However, if injured spouse indicates on Form 8379, line 5b, that his or her marriage was NOT recognized under the laws of the community property states(s) listed on line 5a, allocate items based on the instructions provided in IRM 21.4.6.5.8.4.1, Same-Sex Spouses. On all Forms 8379 (Rev. Do not refer your case to CI or EXAM. Input a TC 290 .00 with a Hold Code 4 to hold the credit when sending a no consideration letter. The Injured Spouse's share of the refund was processed as filed and the taxpayer is now requesting to change their allocation (e.g. Advise the taxpayer to allow 30 days to process. The creditor agency may have obtained relief from the automatic stay. Process Form 8379 based upon community property laws of that state. Input a TC 290 for .00 without the corresponding RN 808/809/810/811 to release the overpayment. The debt may be activated, inactivated or deleted within TOP before a refund is issued. There is an IRS obligation on the secondary taxpayer's account, The injured spouse is the primary taxpayer. Issue a letter to the taxpayer informing them upon completion of their Examination they can resubmit a new Form 8379, Injured Spouse Allocation, if needed for any additional credit that is allowed. A Treasury Offset Program Bypass Indicator is assigned to all manual and systemic refunds certified to Bureau of the Fiscal Service by IRS. Offsets that occur during processing year 2016 and beyond will post with the Agency and Sub-Agency Code at the beginning of the Offset Trace Number (OTN). Failure to input the PC 8 will result in an UPC 159. Please allow up to 180 days for the manual reversal to post. All TC 706 credits occurred within two years before the date of the full or partial abatement. Input the appropriate credit transfer using CC ADD24/CC ADC24 to reverse the portion of the offset applicable to the injured spouse's share of the refund. The BPI is a one-digit indicator that identifies for BFS whether the refund is eligible for offset by TOP. Refer to IRM 21.6.4.4.17.1, Recapture of First-Time Homebuyer Credit (FTHBC), for guidelines on the recapture. The case is suspended for missing and/or additional information and no reply is received within 40 days. Advance CTC is not subject to offset. Research Command Code INOLES or IAT Results IS tool under both the primary and secondary Taxpayer Identification Number (TIN), for the debt indicator: "B" - Both Federal tax debt and Treasury Offset Program debt. You must be sure you input the OTN of the specific TC 898 offset you are reversing, especially when you are reversing only one of the offsets due to an injured spouse allocation. Future year debt owed by the secondary taxpayer. If the injured spouse is not responsible for any part of the debt which offset, always reverse the injured spouse's share of the refund when working a Form 8379, Injured Spouse Allocation. Increase or decrease tax and credits to reflect the correct figures. When a Manual Reversal Request is submitted (identified as PENDMRR in the IDRS control base activity), you must wait for the TC 700 credit to post to the account when there is a TC 899, Type 3 present. See IRM 21.4.6.4.2.9, TC 766 with OTN TOP Offset Reversal, and IRM 21.4.6.5.12.1, Input of TOP Offset Reversals Reference Number (RN) 766 with OTN, for more information. When determining the "TO" date, do not consider the 45-day interest-free period that applies to claims for credit or refund. See IRM 21.6.7.4.1, Source and Reason Codes CP 21/CP 22A Notices, for conditions when a notice will/will not generate. California has rules to keep workplaces safe from COVID-19. Shared Responsibility Payment (SRP) see IRM 4.19.13.10.7 Shared Responsibility Payment (SRP). Do not exceed the amount of the hardship request. Research the account for agency refunds (TC 899 or TC 971 AC 599 Type 2) or prior reversals (TC 766 with an Offset Trace Number (OTN)). This occurs when a TC 766 reverses a TC 898 with a debtor TIN. You may see a TC 971 AC 598 or a TC 971 AC 599 which represents the manual input of an erroneously deleted TC 898 or TC 899 transaction. The priority of offsets within Treasury Offset Program are: Office of Child Support Enforcement The only purpose of this indicator is to provide necessary information for use in IRS automated telephone responses. However, ignore the "No" answer to question 5b and process the Form 8379 the same as opposite-sex couples if the tax year listed on Form 8379 meets the following: On all Forms 8379, issue the Injured Spouse's portion of the refund in "one name only" unless the revised Form 8379 (Rev. If one of the shortcuts methods was used, send the taxpayer an explanation of how the refund was allocated. If you withdrew money from your 401(k) or IRA for reasons related to Covid, you're required to include at least a portion of taxes due on your 2020 return. 7) Taxpayer is aware of offset made, but claims the remainder of the refund not received. Refer case to Insolvency. In all cases, If the taxpayer can provide a copy of Form 8379 via fax, attach a copy of the faxed Form 8379 to the Form 4442/e4442. The state where same-sex couple resided during the tax year listed on Form 8379" is. When issuing a hardship refund under any circumstance, inform the taxpayer that if he/she owes a child support or Federal agency debt submitted for tax refund offset, Bureau of the Fiscal Service may apply his/her refund to the debt through TOP. Check Your 2022 Refund Status | California Franchise Tax Board If the injured spouse is the primary taxpayer and Part II, line 11, is not checked on Form 8379 (Rev. No other payments or credits are made to the 2011 MFJ account. When a taxpayer wants a Form 8379, Injured Spouse Allocation, but mistakenly uses Form 8857, Request for Innocent Spouse Relief, return the Form 8857 to the taxpayer, advising him/her of the mistake. A man signs a document. Inform the taxpayer of the actual amount offset from his/her refund and still outstanding. 2) Taxpayer claims he/she does not owe debt or he/she is not the debtor. See IRM 21.4.6.5.8.9, Form 8379, No Consideration Procedures, for instructions on what to include in the letter. TC 899, type 2, with negative money amount, is used by the agencies participating in TOP to report a refund of a TOP offset. Notate this information on your case history along with the name of the Bureau of the Fiscal Service CSR who provided it. Taxpayers divorce. If an OBR is requested before the 23C date of the tax assessment which created the overpayment; but a clerical error occurred preventing the processing of the request, the IRS can correct the clerical error by reversing the tax offset and issuing the OBR. It generates on all CC RFUND manual refunds issued from modules with the combat zone C Freeze in effect. Use block series 9 and the appropriate BPI. Issue a manual refund using BPI 2 and BS 9. A TC 898 originating from a computer-generated refund, TC 846, has the same DLN except for the document code which is changed to 77. That notice provides the creditor agency contact information. Bureau of the Fiscal Service will not provide the taxpayer with the amount of debt submitted to TOP by the creditor agency. DO NOT take any action or input a TC 766 (TOP offset reversal). If there are no IRS debts, which must be by-passed and the address on ENMOD is not different than the address on the Form 8379, refer to paragraph (1) above to input the adjustment for the injured spouses portion of the overpayment. For TOP offsets, BFS issues the Notification of Offset that provides the creditor agency contact information. 11-2016 MeF) and Rev. Contact the TOP Liaison at , if needed. Mary Cod filed single for 2013. Advise the taxpayer NOT to include a copy of the tax return with the Form 8379 nor to file it with a Form 1040-X unless changes to the tax return need to be made. The new command codes mirror existing command code IDT58. If the IRS offsets the refund claimed on a Form 1040/Form 1040X (in whole or in part) to a Federal tax debt or a TOP debt, the IRS does not issue a Notice of Claim Disallowance, because no claim has been disallowed. Employees of the Taxpayer Advocate Service follow procedures in IRM 13.1, Taxpayer Advocate Case Procedures, unless referred to this section for specific instructions. Offsets that were inadvertently applied to TOP debts other than child support should be reversed and refunded to the affected taxpayers. For 2018 and subsequent: if the exemption portion is blank or shows zero, allocate the child tax credit, credit for other dependents, additional child tax credit, dependent-related education credits, and any other credits as entered on the Form 8379. There is an IRS obligation on the primary taxpayer's account, The injured spouse is the secondary taxpayer. Contact the TOP Liaison , for a manual reversal. The TOP Liaison will refer to IRM 3.17.63.9.27.4, Treasury Offset Program (TOP)/Debtor Master File (DMF) Manual Offset Reversal Transactions. A TC 840/TC 846 posted after receipt of Form 8379; and IRS processed Form 8379 and issued a refund. In all instances related to injured spouse if you are unable to determine the actual received date of the return use the TRDBV date. If the Form 8379 is filed by itself, and there was no offset on the module or a corrected math error has created a balance due, you should not consider the Form 8379. An indicator of "N" means no debt. If you are unable to resolve the math error, work the allocation based on the information you have. For TOP offsets, UPC 189, RC 06, occurs when a TC 766 with OTN is greater than the net TOP offset amount. A Federal tax debt must not be bypassed if a TOP liability exists and a TOP offset will occur. 1. Use RC 087. If you decide to honor the hardship request for $600, you must treat $100 of the refund as an OBR. IRS can no longer manually repay the refund to the agency. Refer to IRM 21.4.1.2 (6) , Refund Research Overview, for information pertaining to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) Section 201. The Recovery Rebate Credit (RRC) is a one-time benefit for people who didn't receive the full Economic Impact Payments (EIPs) in 2020 and whose circumstances may have changed, making them eligible now for some or all the unpaid portion. The transaction date is the received date of the Form 8379. See IRM 21.4.6.5.15, Bankruptcy Cases Involving Tax Offset, for instructions. A mixed entity case is a case involving the filing of a tax return by an individual who is using a TIN belonging to another individual. This example illustrates the exception to the rule. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. Use the following explanations for tax or TOP offset when not considering Form 8379 due to the time limitations per IRM 21.4.6.5.8.10: If the timeframe for submitting Form 8379 is not met for a tax offset or TOP Offset, advise the taxpayer We are sorry, we cannot process your Form 8379, Injured Spouse Allocation. This is required for injured spouse allocation processing. See IRM 21.4.6.5.23.3, UPC 151. The TC 766 posts with the date of the refund creating the offset when that refund includes credit interest. If taxpayer inquires of an existence/non-existence of a TOP debt at Bureau of the Fiscal Service, do not use the Agency or Sub Agency codes found on CC TXMOD or CC IMFOL. Issuance of a letter is not required per IRM 21.3.3.2, What is the Definition of Correspondence? Form 8379, Injured Spouse Allocation, may post to the Master File as an amended return without an original, creating an E Freeze, when the injured spouse files Form 8379 using his/her own TIN, instead of the primary TIN shown on the original joint return. If the injured spouse explains that the agency issued a refund and the TC 841 satisfies a debit balance in the module, no further action is necessary. The following conditions do not require a manual refund: If both taxpayers owe a married filing joint debt and it is the only Federal tax debt owed, input RN 808/RN 809 or RN 810/RN 811 for the difference of the Injured Spouse's portion of the overpayment and joint liability. In this situation, a manual refund is required to issue the refund to the injured spouse. The new regulation does not apply. IRS will not be reversing any RRC tax offset which occurred before March 18, 2021, unless an Injured Spouse Allocation, Form 8379 is filed requesting the injured spouses share of the offset. Your payment may be less because you owed an overdue debt to a federal or state agency. See IRM 21.4.6.5.5, Hardship Refund Request. On occasion, you may have a TC 898 transaction that was deleted in error and a systemic reversal (TC 766) cannot be done. If case meets no move criteria disregard any instructions to place the account in debit balance, and only submit the manual reversal request to the TOP Liaison. For Form 8379, compare the injured spouse's refund allocation with the TC 898 on the module and reverse only the portion needed. When CC RFUND is input on a module with a (C) combat zone freeze, the indicator is set to "4" . See IRM 20.2.4.7.5.2, 45-Day Rule and All Original Tax Returns, for the dates of systemically generated refunds. See IRM 21.4.6.5.10, Allocation of Injured Spouse Form 8379. TC 971 AC 599 must be considered when netting the TOP offset amount. You must attach all Form 8379 Injured Spouse Allocation Worksheets used to determine the Injured Spouse share of the refund to your case file, unless one of the shortcuts apply. For payment status, i.e., if the refund has been sent to the plaintiff or plaintiff's attorney, call 517-636-5333. The TC 898 Document Locator Number (DLN) is the same as the prior TC 840 from which it originated. In most cases, the RRC is split 50 percent regardless of the amount of income, credits/children claimed or community property jurisdiction if it falls within the period of limitations for refunding. Consider whether the case should be referred to the Taxpayer Advocate Service. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. 8) Taxpayer says Form 8379 was filed with his/her original return and no refund was received. a TOP offset has occurred and the TOP offset notice was received. Special exceptions exist for many of the community property states identified above, Refer to IRM 25.15.5, Relief from Joint and Several Liability, Relief from Community Property Laws. An adjustment resulting in a net credit to the tax module must be input after the offset reversal. The debt indicators are: The (I) indicator is not always set for all Federal tax debts. TC 150 is not blocked 92 and a paper return was filed. If there was an Agency Refund for the full amount do not reverse the TC 898. A tax overpayment must offset to an outstanding Federal tax debt before it offsets against other debts or is applied to a credit elect. The order in which they are input does not matter. If you need to reverse a TC 898/TC 896 that is over six years contact the TOP Liaison , for a manual reversal. The TOP Liaison will either approve or disapprove the request for a TOP offset reversal depending on information acquired during research. When CC RFUND is input on a Master File Tax (MFT) Code not eligible for offset, the indicator is set to "3" . Primary and secondary taxpayers have different last names and the secondary taxpayer is the debtor. This may include coordination with another IRS function. Research to resolve the discrepancy (processing error, math errors, or other tax or TOP offset). Each TC 898 or TC 971 AC 598 can represent an offset to one or more agencies for the same TIN. 6) Taxpayer's overpayment is not being held by EXAM, however, there may be a -L or -LR freeze on the account by EXAM pending review of his/her tax return, The TC 570 creating the -R freeze has the same DLN as the original return with blocking series 92.