These instructions are for employees in Submission Processing Accounting to add and apply dishonored checks to the Dishonored Check File and unidentified/unprocessable remittances to the Unidentified Remittance File.

The extent of research conducted on both Dishonored Checks and Unidentified Remittances will not depend upon the dollar amount of the item. Both large and small cases are to receive equal attention, but large-dollar cases will be worked first.

The Dishonored Check File is a separate file within the Integrated Data Retrieval System (IDRS) containing records of all remittances returned to IRS by depositaries upon which payment was refused.

The Unidentified Remittance File is separate file within IDRS containing all received remittances that cannot be immediately identified or applied.

New hire and annual refresher training are required for all Dishonored Check and Unidentified Remittance employees.

The below training courses are available in the new learning plan, The Integrated Talent Management (ITM) System.

All new hire DCF and URF clerks and technicians will complete the new hire training within 30 days of their start date.

All DCF and URF clerks and technicians will annually complete the refresher training by January 31. Notification of scheduling/completion of the refresher training will be sent annually to HQ by the Friday of the first full working week in February.

This IRM is updated and published annually after review and concurrence by impacted stakeholders according to the clearance process established in IRM 1.11.9, Internal Management Documents, Clearing and Approving Internal Management Documents (IMDs). Functional areas are responsible for reviewing the information in this IRM annually to ensure accuracy, consistency, and to promote effective program administration.

First line managers of personnel working Dishonored Check File (DCF) and Unidentified Remittance File (URF) cases will conduct periodic reviews of cases assigned to all employees. The purpose of the review process is to make certain that employees are properly closing cases in a timely manner, identifying Erroneous Refunds, and referring cases to the Erroneous Refund Unit. Managerial Reviews should be submitted to the DCF/URF headquarters analyst via e-mail by the 15th of the month following the month or quarter.

In addition to the caseload reviews, samples of the following output listings shall be reviewed quarterly to ensure that all employees are taking adequate and proper actions.

First line managers of personnel working Dishonored Check File (DCF) must ensure that erroneous refunds caused by dishonored checks are properly identified and stopped. Management must ensure that tax examiners are trained to identify and intercept pending refund.

Program Reviews are mission critical to the health of deposit programs to ensure integrity of the financial statements. It is essential that each function conducts its operations with an emphasis on mitigating risks, identifying best practices, and adhering to IRM requirements. An objective assessment of program compliance, including all applicable procedures and guidelines, is necessary to ensure that adequate internal controls are in place.

Program Effectiveness: The program effectiveness includes conducting reviews and analysis to detect and identify material or significant deficiencies that could adversely impact IRS audits and/or financial statements. These reviews are necessary to ensure Submission Processing is conducting business as prescribed in the governing IRM's and are designed to identify potential internal control deficiencies that may impair the integrity of financial reporting.

Program Review by Designee of Field Director Submission Processing: At least annually, the Field Office Payment Processing Program must be reviewed by a designee of Field Director Submission Processing. The Field Office Payment Processing Program Guide is a tool to assist reviewers.

Program Review by HQ: A program review ensures actions are in accordance with IRM procedures. HQ Submission Processing (SP) Accounting and Deposit Section conducts program reviews to verify compliance with IRM requirements, address TIGTA/GAO findings, identify risks to internal controls, address error trends, and training needs, as needed. In addition, the reviews ensure IRM procedures are applicable, adequate, and adhere to Department of the Treasury and/or IRS guidelines.

Corrective Action Plan: The Corrective Action Plan is a plan of action that is developed to resolve the condition that resulted in noncompliance with IRM requirements. In addition, an effective Corrective Action Plan identifies the root cause of problems to minimize or eliminate their recurrence. Corrective actions are developed, implemented, managed, and monitored to promote program improvement.
As part of the Program Review process, functional areas are required to provide a written Corrective Action Plan response to the review recommendations within 30 days of receiving the program review summary report. The Corrective Action plan must include:

The following table contains a glossary of terms:

The following IRMs are referenced and may be required to research specific instructions or may be used as resources:

All employees must be aware of IDRS notice issuance criteria and the input of CC STAUP on a module if closing action cannot be accomplished before the next notice is issued.

The number of cycles must be for a sufficient period to ensure that balance due notices will not be issued prematurely. It may be necessary to extend the previously input STAUP if the transfer procedure is lengthy.

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees help taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. TAS criteria include economic burden, systemic burden, best interest of the taxpayer, and public policy (as determined solely by the National Taxpayer Advocate (NTA)). TAS assists taxpayers who have unresolved problems with the IRS. See IRM 13.1.7 Taxpayer Advocacy Panel Program if more information is required. The Taxpayer Bill of Rights adopted by IRS in June 2014 provides taxpayers with ten rights. For more information, refer to the Taxpayer Bill of Rights available at Taxpayer Advocate Service.

While the Internal Revenue Service (IRS) is continually working to serve customers in a quality manner, some taxpayers still have difficulty getting solutions to their problems or getting timely and proper responses to their inquiries. Per IRC 7803(c), Congress established the office of the National Taxpayer Advocate (NTA) and its functions within the IRS to help these taxpayers. TAS has identified criteria that qualify taxpayers for TAS assistance. The Case Advocate will conduct an independent review of actions that have been taken or need to be taken to resolve the problems taxpayers are experiencing.

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

If the IRS employee can resolve a taxpayer’s inquiry or provide the relief requested, as outlined in IRM 13.1.7.4, Same Day Resolution by Operations, a referral to a TAS office is not necessary even if TAS case criteria are met. The definition of "same day resolution" is "within 24 hours." However, cases where the employee cannot completely resolve the issue within 24 hours but has taken steps within 24 hours to resolve the taxpayer’s issue, also meet the definition of "same day." Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

An IRS employee should make a referral to a TAS office if the employee receives a taxpayer contact and cannot initiate action to resolve the inquiry or provide the relief requested. A taxpayer does not have to specifically request TAS assistance to be referred to TAS. IRS employees will advise taxpayers of the option to seek TAS assistance when appropriate. TAS will request documentation from the taxpayer if it is needed to support the requested relief or required by the IRM.

TAS has Service Level Agreements (SLAs) with TS, SB/SE, LBI, TE/GE, CI and Appeals to ensure that standards are established within the business operating divisions/functions to process TAS casework when the authority to complete transactions rests with the division/function.

The SLAs are located on the TAS intranet home page under the heading "Service Level Agreements."

IRS has a specific office to collect and process all criminal restitution payments in which the IRS is the victim of a crime. These restitution payments should be processed by the Kansas City IRS Center only. See IRM 3.17.243, Miscellaneous Accounting, for further information on Criminal Restitution Payments and Department of Justice (DOJ) receipts.

If criminal restitution payments are routed to an IRS office or campus other than Kansas City, per IRM 3.8.45.7.26, Department of Justice/Criminal Restitution Program Payments (KCSPC Only), they must be transshipped via overnight traceable method to:
IRS - ACO
Attn: DOJ/Criminal Restitution
Mail Stop 6261, P-6
333 W. Pershing Rd.
Kansas City MO 64108

For any questions about the receipt and reconciliation of criminal restitution payments please contact Kansas City Accounting at internal IRS mailbox ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Valid CC BDADD cases must be added to the DCF within one day of receipt of the debit voucher/SF 5515. Checks should be processed from addition to application within 21 days from the date the original debit voucher/SF 5515 was prepared.

Encoding errors, piggy backs, and improper SF 5515 charge backs must be resolved within 45 calendar days of the date the discrepancy was identified.

Single deposit shortages must be resolved within 90 days.

Slipped blocks must have all avenues of research exhausted within 150 calendar days of the date the discrepancy was identified.

All dishonored checks should be processed through their release from transcription or through application on IDRS within 21 days from the date on the Dishonored Check Number. This processing cycle starts on the date the original debit voucher/SF 5515 is prepared and continues until the account is closed by an application (CC BDAPL) or a void (CC BDOUT). See IRM 2.4.25, Command Codes BDADDR, BDADD, BDAPLR, BDAPL, BDOUTR, BDOUT, BDENT and BDINQ. Area Office Automated Lien Systems (ALS) Unit, Case Processing, must be notified immediately if certain dishonored checks cause the premature release of federal tax liens. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

Should dishonored checks be frequently received by an incorrect agency, use of the Government On-Line Accounting Link System (GOALS) to IPAC to IRS should be encouraged, along with an immediate FAX of back-up material. The date of the original Debit Voucher must be used for control and aging of these items.

Each record in the DCF will be analyzed DAILY, by the status code and age (Julian Date and year digit), for retention and/or necessary action.

All items written off to Account 1510, Other Receivables-Regular, at anytime, require prior approval from the Campus Director. When a record has aged 367 days from the debit voucher/bank date, the status of the record will automatically be changed to "Unprocessable" . A listing and posting document will be generated to write the amount off to the 1510 Account, and the amount will be removed from the DCF total.

Count checks with each debit voucher/SF 5515. Put total on the back of the debit voucher/SF 5515 and stamp today's date beside the volume.

Balance the checks to the debit voucher/SF 5515 and attach the adding machine tape to the debit voucher/SF 5515 and the checks.

If notification is received that an electronic fund transfer or automated clearing house payment is dishonored, all incoming information should be forwarded to Accounting Control for proper action.

Some campuses have a person responsible for contacting the depository banks when there is a discrepancy between IRS and the depository bank. This person may also work with missing checks and other related problems that require contact with banks.

Remittances (usually money orders) which are received without debit vouchers/SFs 5515 should be flagged for "special attention" to avoid applying the same credit twice.

When an IRS campus' agency location code (ALC) is erroneously debited, the total debit should be added to the DCF rather than the individual returned items, pending return of the deposit ticket described below. A letter should immediately be sent to the initiating bank with:

Forms 2424 prepared by the employees in accounting must be reviewed by the manager or their designee, before being sent through for processing.

The manager, or their designee, must sign the Form 2424 and the history sheet if applicable to show that the case was reviewed. The signature can be a wet signature or a digital signature.

These procedures are for the contingency purposes when the Dishonored Check processing sites shutdown due to local or national emergency.

The Dishonored Checks will be pulled from the ECP database. The 5515 debit checks will be pulled from the date your campus shutdown. Review and separate the bank adjustments from dishonored checks. The DCF headquarters analyst will provide a list of the debit vouchers on a spreadsheet for each campus for balancing.

Research and pull the following Control-D reports from the date your campus was shutdown. Save each report in the Portable Document Format (PDF) in the Dishonored Check SharePoint site using the following naming convention: MM.DD.YYYY Control-D ???? report. The link is; Dishonored Check Share Point - Home

The Clerk will:

The TE will:

The Work Leader will:

Write a code for the reason the check was dishonored in upper left front of check. The following is a list of reason codes to use when determining reason codes; do not rely upon it when determining whether a penalty should be applied: (See IRM 3.17.10.2.20.2, Assessing a Dishonored Check Penalty for information on penalizing.)

Underline Name Control. Determine name control as directed in Document 7071, Name Control Job Aid. If no name is available, put "UNKN" .

As a rule, ECP uses alphas as their returned reason codes. The below codes will need to be converted to IRS reason codes for input to the DCF. If you see a returned reason code that is not in the below list, check the Return Reason Code drop down menu in the Payment Query screen in ECP and convert it to the right IRS Return Reason Code.

ECP uses numeric as their returned reason codes for ACH payments. The below codes will need to be converted to IRS reason codes for input to the DCF.

Enter checks on IDRS using CC BDADD (generated by CC BDADDR). See Exhibit 3.17.10-2 As you add the dishonored check on IDRS, you are establishing the check on the DC file. The BDADD format has a running total. This total must balance to the debit voucher/SF 5515. If the total does not balance, look at each check entered by using CC BDINQ. When you find your error, correct the erroneous BDADD by using CC BDOUTZ. See Exhibit 3.17.10-3. It is suggested the Dishonored Checks be input on IDRS in groups of 25. If an error is made, it will be easier to find it in a group of 25 than in a larger group.

Form 8252 is required for all DCF cases. Create a worksheet using Form 8252, Dishonored Check Worksheet, for each check. If the check is coded in the upper-left hand corner with Multiple/Split Remittance Indicator "S," indicating a split payment, make several copies of the check so each separate application of the check will have its own worksheet.

Action taken on cases for which worksheets have been prepared will be appropriately recorded on the Forms 8252. Few cases will require research in all areas listed on Form 8252.

Add money totals from all debit vouchers/SFs 5515 input through IDRS with CC BDADD from the previous workday. Balance to DCF 0340, 1710 Account Transaction Register (Dishonored Checks Added to DCF) daily.

Add volume totals (number of checks) from all debit vouchers/SFs 5515 input through IDRS with CC BDADD the previous workday. Balance to DCF 0340.

Subtract corrected money amounts (BDOUT "Z" s) from total on transaction register.

Annotate on the DCF 0341, 1710 Account Transaction Register (Restricted Application From the DCF) any item which has been removed from the DC file using CC BDOUT.

Send all debit vouchers/SFs 5515, transaction registers and analysis to the RRACS function. Attach a Form 2424, Account Adjustment Voucher, for each discrepancy and a Form 4830, IDRS Posting Document, for each NMF application.

File a copy of the debit voucher/SF 5515 in the Accounting Control area by accounting station symbol and date for month-end reporting, and keep another copy of the debit voucher/SF 5515 in the permanent closed file.

IDRS DCF will be received from the Accounting Control clerk daily.

The DC records with a "closed" status for 3 months will be aged out of the DCF monthly Dishonored Check Records Dropped from the File (DCF54). This listing contains two parts. Part one (DCF 5403) contains complete documentation of each record dropped from the DCF in alpha sequence within area order. Part two (DCF 5404) is an abbreviated record of Part one. It is in DC control number sequence and contains DC control number, DC name control, original amount, IRS Received Date, Entry Date. These listings now become the permanent record of the DCF Dropped File. The DCF54 is viewable on Control D.

The following are examples of checks that can be returned to the bank:

If the payee is missing, stamp "United States Treasury" in the correct line. Complete Form 8250, Request to Redeposit Checks. Make two photocopies of the front and back of check. Make two photocopies of debit voucher/SF 5515. Keep one copy of each and file in a deposit ticket file. Forward check and remaining copies to Receipt and Control to be redeposited. See Figure 3.17.10-2, Request to Redeposit Checks.

If the check is returned because a signature is not present on the receipt or voucher that is attached to a check that has been previously endorsed by IRS, the designated space on the front of the receipt must be signed. A local decision will be made as to who will sign the receipt/voucher. Prepare Form 8250, Request to Redeposit Checks, to redeposit the check and proceed as outlined in (2) above.

Figure 3.17.10-2

Pictured is a completed Form 8250, Request to Redeposit Checks, This form is completed when checks are sent back to Receipt and Control to be redeposited. Items on the form are listed below: TO, Number of ChecksFROM (Branch, section, unit), AmountRedeposit to (Name of Bank), Debit voucher number, voucher date, District Off codeReasonName of preparer, Employee ID, Date

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Redeposited checks are sent to the campus' bank even though they may have originally been deposited elsewhere.

A copy of the Form 8250, a copy of the redeposited checks and the white copy of SF 5515 are returned to the DC Unit from Receipt and Control when checks are redeposited. When you receive this notification, use CC BDOUT plus code "R" to void these DCs from the Dishonored Check File. See Exhibit 3.17.10-3

When a debit voucher/SF 5515 is overstated, contact the depositary bank. The bank will forward a Form 215 (credit voucher) to DC function which then forwards it to the RRACS function.

When an error is found by the bank, the bank will forward a Form 215 with a copy of the check and a copy of Form 813, Document Register. For example, if a check was written for $2,000.00 and was encoded for $200.00, the Form 215 will show a credit for $1,800.00.

When this type of Form 215 is received, research the account to determine if the taxpayer received the correct amount or if the credit is needed. Forward the credit to the RRACS function for input to Account 4620 (Unidentified Remittances) if the original IRS-received date is less than one year or to Account 6800 if the original IRS-received date is one year or more. If the proper application can be determined, apply the credit to the taxpayer's account using CC FMAPL if in URF or CC XSAPLR if in XSF.

In some instances, your case work may require DLN assignment. Number Form 3244 using the following series of numbers and date of the Form 215.

Examine each check to identify payments on offers in compromise. These checks may be processed as BMF, IMF or NMF payments.

OIC Payments applied to the Master File should be processed accordingly:

NMF payments have:

NMF Payments identified as made on offers in compromise:

When researching and processing dishonored checks, the dishonored checks should never leave the DC function. If a photocopy is not made on the worksheet, make a photocopy of the check if there is a need to take the check's image to a different area. Secure all checks at the end of the day. This practice will help prevent the loss of a dishonored check.

Transfer the DLN from the DC to the DC worksheet. See Figure 3.17.10-3, Transferring DLN to DC Worksheet.

Figure 3.17.10-3

Pictured is a return DLN showing the breakdown of the elements. The DLN should be entered on the top right portion of Form 8252, Dishonored Check Worksheet. The elements of the DLN are listed left to right. File LocationTax ClassDocument CodeJulian DateBlock NumberDocument NumberYear Digit

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The DLN will be one of the following:

The sequence that should be used when researching Dishonored Checks for payment of IRS tax liabilities is outlined in 3.17.10.2.11(2) (Researching Dishonored Checks for Payment of IRS Tax Liability) through 3.17.10.2.11.1.1.2 (Research Other Areas) below.

Examine the audit trail on the reverse of all Integrated Submission and Remittance Processing (ISRP) and Lockbox checks. Complete information to reverse a payment is printed on each check processed via ISRP. See Figure 3.17.10-8, ISRP Audit Trail and Endorsement.

Figure 3.17.10-8

Pictured is the reverse of a check showing the audit trail encoded when the check is processed through ISRP. The check will display the items listed below.

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Processing Dishonored Checks Received for Shipment of Forms-If you receive any such checks, add these checks to DCF and return the check to the bank. On the Request to Redeposit, indicate the distribution center to which the check should be forwarded. When the SF 5515 is returned, void the checks off the DC file with BDOUT "R" . All checks received for shipment of forms should have been forwarded to the National Distribution Center at the address below:
National Distribution Center
2402 E. Empire
Bloomington, IL 61799.

Processing dishonored checks intended as voluntary contributions to reduce the public debt-Void check from DCF. Send copy of front and back to RACS Unit for journalization to Account 2350, Public Debt. Return check to the taxpayer with a brief explanation. Do not assess a bad check penalty.

Processing dishonored checks intended to pay for a photocopy of a tax return.

Figure 3.17.10-12

Pictured is a completed Form 8157, Check for Copy of Tax Return Not Accepted by Bank. This form contains taxpayer data as well as remittance information. This will be attached to the dishonored check and sent to the taxpayer. The form lists the following: amount of check, received date, social security or employer identification number, control number, and taxpayer name and address.

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Processing a non-IRS check which was originally deposited by IRS-Void check from the DCF using CC BDOUT "I," when returned as "not payable to IRS." Prepare Form 2424, to credit Account 1710 (Dishonored Checks) and to debit the taxpayer account that received the credit when IRS processed the check. Return the check to the taxpayer with an explanatory letter containing an proper apology for processing the remittance in error.

Processing a non-IRS check which was not originally deposited by IRS-Contact bank, explaining situation, and ask for the preferred procedure by which the bank will issue a confirmed Form 215 to reverse the SF 5515. Follow the procedure indicated. Void the item from the DCF using CC BDOUT "V," entering "Unprocessed non-IRS check" in Comments section. Prepare Form 8250 for Deposit function, explaining situation and describing bank procedure to be followed in "Reason" section. Annotate in red with "DO NOT ENDORSE." Flag the Form 8250 for special handling. Do not contact the payor.

Processing checks intended to pay TE/GE user fees for letter rulings and for determination, notification, advisory and opinion letters. TE/GE user fees are deposited in Ogden.

Processing checks intended to pay Examination and Chief Counsel. Processing checks intended to pay user fees for letter rulings and for determination and opinion letters.

An Encoding Error is a check encoded for a money amount different than that for which the check was written. To process an Encoding Error type check, you will need to get "back-up" documentation. Back-up consists of a copy of the document, a copy of the Form 813 and a copy of the encoding tape, if the document is manually encoded. Obtain an IDRS printout of the tax module, using CC TXMODA, to see if the taxpayer was given the correct credit. If the module is not on IDRS, request information from the Master File using CCs IMFOL/BMFOL.

Identifying an "Amounts Differ" Check-An "Amounts Differ" check occurs when the written amount differs from the numeric amount. Process amounts differ checks using the same procedures for Encoding Error. (Figure 3.17.10-14, “Amounts Differ” Check)

Figure 3.17.10-14

Pictured is an example of an amounts differ check. The numeric amount ($126.00) differs from the written amount (One Hundred Six and 00/100). The check was encoded with the numeric amount of $126.00.

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A "guarantee amount" is an Amounts Differ check i.e., the written amount differs from the numeric amount. You can guarantee a check only if the written amount and the numeric amounts are different. Process Guarantee Amount checks as indicated for Encoding Error.

After you research checks for encoding errors, amounts differ and guarantee amounts, take the cases to the work leader. Each case is different. In some instances, the taxpayer will have received the correct credit and you will not debit the account. Send these checks back to the bank on Form 8250, Request to Redeposit Checks. On other cases, the taxpayer's account did not receive the correct credit. Debit the taxpayer's account and prepare Form 3244, Payment Posting Voucher, and carry the Form 3244 and the check to Receipt and Control. List the check being redeposited in the redeposit book for our records and for Receipt and Control to initial.

A mutilated Check will not be accepted by the bank because it has been partially destroyed. From what is left of the check, find the return and get "back-up" documentation. Debit the taxpayer's account and mail a letter of explanation to the taxpayer. Send Form 2287/Form 2287 (SP) and 8290, Returned Check Repayment Notice, to the taxpayer to request that a new check be mailed to IRS. Do not assess a bad check penalty.

Identifying Form 941M and Form 720M-When you are researching CC INOLE or ENMOD, the filing requirements (FR) will show FR 941-09 or 10 or FR 720-09. This show the taxpayer is a monthly filer. When you see this, "flag" the check to show the taxpayer is a monthly filer. There will be no contact between taxpayer and campus at this point. Forward check and Form 2287 /Form 2287 (SP) to the Area Collection Office Function, on Form 3210, Document Transmittal. See Figure 3.17.10-15, Forms 3210 and Form 2287/Form 2287 (SP).

Figure 3.17.10-15

Pictured are examples of a completed Form 3210, Document Transmittal, and Form 2287/Form 2287 (SP), Check Not Accepted by Bank. The Form 3210 is used as a routing document to forward the dishonored check for monthly Form 941 filers and Form 2287/Form 2287 (SP)to the Area Collection Office.

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Processing Foreign Checks

Processing a Levy Check-A levy check will have the following endorsement on the back: "This check (money order, draft) and the proceeds thereof have been seized under authority of Title 26, United States Code, Section 6331, for application on the unpaid tax liability of (name of taxpayer), and is herewith deposited to the credit of the Treasurer of the United States (name of Area Director) Area Director of the Internal Revenue Service (City or State)" .

A check submitted by one party to pay another taxpayer's liability or a third-party check (one originally written payable to someone other than IRS but endorsed "payable to IRS" by the taxpayer) are to be handled the same way. When one of these checks is received as dishonored, do not contact the original maker of the check. Such contact could have disclosure implications. Only the taxpayer should be contacted and asked to submit another remittance. Therefore, If the check was made out to the taxpayer and subsequently endorsed over to the IRS, send the check back to the taxpayer using Form 14219. Send the check back to the original maker using Form 14219 only if the check was made out to the IRS by the third party.

If a check is returned for a missing date, enter the original deposit date (from the back of the check). These checks should then be promptly delivered to the Deposit Activity for redeposit.

Deposit discrepancy situations described above differ from those described in IRM 3.17.10, Redepositing Returnable Checks in that these are errors on single payments which do not affect other payments in the block.

If research of CC ENMOD/TXMOD show only check digits or no name control on the module, before using CC BDAPL, you must change the name control on the dummy module to correspond to that shown on the ACTRA hard copy transcript. To do this, use CC ACTON.

If research show that a refund may be issued from the account before application of the dishonored check debit, follow the instructions in IRM 3.17.10.2.12.1.1.3, IMF Erroneous Refunds caused by Dishonored Checks for IMF and the instructions in IRM 3.17.10.2.12.1.1.4, BMF Erroneous Refunds caused by Dishonored Checks for BMF. See IRM 3.17.10.2.12, Researching Dishonored Checks for Payment of IRS Tax Liability.

As of July 2, 2010, the penalty for dishonored payments applies to all forms of payment, including electronic payments.

The penalty is systemically generated with Transaction Code 286.

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If the electronic payment unposts and needs to be transferred to Kansas City Non-Master File, the penalty will also need to be computed and transferred. Compute the penalty per instructions in 3.17.10.2.20.2, Assessing a Dishonored Check Penalty and then input the amount on Form 3465, Adjustment Request. Forward Form 3465 with the completed Form 2158, Credit Transfer Voucher, and backup to Kansas City.

Take all the ISRP checks and researched worksheets to IDRS and verify entity and payment to ensure that the credit is still on the account which you are about to debit. An unpostable condition is created if a dishonored check debit (TCs 611, 621, 641, 661, 671, 681 or 691) try to post in the absence of a matching credit. Such unpostables will be returned to the DC function to be added back to the DCF and for reprocessing. Care should be taken when applying money orders to ensure that the same remittance is not debited twice.

Input CC BDAPLR to request CC BDAPL. Transfer information from the worksheet to the IDRS screen. See Exhibit 3.17.10-4

If you find when closing a case, the taxpayer used an incorrect TIN and you find the correct TIN, use the correct TIN for application. You may wish to enter in the Remarks area, "X-ref t/p used incorrect TIN" . Ensure corrective action has been taken on the incorrect posting.

If research show NMF account, void debit w CC BDOUT "V" and transfer debit to Kansas City via Form 2158.

At the end of the fiscal year, if October 1 falls on a Monday thru Friday, do not input applies with a current Julian date until after the following Sunday. Applies with current Julian dates that are input before the first Sunday in October will be considered 'prior year' and will not appear on DCF0540 until the second working day following the first Sunday in October.

Change entity information, the Employee Number or Trace ID Number of a record on the Dishonored Check File with CC BDENT. See Exhibit 3.17.10-5

For Deceased taxpayers, see instructions in IRM 3.13.5.30, Individual Master File Account Numbers.

Research for payments received for IRC 965 repatriation tax under Section 14103 of P.L. 115-97, Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017. Valid IMF MFTs are 30, 31 and 82, BMF MFTs are 02, 05, 06, 34, and 83. All section 965 tax payments will be posted to the tax module where the assessment posted. For example, if the section 965 tax assessment is posted on the 201712 tax module, all section 965 tax payments will be posted to the 201712 tax module, regardless of the year in which the payment is made based on the installment percentages in the subsequent years. Section 965 returns have a posted TC 766, credit reference number (CRN) 263. IMF returns are identified with return processing code (RPC) F, BMF with computer condition code (CCC) J. Taxpayers were instructed to send two checks, one for their non-965 tax liability and one for their section 965 tax liability. Apply the debit transaction to the module with DPC 64.

The CC BDINQ format displays a specific record on the DCF. At times you may need to see how a check was added to the DCF or if a record has been closed. On splits, you may wish to make certain that you closed the case correctly. Personnel outside the unit may use CC BDINQ to ensure that a payment to be refunded has not been dishonored.

Using CC BDINQ, the DCF can be researched by name control, DCN, or money amount. However, search of the file is narrowed by using as many of the three elements as possible. See Exhibit 3.17.10-6.

Associating the DC Checks to the Form 2287/Form 2287 (SP) and the DC Worksheet—After checks have been debited on IDRS with CC BDAPL, an IDRS notice will generate. The notice is printed on Form 2287/Form 2287 (SP). This Form 2287/Form 2287 (SP) will be delivered to the DCU the next working day after the input is made. The date printed on the generated Form 2287/Form 2287 (SP) is that of the third business day after the CC BDAPL input; therefore, all pre-mail activity, including quality review, must be completed by COB that third business day.

Match the check to the Form 2287/Form 2287 (SP) and the worksheet; pull the worksheet, the notice and check. Also review for received date, tax period, penalties, etc.

Return check and separate Form 2287/Form 2287 (SP) to the taxpayer. If the payment was for multiple modules, staple all of the parts 2 together and attach a Form 8269 show the total amount due and request that all of the parts 2 be returned with the replacement remittance. Staple the check to the parts 1. See Figure 3.17.10-19, Form 2287/Form 2287 (SP) Notice of Check Not Accepted by Bank. At local option, a cover Form 2287/Form 2287 (SP) may be prepared to show to the taxpayer the total amount due.

Figure 3.17.10-19

Pictured is a completed Form 2287/Form 2287 (SP), Check Not Accepted by Bank, which contains taxpayer and remittance data. Form 2287 is sent to the taxpayer with the dishonored check.

Please click here for the text description of the image.

Abating Penalties-If you find a penalty has been assessed when one is not required, abate the penalty by using CC REQ54 which generates the ADJ54 format. The incorrect penalty must be posted before it can be abated.

Assessing Penalties-If no penalty was assessed and a penalty is justified, apply a penalty and retype Form 2287/Form 2287 (SP).

Erasing the IRS Endorsement-Before mailing checks and Form 2287/Form 2287 (SP), erase the IRS endorsement and stamp the date of the debit voucher inside the erased endorsement stamp. Never erase endorsements on checks that can be redeposited.

Resolving an Erroneous Application-If the debit was applied to the wrong taxpayer, send the case to Accounts Management or other designated areas for correction.

If research or the check reveals a different taxpayer address than that shown on CC INOLE or ENMOD, include Form 8822, Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns), or Form 8822B, Change of Address or Responsible Party-Business, with the dishonored check and Form 2287/Form 2287 (SP) to be sent to the taxpayer.

Take the check, notice, other inserts to be sent to the taxpayer, and worksheet to quality assurance for review.

Filing the Dishonored Check Worksheets-File the DC worksheets in alphabetical order. At the discretion of the Director, the worksheets may be filed by TIN within the Julian Date week indicated by the DLN. Dispose of the file items following Document 12990, Records and Information Management Records Control Schedules.

Mailing the Form 2287/Form 2287 (SP) and the Dishonored Checks-Send the Form 2287/Form 2287 (SP) and the dishonored checks and any inserts to Facilities for mailing. The Form 2287/Form 2287 (SP) and the dishonored check must be mailed to the taxpayer within 3 working days from the date of the debit.

Mailing Checks and Notices for Form 941-M and Form 720-M- When a check has a note attached indicating a Form 941-M or a Form 720-M, pull the check and the Form 2287/Form 2287 (SP). Using Form 3210, mail the check and Form 2287/Form 2287 (SP) to the area office Collection function for timely collection of the account.

Typing Form 2287/Form 2287 (SP) for misplaced notices-As the checks and the Form 2287/Form 2287 (SP) notices are being associated and there is a worksheet indicating the case is closed but no Form 2287/Form 2287 (SP) notice, go to IDRS using CC BDINQ to see if this case has been closed. If the case has been closed, type a Form 2287/Form 2287 (SP) notice and mail the check and the Form 2287/Form 2287 (SP) to the taxpayer. This should be checked each day to avoid missing the 3-day limit on mailing the DC and the Form 2287/Form 2287 (SP) notice to the taxpayer. If the case has not been closed, give the worksheet to the work leader to be completed.

There may be some taxpayer correspondence received after issuance of Form 2287/Form 2287 (SP). Procedures should be developed to ensure that proper adjustments are made to the taxpayer's account. DC worksheets or drop listings may be useful in the research process.

When correspondence concerning balance due accounts is received from a taxpayer stating that he/she refuses to pay, will pay the bill in the future, is unable to pay, or wishes to pay in installments, route the case to the Compliance Services Collection Operations.

Taxpayer correspondence may likely contain requests for reasonable cause abatement of the dishonored check penalty. In addition to causes which are reasonable as described in IRM 20.1, Penalty Handbook, the following should be accepted as reasonable cause for dishonored checks:

If the request for penalty abatement is accepted, use CC REQ54 to input TC 281 as directed in IRM 2.4., IDRS Terminal Input. Be sure to properly notify the taxpayer of our response to his request.

If the request for penalty abatement is denied, send Letter 854C to the taxpayer giving an explanation for not abating the penalty and input TC 290 with .00 as directed in IRM 20.1.1, Penalty Relief.

DCF01-Dishonored Check File Analysis

Figure 3.17.10-22

Pictured is an example of the DCF01 Report, Dishonored Check File Analysis. DCF01 is an inventory report which generates daily. It lists the beginning (prior) balance, new accounts added, increased amounts, accounts closed, partial applications, unproc write-off to the 1510 account, voided accounts, partial voided accounts, decreased amounts, unidentified checks, and the new DCF balance.

Please click here for the text description of the image.

DCF03-Transaction Register

Figure 3.17.10-25

Pictured is an example of the DCF03 Report, 1710 Account Transaction Register- Restricted Application. It lists the restricted applications via CC BDOUT applied from the DCF. It is generated daily.

Please click here for the text description of the image.

DCF05-DCF Applications for IMF/BMF/IRAF-Controls

Figure 3.17.10-26

Pictured is an example of the DCF05 Report, DCF Applications for IMF/BMF/IRAF. It lists the master file applications in DCN order. It is generated daily.

Please click here for the text description of the image.

DCF09-Dishonored Checks Aged 15 Days List

DCF50-Monthly Dishonored Check File Analysis summarizes activity for the fiscal month in the same format shown in (1) above.

DCF54-Dishonored Check Records Dropped from the File

Figure 3.17.10-29

Pictured is an example of the DCF54, Dishonored Checks Dropped From the File - Part II. It lists the closed records by DCN. It is generated monthly.

Please click here for the text description of the image.

Upon receipt, reports should be balanced to employees' work records. Discrepancies should be resolved and reported to the manager and/or the RRACS Data Base Administrator.

DCF60- Monthly Dishonored Check File Analysis. See Figure 3.17.10-30, DCF60- DCF Monthly Dishonored Check File Analysis.

Figure 3.17.10-30

Pictured is an example of the DCF60, Monthly Dishonored Check File Analysis. It lists a monthly summary of all actions to the DCF for each campus. It also includes a national total for the campuses. The Analysis contains the prior balance, new accounts added, increased amounts, accounts closed, partial applications, unproc write-off to the 1510 account, voided account, partial voided accounts, decreased amounts, unidentified checks, and new DCF balance.

Please click here for the text description of the image.

Production data for the weekly WPC Managers Report should match the staff hour reporting period ending Friday or Saturday as directed in IRM 3.30.50, Performance Evaluation Reporting System.

Monthly computer-generated reports showing campus totals for dishonored checks (DCF50) are to be used as the source data for input to the MISTLE report. Daily computer generated reports (DCF) should be used as the source data for reporting to the weekly MISTLE report.

A report must be submitted showing the number of aged dishonored check cases. The report must be submitted monthly, January through December. In addition to the monthly reporting, weekly reports must be submitted beginning the first week in March through the end of May. The report should include the following:

An weekly Inventory report, which is located on the Dishonored Check SharePoint must be submitted by the close of business every Monday to the Dishonored Check Headquarters analyst. The Dishonored Check SharePoint link is; Dishonored Check Share Point - Home.

Each record within the URF contains the Unidentified Remittance (UR) control number and amount of remittance. Other record elements may include type of remittance, received date, check or money order number, telephone number, bank name, taxpayer's name and address, taxpayer's identifying number (if known), and available payment and follow-up information.

URF provides a rapid research tool for payment tracing, which is available to all areas serviced by the campus. It provides registers and listings for controlling and balancing. Since the remittance is under the control of IDRS while it is unidentified, the unidentified portion of the Service Center Control File (SCCF) is no longer required. However, once the payment is applied, the account falls under regular SCCF control.

Revenue Receipts information will be provided on a monthly basis from the monthly URF Analysis. See IRM 3.17.10.3.17, Unidentified Remittance Computer-Generated Reports for description of available URF computer reports. The balancing operations will be performed by the Accounting Balancing function or by designated personnel within the Unidentified Remittance function. See IRM 3.17.10.3.18, Balancing Computer-Generated Reports for balancing within the function.

UR records are established only by the Campus Cashier and Unidentified Remittance functions. There are a number of different types of Unidentified Cases: cases from Cashier function, UNKNOWN, Non-Master File, Rejects, Statutes and Unpostables.

Using CC URAPL, application of UR credits may be made only by UR function personnel and only to the module or for the purpose indicated by the taxpayer. Personnel outside the UR function may complete Form 8765, IDRS Control File Application, to request application from the URF.

Due to restrictions within the command codes, correction of erroneous records using CC UROUT and URENT are restricted to the terminals located in the UR functions located within Accounting. Instructions on the operation of IDRS and use of the CCs are in IRM 2.4, IDRS Terminal Input.

The following steps must be taken in Receipt and Control Operations before a remittance is added to the URF:

The IDRS URF contains four separate files on disk. They are the UR Name File, UR Amount File, UR TIN File and UR Control Number File. (NOTE: The UR TIN File stores data but cannot be used to retrieve information.) The paper file will contain history sheet, the document, correspondence, photocopy of remittance, etc. Subsequent IDRS activity with the URF is automatically recorded by the computer, and, if appropriate, balance amounts are also adjusted, thus becoming the official URF. A record will be removed from the open file at the time the case is closed on IDRS.

Route closed cases to Files in folders other than IDRS source document folders. Frequency and manner of transfer may be arranged locally between the UR function and Files to ensure that records are retained as described in Document 12990, Records and Information Management Records Control Schedules.

Receive Unidentified Remittance (UR) Cases and URADD Transaction Register (URF 03) from Perfection function. The UR cases will include letters, envelopes, and all case material received from the taxpayer (except the remittance), as well as copies of items such as money orders, cashier checks, government checks or illegible remittances. Other information hand copied from the remittance will be either the complete name and address or the check number in those cases in which the photocopy of the remittance is not included in the file.

Receive "UNKNOWN" Cases from Cashier function. These cases are determined to be unknown (UNKN) when there is no taxpayer information, or the handwriting is illegible. All UNKNOWN cases should have copies of all documentation received. These cases have been numbered with a UR DLN of the type shown above. A history sheet will be attached to each of these cases before assignment to the UR technicians; a blank Part 3 of Form 3731/Form 3731 (SP) may be used for this purpose.

Receive and process credits transferred from Nullified Unpostables and/or Reject functions to the URF. You will receive original documents together with the adding machine tape totaling dollar amount of each document attached. A Nullified Distribution Listing will be received in the unit for Unpostable Resolution Code 8, Nullify Area Code 40 cases; the listing includes the following information for each item shown: master file, DLN, TIN, name control, MFT, tax period, amount. See IRM 3.12.32, General Unpostables, for further description of GUF 55-47 listing. The unit is responsible for securing cases shown on the listing for input to URF.

Receive and process transfers from IMF, BMF and NMF accounts to the URF using Form 2424, Account Adjustment Voucher. See Figure 3.17.10-33, Form 2424, Account Adjustment Voucher.

Figure 3.17.10-33

Pictured is a completed Form 2424, Account Adjustment Voucher. Form 2424 has both the debit and credit copy. The required entries are listed below.

Please click here for the text description of the image.

Cases will be received with complete documentation and back-up as follows: If incomplete documentation is received, return the case to the submitting unit.

Undeliverable refund checks will be transferred to the Unidentified Remittance account when the undeliverable refund check cannot be released through research or correspondence with the taxpayer.

Unapplied payments can be received from Entity Control function, either directly or through Rejects, which represent payments received from filers who are not liable.

The State Income Tax Levy Program (SITLP) is a Collection program which uses state income tax refunds as levy sources on delinquent taxpayers. If a state sends money to the IRS that was in error due to a tape problem that was not corrected upon receipt, the funds will be transferred to the Unidentified Remittance File for refunding to the state. Extensive documentation and supporting correspondence from the state should accompany the refund request (Form 8765) received from Collection. Any questions or problems concerning the refunding of SITLP monies should be directed to the initiator of the Form 8765.

Occasional cases, particularly those received from Unpostables, may be too old to add to the URF. (See criteria in IRM 3.17.10, Receiving Statute Credits). Exhibit 3.17.10-7 These cases must be added to Account 6800, Excess Collections, for accounting purposes. Return these documents to the originator with an explanation that they are to be added to the XSF using Form 8758, Excess Collections File Addition.

Do not accept documents numbered with doc codes 48, 58 or 65, even with current year DLN. These credits belong in XSF. Return these documents to the originator with an explanation that they are to be added to XSF using Form 8758, Excess Collections File Addition.

Do not accept pre-posted documents representing nullified unpostable or rejected, redeposited, undelivered refund checks or deposited cancelled refund checks (doc code 45, transaction codes 740 or 841). These credits belong in Account 4970, Unapplied Refund Reversal. Return these documents to the originator with an explanation that they are to be added to Account 4970 using Form 3809, Miscellaneous Adjustment Voucher.

Cases will be received from Rejects which represent erroneously filed remittances on Form 8752, Required Payment or Refund under Section 7519. Unpostables will have determined that these taxpayers are not liable and will have notified them of that fact. These cases may represent erroneously filed remittances from personal service corporations; Form 1120 filers where a TC 090 is on the account, no TC 055 is present, and the taxpayer has not replied when asked for a copy of an approved Form 8716; or other like situations. These cases must be added to URF via CC URADD and manually refunded via CC URREF ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

As of April 2000, cases are no longer received from Account Maintenance (AM) and Collection when taxpayers do not respond to requests for returns when only a payment/credit is present on the taxpayer's account unless the statute has expired for either assessment or credit/refund. This includes AM-12 and AM-18 transcripts only. Exception to AM-18: Accounts with a TC 594, TC 599 or credits with DPCs of 04, 05, 16, 18, 20, or 21. Collection should try to contact the taxpayer prior to any money being moved to URF.

Cases will be received which represent remittances received with Form 1065B. These credits should be added to the URF without further research and no attempt should be made to contact the taxpayer.

Cases should no longer be received which represent remittances received with Form 5329 (MFT 29) unless there is insufficient information to locate the taxpayer's account. Per IRM 3.8.45.6.6, Manual Deposit Process, these MFT 29 credits should be processed through RRPS/ISRP. If the taxpayer's account cannot be located, a Form 3244, Payment Posting Voucher, will be prepared with a copy of the Form 5329 to move the credit to URF.

Cases will be received which represent erroneous refunds caused by misrouted direct deposits.

Cases will be received which represent returned refunds from the bank for Refund Anticipation Loans (RAL) or Refund Anticipation Checks (RAC).

Credits will be added to IDEN status when:

Fresno and Cincinnati URF received deposits dated December 1, 2011, through April 30, 2012, which represented returned refunds from various banks included in the IVO (Integrity Income Verification Operation, formerly AMTAP) External Bank Leads program. IVO employees performed research and bank contact to resolve the refunds. IVO used Form 3245 for application of the returned refunds.

Offshore Voluntary Disclosure Payments are consolidated to AUSC, but occasionally payments will be received at other SPC's. When a payment has been identified as OVDP, forward the payment to Austin Accounting, using Form 2158, Credit Transfer Voucher.

Form 2424 will be received for Bankruptcy payments that the service is entitled to per IRM 5.9.15.2.2, Payments In Bankruptcy. Add the credit to URF with status “IDEN”. Remarks on Form 2424 will be annotated, "This credit is a bankruptcy payment and should not be refunded or applied." Also, the form must say, "No follow-up action with taxpayer is required", and a TC 520 must be posted to the account so the service will not try to contact the debtor. If the remarks do not state this, work case as an unidentified remittance. A hard copy of the TXMODA or IMFOLT/BMFOLT screen print showing the credit being transferred must be attached to the Form 2424. The TXMODA or IMFOLT/BMFOLT can be dated no more than seven days prior to the receipt date in the URF unit.

No reply to Letter 18C cases will be received when a freeze is set for missing information on a refund claim on a decedent return. For information on Decedent returns, see IRM 21.6.6.4.22.2, Processing Decedent Account Refund.

Cases added to the URF may have an IRS-received date no earlier than one calendar year before the current date. For example, on February 11, 2007, a credit other than doc codes 48, 58 or 65 and true statute cases, received by February 11, 2006, or later may be added to URF. The IRS-received date should be the Return Due Date (including any extensions of time to file) for Transaction Code 806 (withholding and excess FICA payments). Use the actual IRS received date, i.e., the earliest date recorded by any IRS office, for all other credits.

CC URADD will show a generated running subtotal of items and total money being entered. After all cases have been added, compare the totals by verifying item count and amounts on the IDRS screen with those on the adding machine tape.

If the amounts do not agree, locate the erroneous record using CC URINQ and correct it by using CC UROUT "Z" . For an example of how to void a UR record see Exhibit 3.17.10-10.

A history sheet will be attached to each case before assignment to the UR Technicians.

Add cases to the URF by entering CC FMADD and transmitting. Input "C" in position 7 only to request a new CC URADD format when the running item count and dollar amount must be retained. The valid response is the CC URADD format. See Exhibit 3.17.10-7

Verify the case count on URF03 listing.

Large dollar cases will be worked first.

Credits under $1.00 can be transferred to Account 6540, Small Debits and Credits Cleared. Use CC URAPL "T" to transfer credits under $1.00. See Exhibit 3.17.10-12 for an example of CC URAPL "T" .

Receive, count and record all new cases on desk inventory if cases have been reassigned for more detailed work.

Review cases before they are filed in the open file.

Review all other cases and determine, if possible, how to research each case.

An in-depth review and analysis will be necessary before the payment can be applied accurately. Research all cases on IDRS using all available pertinent CCs. The correct TIN may be located, or a pattern of payments may be established using the various command codes for payment application. Research all cases on IDRS using all available pertinent CCs. IDRS is the place to begin your research. Command Codes which may be helpful are:

Research the Automated Non-Master File using the data base procedures and the query symbols for research shown in IRM 3.17.46, Automated Non-Master File. Non-Master File research can also be requested on Form 4338, Information or Certified Transcript Request. See Figure 3.17.10-35, Information or Certified Transcript Request. Be certain to secure the DLN before making this request by calling the NMF Function in KCSPC.

Figure 3.17.10-35

Pictured is a completed Form 4338, Information or Certified Transcript Request. This form is sent to research the Automated Non-Master File (ANMF). Taxpayer, tax data and preparer information must be entered on the form.

Please click here for the text description of the image.

Research microfilm as needed.

Transcripts and IDRS now show whether a payment were part of a multiple/split remittance. See IRM 3.17.10.2.12.1.1.2, Research Other Areas for information about the multiple/split remittance indicator.

Use CC RTVUE/BRTVU or ESTAB whenever an original document is needed in your research.

Obtain copies of source documents on nullified unpostable cases if unable to apply payment.

Request original documents on all rejects if unable to research on IDRS. When you receive an original return, you must determine if it has posted to the taxpayer's account. It will be necessary to request a transcript from master file if this information is not on IDRS. Research the SCCF using CC SCFTR to determine the status of the document. If the return is open on SCCF as non-remit, the return may be reinput. If the return is not open on SCCF, do the following:

Use CC EFTPS to research electronic payments made via EFTPS. The following types of payment methods are available: ACH Debit, ACH Credit, FR-ETA, Levy, EFTPS-Online, Credit Card, RRB Link, Government, E-File Debit (EFW) and Direct Pay. An EFT number is assigned to each payment. The second digit of the EFT number identifies the payment method used. Refer to IRM 3.17.277.4.3, Electronic Payments, for the configuration of the EFT Number and the payment method identification codes.

Pull closed files on all cases rejected back to URF. Make a copy of this and refile original in closed file. The material on the closed case will provide information to begin your research.

Research the Remittance Transaction Research (RTR) System. RTR is a database which stores information from the Remittance Register Report (F813) and the Endpoint Master Listing Report. This system replaces the printing process of these reports produced by ISRP and allows for research to be done on-line.

Research IDRS for evidence of Underreporter indicators: For IMF, CP2000 Indicator TC 922, "F" Freeze code, and/or campus URP control number. For BMF, CP2030 Indicator, TC 925, F Freeze code, and/or campus BMF Automated Underreporter control number. If present on CC TXMODA or IMFOLT/BMFOLT, apply payment with TC 640. Also check for substitute return (SFR) indicators which vary at each SPC.

ACCURINT is a research tool for front line employees that may be helpful in processing URF cases. Managerial approval is required, and it is the campus option to approve users to access ACCURINT. Information concerning ACCURINT can be found at Accurint website.

Research and copy manually deposited payments with US Bank via US BankSinglePoint System. Contact the HQ analyst for information on US Bank SinglePoint user access. The SinglePoint website address is US Bank SinglePoint. The Commercial Customer Service telephone number is 866-483-3335, and their hours of operation are 6:00 a.m. EST to 7:00 p.m. EST.

Research for payments for the Affordable Care Act (ACA) Individual Shared Responsibility Payment (SRP). Apply to MFT 35 with a TC 640. Use the DPC received with the payment, if no DPC is indicated use DPC 36.

Research for payments for the ACA Employer Shared Responsibility Payment (ESRP). Apply to MFT 43 with DPC 43 with a TC 640.

Research for payments received for IRC 965 repatriation tax under Section 14103 of P.L. 115-97, Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017. Valid IMF MFTs are 30, 31 and 82, BMF MFTs are 02, 05, 06, 34 and 83. All section 965 tax payments will be posted to the tax module where the assessment was posted. For example, if the section 965 tax assessment is posted on the 201712 tax module, all section 965 tax payments will be posted to the 201712 tax module, regardless of the year in which the payment is made based on the installment percentages in the subsequent years. Section 965 returns have a posted TC 766, credit reference number (CRN) 263. IMF returns are identified with return processing code (RPC) F, BMF with computer condition code (CCC) J. Taxpayers were instructed to send two checks, one for their non-965 tax liability and one for their section 965 tax liability. If taxpayer contact or research shows the payment was for section 965, apply as a TC 670, secondary TC 570 with DPC 64.

Research no reply to 18C letters for estate refund information casefiles as below:

Apply the payment as below when research or taxpayer correspondence show the payment was for other than an open liability.

Conscience money: This is a remittance received to ease the taxpayer's conscience. Usually there will be a note attached indicating it is for the "conscience fund" . For example: A taxpayer might write a note stating, "I will be able to sleep better now" . Use CC URAPL "T" to transfer conscience funds to Account 2360, General Fund Receipts. (The Contra Account is 6400, Miscellaneous Fees). See Exhibit 3.17.10-12 for an example of CC URAPL "T" .

Photocopy Fee: The entire processing of requests for photocopies of tax returns or tax return information is handled by IRS. A taxpayer remittance could be placed in the URF. If a remittance was intended for a photocopy or return information, transfer the credit to Account 2340 (Photocopy Fee) using CC URAPL "T" , and show in the remarks photocopy fee. Forward a copy of Form 4830 to the RACS Unit.

Bulk Forms Fee: Remittance received from tax practitioners and other persons for shipment of bulk orders of tax forms should be refunded using CC FMREF/URREF; under no circumstances may these amounts be applied to outstanding tax liabilities. The remitter should be sent a note explaining that the Superintendent of Documents (part of the Government Printing Office) is the only government agency authorized to sell printed materials such as federal tax forms. Refer them to the practitioner gate at the toll-free number 800-829-3676 or send them a copy of Publication 1045, Information for Tax Practitioners.

Voluntary Contributions to reduce the Public Debt: If taxpayer contact reveals that the remittance was intended as a contribution to reduce the public debt, transfer the credit to Account 2350 (Public Debt) on IDRS using CC URAPL "T" , and show in the remarks as public debt. Forward a copy of Form 4830 to the RACS Unit. See Figure 3.17.10-37, Form 4830, IDRS Posting Document.

Figure 3.17.10-37

Pictured is an example of a completed Form 4830, IDRS Posting Document. This form is being used to transfer a credit in the URF to Account 2350, Public Debt. It shows the taxpayer's entity information, tax data and the debit and credit amounts.

Please click here for the text description of the image.

Payment other than the partial payments required under TIPRA received with Offer in Compromise: This is a remittance received with Form 656, Offer in Compromise other than the partial payments required under TIPRA and explained in IRM 5.8.1.9, Offer in Compromise. The payment may be received from a third party on behalf of the taxpayer making the offer. Compliance Operations can verify the payment. An OIC payment may be identified by:

User fees for letter rulings and for determination and opinion letters: Contact the Tax Exempt and Government Entity (TE/GE) Unit in the Cincinnati Campus to have them determine which RRACS account these monies should be journaled to.

Wrongful Levy Situations: These are credits received from attaching property belonging to a third party in which the taxpayer has no rights (for example, from a bank account other than the taxpayer's or from the sale of what appeared to be the taxpayer's property, or from attaching property over which the third party has a superior claim which would be destroyed by the levy). See IRC 6343(b) and Treas. Reg. 301.6343-2. When a payment is identified as a wrongful levy situation, immediately hand carry supporting documentation and a print of the CC URINQ module to the Chief, Compliance Services Collection Operations. Collection personnel will follow their procedures for issuing an expedited manual refund. Upon assurance that the expedited manual refund procedures have been followed, annotate the worksheet showing action taken and remove credit from the URF using CC UROUT "V" .

Unclaimed Funds: These are credits returned to the IRS by a state and represent bank drafts and cashier's checks purchased by taxpayers which have never been cashed, but were made payable to "Internal Revenue Service" . Research thoroughly to identify the taxpayer entitled to such a credit. A call to the state agency issuing the credit will identify the bank which forfeited the credit if the documentation attached to the incoming credit does not. Contacting the bank which forfeited the credit to the state often yields more information since the forfeiture took place recently. However, if the taxpayer who bought the cashier's check or bank draft cannot be identified, the credit will remain in the URF.

Preparer Taxpayer Identification Number (PTIN) Payments: PTIN remittances intended for processing by an outside vendor may be deposited in error by IRS. If the PTIN payment has not posted to a taxpayer's account, it may be refunded back to the taxpayer from the URF using CC FMREF/URREF. Prepare Letter 3064C with a statement requesting the taxpayer to send the payment to:
IRS Tax Pro PTIN Processing Center
1605 George Dieter PMB 678
El Paso TX 79936

USDA Discrimination Settlement Payments - KCSPC only: The United States Department of Agriculture (USDA) paid cash settlement and granted loan cancellation to a limited number of farmers. The settlement resulted from a discrimination suit brought against the USDA by the farmers. Awards from the settlement are treated as taxable gross income. Poorman-Douglas Bankruptcy Services forwards to the Internal Revenue Service a list of recipients who received USDA settlement payments. Each claimant who received a $50,000 settlement from Poorman-Douglas is also entitled to receive $12,500 from the IRS to pay their taxes on this settlement. Exception: Cancellation of Debt may be a larger settlement amount in which case IRS pays taxes equal to 25percent of the settlement amount.

If unable to determine the application for Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, contact Employee Plans (EP) for a resolution.

Health Care Tax Credit (HCTC) Program: this program is for individuals who have lost their jobs due to trade agreements. Payments are made directly to health insurance companies and COBRA administrators and then forwarded to a Lockbox bank. At times the payment is returned by the vendor to HCTC because the individual's insurance expires. The vendor may mistakenly send the payments to BFS or to an IRS office. Forms or correspondence that may be received include:

CC URINQ researches the Unidentified Remittance File (URF) in three ways: by amount of remittance, by name control or by DLN. If the DLN isn't known, adding the area office number to one of the other data elements narrows the search. See Exhibit 3.17.10-8

The URF Drop List may be used to research by Alpha (Part I), DLN (Part II) and Money Amount (Part III) all URF applications closed 4 months, or voids closed one month, prior to the list date. This list provides complete application information and can be used to determine payment application. (See Figures 3.17.10–54 through 57.)

Use CC URENT to update the following elements of the URF record:

CC URINQ history will contain a record of the data change.

Use CC URENT to send Letter 6268/Letter 6268 (SP) to the taxpayer after the record has been added to the URF.

See Exhibit 3.17.10-9 for CC URENT format and an example of a completed CC URENT sending a Form 3731/Form 3731 (SP) and changing the taxpayer's address.

To correct or drop UR records before application has been made, use CC URAPL format and overlay with CC UROUT. See Exhibit 3.17.10-12 for CC URAPL formats. CC UROUT formats can be used only in the Accounting UR functions. This procedure is used to record a dishonored check, correct an erroneous UR amount or to void a record. The UR name control cannot be "UNKN" .

CC UROUT "Z" is used to correct an erroneous money amount. See Exhibit 3.17.10-10

CC UROUT "V" is used to completely void the UR record from the Unidentified Remittance File.

UROUT "D" records a dishonored check in whole or in part on the file. The information and a copy of the dishonored check are received from the Dishonored Check function. The dishonored check application updates the status from "OPEN" to "BDCK" and reduces the balance in the UR record. When the dishonored check has been recorded on the URF, make a copy of the URINQ response showing the completed action and forward to the Dishonored Check function.

Should a DLN change, or correction be necessary, void the record from the system using CC UROUT "V," and re-add the record to the URF with the correct DLN using CC URADD.

After researching for proper application utilizing the various command codes and taxpayer inquiries, determine the correct application to be made and input information on IDRS with CC FMAPL/URAPL. URF credits are to be applied only to the module which the taxpayer originally intended or subsequently directed. If the taxpayer has not clearly designated the application of the payment through inquiries and research did not show a pattern of payments, research for balance due modules and apply the payment to the earliest unexpired Collection Statute Expiration Date (CSED). If multiple periods have the same CSED, apply to the earliest tax period. See IRM 5.1.19.4, CSED Payment Application.

Research for taxpayer directions and source documents. In general, the Service will apply voluntary partial payments as a taxpayer has designated in writing. See Rev. Proc. 2002-26, section 3.01. Certain payments may be limited to certain periods. For example, a levy is made for a certain period or periods’ liability; the period or periods covered by an installment agreement are listed on the Form 433-D; and an offer-in-compromise may provide for an allocation of payments on Form 656.

Undesignated voluntary partial payments and involuntary partial payments are applied to periods in the order of priority that the Service determines will serve its best interest. Rev. Proc. 2002-26, section 3.02. Usually, the best interest of the Service is to satisfy the account with the earliest unexpired Collection Statute Expiration Date (CSED). If multiple periods have the same CSED, apply to the earliest tax period. See IRM 5.1.19.4, CSED Payment Application.

If research does not produce written taxpayer directions or a source document for payments, but research show a payment is one of a pattern of payments (as required by an installment agreement or an offer, for example), it may be the interests of the Service to adhere to that pattern.

Application of credits from the URF, using CCs FMAPL and URAPL, cannot be made by persons outside the UR Unit. Upon finding the credit using CC URINQ, personnel outside the UR Unit will submit Form 8765, IDRS Control File Credit Application, with attached documentation identifying the credit and indicating its proper application. See Figure 3.17.10-38, Form 8765, IDRS Control File Credit Application.

Figure 3.17.10-38

Pictured is a completed Form 8765, IDRS Control File Credit Application. Line items needed are explained in 1. through 27. below.

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Form 8765 mirrors the CC URAPL (and CC XSAPL) format as closely as possible. All Forms 8765 submitted to the UR Unit should have documentation attached identifying the credit on the URF as well as justifying its requested application through correspondence, research performed, etc. Should Form 8765 be received without this documentation or without proper completion of all required entries, return to the requestor immediately. Use CC FMAPL to request the generated CC URAPL format on IDRS. CC URAPL cannot be input to the URF if the name control on the UR record is UNKN; the name must be changed with CC URENT. See Exhibit 3.17.10-12 for examples of CCs FMAPL and URAPL.

If the name control does not match that on the UR record, use CC URENT before using any CC URAPL format. CC URAPL cannot be input to the URF if the name control of the UR record is UNKN; use CC URENT to correct this before using CC URAPL. See Exhibit 3.17.10-9.

Form 4830, IDRS Posting Document, will be generated for each "N" or "T" application.

Should an "M" or "N" application not be based upon information received from the taxpayer, send Letter 2349/Letter 2349 (SP) to the taxpayer. See Figure 3.17.10-39

Figure 3.17.10-39

Pictured is a completed Letter 2349. This letter is sent to the taxpayer to explain that an credit has been applied to his/her tax account but the information received to make the application did not come from the taxpayer.

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Should the outstanding balance of the taxpayer's account be less than the amount of the payment being applied and where no Letter 2349/Letter 2349 (SP) has been sent, send the taxpayer Letter 3064C with an explanation. Should a credit be applied to a full-paid account pending more liability, input TC 570 as a secondary transaction to hold the credit on the account and avoid more work for Unpostables. Record the pending liability and amount as part of the history. All TCs 570 input must be monitored to determine the release for refund (TC 571) when more liability is no longer pending.

Use CC FMREF/URREF to issue a manual refund from the Unidentified Remittance File. This type of application is restricted to the UR function and should be used sparingly. The UR record status must be OPEN or IDEN.

A refund will be Issued based on the taxpayer's response. Some examples of refunds are: payment sent in error, payment intended for another agency or another payee, taxpayer paying interest on Form 1099, IRS test money, taxpayer having paid the same bill twice and having no outstanding balances, etc.

If the taxpayer is to receive interest or needs penalties abated, apply to the taxpayer's account rather than manually refunding from the URF. See IRM 20.1, Penalty Handbook, and IRM 21.4, Refund Inquires, for more instructions.

Always check SUMRY or IMFOL/BMFOL to be certain there are no outstanding balances before manually refunding.

Manually refund payments received from Entity for Forms 8752, Required Payments or Refund Under Section 7519, where the taxpayer did not file a Section 444. Do not offset to an outstanding balance due. See IRM 21.7.4.4.7.6, Form 8752 Overpayments.

No remittance which the taxpayer intended for a non-IRS payee (i.e., utility company, state department of taxation) should be applied to an outstanding balance.

On parent-subsidiary cases—

All refunds from the URF will be reviewed by the manager or designate before application.

Refund a UR credit by following these steps:

After applying the refund from URF, use CC URENT to add audit trail information to the permanent file, including the reason for the manual refund, ATAO case number or other identifying data.

When refunding a payment for another agency or payee, send an explanatory letter to the taxpayer containing an proper apology for processing the remittance in error. Special IDRS Letter 3064C may be used.

All manual refund requests require the use of Form 14031, Manual Refund Signature Form. See IRM 3.17.79.3.5.4, Form 14031 Processing Requirements for Unidentified/Excess Collections/Photocopy Fee Manual Refunds (Submission Processing ONLY). If your function uses the URF0340 report on Control D that lists the generated URF refunds, scan or save the first page listing the URF refund(s) as a pdf file. The Manual Refund approver will electronically sign the copy of the report being sent to be certified.

Manual refunds may be subject to the Treasury Offset Program (TOP) per IRC 6402. See IRM 21.4.6., Refund Inquiries. If a taxpayer mistakenly, but intentionally makes a payment to the IRS, any excess payment would be an overpayment. An over-stamped check by the IRS is an example of a payment which is not subject to TOP offset.

If after contact with the taxpayer, a claim is made that the payment was for other than an IRS tax debt such as a state tax debt, it is not subject to TOP offset regardless of whether the payment was made electronically or by paper check.

A TOP offset bypass indicator (BPI) is assigned to all manual and systemic refunds issued to BFS by the IRS. For URF manual refunds, the BPI is limited to Yes (allow TOP offset) or No (do not allow the TOP offset).

Do not allow a TOP offset where Combat Zone -C freeze is set.

On the URF 0303 report, notate to the right of each record whether or not a TOP offset is bypassed. Notate “Y” to allow for TOP offset, “N” for bypass of the TOP offset.

Check IDRS for Debit indicator F, TOP offset. If present, inform the taxpayer they are still subject to TOP offsets by BFS.

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) provides for withholding of income tax on Individual Retirement Accounts (IRAs) and deferred compensation plans (pensions) unless the payee elects not to have withholding apply. The withheld income tax from these plans can be deposited and reported as follows:

Review all correspondence to determine if you have sufficient information to close your case. It is recommended that correspondence be worked as you receive it.

In cases in which the taxpayer show the remittance is for FTD penalty or Letter 1206C, use CC FMAPL/URAPL with TC 690 to make the proper application to close the case.

For replies indicating the payment is for a Form 1096, failure to file a correct information return penalty:

Verify information received from the taxpayer on all cases that have already been closed.

Open File.

Applications received from Payment Tracers or other functions for action.

Should taxpayer response indicate a claim of identity theft and there is no indication that the taxpayer has been provided with the ID Theft information, refer them to UAC Identity Protection for more information. See IRM 25.23.1, Identity Theft Protection and Victim Assistance - Policy Guidance, and IRM 25.23.2, Identity Protection and Victim Assistance - General Case Processing.

IRC 6311 says in the case of payment made by credit card or debit card transaction of an amount owed to a person as the result of the correction of an error under section 1666 or section 908 of the Electronic Fund Transfer Act (15 USC 1693f), the Secretary is authorized to provide such amount to such person as a credit to that person’s credit card or debit card account through the applicable credit card or debit card system. See IRM 21.4.4.7.2, Refund Inquiries for information on the procedures for working Credit Card Chargebacks. IRM 21.4.4.7.2.1(12), Refund Inquiries, says the credit card company must submit the claim within 150 days from the date of the payment. If the taxpayer response show the credit/debit card payment was in error, and the Electronic Funds Transfer (EFT) number show the payment was from a credit card payment:

Send detailed information to the HQ CORs located in the EFPPS group if the taxpayer is experiencing issues obtaining the funds back from the processor under normal guidance.

If the taxpayer responds they did not make the payment or there is an SSN, name mismatch:

Form 8288 is processed to the Business Master File. The first valid tax period is 200512. The tax period is based on the "Date of Transfer" (DOT) of when the U.S. real property interest (USRPI) or a partnership interest under IRC 1446(f)(1) was sold. Payments for foreign withholding under Section 1445, Foreign Investment Real Property Tax Act (FIRPTA) or under IRC 1446(f)(1), remitted without Form 8288 should be processed to tax accounts in the same manner as if the form were submitted.

A FIRPTA database is maintained to store information for Form 8288, Form 8288-A, Form 8288-B, and Form 8288-C. Access can be gained by inputting a BEARS request.

If Form 8288 is received, apply the payment to the month and year of the Date of Transfer on Line 3. For example, the taxpayer can file a Form 8288 every other month for the U.S. Real Property Interest from a foreign person or entity (202301, 202303, 202305, 202307, 202309, etc.).

If Form 8288 is received and the taxpayer does not have a TIN, forward the return to the Entity Function who will establish the SSN/ITIN/IRSN on the BMF MFT 17 with a TC 000. Include the following information:

Monitor for the establishment of the TIN and apply the payment.

If the response does not include Form 8288, request Form 8288 from the taxpayer using Letter 3064C or Letter 1687C.

If there is no response, the funds will remain in the URF.

Form W-7 is an application for an Individual Taxpayer Identification Number (ITIN). This form is also used to renew an existing ITIN. An ITIN is a 9-digit number issued by the IRS to individuals who are required for U.S. federal tax purposes to have a U.S. taxpayer identification number but who do not have and are not eligible to get a social security number (SSN). ITINs may not be issued without a return or some proof of a need for an ITIN. That means ITINs will not be issued for two to three weeks from receipt of the request. Remittances received with Form W-7 will be added to the Unidentified Remittance File (URF) at the receiving campus. Form W-7 with all documentation and a photocopy of the check should be routed to the Austin campus per IRM 3.8.45.4.16, Manual Deposit Process.

All Form W-7 packages should have been forwarded from Receipt Control via Form 3210 to the ITIN Unit at the Austin Campus. If Form W-7 is received with a remittance, add the credit to the URF. Route Form W-7, attachments, and a photocopy of the check received with Form W-7 to the Austin address below. See IRM 3.8.45.4.16Manual Deposit Process.

Remittances received with original Form W-7 packages should remain in the receiving campus's URF inventory.

AUSC ITIN Unit at the Austin Campus will research the package for assignment of an ITIN. Depending on the assignment, ITIN unit will edit the assignment information on the check copy and return to AUSC URF function. Follow the below instructions for processing per the edited check copy. If the payment is located in another campus URF, AUSC URF function will forward the edited copy to the receiving URF campus.

For payments over six months old from received date of the payment where no information has been received from the ITIN or Entity units, research IDRS and the ITIN system for any newly posted information.

When closing a case which needed research because the taxpayer failed to provide sufficient identifying information or the information provided was illegible, send Letter 2349/Letter 2349 (SP), as appropriate, to the taxpayer.

Check all closed cases applied to IMF or BMF accounts against the URF Applications for IMF/BMF/IRAF Controls (URF 05), produced daily.

Check all closed cases applied to NMF or cases that were refunded against the UR NMF Apply Register (URF03).

All cases that have been on the URF for 10 months (aged cases) will appear on UR Aged 10 Month List (URF50).

Cases that are still unidentified after 365 days, based on the IRS payment received date, will automatically be dropped from the URF. A status code of XCES will be generated to the URF. A posting document and Transaction Register—Excess Collections (URF50) will be generated.

If sufficient information is received to close a case after it has dropped to Excess, prepare a Form 8765, IDRS Control File Application, as directed in IRM 3.17.220, Excess Collections File. See Figure 3.17.10-41

Figure 3.17.10-41

Pictured is an example of a completed Form 8765 by the Unidentified Remittance Function. This case has been transferred to the Excess Collection Function. Sufficient taxpayer information is entered on Lines 7 through 10 so that the credit can be posted correctly.

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URF01—Unidentified Remittance File Analysis

URF01-Monthly Unidentified Remittance File Analysis summarizes activity for the fiscal month in the same format described in (1) above.

URF03-Transaction Register

URF05-URF Applications of IMF/BMF/IRAF-Controls

Figure 3.17.10-47

Pictured is an example of the URF05 Report, URF Applications of IMF/BMF/IRAF-Controls. This is generated daily and lists all completed applications to the master file via CC URAPL M. The last page show a summary total of records input by IMF, BMF and IRAF with the numbers of records input and money amounts applied.

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URF07-Unidentified Remittance File Performance Indicator Analysis

URF45-Accounts Receivable URF Report

URF50-Transaction Register

Figure 3.17.10-55

Pictured is an example of URF50, UR Case Assign List. It shows the employee number of the person who added a particular case to the file or the person to whom the case is assigned. The list all contains from left to right the name control, employee #, entry date, UR Control Number and balance amount.

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URF60 - Monthly National Unidentified Remittance Analysis

Figure 3.17.10-56

Pictured is an example of URF60, Monthly National Unidentified Remittance File Analysis Report. It lists a monthly summary of all actions to the URF for each campus. It also includes a national total for the campuses. The lists contain the prior balance, new accounts added, statute expired cases added, increased amounts, accounts closed, partial application, open accounts dropped, voided accounts, decreased amounts, and new URF balance. Also listed is source code EF, P1, P2 and source total.

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Figure 3.17.10-57a

Pictured is an example of the URF File Source Analysis, which is included in the URF60, Monthly National Unidentified Remittance File Analysis Report. It lists a monthly summary, by campus, of the count and amount of credits added to the URF by the organization from where the credit is being transferred. It also includes a national total for the campuses.

Please click here for the text description of the image.

Figure 3.17.10-57b

Pictured is an example of the URF60, Monthly National URF Apply Code Report, which is included in the URF60, Monthly National Unidentified Remittance File Analysis Report. It lists a monthly summary, by campus, of the count and amount of credits applied from the URF by the file source: Master file, NMF, or Transfer. It also includes a national total for the campuses.

Please click here for the text description of the image.

Upon receipt in the Unidentified Remittance Unit, computer-generated reports should be balanced to the employees' work records. Discrepancies should be resolved and reported to the manager and/or the RRACS Data Base Administrator.

The extent of balancing performed will vary between individual Unidentified Remittance operations.

The following is an example of daily balancing which will immediately reveal any imbalance or problem on the URF as well as facilitate production of a monthly trial balance: