8752 allows for allocation of the Earned Income Tax Credit (EITC) shown on the joint return. Because of the outstanding tax assessment, the $500.00 and $300.00 credits are transferred in April 2013 to the MFJ tax liability for 2011. The Agency and Sub Agency codes will also be shown on the taxpayers account. The husband does not file an income tax return for 2012 that claims an overpayment. When working Injured Spouse Allocation Cases involving math errors with First-Time Homebuyer Credit, follow procedures in IRM 21.4.6.5.8.3(17)(c), Processing of Form 8379 Injured Spouse Allocation, and IRM 21.5.4.5.7, Math Error with Injured Spouse. See IRM 3.17.795, Refund Schedule Number Format, for additional information. Research CIS for an explanation the previous denial and explain the reason for the denial to the taxpayer. Compute an allocation for the original offset and 50 percent for the stimulus payment. Relief for Taxpayers During COVID-19 Pandemic Allocate the education credit to the spouse who would have shown the item on his or her separate return. After 2018, the SRP is $0.. Advise the taxpayer of the reason for the offset. See IRM 21.4.6.4.2.6, TOP Offset Notice, for notice information. Research for Outstanding Balance Liabilities (OBLs) for both spouses before completing the allocation. On September 1, 2013, the IRS fully abates the tax assessment on tax year 2011. We cannot properly calculate their entitlement to injured spouse allocations (for federal tax purposes) without knowing whether the state community property laws apply. When the taxpayer calls concerning his/her injured spouse allocation, TC 150 with Blocking Series (BS) 92 or TC 971 Action Code (AC) 071, use the following chart: Do not make any changes to the account or release the refund without first contacting the area that worked the injured spouse allocation. Provide the name and TIN of the taxpayer(s) and request confirmation of the existence of a debt, and the amount(s) owed, notate the information on your case history along with the name of the Bureau of the Fiscal Service CSR who provided it. ", RC 091 - "based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.". To determine the appropriate campus, use the 8th and 9th position of the RSN. A manual refund is necessary when the injured spouse's portion of the joint overpayment will offset to a Federal tax debt for which he/she is not liable. 3) There is a posted TC 740 or TC 841 and the account shows TC 899 type 1 with the same OTN of the posted TC 898. BPI 6 is required if a manual refund will be issued to an injured spouse who is primary, from a module with a combat zone C Freeze. Use hold codes 1, 2 or 4 when creating an overpayment on an IDRS adjustment that changes the tax, credits, or payments to hold an overpayment from offsetting. Determine the married filing separate (MFS) tax for each spouse. In the case of partial abatements, all TC 706 credits transferred from the same person. Accounts Management will work all Form 8379s found in the block. If the taxpayer wants to claim Innocent Spouse Relief, but mistakenly uses Form 8379, Injured Spouse Allocation. See IRM 21.6.6.2.20.2, Processing Decedent Account Refunds. These are due process notices and there is no requirement that IRS return them to the agency or forward them to the taxpayer. 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. IRC 6402(b) provides that a taxpayer can elect to have an overpayment applied to a future tax, once all tax and TOP debts subject to offset under IRC 6402(a), (c), (d), (e) and (f) are satisfied. The TOP Liaison will either approve or disapprove the request for a TOP offset reversal depending on information acquired during research. If one of the shortcuts methods was used, send the taxpayer an explanation of how the refund was allocated. The taxpayer's main home was in a community property state. As of March 18, 2021, the 2020 RRC amount will no longer be applied to past due federal income tax debts. See IRM 21.4.6.5.23.2, UPC 137 or UPC 437. Monitor the account until all account adjustments have posted and the account is in zero balance. In addition, retain the IDRS category code as DMFC (97140 paper)/ DMFE (97144 electronic). After getting through to Bureau of the Fiscal Service, select the option "If you are calling from a government agency.". Alaska and Oklahoma are not community property states for the purpose of processing injured spouse allocation cases. 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. If the taxpayers live in a Community Property State see Note below. If credits are applied back to the IMF account and then refunded because there are no other tax, penalty or interest obligations, the taxpayer may void the check and return with instructions to apply the funds back to the LLC tax period(s). For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights. The following tables can assist you in resolving taxpayer inquiries related to TOP offsets, TC 898 (TOP offsets) or TC 971 AC 598 (manual input of TOP offset). Agency receiving the payment. If PENDMRR or MRRTONHQ is not present in the IDRS case control activity, then the TC 899 Type 3 is a BFS/IRS correction. To reverse TOP offsets for scrambled SSN cases: Reverse an offset only when you can establish that the taxpayer who was offset absolutely was not the obligor. If the injured spouse is entitled to the entire overpayment, this computation is not needed. 1. It is not all-inclusive. After January 15, 2021, EIP 2 could no longer be issued and had to be claimed on a 2020 return as RRC. UPC 342, RC 07, occurs when a TC 767 with OTN is greater than the net TC 76X with same OTN. If the account was corrected no other action is needed. The computation is carried out to four decimal places throughout the entire calculation, then rounded to two decimal places after figuring the injured spouses share of the joint tax. A UPC 138, RC 0, will still result if there is a TC 898 TOP offset and the TC 740/TC 841 is less than the related TC 840/TC 846: (TC 899 type 2 or 3) + (TC 899 type 4) (TC 76X), all with the same OTNs as the TC 898. See IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals, for levy proceeds. Input 290 .00, RN 810 or RN 811, RC 086, SC 7 with the appropriate PDC or issue a manual refund if applicable. 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)). Working through OCSE, the offset payment is then sent to the state child support agency to pay toward the past-due support. UPC 168, RC 0, is an IMF unpostable code that occurs when TC 766 with OTN fails to find a previously posted TC 898 with the same OTN. Certain BPIs also identify one of the spouses on a joint refund as eligible for offset. This has no effect on injured spouse forms filed against tax offsets since IRS creditor rights permit an offset based on the applicable state law regardless of how EITC may be allocated. If approval to issue the refund is received, input a Manual Refund using BPI 8 or 9. Form 8379, Injured Spouse Allocation, must be reviewed to determine that all income shown on the joint return has been properly allocated and verified. Bypass TOP offset for all debts other than child support. However, if only one spouse received their EIP refunds and RRC is claimed on the joint return , then the spouse who did not receive their EIP refunds should be allocated the RRC up to the amount of the EIP they did not get. This is needed on Form 5792, Request for IDRS Generated Refund (IGR), and Form 3753, Manual Refund Posting Voucher. 2) Taxpayer inquires about his/her portion of refund prior to filing original return, 3) Taxpayer inquiries about his/her portion of refund after filing original return. See paragraph (11) above. The agency is required to make the refund payable in the name or names that were on the IRS refund file at the time the original refund and TOP offset occurred. If unable to verify with original return, use command codes (CC) IRPTR, SUPOL, IMFOL, RTVUE, TRDBV, or Return Request Display (RRD). Bureau of the Fiscal Service maintains the TOP debts subject to offset under IRC 6402(c), (d), (e), and (f). Advise taxpayer to allow five calendar days for direct deposit or 4 weeks for paper check to arrive. Be sure to Indicate "TC 766REJ" on the adjustment. Mary Cod filed single for 2013. The executor or administrator must have provided a copy of their appointment. It must be input on all manual refunds resulting from an Injured Spouse Allocation form filed by the secondary taxpayer unless combat zone, BPI (5), applies. When the amount of a credit elect is reduced by a TOP offset, but the credit later becomes available because of an injured spouse allocation, no comparison is made against the BFS debtor file. Insolvency will determine if the tax offset is in violation of the automatic stay. Treasury Offset Program - Bureau of the Fiscal Service This server has a login program control. If Combat indicator is "2", then the taxpayer is no longer a combat zone participant. (-G) Math Error Freeze, Forms 8379 received with an original return that shows a math error on the return should not be processed without first attempting to resolve the math error. Some examples are provided below: If a joint return was originally filed claiming the credit, and the credit was split 50/50 between the two spouses; and a joint return is filed with the 6-2/3 percent recapture, it will also be split 50/50. For other types of Congressional inquiries, refer to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines. You may encounter situations that require an opinion by IRS Chief Counsel. TC 971 AC 599 (manual input of TOP offset reversal record which is used when the TC 899 Type 1, 2, 3 or 4 record, generated by Bureau of the Fiscal Service, is deleted in error). Offsets due to delinquent child support occurring during processing years 2012-2015 will be identified by the posting of Transaction Code (TC) 971 Action Code (AC) 126. See IRM 21.4.6.5.10.4, Injured Spouse Refund TOP Offset, for instructions on computing credit interest when a TOP Offset that included credit interest is reversed and the subsequent refund will be computer generated. The return due date (determined without regard to any extension of time for filing), the date of the overpayment (as determined in the preceding table), or the return processable date (if the RPD is after the extension date). Helps a business get access to capital from a bank. Possible open paragraph can read, Due to a systemic issue, we previously wrote you requesting a copy of your previously submitted Form 8379, Injured Spouse Allocation. Handle each OBR on a case by-case basis. See IRM 21.4.6.5.1, Taxpayer Inquiries on TOP Offset. Additionally, normal injured spouse allocation rules apply if CTC is claimed on the 2021 return. The U.S. In these instances, the refund will be sent as a paper check. Contact Insolvency prior to a reversal of a TOP offset for permission to release the refund either systemically or manually. A TC 766 reversing a TC 898 with an OTN starting with 2 (indicates secondary taxpayer debt) results in the generation of a TC 846 with BPI 2. Before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. If there are two or more offsets with different dates, consider each one separately when determining the six-year period for reversal. It does not matter where a taxpayer resides. 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. (-R with an Unreversed TC 971 and/or TC 972 AC 134) IVO Involvement: Process the injured spouse allocation without regard to IVO indicators when the income data is verifiable on CC IRPTRL. If you need to reverse a TC 898/TC 896 that is over six years, a manual reversal is required. 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. When the interest payment is present on a tax module, including its associated accrued interest amount (also posted as TC 776), and the sum was offset with TC 898, compute TC 766 as follows: Compare the injured spouses share of the joint return overpayment with the total return overpayment, determining its percentage rounded to the fifth decimal point.Example: The total of the 2019 joint return overpayment for the taxpayers is $9,500, of which $4,200 is the injured spouses share. When permission is granted for the manual refund before the TC 700 posts to the account, input TC 470 CC 90 to prevent notices from being issued. When working an injured spouse allocation with a Federal tax offset "I" debt, the control base must be changed from DMFC (97140 paper)/DMFE (97144 electronic) to DMFT (40110 Tax Debt). See IRM 21.5.6.4.46, -W Freeze, for instructions. If the Form 8379 is not for another year return the Form 8379 to the taxpayer advising them we have no record of a return being filed for the tax year indicated on the Form 8379, use Letter 3179C. Because of the outstanding tax assessment, the wife's $500.00 credit is transferred in April 2013 to the married filing joint (MFJ) tax liability for 2011. TOP offsets on condition 1 scrambled SSN cases are reversed only if the wrong taxpayers money offset to the debt. Use HC 3, RC 087, and PC 8 when applicable and use the appropriate post delay code. Relief for Taxpayers During COVID-19 Pandemic To help people facing financial challenges resulting from the COVID-19 pandemic, the Department of Revenue is providing many taxpayers with increased flexibility with regard to their tax obligations. The Form 8379, Injured Spouse Allocation, is an allocation of the taxpayers joint income, payments, deductions, exemptions, and credits used to determine each spouses share of the joint overpayment subject to offset for any eligible individual or joint, Federal tax debt or TOP debts. DO NOT provide the currently posted or a recalculated amount of EIP. A hardship request to expedite the injured spouse's portion of an overpayment, resulting from Form 8379, Injured Spouse Allocation, filed with an unprocessed original return, may be honored prior to the return posting and a TOP offset. The sum is the amount of the TOP offset reversal to be input as a TC 766. Three or more TC 766s will require a manual refund. The QBID will be allocated as a percentage of each spouse's Qualified Business Income if the Qualified Business Income (QBI) can be determined. Input the net credit adjustment (TC 29X) using HC 1 or HC 4 and the appropriate blocking series, SC, RC, and PDC for 1 cycle. Input TC 807 first with HC 1, then input TC 808/809/810/811 with a PDC for 1 cycle. But note that there are numerous exceptions which would allow a taxpayer more time to file a claim for refund, and consequently, more time to file the associated Form 8379 see IRC 6511. CC RFUND has a field entitled "BYPASS INDICATOR" . A TC 898 with document code 45, TOP offset of manual refund, re-sequences for 10 cycles, if TC 840 with the same DLN is not posted. The Treasury Offset Program debt indicator (F) is set when Bureau of the Fiscal Service informs Internal Revenue Service (IRS) that at least one TOP debt exists and an offset may occur if a refund is authorized. The taxpayer is sent a notice of offset by Bureau of the Fiscal Service for Treasury Offset Program offsets. The amount may be for all or part of the TC 898 with the same OTN. One adjustment will be for the original overpayment and the second adjustment will be for the EIP. You must ensure all unpostables (TC 898 or TC 899 types 1, 2, 3 or 4) are resolved before reversing the TOP offset amount for TOP transactions with the same OTN. The original refund for $1,586, TC 846 dated 03/06/2009, was offset for $1,000, TC 898. UPC 342, RC 08, occurs when a TC 766 with OTN attempts to reverse a TC 898 with the same OTN, and the 23C date of the offset is more than six years from the date of reversal. For prior revisions of Form 8379, always issue the Injured Spouse's portion of the refund in "one name only" even if the one name only box on line 11 is not checked. The notice of offset informs the taxpayer that his/her Federal tax refund was offset for a debt owed to an agency(s). Use the same column in the EITC table as used to determine the EITC on the original joint return. If taxpayer is requesting an explanation of the allocation see paragraph (7) below. Refer to Document 6209, Section 8 - Master File Codes, for additional information. If both spouses have income (see Note below), If one spouse has income (see Note below), The earned income is $12,903.00 or more (phased out with a MAGI of $150,000). Form 3753 must be processed no later than the 43rd day. The Department of the Treasury (Treasury), Bureau of the Fiscal Service (BFS), amended its regulation governing the offset of tax refund payments to collect past-due child support obligations. Bypass TOP offset for all secondary TIN debts except child support. The IAT Results IS screen may respond with a debt indicator "N" when an invalid TIN indicator follows the TIN. You must complete Form 8379 Allocation Worksheet and attach the Form 8379 Allocation Worksheet to the CIS case. You can tell the taxpayer: The IRS no longer maintains child support or other TOP debts. These shortcuts are applicable to Nevada, New Mexico and Washington tax and TOP debt, all conditions must be met before the shortcut can be used. 11-2016), input a TC 290 for .00 with RN 810, RC 086, SC 7 and the dollar amount of the allocated refund. Check your federal or state tax refund status | USAGov Indicate that the back-up information is Letter 3064C for your action. The Collection Statute Expiration Date (CSED) must be considered in all cases and the overpayment will offset to the earliest unexpired Imminent CSED for all MFT 29, MFT 30, MFT 31, MFT 35, or MFT 55 modules. Treasury Offset Program - FAQs for The Public An account may have both a tax offset and a TOP offset. Process the case regardless of the AIMS status. TDD at 866-297 . See IRM 21.4.6.4.2.1, Top Offset Bypass Indicators. Bureau of the Fiscal Service maintains these debts and affects the offset through TOP. The Refund for both taxpayers on a joint return (FS2) could be offset for separate debts that are reported to IRS and shown as separate TC 898(s) or TC 971 AC 598(s). The amount of credit elect, up to the amount of the debt owed, is released for refund and includes any applicable interest.

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