Overview : This IRM provides a resource guide on how to use IDRS programs to calculate accrued interest and penalty for IMF/BMF modules to a date specified.

Purpose : This IRM contains the resource guide for using IDRS command codes to calculate accrued interest and penalties.

Audience : LB&I, SB/SE, TE/GE, W&I.

Policy Owner : The Chief Information Officer (CIO) is responsible for overseeing all aspects of our systems that operate the nation’s tax infrastructure.

Program Owner : Account Services, which is under the Director, Customer Service.

Primary Stakeholders : Wage & Investment (W&I), Large Business and International (LB&I), Small Business Self-Employed (SB/SE), Tax Exempt and Government Entities (TE/GE), and Enterprise Operations (EOPS)

Program Goals : This IRM provides the fundamental knowledge and procedural guidance for employees who work penalty and interest responses on IDRS. By following the processes and procedures provided by this IRM, employees will process balance due responses in a manner that follows IRS policy and procedures while promoting the best interests of the Government.

CC INTST computes the correct outstanding balance, including interest and failure to pay accruals, to the date specified in the input of the command code.

The module used in the computation must be present on IDRS, and, for a complete computation, must not contain any of the restrictive conditions specified in See Exhibit 2.3.29-3 (4), (5) and (6).

CC INTSTN has the same capabilities as INTST. In addition, accruals will be computed to the input date plus 30 days, input date plus 45 days, and input date plus 60 days.

CC INTSTA has the same capabilities as INTST. In addition, accruals will be computed to the input date plus 10 days, 15 days and 21 days or any dates input, as long as they are less than 30 days.

CC INTSTB has the same capabilities as INTST In, addition, it computes a separate total for other assessed penalties.

CC INTSTV has the same capabilities as INTST. In addition, accruals will be computed to the input date, input date plus 30 days, and input date plus 60 days.

CC INTSTD has the same capabilities as INTST. In addition, it will also shows the detail break down for Interest and FTP computation table.

The input of CC COMPA causes IDRS to compute the interest on a specified amount for a specified period of time. Each screen display (page) can accommodate up to 21 amounts. CC COMPA computes and displays a line amount for each line of input. The line amounts are accumulated and displayed on line 23 as the page total. CC COMPA also has the capability of accumulating page totals for display on subsequent page(s). It is important that the interest periods input not overlap. COMPA computes debit interest before 1-1-1999. From 01-01-1999 and subsequent, COMPA will compute CREDIT and DEBIT interest (since the interest rate for "Non-Corporate" taxpayers will be the same for CREDIT & DEBIT).

COMPAC is used to compute credit interest before 1-1-1999. From 1-1-1999 on COMPAC will compute credit interest for "Corporate" taxpayers only. Input and output formats are the same as COMPAD.

COMPAE provides estimated tax from dates and to dates for a specified period ending and MFT.

COMPAD can accommodate 21 lines of input (21 amounts); for each line (or amount), COMPAD displays the detail used to compute the interest. The appropriate percent(s), the to and from dates used to compute the elapsed time, the factor used and the amount computed as the result is displayed and then accumulated into a total for all screens. COMPAD computes in the same manner as COMPA and is designed to be used with one tax module. COMPAD computes DEBIT interest before 1-1-1999. 01-01-1999 and Subsequent for "Non-Corporate" taxpayers, COMPAD will compute CREDIT and DEBIT interest (since the interest rate for "Non-Corporate" taxpayers will be the same for CREDIT & DEBIT).

COMPAF causes IDRS to compute failure to pay penalty on a specified amount for a specified period of time. Each screen display can accommodate up to 21 amounts. COMPAF displays a page total and FTP penalty computed for each amount input. It also has the capability of accumulating page totals for display on subsequent page(s).

COMPAS, to be used for manual computation of estimated tax penalty, has the same capability as COMPA except that interest will not be compounded.

COMPA4, to be used with certain estate tax modules, has the same capabilities as COMPA except that the interest rate is always 4%.

COMPAR is used when several independent debit interest calculations are desired on the same page of input. For example, up to eleven computations can be checked on one input screen, provided that each input line is from a separate tax module. If more than one input line is needed for one module's interest computation, COMPA will have to be used. Overlapping dates may be used in COMPAR. Line amounts will be displayed and a page total accumulated, which may be carried over onto subsequent pages. Computes Debit interest before 01-01-1999. 01-01-1999 and subsequent Debit and Credit (for "Non-Corporate taxpayers" ) interest.

COMPAM is used for multiple independent credit interest calculations on the same input page. It is possible to input eleven computations on one screen, provided that each input line is associated with a separate tax module. COMPAC will have to be used if the computation from one module requires more than one input line. COMPAM, like its debit interest counterpart, COMPAR, will accept overlapping dates. Line amounts will be displayed and a page total accumulated, which may be carried over onto subsequent pages. Computes Credit interest before 01-01-1999. 01-01-1999 and subsequent Credit interest for Corporate taxpayers only.

COMPAP, to be used with dates after 12/31/1984, has the same capabilities as COMPA except that the interest rate is 120 percent of the regular rate.

COMPA, COMPAF, COMPAS, COMPA4 and COMPAP are designed to be used for only one module per input.
For example, a module with the following transactions:

COMPAG is used to compute credit interest for GATT corporations. (Tax periods 199412 and subsequent) Input is the same as COMPAC. Output is the same as COMPA.

COMPA6 is used to compute interest for Military personnel based on IRM 5.1.7.12.2 where the interest can only be charged at a maximum of 6 percent.

CC ICOMP will compute payment information for installment agreements, for an entire account or for up to 15 requested modules of an account. The interest and penalty accruals, total balance due, total payments, and the date and amount of the final payment, are computed for the life of the agreement.

ICOMPF returns a format to be used for inputting a CC ICOMP request.

Error Responses: Error messages are displayed in inverse Video on line 24 beginning in position 1. The invalid elements can be corrected and re-entered.— See Exhibit 2.3.29-2.

Valid Response:
Output of command code INTST: See Exhibit 2.3.29-3.
Output of command code INTSTB: See Exhibit 2.3.29-4.
Output of command codes INTSTA, INTSTN, and INTSTV: See Exhibit 2.3.29-5.
Output of command codes INTSTD: There are more than one screen display. The first screen is similar to INTST. The subsequent screen show the interest computation table and FTP computation table. See Exhibit 2.3.29-6

TIN INVALID — TIN other than numeric or incorrectly formatted.

ACCOUNT NOT ON FILE — TIN not present on the TIF.

BMF ACCESS DENIED — Employee not profiled to access BMF accounts.

IMF ACCESS DENIED — Employee not profiled to access IMF accounts.

NAME CONTROL MISMATCH — TIF contains match on TIN but there is a mismatch on Name Control.

MFT/TAX PERIOD MISMATCH — MFT/TAX Period do not match with any on TIF for this taxpayer.

FILE SOURCE INVALID — Other than IMF/BMF/IRAF.

NAME CONTROL INVALID — Name Control on screen is missing or is invalid/inconsistent with input file source.

TO DATE INVALID — Date is invalid.

MFT INVALID — MFT is invalid.

MFT INCONSISTENT WITH TIN — MFT inconsistent with SSN format or MFT inconsistent with EIN format.

TAX PERIOD INCONSISTENT WITH MFT — Tax period not valid with input MFT.

TAX PERIOD INVALID — Tax period is invalid.

INVALID DEFINER — Command code definer is other than D, N, A, V, B, or blank.

PLEASE CORRECT INVALID DATA — Self explanatory.

MFT NOT VALID FOR INTST — Self explanatory.

COMPUTATION HOLD ON INTEREST/FTP— Self explanatory

TO-DATE WITHIN GRACE OF A NOTICE. NOTICE DATE IS— Notice date is displayed after the message

EXCEEDS 30 ADDITIONAL DAYS— Display if INTSTA To Date plus number of days field exceeds 30

MFT 17 HAS MULTIPLE 150'S— Self explanatory

WARNING FTD PENALTY SUBJECT TO POSSIBLE INCREASE

COMBAT: ADD'L INT & FTP DEPEND ON EXIT — Occurs when there is a calculation request on active combat accounts, Interest and FTP calculated to entry date.

CAUTION: SELF-INDENTIFIED COMBAT ZONE

PN 502 - CHECK AGAIN AFTER TC POSTED

INT ACCRUALS RESTRICTED/SMALL BAL IND — Occurs when there is a small balance indicator present.

UNREVERSED TC 500 OR TC 780

MF STATUS CODE 14 — Status Code 14 is present in the Master File Status History Record.

MFT 52 WITH NO DATE OF DEATH

MF STAT 10/12 & SC MOD BAL ZERO/CREDIT

941 FILING REQ. 2 — PRIOR TO 197528.

FEDERAL GOVERNMENT EMPLOYER — Employment code in Basic Entity Module is "F" .

STATE OR LOCAL GOVERNMENT EMPLOYER.

TODATE IS PRIOR TO RDD — To date entered is prior to return due date.

NO POSTED RETURN PRESENT — No Return or Form 7004 posted (TC 150, TC 620) including corporate returns for MFT 02, 33, 34 with tax period prior to 198312.

FOREIGN OPERATIONS DISTRICT 66 OR 98.

UNREVERSED TC 534—TC 535 for reversal is not present in the module.

ACCOUNT TRANSFERRED OUT/STATUS CODE 29 — Master File Status History Record contains a current status code of 29.

COMBAT ZONE FREEZE — Requires manual Interest and Failure to Pay penalty computation.

TC 370 WITH DOC-CD 52

UNREVERSED TC 604/608 — A reversing TC 605 is not present in the module.

INT & FTP RESTRICTION ON MFT — Self explanatory.

F706 FREEZE SET BY MF — Master File set this condition.

INVALID CALLER NAME USED — Caller other than 'TDA ', 'INTST', 'PINEX', 'ICOMP', 'ICD07', 'SIA ', 'URP ', or 'ICS '.

MFT 17 HAS MULTIPLE 150S — Self explanatory.

INVALID RESTRICT CODE RTN FROM COM CD — Set when Master File Common Code return an invalid Interest or FTP restriction value.

UNREVERSED TC 340 OR TC 341 — TC 342 not present in the module.

PEND ADJ WITH 870 WAIVER DATE.

INTEREST FREEZE SET BY MF — Interest Freeze on posted return set by Master File.

MODULE TOO LARGE TO COMPUTE INTEREST — There are more than 600 transactions in the interest table.

INT RESTRICTED BY P&I /SMALL BAL SWITCH — The assessed module balance equals zero and the Small Balance Switch in the Balance Section is significant.

HOLD40 FREEZE - MOD FZ SET TO M- — Restricted depending upon value in HOLD40 element.

F5330 FREEZE - MOD FZ SET TO F- — F5330 return and F5330 Freeze significant.

INT RESTRICT ON MFT — Interest is not computed.

F941 WITH TAX PERIOD = ZEROS — Self explanatory.

START DATE MISSING/FTP FROZEN BY MF — FTP penalty start date in posted return is zeros.

TAX LIAB LESS THAN OR EQUAL TO ZERO — Total tax liability amount in posted return plus any additional assessment(s) and/or abatements net to zero or less.

UNREVERSED TC 270 or TC 271 — Last TC 270 or TC 271 posted has no subsequent TC 272 reversal.

UNREVERSED TC 320 — TC 321 not present in module (Tax Periods 198712 and prior).

6020B CASE WITH MF STATUS CODE 12

6020B CASE WITH RET-CYC 198417–198436

MFT 13/55/03 MODULE 08 — FTP Penalty is not computed on Civil Penalty and Branded Prescription Drug (BPD) Modules.

MFT 30 WITH RETURN DATE OF ZEROS — Self explanatory

DOC-CD 51 W/RESTRICTION BLOCK NUM

FTP RESTRICT ON MFT — FTP penalty is not computed.

PENDING ADJUSTMENT TC 29X/30X — Self explanatory

TOO MANY TRANS FOR AN INTERNAL TABLE — There are more than 20 adjustments present in module.

MODULE TOO LARGE TO COMPUTE FTP — There are more 600 transactions in the FTP table.

RETURN HAS A CONDITION CODE D PRESENT

RETURN HAS A CONDITION CODE M PRESENT

MF PENALTY ABATE FREEZE SET — Freezes abatement of penalty and interest when refund statute expired (BMF).

MFT 05 WITH DOC-CD 46 — Self Explanatory.

MFT 58 - 64 PRIOR TO 1968 — Self Explanatory.

MFT 44 WITH 990PF E.O. IND SET — MFT 44 with 990PF indicator set..

Error Response: An asterisk (*) will display to the right of each invalid data element. On line 23, beginning in position 1, the error message "PLEASE CORRECT INVALID DATA" will display in inverse video. The error message " INVAL START — DT/NO 1% COMPUTATION" will display in inverse video on line 23 should the operator attempt to input a 1% Start Date which is within the time period in which FTP was computed at ¹/₁%.

Valid Response: Output of COMPAF. See Exhibit 2.3.29-15.

FILE SOURCE INVALID — The file source is not IMF, BMF or IRAF.

ACCOUNT NOT ON FILE — TIN not present or the TIF for the specified File source is not present.

BMF ACCESS RESTRICTED — Employee not profiled to access BMF accounts.

IMF ACCESS RESTRICTED — Employee not profiled to access IMF accounts.

MFT INCONSISTENT WITH TIN — MFT inconsistent with master file.

NAME CONTROL MISMATCH — TIN/File source matches with one on the TIF but Name Control does not match.

TIN INVALID — Taxpayer identification number other than numeric or incorrect format.

TAX PERIOD INCONSISTENT WITH MFT — Tax period inconsistent with master file.

MODULE INCOMPLETE ACCRUALS — Accrued interest and/or accrued Failure-To-Pay could not be computed.

MFT/TAX PERIOD MISMATCH — Requested module is not on the TIF.

DEFINER INVALID — Definer is not equal to "F" or space.

MFT INVALID — The MFT is not valid.

TAX PERIOD — The tax period is not valid.

MODULE NOT INCLUDED IN COMPUTATION —

TOO MANY PAYMENTS — 1000 or payments to be applied to module balance.

TOO MUCH MONEY — No. of payments input will create a credit balance at the end of the agreement.

PAYMENTS EXCEED TOTAL AMOUNT DUE — The final payment is displayed in credit balance to indicate how much total balance due is in overpayment. The user should reduce the total number of payments, the payment amount, or both. This credit balance is not to be refunded to the taxpayer.

PLEASE CORRECT INVALID DATA — The data preceding the asterisk is incorrect. Correct and re-enter.

Employment Code is F or G and return posted prior to cycle 197528.

BMF Module with 941 Filing Requirement 2 and return posted prior to cycle 197528.

Interest Freeze Indicator is on (unreversed TC 340, 341, 534 or 780 is present; or BMF only, Status Code 14 is present in Master File Status History Section).

TC 150 not present.

"To Date" prior to Return Due Date.

BMF 941 Filing Requirement is 2, DO of Primary Location Code is 66 or 98, and TC 150 posted prior to cycle 197612.

Employment Code is F and return posts subsequent to cycle 198226.

TC 270/271 Manual Assessment/Abatement of FTP Penalty.

Entity Employment Code is F or G (BMF) and the return posted prior to cycle 197528.

Form 941 Filing Requirement Code is 2 (BMF) and the return posted prior to cycle 197528.

Form 941 Filing Requirement is 2 (BMF) and the HISTORICAL DO CD is 66 or 98 or 20.

Status Code 14 (Form 1041 Installment) is present in the Status History Section (BMF).

Unreversed TC 500 Military Deferment is present on Condition Code Z (Reasonable Cause (IMF)).

Unreversed TC 320 Fraud Penalty is present (Tax Periods 198712 and prior).

Transfer-In Doc-Code 52 Transaction.

Transfer-In Doc-Code 51 Transaction prior to January 1983 (BMF).

Transfer-In Doc-Code 51 (TC 150) with DLN Blocking Series other than 100–199 (BMF).

Transfer-In Doc-Code 51 Transaction other than DLN Blocking Series 100–159, which posted 1-1-1973 or later (IMF).

Non-Delinquent Form 1120, Form 990C, Form 990T where current 23c date earlier than the return due date plus 80 days (BMF).

Form 1120, Form 990C, Form 990T or Form 1041A (BMF).

TC 150 not posted.

"TC Date" is prior to return due date.

Unreversed TC 780 (Account Compromised) is present.

Unreversed TC 534 with a significant amount is present Expired Balance Write-Off.

TC 400 Freeze is in effect.

Audit/DP Tax Adjustment posted prior to 1/1/1970.

Condition Code D (Reasonable Cause) is present, (BMF).

Condition Code M (Reasonable Cause) is present, (IMF).

Net of TCs 150, 290, 291, 301 and 300 equals zero.

Period Ending Date is prior to 196912.

Module is credit balance.

Module balance consists entirely of penalty and interest.

Too many modules on TIF for CC ICOMP to complete.