, but are not limited to, the following:

The Taxpayer Services Commissioner oversees all policy related to this annually published IRM.

The Director of Accounts Management (AM) oversees the instructions to the employees contained in the IRM content.

Accounts Management Policy and Procedures IMF (PPI) Tax Analyst(s) oversees the content in this IRM and acts as a point of contact for all Accounts Management sites.

Managers and leads ensure compliance with the guidance and procedures in this IRM for Returned Refunds/Releases case resolution.

Employees resolve Refund Inquiry requests following procedures in this IRM.

Program Effectiveness: Program Effectiveness is measured and controlled through:

Program Goals are measured and controlled through:

Common acronyms listed throughout this IRM:

Refer to the related resources below (list is not all inclusive):

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. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights.

Sometimes taxpayers return refund checks directly to the RFC instead of sending them to the campus.

If the check has not expired, the Accounting Function receives SF 1098, Schedule of Cancelled Checks, from the RFC. The Accounting Function may forward the list to the Refund Inquiry (RI) Unit at their campus for notification purposes. If received in RI, the list may be kept in the unit files or destroyed as classified waste.

Correspondence received from the taxpayer will be sent with the SF 1098 list. See paragraph 9 below for instructions.

Undelivered checks are identified on the SF 1098 list as "Code 2" . Checks returned to RFC by the taxpayer are identified as "Code 3" .

Transaction code (TC) 841, blocking series and serial number "99999" , on the module, identifies checks returned by the taxpayer.

TC 740, blocking series and serial number "99999" , identifies checks returned by the U.S. Postal Service.

When the RFC receives a refund check for cancellation, they send the following to the RI function:

The RFC or U. S. Postal Service will annotate on correspondence:

The RI function will:

A recertified check is any check reissued to the taxpayer to replace an original check. If a check was cancelled, the account will show a credit for the refund, TC 841 or TC 740. A refund may be cancelled for any of the following reasons:

When the taxpayer returns either the original, recertified, or both checks, use the following procedures:

If the U.S. Postal Service cannot deliver the refund check to the taxpayer's address they will return the check to the Bureau of the Fiscal Service (BFS) Regional Finance Center (RFC).

The RFC cancels the undelivered refund checks weekly and transmits the undeliverable refund checks to Martinsburg Computer Center (MCC) for posting of TC 740 to credit the correct taxpayer's account. If a Treasury Offset Program (TOP) offset was made on the original refund, TOP will generate a TC 899 code 1 to reverse it.

Review the module for conditions that could determine allowable credit interest (e.g., identity theft (IDT), etc.) and take the proper action, including a manual computation of interest if necessary, before releasing the refund.

An S- freeze occurs when:

For SCADDRESS transcripts received in Refund Inquiry (RI), take the following actions for case resolution:

Do NOT input a CC CHK64 under the following conditions (reissue refund as a manual refund):

Any of the following will release an S- freeze.

Customer service representatives (CSRs), tax examiners (TEs) and RI Unit Examiners will input CC CHK64 (TC 018) to change the address.

Use the chart below to release an S- freeze:

Additional research may be required to determine the type of refund to send to the taxpayer. If there appears to be a need for further research on the account, take the proper action. This may include contacting other IRS functions or more communication with the taxpayer, see Letter 533C, Refund Check Undelivered or Not Negotiated.

If additional research or contact with the taxpayer results in moving the overpayment to a different tax module, follow the guidance in IRM 21.4.3.5.5 (5), Resolving Returned Refunds (Unexpired Checks).

Take the proper action on Computer Paragraph (CP) replies.

If the taxpayer calls or sends in a request on how to return their refund check, the customer service representative (CSR) or tax examiner at the IRS Campus Refund Inquiry (RI) Unit, should first confirm the refund check was issued by the IRS. Refer to IRM 3.8.44-7, Agency Location Codes (ALC), to confirm the ALC is on the list. If the ALC (begins with 2009XXXX) located at the top of the check next to the date is on the listing, advise taxpayer to write "void" in the endorsement area on the back of the check. Advise taxpayer to mail the check with a letter of explanation to the IRS campus RI Unit associated to the taxpayer’s state of residency. See the Refund Inquiry Unit Addresses link for the correct address. Advise the taxpayer not to write on the front of the check. If the ALC is not on the list, advise taxpayer the check was not issued by the IRS, but by another federal agency.

Returned refund checks, whether being sent to a Refund Inquiry team from within the campus, or from outside the campus, must follow the procedures in IRM 3.8.47.4.4, Secure and Process a Returned Refund Check, for documentation and packaging to ensure the security of the check.

When there is potential refund fraud or ID theft involved, Refund Inquiry should take the following actions. (In most instances, these checks will already have been routed by Submission Processing.)

Refund checks returned within 12 months of issue date are stamped "NOT NEGOTIABLE" , listed on a Form 3210, Document Transmittal, and sent to the Philadelphia RFC daily for cancellation. A copy of the check should be kept with the case. Non Refund Inquiry Unit employees, see (3) below. Refund Inquiry Unit employees, do not include any reference to the IRS in the To portion of the address label. Forward the Form 3210 and documentation via US Postal Service, to:

RFC will return credit for returned refund checks via SF 1098 and will post a Transaction Code (TC) 841 to the taxpayer's account in approximately four to six weeks after the check is forwarded to RFC. If there was a TOP TC 898 on the original refund, TOP will generate a TC 899 to reverse it. RFC will return credits for Non-Master File (NMF), Individual Retirement Account File (IRAF) and fee refunds manually on SF 1098.

Take the following action when you receive a Form 3210 and/or a returned refund check.

To research and resolve returned refund checks that include an explanation from the taxpayer, refer to the chart below. Follow the taxpayer's instructions whenever possible.

If a taxpayer returns a refund check requesting that it be applied to another tax module and:

If no explanation or other information is provided by the taxpayer, and you are unable to determine why the refund check was returned, correspond with a Letter 407C, Refund Returned by Taxpayer; No Reason Indicated, or Letter 18C, Decedent Refund (Form 1310 Requested), if a Form 1310 is needed. Suspend the case and allow 45 days for a response (70 days for overseas taxpayers). If no response is received, follow paragraph (11) below.

When a refund check is reissued to the taxpayer or designated payee, do not allow interest if:

Allow interest under the following conditions:

Use the following guides when inputting a TC 290 to release P- freeze as a refund to the taxpayer. Refer to IRM 21.5.6, Freeze Codes.

Depending on the age of the credit, transfer the payment or credit to the Unidentified Remittance or Excess Collections accounts if:

If unable to release the credit, transfer the credit as follows:

Under Title X, Government Checks, of the Competitive Equality Banking Act of 1987 (known as Limited Payability provision), checks issued October 1, 1989 or later expire the last business day of the 12th month after issuance. The credit for an expired refund will post as a TC 740, blocking series/serial number "66666" , approximately three weeks into the 14th month. Upon completion of the case, destroy the original expired refund check as classified waste. Do not send an original check to files.

If the taxpayer contacts IRS and either returns or wants to return a refund check that is over 1 year old (known as a "stale dated" check) use the following chart to determine your response:

For refunds meeting or related to TRNS46 transcripts (STAT-08 and AMX-08) with decedent refunds, refer to IRM 21.2.4.3.20, Processing TRNS46 Cases, to address refund.

The two Category Codes that pertain to returned refund checks (excluding undeliverables) are 3913 and 841P, but these may change depending on actions taken on the account.

Unexpired refund checks are input on the automated Returned Refund program in AMS, which opens a control base on IDRS in 2-3 days in Category Code 3913. When the check is sent to the Bureau of the Fiscal Service (BFS) RFC for cancellation, a TC 841 will post in about 4 - 6 weeks at which time the Category Code changes to 841P.

Returned refunds in Category "3913" age in 45 days from the received date. When the category updates to "841P" , action must be taken in 14 days to avoid becoming overaged. Use the following chart for required follow-up action time frames on these categories: