Internal Revenue Manual - 3.14.2 BMF Notice Review (Cont. 2)

Part 3. Submission Processing
Chapter 14. Notice Review
Section 2. BMF Notice Review (Cont. 2)

3.14.2.4.18 (01-01-2009)
Adjustment Notices

Adjustment Notices are CP 210, CP 220, CP 225 and CP 260.
Adjustment Notices generate to tell the taxpayer of adjustments or credit transfers made on the account. For example:
- Examination (Doc Code 47)
- Data Processing (DP) (Doc Code 54)
- Changes to penalties, Failure to File (FTF -- TC 166/167), Failure to Pay -- decrease only (FTP -- TC 277), Failure to Deposit (FTD -- TC 186/187), Estimated Tax Penalty (ES -- TC 176/177)
- Penalty assessed on an overpaid, non-math error return (CP 210 as first notice)
- Credit transfer on Doc Code 34 with Correspondence Received Date entered on the credit side of FRM 34 (CP 225)
- Credit reversal on an overpaid or even balance module resulting in a debit balance of ≡ ≡ or more (CP 260)
An adjustment notice will not generate with posting of TC 290 .00 without a Credit Transaction Code.
Notice Review Tax Examiners are responsible for determining the effects any adjustments or credit transfer will have on the module. Proper use of Hold Codes, Local Control File, TC 570, and unpostable bypass indicators is essential for preventing incorrect adjustment notices.

3.14.2.4.18.1 (01-01-2009)
CPs 210 and 220

Notice Elements of CP 210 -- Account adjustment notice.
1. The adjustment results in an overpayment, an even balance, or a balance due of less than ≡ ≡ ≡ (≡ ≡ ≡ for MFT 61), or the adjustment results in a balance due of ≡ ≡ ≡ ≡ ≡ or more (≡ ≡ ≡ ≡ ≡ for MFT 61), and the module was in TDA Status (22, 24, or 26) before the adjustment for the conditions listed in b.
2. The adjustment is a change to tax (DP or Exam) or credits (TC's 637, 766, or TC 767), penalties (FTF, FTP (decrease only), FTD or ES), or Civil Penalty (TC 240 with Reference Numbers 680-682 for MFTs 05, 51, and 52).
Reminder:

When an account has quite few pending payments (such as TC's 610, 620, 640, 650, 660, 670, 700 or 710) that are resequencing or teping (TEP) or adjustment pending (AP) or corrected unpostable (CU) or pending transaction (PN), then label the notice with the appropriate label and mail out the notice.
Notice Elements of CP 220 -- Account adjustment notice.
1. The adjustment results in a balance due of ≡ ≡ ≡ or more (≡ ≡ ≡ for MFT 61) and the module was not in TDA Status (22, 24, or 26) before the adjustment for the conditions listed in (b).
2. The adjustment is a change to tax (DP or Exam) or credits (TC's 637, 766, or 767), penalties (FTF, FTP (decrease only), FTD or ES), or Civil Penalty (TC 240 with Reference Numbers 680-682 for MFTs 05, 51, and 52)
  
  Note:
  
  There is no minimum money amount tolerance for the notices. If the balance due is less than ≡ ≡ ≡ ≡ ≡ , the balance due amount will print as none.
An adjustment notice will have an original DLN if it generated for the recomputation of FTF (TC 166), FTP (TC 276 decrease only), ES (TC 176), or FTD (TC 186) penalties to a timely credit or extension posting after the notice module has settled or at settlement if the notice module is overpaid with no math error.
The notice will have an adjustment DLN only if generated by a Doc Code 54 or 47 adjustment action. The 4th and 5th digits of the DLN will carry the Doc Code of the adjustment document. Doc Code 54 indicates an adjustment input on CC REQ54. Doc Code 47 indicates an adjustment input on CC REQ47 by Examination.

CP 210 and CP 220 Review Procedures

Review Adjustment Notices on IDRS to accurately decide notice disposition. Ensure the action creating the adjustment notice:
• Is not a duplicate of a previously posted credit or adjustment
• Is a valid credit and has not unposted on the debit side of the credit transfer

Reviewing a notice generated by a Doc Code 47 or 54

CP 210/220 Decision Table

If	Then
The validity of the assessment or abatement is an unreasonable amount or a duplicate	Compare the adjustment item with the source document. Verify the adjustment was input correctly.
The adjustment appears to be incorrect	Contact the originator (lead or manager if originator cannot be contacted) for advice in taking corrective action such as notice disposition or deleting refund.
The originator or lead or manager cannot be contacted	Take case to Notice Review lead to decide possible corrective action.

Note:

Verification of the adjustment action is required only if the source document is provided with the NRPS package.

If the notice module has a TC 300 .00 adjustment, look for a refunding TC 640 (advance payment of decided deficiency) on the module. If the TC 640 is refunding, check the Disposal Code on CC AMDISA

AMDISA Disposal Codes

If	Then
Disposal Code is 01 or 02	Allow the refund and mail the notice.
Disposal Code is other than 01 or 02	Delete the refund and contact Exam for notice disposition.

CP 210 and CP 220 Notice Disposition for Doc Code 47 or 54 Transactions .

Notice disposition for pending Doc Code 47 or 54 tax decrease or credit increase transaction:

Decision Table

IF THE PENDING IS A TAX DECREASE OR CREDIT INCREASE	Then
Input with Hold Code 0 or Hold Code 1	A subsequent notice will generate. Apply label #1.
Input with Hold Code 2 and Doc Code 24 or 34 will post in the same cycle	A subsequent notice will generate. Apply Label #1.
Input with Hold Code 2 (no Doc Code 24 or 34 transfer) or Hold Code 4	A subsequent notice is suppressed and credit is held. Print the notice.
Input with Hold Code 3	A subsequent notice is suppressed. Apply label: • # 3 if the balance due will be reduced • # 4 if the notice module is not refunding but the pending will create an overpayment or refund • #17 if the notice module is refunding and the pending will create an additional refund

Notice disposition for pending Doc Code 47 or 54 tax increase or credit decrease transaction: (See table below)

Pending Doc Code 47 or 54 Transactions

IF THE PENDING IS A TAX INCREASE OR CREDIT DECREASE	THEN
Input with Hold Code 0 or Input with Hold Code 1 or Input with Hold Code 2 and Doc Code 24 or 34 will post in the same cycle.	A subsequent notice will generate
	If the account is	Then
	Refunding (the pending transaction will reduce the refund)	1. Delete the refund. 2. Mark Disposition with "H" to allow the 2nd Adjustment Notice to post. 3. Request the subsequent notice on LCF. 4. After TC 841 posts, retype the combined information on appropriate adjustment notice. 5. Void the other notice.
	Not refunding	Apply Label #1 to the selected notice.
Input with Hold Code 2 and Doc Code 24 or 34 will not post in the same cycle or Input with Hold Code 3 or Input with Hold Code 4	A subsequent notice will not generate
	If the account is	Then
	Refunding	Delete the refund. After the TC 841 posts, retype the notice to reflect the correct module information.
	Not refunding ( regardless of module balance)	Retype the notice to reflect the correct module balance.

Notice disposition for Resequencing (RS) and Unpostable (UP) Doc Code 47 or 54 transaction.

RS and UP Doc Code 47 or 54 Transactions

If	Then
The transaction is resequencing (RS)	The transaction will post unless conditions on the module or the transaction data will cause it to unpost. decide notice disposition based on Hold Code per previous chart.
The transaction is unpostable (UP)	decide if transaction will post. If determination cannot be made, print the notice. If determination is made that transaction will post, decide notice disposition based on the Hold Code input per "b" above.

Example:

A Doc Code 47 or 54 pending transaction with an "L" Freeze on the module will unpost without priority code 1.

Reviewing CP 210 and CP 220 with a Pending Credit or Debit Transaction.

If review of the module indicates pending credits or debits will post to the module, the transaction may result in systemic recomputation of penalty and/or interest. Recomputation of interest (TC 196) does not generate an adjustment notice. Recomputation of penalty will result in the issuance of a CP 210 or 220:

CP 210/220 with Pending Credit or Debit

If	Then
TC 166 (FTF Penalty)	CC PIFTF recomputes
TC 176 (ES Penalty)	CC PIEST recomputes
TC 186 (FTD Penalty)	CC PIFTD recomputes
TC 276 (Paying Late)	CC INTST decrease only

Note:

CC INTST does not provide correct computation of FTP or Interest if pending payment on IDRS is Unpostable (UP), Resequencing (RS), or Tepping (TP).

The penalty period for FTP (TC 276) is calculated from the date the penalty period begins (the Return Due Date) to the same date in each following month. TC 276 will not recompute if the payment is late and dated within the same monthly period as the 23C Date of the notice. If the return is due the 15th of the month, the penalty will not recompute until the 15th of the month after the 23C Date of the notice.

Note:

If the payment is timely (≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ), the FTP will recompute and generate an adjustment notice even if the payment is dated within the same monthly period as the 23C Date of the notice.

If timely credit is removed from a module, an FTF or FTD penalty may assess on the module.

Decision Table

If	Then
CC FTDPN indicates penalty	TC 186 will assess and an adjustment notice will generate.
CC PIFTF indicates penalty	TC 166 will assess and an adjustment notice will generate.

CP 210 and CP 220 Notice Disposition for Pending Credit Transactions.

Notice disposition for pending (PN, RS, TP or UP) credit transactions such as TC's 610, 640, 650, 660, 670, 700 or 710:

Notice Disposition

If	Then
The notice module is overpaid, a refund will issue, and no subsequent notice will generate	Apply label #6.
The notice module is balance due, the balance due will be reduced, and no subsequent notice will generate	Apply label #3. See caution below.
The notice module is balance due, changes to overpaid, and no subsequent notice will generate	Apply label #4. See caution below.
A subsequent notice will generate due to recomputation of penalty (FTF - TC 166, ES - TC 176, FTD - TC 186, or FTD - TC 276 (decrease only)	Apply Label #2.

Caution:

INTST does not reflect recomputation of CCs PIFTD, PIFTF, or PIEST. If FTD penalty (TC 186), FTF (TC 166), or ES penalty (TC 176) is on the module and timely credits are applied, CC INTST will not reflect any changes to the penalties in the balance due amount.

Multiple pending credit transactions on the notice module may post in different cycles. decide the cycle the credit will post and complete notice disposition:

Notice Disposition

If	Then
A subsequent notice will generate	Apply Label #2; Address only the pending credits that will be reflected in the adjustment on the subsequent notice. Use LCF to request subsequent notice and label with applicable label.
A subsequent notice will not generate	Apply applicable label per instructions in "(8)a" above. Address all pending credits.

Note:

Check CC BMFOLT for posting of credits in the subsequent cycle. The cycle indicated on the pending transaction on CC TXMOD is not always the cycle the credit posts in. The credit often posts in an earlier cycle.

If credit is unpostable, decide if the credit will post. If determination cannot be made, do not reflect the credit on the notice.
If the PN (pending), RS (resequencing) or TP (tepping) credit is listed on the NRPS contents page but not on BMFOLT or TXMOD, decide if the credit will post to the module. If determination cannot be made, do not reflect the credit on the module.

Note:

DLN of payment will indicate campus location of payment.

CC INTST does not compute correct module information if the pending transaction is a RS, TP or UP. If the payment belongs on the module and a correct balance is required on the label:

Decision Table

If	Then
Payment is RS or TP and reflected on CC BMFOLT	RECON module to IDRS and CC INTST for correct module balance.
Payment is RS or TP but not reflected on CC BMFOLT	Compute correct balance using CCs COMPA and COMPAF.
Payment is UP and belongs on the module	Compute correct balance using CCs COMPA and COMPAF.

Ensure the transaction creating the adjustment notice is correct and valid. The credit transfer may be a duplicate transaction. If TC 700 or 710, ensure the debit side of the transfer is not unpostable and the credit is available for transfer.
If the transaction has unposted on the debit side do not reverse the transaction. Unpostables will reverse the credit side of the transaction in a future cycle. Void the adjustment notice and request and void any subsequent notice utilizing LCF.

Example:

TC 710 posts to the notice module but has unposted on the debit side. Unpostables will reverse the TC 710 in a future cycle. Any previous penalty decrease will reverse and generate a subsequent notice.

CP 210 and CP 220 Notice Disposition for Pending Debit Transactions

Notice disposition for pending (PN, RS, TP or UP) debit transactions such as TC's 612, 642, 652, 662, 672, 701 or 702):

Notice Disposition

If	Then
The notice module is overpaid and a subsequent notice will generate and the module balance changes to balance due.	1. Delete the refund if applicable. 2. Request the subsequent notice using LCF. 3. Retype the subsequent notice to combine the information on one notice after all transactions have posted (including TC 841). 4. Void the other adjustment notice.
The notice module is overpaid and a subsequent notice will not generate and the balance will change to balance due.	1. Delete the refund if applicable. 2. Retype the notice after all transactions have posted.
The notice module is overpaid and the module balance will remain in credit or even balance.	1. Delete the refund if applicable. 2. Apply Label #7. 3. Retype to remove credit interest included on the notice if applicable. Note: Void the notice (rather than label) if the pending transactions is a reversal of the transaction that generated the adjustment notice. Pull and void the subsequent notice.
The notice module is balance due and a subsequent notice will generate.	1. Request subsequent notice utilizing LCF. 2. Retype the subsequent notice to combine the information on one notice. 3. Void the other notice.
The notice module is balance due and a subsequent notice will not generate.	Retype the notice.
A subsequent notice will generate and the notice is reviewed after LCF cutoff and the notice requires retyping (per above procedures).	1. Delete the refund if applicable. 2. Retype the notice after all transactions have posted. 3. Apply label #13.
The pending transaction will transfer the credit to another EIN.	Follow applicable instructions above, except in all instances, retype (do not label) the notice.

Notice Disposition for Pending Debit Transactions -- (PN, RS, or UP) TC 820 or 830. If the pending transaction is a TC 820 or TC 830, the transaction will unpost if the overpayment is refunding or the module balance is less than the transaction amount (since the credit is not available to be transferred).

Notice Disposition

If	Then
TC 820 or TC 830 is in error or pending on a debit module.	Take no action. Print the notice.
TC 820 or TC 830 is correct and is pending on an overpaid, non-refunding module and the full credit is available.	1. Apply Label #7. 2. Retype to remove credit interest included on the notice if applicable. 3. If credit will remain on the account after the TC 820/830 posts, release the -R Freeze with TC 571 or TC 290 .00 Hold Code 3. Note: If the full amount of credit is not available, the transaction will unpost.
TC 820 or TC 830 transaction must be reinput and the module is refunding. Note: The unpostable condition will be corrected by the Unpostable Function.	1. Delete the refund. 2. Apply Label #7. 3. Retype to remove credit interest included on the notice if applicable. Reminder: Notice Review Tax Examiner is responsible for notices generating on the credit side of the transactions. 4. Close case control. Note: Do not input 290 .00 on account. Doc Code 24/48 will release the P- Freeze when the transaction posts.
TC 820 or TC 830 is incorrect due to insufficient credit available	Follow above instructions as applicable and reinput transaction with correct amount.

Note:

It may be necessary to contact the originating tax examiner to decide the correctness of the transaction.

Review all aspects of the CP 210 and CP 220 notice module before voiding. CP 210 or CP 220 can only be voided if:
1. The original notice was voided (returning to taxpayer's figures)
2. The original notice was retyped to reflect the information on the adjustment notice or the information on the adjustment notice was previously communicated to the taxpayer
3. An adjustment notice reflecting the correct module information will be retyped in a subsequent cycle
4. The Doc Code 47 or 54 is incorrect and subsequent pending transaction will correct the module
5. The credit transaction that created the notice is invalid and will unpost in a subsequent cycle
6. A pending transaction on the notice module is a reversal of the adjustment action that created the adjustment notice
  
  Note:
  
  If subsequent notice generates, request the notice on LCF and void or retype to exclude incorrect transaction as applicable.
CP 210 and CP 220 cannot be voided if:
1. The taxpayer has not previously received the information and will not receive the information on a subsequent notice
2. If the original Balance Due Notice was voided in error and the subsequent CP 210/220 is selected, release the CP 210/220 with the current notice module information. If the taxpayer contacts Customer Service to inquire why a previous notice was not sent, the Customer Service Representative will be able to read the account history and explain the account activity to the taxpayer.

3.14.2.4.18.2 (01-01-2009)
CP 225 — Notice of Credit Transfer

CP 225 is issued to tell the taxpayer that a missing payment(s) inquired about either through correspondence or telephone, has been located and applied. It generates if the CORRESP-DT field on FRM 34 is overlaid with a correspondence received date and will not be voided.

There are four versions of CP 225:

There are four versions of CP 225:
Complete CP 225 — balance due	Generates if no other notice of demand is generated in the same cycle (a CP 210/220). Informs taxpayer of payment(s) located and applied to the requested tax module. Fully explains the balance due (including tax data and penalty information)
Partial CP 225: No return filed Overpayment Even Balance	No return filed — Informs taxpayer that payment(s) was located and applied. Overpayment — Informs taxpayer that payment(s) was located, applied and the resulting overpayment amount. Even Balance — Informs the taxpayer that payment(s) was located, applied and account is full paid.

The partial CP 225 and the CP's 210/220 generate in the same cycle.
Use the NRPS package and IDRS to review a partial or a complete CP 225. Ensure the credit transfer creating the CP 225 is valid.

Note:

If both CP 225 and CP 210 are selected for review, both notices are to be reviewed. Verify tax period, all credits, tax assessed, prepayments, penalty and interest amounts. Verify balance due, even and overpayment amounts.

Review the CP 225 for accuracy :

If the CP 225 is	Then
Even balance	Verify the validity of the action that settled the account.
Overpaid	Verify that the action is valid and the refund must not be intercepted.
Balance Due	Verify that the action is valid; search for remaining claimed credit(s) that match the balance due. If found, transfer in.

Note:

If the credit transfer that settled the account is being removed from the account with a pending TC 652, or the validity of the transfer is questioned, mail the notice. Another CP 225 will generate after the pending transactions posts.

Review the NRPS package and IDRS for any AP, PN, or RS transaction that affect the notice module. For complete balance due CP 225 notices:

Decision Table for Complete Balance Due CP 225

IF	AND	THEN
Credit(s) are pending (AP, PN, or RS)	Penalties will recompute	Mail the CP 225 with Label #2
Credit(s) are pending (AP, PN, or RS)	Penalties will not recompute	Mail the CP 225 with Label #3 or #4
A TC 29X or 30X is pending	A subsequent notice will generate	Mail the CP 225 with Label #1.
A credit balance is refunding	1. A debit transaction is pending that will decrease the refund	1. Delete the refund. Mail CP 225 with Label #7 or #14.
A credit balance is refunding	2. The overpayment is the result of a duplicate credit transfer	2. Delete the refund and retype the notice.

Note:

Follow procedures in IRM 3.14.2.4.27— Notice Disposition of Adjustment Notices for any other condition.

Review a partial CP 225 to ensure the credit transfer is valid. If valid, mail the notice.
Since the partial CP 225 is verification to the taxpayer of the payment transfer, do not label to reflect other transactions pending on the module. An additional CP 225 will generate in subsequent cycles for pending Doc Code 34 credit transfers, if correspondence received dates were input. The CP 210/220 generating in the same cycle as the CP 225 will be labeled or retyped with any changes affecting the notice module. The partial CP 225 must be mailed.

3.14.2.4.18.3 (01-01-2009)
CP 260 — Credit Reversal Adjustment Notice

CP 260 is generated to tell the taxpayer of a credit reversal on the tax module. The notice generates under the following conditions:
1. A credit reversal transaction (TC's 612, 642, 652, 662 and 672) posts without a secondary TC 570 and the notice module is zero or credit balance
2. The resulting module balance is a debt of ≡ ≡ ≡ or more
  
  Reminder:
  
  When an account has quite few pending payments (such as TC's 610, 620, 640, 650, 660, 670, 700 or 710) that are resequencing or teping (TEP) or adjustment pending (AP) or corrected unpostable (CU) or pending transaction (PN) then label the notice with the appropriate label and mail out the notice.
3. The credit reversal does not cause a recomputation or assessment of penalties resulting in the generation of CP 210 or 220 adjustment notice (FTF, FTD, ES or decreased FTP penalties).
  
  Note:
  
  TC 570 on the debit side of a credit transfer suppresses the CP 260 but does not suppress a CP 210 or CP 220. Hold Code 3 input on CC REQ54 does not suppress CP 260.

Use the NRPS package and IDRS to review CP 260 for possible resolution of the debit balance.

Check all other tax modules for a credit claimed on the notice module. If located and available for transfer, process the credit transfer. Check NRPS and the tax module on IDRS for pending (AP, PN, RS, UP, and TP ) transactions.

Decision Table

IF	THEN
The credit will satisfy the debit balance (overpay, even balance, or balance due less than ≡ ≡ )	Void the notice. Input CC STAUP for 9 cycles. (STAUP is not required if the credit is posted on CC BMFOL).
The credit will not satisfy the entire debit balance, and penalties will not recompute	Label the notice with Label #3. Input CC STAUP if necessary.
The credit will not satisfy the entire debit balance but penalties will recompute (TC's 166, 186, 176 or decrease TC 276)	Void the CP 260 and allow the adjustment notice to mail to the taxpayer. Input CC STAUP if necessary.
If the credit is unpostable on the notice module or another module	Input CC STAUP for 9 cycles. Notify Unpostables by utilizing CCs UPTIN, UPDIS, and UPCASZ. Follow the above for correct notice disposition.

Check the tax module on NRPS and IDRS to decide if the credit needed has offset (TC 826/706)

Decision Table

IF	THEN
TC 826 generated from another module in the notice cycle	1. Reverse enough of the offset to cover the debit balance (if available) 2. Transfer the credit to the notice module. 3. Void, retype or label the CP 260, as applicable. 4. Void CP 138. (Retype if only part of the offset was reversed). Pull and void or retype CP 128 if it generates.
TC 826 offset in a prior cycle from the notice module or from another module	Do not reverse the offset unless the credit is refunding or available for reversal, since the taxpayer has previously received the CP 138 (notification of the offset)
TC 856 (offset of generated interest) and TC 776 (generated interest) are present and the offset is reversed.	Use CC ADD24 to reverse TC 856 with TC's 731/851. Then use CC REQ54 to reverse TC 776 with TC 772 (Hold Code 3)

Check the tax module for a prior cycle refund.

Decision Table

IF	THEN
The refund was deleted and the TC 841 will satisfy the debit balance	Void the CP 260 and input CC STAUP for 9 cycles. (STAUP is not required if TC 841 has posted on CC BMFOL).
The refund was deleted but the TC 841 will not completely satisfy the debit balance	AND	THEN
	A notice or a refund previously generated	Retype the CP 260 with the current account information.
	A notice or a refund did not previously generate	Retype the CP 260 to the appropriate settlement notice.
The case control history shows a category 3913	Void or retype the CP 260 using the above criteria. Input CC STAUP for 9 cycles.
The refund (TC 846 was not deleted and a category 3913 is not present).	Mail the CP 260.

Note:

Use CC COMPA to compute penalties and interest when CP 260 retype is required. Input CC STAUP for 9 cycles.

Check the module for a pending tax adjustment:

Pending Tax Adjustment

If	Then
The adjustment contains: 1. No Hold Code 2. Hold Code 1 or 3. Hold Code 2, with a pending Doc Code 24/34 credit transfer	Void CP 260.
The adjustment contains: 1. A Hold Code 2, with no pending Doc Code 24/34 credit transfer 2. Hold Code 3 3. Hold Code 4	And if	Then
	The module balance will be full paid or credit	Void CP 260.
	The module will remain in balance due	Retype CP 260 with the correct balance due.

If the payment was transferred to a module for another taxpayer, (different TIN), mail CP 260.
It is important to take into account the penalties and interest shown on CP 260 are accrued, not assessed on the module and the taxpayer has not been previously notified of these accruals.
Always input history items when voiding, labeling or retyping CP 260.

Reminder:

When deleting a refund for a pending credit reversal, use Local Control File to pull the CP 260, Retype or void CP 260 based on the TC 841 amount.

3.14.2.4.19 (01-01-2009)
Selection Keys — Additional Review Required for Notices Generated Under Keys 09, 33, 52, 54, 55, 90 and 91

Key 09 – TPNC 90—When none of the standard TPNCs adequately describe an error condition on the return, the Error Resolution System (ERS) Tax Examiner selects an approved 90 Math Error Code or writes a specific, math error explanation on a 3 X 5 slip of paper and attaches it to the return.

Key 90 Decision Table

IF	THEN
The return is not included in the NRPS Package	Check with Notice Review Clerical Team to ensure return was not received from ERS.
Return is not located in Clerical	Use CC BRTVU to decide Math Error

Note:

ERS may indicate a standard TPNC for the math error rather than a 90 Error Code.

Follow normal review procedures.

Review the validity of the 90 Error Code written on or attached to the front of the return.

Decision Table

IF	THEN
The taxpayer is correct with no math error on the return	Void the notice
A standard TPNC is indicated and is correct	Indicate the TPNC on the Quick Print. (Clerical will type the error message on the notice).
The standard TPNC is incorrect	decide correct TPNC and indicate on the Quick Print.
If an error message written on the 3 X 5 is correct	Include error message with Quick Print (Clerical will type the error message on the return).
The error message is incorrect	Take appropriate action to provide accurate explanation (TPNC, 90 Error Code, or appropriate error message).
The 90 Error Code is correct	Attach the 90 Error Code label to the High Speed Notice Print (Quick Print)
The 90 Error Code is incorrect	decide if a different 90 Error Code or standard TPNC will be used
	IF	THEN
	A different 90 Error Code will be used	Attach the 90 Error Code label to the Quick Print.
	A standard TPNC will be used	Indicate the standard TPNC on the Quick Print.

Since BMF Phase II has been implemented, the Notice disposition will be Labelled and tax examiners will retype the notice. If no math error, void the notice. Input history item on IDRS.
Follow local procedures for providing feedback to ERS.

Key 33 - CP 161, MFT 51 -- Form 709 -- The selection for Key 33 changed for 2004. The TC 460 will no longer be placed on the Form 709 tax module. Therefore, the criteria was changed to select any CP 161 with an MFT 51. To decide if the taxpayer filed an extension on their Form 1040 and the payment intended for the Form 709 is available on the Form 1040 module, do the following:
1. Use IMFOL to research the IMF SSN for a TC 460 on the tax module applicable to the Form 709 filing. If a joint return, research both SSN's.
2. If timely extension is found, input the TC 460 on the Form 709 notice module.
3. If the 1040 module is overpaid, check CC RTVUE to decide the amount of credit claimed by the taxpayer.
4. If the credit is available and can be transferred to the Form 709 notice module without placing the IMF module into a balance due status, transfer the credit using the appropriate transaction code. Do not consider penalty and/or interest charges not claimed on the tax return if they create the balance due left on the account.
5. If the above actions will systemically abate any penalty and/or interest charges in full, void the notice.
6. If a balance due remains after completing (a) and/or (b) above, make the necessary corrections to the notice and release the notice for mailing.
Key 52 - MFT 60 -- Form 2290-- Select if the notice amount (NTC) is less than or equal to the amount being refunded (TC 846) this cycle from another tax period within the account (TXM). The criteria for the issuance of return:
1. If the Primary Selection Key requires a Document Request.
2. If the Secondary Selection Key requires a Document Request.
3. If the notice is an adjustment notice, issue the request on the DLN Document Code 47 or 54.
Note:

Display transcript of refunding tax period.

Key 54—Delinquency Penalty (TC 166) was not assessed on a potentially delinquent return. The Balance Due Notices are selected if returns that appear to be late are processed with timely received dates.

Use the following guidelines to decide the correct received date of the return and conclude if Failure to File penalty (TC 160) will be assessed:

Received Date Decision Table

Received Date Decision Table
•	IRS stamped Received Date or edited Received Date,
•	Earliest postmark date, if the envelope is attached, Note: The return is not late if the postmark is on or before the Return Due Date (RDD), regardless of the IRS Received Date stamp.
•	Use the taxpayer signature date if there is no IRS Received Date or postmarked envelope,
•	Julian control date of DLN (i.e. if more than one DLN is present, then use the earliest DLN Julian Date posted) minus 10 days in the DLN, or
•	Current date minus 10 days.

Note:

Use the due date of the return if there is not a date stamped, an envelope post mark date, a taxpayersignature date, a Julian Date, or a current date present.

Caution:

Do not use correspondence issued from Code & Edit to decide the received date. That correspondence is often sent on timely filed returns after the due date.

If the return is delinquent, compute and assess the FTF penalty using the following steps:

FTF Penalty Assessment

FTF Penalty Assessment
1.	Identify the penalty period -- From the Return Due Date to the return received date (the number of months or any part of a month the return is late, up to a maximum of 5 months).
2.	Identify the penalty rate -- 4 1/2 percent per month (maximum 22 1/2 percent) or 5 percent per month (maximum 25 percent) if FTP is not assessed for the same time period.
3.	Identify the amount subject to penalty -- the TC 150 tax amount minus timely credits received on or before the RDD. Note: Payments received after the RDD will not be used in the penalty computation.
4.	Multiply: amount subject to penalty X penalty rate X penalty period = the penalty amount.
5.	Assess TC 160 on CC REQ 54, Blocking Series 00, Hold Code 3.
6.	Retype the notice to reflect the assessed FTF penalty and the correct interest amount due.
7.	Use CC COMPA to compute the interest, but do not assess the additional interest. Reminder: Interest is charged on FTF penalty. Include the penalty amount when computing the interest due.

Caution:

Do not assess FTF penalty if reasonable cause indicator "R" for filing late is on the return.

Key 55—Balance Due Notices are selected if an acceptable reason for not filing a return (TC 590 or TC 591) is posted to the notice module. The Collections function inputs a TC 590 or TC 591 to indicate no further filing is required for an EIN.

Since taxpayers may change EINs for various reasons research is required:

EIN Changes

EIN Changes:
•	Use NRPS and IDRS to research previous tax modules
•	Check the return for an indication of any other EIN
•	Use CC NAMEB Note: Research the Doing Business As (DBA), as well as the primary name on the return. The business may have been incorporated.

Take the following action:

Required Action

IF	AND	THEN
Another EIN is found	The return has posted to the correct EIN for the notice module	Transfer any missing claimed credits located to the notice module.
Another EIN is found	The return has posted to the incorrect EIN for the notice module	Reprocess the return to the correct EIN (rather than transferring credits)
No other EIN is found		Mail the notice.

Key 91—The Error Resolution System (ERS) has no provision for correcting a record after the document has been completed in ERS. If a defect is detected, ERS will notify Notice Review to delete the notice as follows:

Error Correction tax examiners will prepare Form 3465, and send it with the return to Notice Review
Upon receipt of Form 3465, use Key 91 under Local Control to select the notice for review

Follow General Review procedures in addition to the following:

Key 91

IF THE ACTION REQUESTED ON FORM 3465 IS	THEN
Correct	1. Delete the refund if necessary. 2. Input the adjustment (use Posting Delay Code if necessary). 3. Take corrective action on the notice.
Incorrect, unclear, or an action not normally completed in Notice Review	Follow local procedures for requesting clarification from or providing feedback to ERS.

3.14.2.4.20 (01-01-2009)
CP 173 — ES Penalty

Purpose: CP 173 is a settlement notice generated to tell the taxpayer of a computer generated Estimated Tax penalty assessment (TC 176) on Forms 990–C, 990–T, 990PF, 1041 and the 1120 series. The notice is issued in the cycle of the TC 150 with a full paid module (Status 10 or 12) and in the absence of any other taxpayer settlement notice.

Review Instructions:

Use the NRPS selection key as a guideline to assist in the review of the notice.
Follow General Review procedures. If the return is not included with the NRPS package, resolve the case without it.

Verify that the ES payments on the notice module match the ES credits claimed on the return. If the credits do not match, then some or all of the ES payments may have been misapplied. This applies to:

Misapplied ES Payments

Misapplied ES Payments
•	Late or timely unclaimed or excess payments posting incorrectly to the module
•	Timely missing payments posting incorrectly to a different module or TIN

Research

Research the NRPS package and IDRS for any timely payments that must be applied to the notice module:

Research for Timely Payments

Research for Timely Payments
•	Request payment voucher according to local procedures
•	Check for an indication of the correct placement of questionable payments
•	Use CC BMFOL and TXMOD
•	Research additional EINs indicated on the return

Case Resolution—If found:
1. Transfer the payment(s) to the notice module
2. Use CC PIEST to decide if the ES Penalty will recompute
  
  Reminder:
  
  An adjustment notice generates when the ES Penalty recomputes.
3. Research additional TINs indicated on the return or in the NRPS package for missing payments or resolution of excess credits
Check dates and amounts of unclaimed payments and take the following action:
1. If the payments are timely for the subsequent tax year, delete the refund (if applicable) and transfer the payment(s) (Use proper Posting Delay Code)
  
  Note:
  
  To resolve a CP 173 case, transferring missing payments into the module and excess payments out of the same module may be necessary.
  
  Reminder:
  
  Credit Elect may need to be reversed and CP 145 typed or retyped when transferring credits from a notice module with a TC 836 (Credit Elect Transaction Code).
2. Verify any payments that are out-of-line (date and amount) for the notice module but will not be transferred to the subsequent tax year
Follow instructions in IRM 3.14.2.4.27, Notice Disposition.

3.14.2.4.21 (01-01-2009)
Types of Penalties and Interest

Penalty and Interest Types

Type	Transaction Code	Notice Code
Failure to File (FTF)	166/160	01
Estimated Tax (ES)	176/170	02
Dishonored Check	286/280	04
Fraud	320	05
Negligence Note: Only valid for returns due before 1–1–90.	350	06
Failure to Pay (FTP)	276/270	07
Debit Interest	196/340	09
Daily Delinquency	238/234	10
Miscellaneous	240	28
Credit Interest	776/770	—

3.14.2.4.21.1 (01-01-2009)
Recomputation of Interest and Penalties — General

See IRM 20.2(Interest) for information on computing interest. Even though this IRM has instructions for manually adjusting penalty and interest, input manual restrictions only after determining that the computer cannot correctly assess or abate the penalty, interest, or both.
If the taxpayer requests abatement due to reasonable cause, refer to IRM 3.14.2.4.6.2.7, Taxpayer Correspondence.
The computer will assess and abate penalties on the Master File when:
- An exam adjustment posts
- A tax adjustment posts
- An approved Extension of Time To File posts after the tax and penalties were computer assessed
  
  Note:
  
  A manual penalty assessment will prevent the recomputation.
- An adjustment to a refundable credit posts
- A payment posts, or is transferred to or from the account
See IRM 20.2Interest for an explanation of "Interest Netting."
Miscellaneous penalty issues:
1. If the taxpayer requests reasonable cause consideration on FTF or FTP penalties and the amount of each is under≡ ≡ ≡ ≡ ≡ , allow the request and abate the penalty
2. If the taxpayer requests abatement of Estimated Tax (ES) penalty and the amount is under ≡ ≡ ≡ ≡ ≡ ≡ , allow the request and abate the penalty

3.14.2.4.21.2 (01-01-2009)
Failure to File (Delinquency) Penalty Recomputation

The Failure to File (FTF) penalty is assessed on returns received after the normal or extended return due date (RDD) when the tax was not paid in full at the normal RDD.
Any time the tax or timely credits change, and the above conditions exist on the account, the computer will assess (TC 166) or abate (TC 167) the FTF penalty if it has not been restricted. CC PIFTF is used to display the recomputation of the FTF penalty. This systemic recomputation generates a CP 210 or CP 220 unless Hold Code 2, 3 or 4 is used on a TC 29X or 30X.

Note:

Payments received after the normal RDD (the due date decided without regard to filing extensions), have no effect on the FTF penalty. (See IRM 3.14.2.4.21.1, Recomputation of Interest and Penalties—General).

After inputting an adjustment action, compute the penalty manually to decide whether the FTF penalty will recompute when the adjustment posts:

Note:

A PC or the TIPS program will assist with the manual computation.

Count the number of months from the normal or extended RDD to the received date to decide the penalty period. The penalty is computed up to a maximum of five months.

Note:

Any part of a month counts as a full month.

Multiply the number of months by the penalty rate. The FTF penalty rate is:

FTF Penalty Rates

FTF Penalty Rates
5%	When the Failure to Pay (FTP) penalty is not assessed at the same time as the FTF penalty.
4¹/₂%	When the FTP penalty is assessed at the same time as the FTF penalty.
5%	On all TC 290 assessments.

Note:

Use the same percentage rate for abating that was used for assessing the FTF on the same unpaid tax amount. Different penalty rates may apply to different amounts of tax for the same time period. The maximum penalty rate is 25%, or 22¹/₂% if FTP is also assessed.

Example:

The original unpaid tax may be penalized at the 4¹/₂% monthly rate and a TC 290 amount at 5% per month. Add the two amounts to decide the total FTF penalty.

Multiply the amount of unpaid tax at the normal due date (decided without regard to filing extensions) by the penalty rate. Then multiply this amount by the number of months that the return was filed late, up to 5 months. The result is the FTF penalty.

Note:

TC 291 or 301 will reverse the most recent unreversed TC 290 or 300, then the next most recent, etc. If there is no unreversed TC 290 or 300 then the TC 291 or 301 will reverse the TC 150.

The "minimum" penalty may apply on BMF income tax returns (Forms 1120, 1041, 990–C, and 990–T) if more than 60 days late:
1. If the computed penalty is less than $100, the minimum penalty applies. The penalty amount is the lesser of $100 or 100% of the unpaid tax at the normal RDD (or zero, if there is no unpaid tax).
2. The minimum penalty may also apply on a TC 290 if the total computed penalty is less than $100. The penalty amount is the lesser of $100 or 100% of the unpaid tax.
Form 1065 — Computing the Failure to File Penalty
1. Decide the number of months or fraction of a month the return is late.
  
  Note:
  
  Any return due after December 20, 2007, then penalty amount was increased to $85.
2. Multiply the number of months, up to a maximum of five, by the number of partners, times $85.00.
  
  Example:
  
  3 months late x 6 partners x $85.00 = $1,530.00 for the FTF penalty.
Input a manual FTF assessment (TC 160) or abatement (TC 161) when the computer cannot correctly compute the penalty or when the module was previously restricted. A manual restriction is necessary when:
1. A late return received date was not transcribed (i.e., the return posted as being timely)
2. An incorrect received date posted (i.e., a timely return posted as being late)
3. The taxpayer states a reasonable cause for filing late

3.14.2.4.21.3 (01-01-2009)
Failure to Pay Penalty Recomputation

The Failure to Pay (FTP) penalty is assessed after the Return Due Date (RDD) when there is an unpaid tax liability on the tax return, or as a result of an Audit or DP tax adjustment and there is no exclusion for failure to pay the tax owed.

Note:

FTP is based on the tax shown due on the return or the subsequently assessed tax (TC 290/300).
decide when the FTP penalty begins:
1. On original balance due returns, FTP begins on the payment due date (generally the return due date) and ends on the date the payment(s) is made.
2. On math error assessments, FTP begins on the twenty-second day (or the eleventh business day if the module balance is $100,000 or greater) after the "23C Date" (the notice and demand date), or the payment due date, whichever is later.
  
  Note:
  
  See Exhibit 3.14.2-5 (CP 101) Correction Notice Amount Due IRS for state-by-state business day computations.
3. On adjustments to tax that cause a balance due, FTP begins on the twenty-second day (or the eleventh business day if the module balance is $100,000 or greater) after the "23C Date" .
  
  Example:
  
  If the "23C Date" was September 8, the FTP begins on September 30.
  
  Note:
  
  An adjustment to income tax withholding will not change the FTP start date, which is the normal RDD (not including extensions).

3.14.2.4.21.4 (01-01-2009)
Definitions

Start Date—The date the penalty starts for a specific unpaid tax liability. This date indicates the beginning of the first monthly period.
- Multiple Start Dates are possible when there are different tax liabilities assessed at different times on the same module
- The most common Start Dates are the normal return due date (RDD), the extended payment due date, and the twenty-second day after an assessment date of demand (23C Date)
- In the case of an installment agreement, the start date for the reduced penalty rate is the later of 1/1/2000 or the transaction date of the TC 971/Action Code 063
Monthly Period—The period that begins on the Start Date and ends on the numerically corresponding day in the following calendar month. If the following month does not have a matching day, use the last day of that month.

Example:

If the Start Date is August 31, the Monthly Period ends on September 30.
Penalty Rate—¹/₂% per month or fraction of a month. The penalty is figured on the first day of the monthly period. The rate changes to 1% per month on:
1. The beginning of the first month following the tenth day after the Status 58 date or TC 971 with Action Code 035, or
  
  Example:
  
  If the Status 58 date is September 25, the 1% would begin on the first day of the monthly accrual period following October 5.
2. The 1% rate begins on the 23C Date of a Jeopardy assessment (TC 370, Doc Code 51 Blocking Series 100–119).
  Example: If the 23C Date is September 25, the 1% would begin on October 1.
  
  Note:
  
  The maximum FTP penalty rate charged on the unpaid balance of each assessment is 25%.
Reduced Penalty Rate— Beginning 1/1/2000, a penalty rate of ¹/₄% per month or a fraction of a month may apply. All of the following conditions must be met for the ¹/₄% rate to apply:
- Return must have been timely filed
- Unreversed TC 971, Action Code 063 is on the module
Penalty Amount—The balance of unpaid tax at the beginning of each monthly period.

Note:

A payment received after the beginning of the monthly period will not affect that month's penalty amount.
Assessments—Tax assessments are any of the following Transaction Codes: 150, 290, 298, 300, and 308.

3.14.2.4.21.5 (01-01-2009)
FTP Penalty Command Codes

CC INTST and CC FTPIN—These command codes display the FTP penalty computation, including both posted and accrued amounts, up to the date specified. Both CC FTPIN and CC INTST with definer "D" show how the computer figured the penalty. Both are accurate unless there is an FTP restriction (TC 270/271) or a pending TC 28X, 29X, or 30X on the account. Use these command codes for updating a notice to include pending payments and credit transfers.
CC COMPAF—Use this command code to manually compute the FTP penalty. CC COMPAF computes the penalty on a specified amount for a specified time period. Input a separate CC COMPAF for each Start Date on the module.

Note:

Use CC COMPAF to compute FTP when the account is restricted after an adjustment or when a credit is pending but does not yet show on IDRS.
1. Input the "to" and "from" dates and the underpaid amounts. Begin with the Start Date and end on a notice 23C Date.
2. Add payments on the received dates and subtract their amounts from the underpaid liability amount.
3. If multiple CC COMPAF screens are input for multiple Start Dates, add the totals of each screen to compute the total FTP penalty.

3.14.2.4.21.6 (01-01-2009)
Estimated Tax Penalty

IRC Section 6655 provides for a penalty when a corporation (C or S), private foundation (including those organized as a trust), charitable trust, or a tax exempt organization liable for unrelated business income tax, underpays any required installments of estimated tax liabilities reportable on Forms 1120, 990 series, and certain Form 1041s. Other Form 1041s are subject to the same requirements as individuals filing Form 1040, per IRC Section 6654.
Corporation Requirements:
1. For tax years 8812 to 9211 corporations were required to prepay the lesser of 90% of the current year tax liability, 100% of the prior year tax liability, or the amount decided under the annualized or adjusted seasonal income installment method. The prior year must have been a 12 month taxable year with a tax liability greater than zero.
2. For tax years 9212 to 9305, the rate for the current year liability is 93% of the tax shown on the return, less any refundable credits.
3. For tax years 9306 to 9411, the current year rate is 97%.
4. For tax years 9412 and later, the current year rate is 100%.
5. Beginning with 200312 modules deposits will be the smaller of 90% of the expected tax for 2003 or 110% of the tax shown on the 2002 return, to avoid an estimated tax penalty.
Large Corporation
1. A large corporation is any corporation having a taxable income of $1,000,000 or more during any of the preceding three tax years.
2. A large corporation may use 100% of the prior year liability as a basis for the first installment payment only.
3. When the 100% prior tax base is used for the first installment, the difference between the 100% prior rate and the current rate must be added to the second installment payment.
Form 1041 Requirements (except private foundation and charitable trust):
1. The following fiduciaries are exempt from paying estimated tax for the tax years ending before the date two years from the date of death: Decedent's estates, grantor trusts that receive the residual of a probate estate under the decedents will, and for tax years after 8711 (if there is no will to probate), a trust that is primarily responsible for paying taxes, debts, and expenses of administration.
2. The estimated tax base is the lesser of: 90% of the current tax liability, or 100% of the prior year liability if (1) the prior year was 12 months and (2) a return was filed for the prior year.
Form 1120 Installments
1. The installment payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year.
2. When the installment date falls on a weekend or legal holiday, the payment is considered timely if made on the next workday.
3. Payments are applied against the earliest underpayment regardless of the date the payment was received.
Form 2220
1. Taxpayers use Form 2220 (Form 2210 is used for Form 1041) to compute estimated tax penalty. The taxpayer is assessed the amount shown on the Form 2220. A CP 234 is generated to the Accounts Management (Adjustments) Function to verify the penalty amount.
2. The estimated tax penalty is computed on the tax shown on the original taxpayer return, whether the return is filed timely or late. The penalty is not increased or decreased with subsequent changes to the tax after the return due date.
3. In case of a math error, the computer is programmed to compute the penalty on the lesser amount of tax as computed by the taxpayer or corrected by the IRS.
Recomputation of ES Penalty
1. The computer automatically recomputes the estimated tax penalty when an adjustment to TC 806 or 807 is made or a transaction code 43X, 61X, 62X, 66X, 67X, 700, 702, axe 760, 762, or ax is present or transferred in with a transaction date before the return due date.
2. The computer will not automatically recompute estimated tax penalty when there is a CCC P or exception 5. If CCC "A" , or a TC 170, or both are on the module, the computer will issue a CP 234 rather than posting a TC ax.
Use CC PIEST to view the computation of a TC 176. It will show any changes to the TC 176 after inputting a credit transfer, withholding adjustment, or a refundable credit (TC 766) adjustment. If a payment is pending on the module, and ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Input Hold Code 3 if the adjustment notice will be suppressed.
1. The amount shown on CC PlEST is used as the ES penalty amount on a retyped notice.
2. CC PIEST cannot be used if there is a TC 170,171, or no ES penalty charged on the tax module.
Use CC COMPAE to manually figure the ES Penalty.
1. Input CC COMPAE with the MFT and tax period of the return. The response format is CC COMPAS with the due date of each installment in the left column and the return due date in the right column.
2. Overlay the dates with the appropriate "from" and "to" dates, if necessary, and enter the underpayment amounts, then input.
3. More lines may be entered if payments were not made on the due dates.
4. Each installment date adds to the liability and each payment subtracts from the liability.
5. CC COMPAS can be entered directly but all dates and amounts must be manually filled in.

3.14.2.4.21.7 (01-01-2009)
Failure to Deposit Penalty

Taxpayers filing Forms 940, 941, 943, 944, 945, CT-1, 720, and 1042 are required to pay taxes through the Federal Tax Deposit System. Forms 941, 943, 944, and 945 filers must deposit taxes either monthly or semi-weekly. Taxpayers who report less than $2,500.00 in taxes for a tax period on Form 941, Form 943, or Form 944, or Form 945, may send the tax payment with their return when filing timely. For tax periods beginning after December 21, 2004, taxpayers who report less than $500.00 in taxes for a tax period on Form 940 may send the tax payment with their return when filing timely.
A taxpayer's status, for Forms 941, 943, 944, and 945 filers, will be decided by a review of the 12 month period ending the preceding June 30. This is the look back period. If the sum of taxes reported during the look back period is less than $50,000.00, the taxpayer will be considered a monthly depositor. If the sum of the taxes reported during the look back period is more than $50,000.00, the taxpayer will be considered a semi-weekly depositor. Taxpayers make their tax deposits, using FTD coupons (Form 8109), to authorized Commercial Banks. Some taxpayers that are required under NAFTA regulations must deposit using an electronic fund transfer system.
The FTD penalty has a four-tier rate structure of 2%, 5%, 10%, and 15%, charged as follows:
1. 2%—for deposits 1 to 5 days late.
2. 5%—for deposits made 6 to 15 days late.
3. 10%—for all payments made directly to IRS.
4. 10%—for amounts subject to electronic deposit requirements but not depositing using EFTPS or for depositing in an incorrect method (when required to use EFTPS).
5. 10%—for deposits made more than 15 days late, but on or before the 23C Date plus 10 days.
6. 15%—for all undeposited taxes still unpaid after the 10th day following the first Balance Due Notice or the day on which notice and demand for immediate payment is given.
Deposits are applied in received date order to liability in due date order. For penalty computation purposes, the TC 716 availability date is the date on which the overpayment actually occurred. If more than one deposit makes up the overpayment, the date of the earliest deposit is the TC 716 availability date. The failure to deposit penalty (TC 186) will automatically recompute whenever timely credits are transferred into or out of a module that is not restricted (TC 180/181). An adjustment notice will generate when an automatic recomputation of the FTD penalty occurs.
A review of this penalty will be made whenever timely payments are transferred into or out of an account containing an FTD penalty.
1. Command Code PIFTD can be used to obtain the computer's FTD computation on a screen display for Forms 940, 941, 943, 944, 945 and 1042 (on accounts with no TC 180 or TC 181).
2. Command Code FTDPN (with Definer Code A) can be used to manually compute the FTD penalty. The penalty can be adjusted with a TC 180 to increase the penalty or a TC 181 to decrease the penalty, using blocking series 00 or 15.
3. When transferring credits, use CC PIFTD to decide penalty recomputation on modules with TC 186.
4. The computer will abate the FTD penalty if it recomputes under ≡ ≡ ≡ ≡ for returns due after January 1, 2001. Before January 1, 2001 the computer will abate the FTD penalty if it recomputes under ≡ ≡ ≡ ≡ .
  
  Note:
  
  When retyping a notice, use the appropriate FTD penalty code to ensure the taxpayer receives the correct explanation.
The FTD penalty will be reviewed whenever an adjustment to tax is made on the notice module.
1. If the tax is being increased and there is an unreversed TC 180 or TC 186 on the account, the TC 290 tax adjustment will post without addressing the FTD penalty. Manually recompute the penalty and adjust any increase/decrease with TC 180/181.
2. If the total tax is being decreased and there is an unreversed TC 180 on the account, the TC 291 will unpost if the FTD penalty is not addressed.
3. A partial tax decrease will post without the FTD penalty being addressed. The penalty may also need to be decreased (TC 181) to avoid an erroneous notice.
4. If the TC 291 abates the entire tax, then the TC 186 will abate in full.
5. The penalty may be abated if reasonable cause is requested.

FTD penalties may be assessed on Forms 941, 943, 944, and 945 when the Record Of Federal Tax Liability (ROFTL) or liability schedule is incomplete, illegible, or the liability does not equal the net taxes.

For tax periods beginning January 1, 2001 and subsequent, Code and Edit must enter Schedule Indicator Code (SIC) 1 on the return when:

Schedule Indicator Codes

Schedule Indicator Codes
•	Net Tax is less than ≡ ≡ ≡ ≡ ≡ ≡ ≡
•	Net Tax is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more and the ROFTL is blank without an attached liability schedule
•	Net Tax is ≡ ≡ ≡ ≡ ≡ or more and there is a difference of ≡ ≡ ≡ ≡ ≡ ≡ or more between Net Taxes and Total Liability
•	Negative amount of ≡ ≡ ≡ ≡ or more is on ROFTL or Liability Schedule

Note:

If no entry for Net Tax, use Total Tax.

Data Input System (DIS) does not enter the liability schedule when SIC 1 is edited; tax liabilities will be averaged and an FTD penalty will assess on the module.
If Code and Edit does not edit SIC 1 and the liabilities on the ROFTL do not equal the net tax within ≡ ≡ ≡ ≡ ≡ ≡ , the return will reject to ERS. ERS will try to resolve the discrepancy. If it cannot be resolved, SIC 1 is entered and the penalty will be assessed.

Note:

Watch for transcription errors and obvious transposition errors, the FTD penalty may need to be adjusted manually.
Ensure the liability schedule was entered by DIS unless the criteria of SIC 1 is met. If the liability schedule has been omitted in error or transcription errors are found, verify the taxpayers addition on the schedule. If the schedule is valid, compute the FTD penalty on CC FTDPN definer A and adjust the module according to the computation.

3.14.2.4.21.8 (01-01-2009)
Computing Normal and Restricted Interest — General Rules and Information

The purpose of recomputing interest is to ensure that all outstanding balances, late posting credits, subsequent assessments, etc., are considered in determining the amount of interest due on a tax module up to the current 23C Date, and to make adjustments, if necessary.

Note:

The purpose is not to verify a previous manual computation. Do not recompute the interest on the entire account unless there appears to be an obvious error on a previous manual interest computation.
If the due date for filing a return or making a payment is on a weekend or legal holiday, taxpayers may file or pay on the following workday without penalties or interest.

Note:

If the taxpayer pays after the following workday, penalties and interest will accrue from the due date, even though the due date was a weekend or legal holiday.

Exception:

Compute interest on Examination cases with a waiver date, (See IRM 3.14.2.4.21.9, Interest and Examination) to the 30th day after the waiver is filed, even if that date falls on a weekend or legal holiday.
Effective January 1, 1983, interest is compounded on interest. Use December 31, 1982, as the compounded interest start date.
Apply payments in the following order:
1. Tax
2. Penalties
3. Interest
Completely recompute the module when manually computing interest. Add additional tax assessments to the original tax to arrive at the total "corrected" balance of tax due on the RDD. Because of the order in which payments are applied, a payment which previously paid penalty and/or interest on an earlier assessment may now pay an additional tax assessment. Any remaining credit will apply to the penalty and interest. This actually reduces the amount of interest assessed on additional tax assessments, and may also reduce or completely eliminate the FTP penalty.
Compute interest on tax and interest on penalties at normal interest rates.

Interest computations on an account where a refund was previously allowed depend on the amount of interest, if any, allowed on the refund:

Interest Computations on Refunds

If	Then compute interest on
The refund did not include interest	The part of the assessment up to the amount of the refund from the refund date.
The refund did not include interest	Any part of the assessment greater than the amount of the refund from the due date of the return.
The refund did include interest	Any additional assessment from the due date of the return until the tax is paid.

3.14.2.4.21.9 (01-01-2009)
Interest and Examination Issues

Compute interest on an Exam deficiency to 30 days after the 870 waiver date. If an assessment is not made within 30 days after the waiver is signed, interest will not accrue until 30 days after the assessment date for additional tax is done. Interest will resume accruing from the date of assessment to the payment date.

Note:

The term "deficiency" includes certain penalties related to the Examination assessment. Beginning January 1991, interest on these penalties will also be automatically suspended during the interest free period. See IRM 20.2, Interest.

Caution:

TMT situations:
1. The waiver period applies to interest on penalties if an agreement is secured for penalties.
When computing restricted interest on Exam assessment cases it may be necessary to request the documents to verify the interest computation. If the case is still open on AIMS, contact the appropriate area and request that they send a copy of the interest computation.
TC 300 for zero with a TC 340 for a non-zero amount usually involves a Form 2285, outlining carryback adjustments figured by Exam. If so, request the document to verify the interest computation and update the accruals.
When a payment is made before the additional tax assessment, apply the payment to the deficiency on its received date. Continue to compute interest on the balance due remaining after the payment is applied.

When an Examination assessment is made on an account, apply payments as the taxpayer designates, to an extent:

Payment Application on Exam Assessments

If the Examination is	Then the Taxpayer Can
AGREED	Prepay interest without paying tax and penalty first.
NOT AGREED	Only pay a percentage of the interest due as compared to the tax.

Example:

If the taxpayer wants to make a payment that will pay 50 percent of the additional tax.

Apply partial non-designated payments on Exam TMT cases in the following order:
1. Any tax that is not tax motivated.
2. Any tax that is tax motivated.
3. All penalties.
4. Any interest that is not tax motivated (including interest on penalties).
5. Any interest that is tax motivated.
  
  Note:
  
  For payment purposes, tax motivated interest is all of the interest on the TMT tax, including the normal interest computed before December 31, 1984.
When a payment is made on an Exam deficiency before the interest free period begins (the waiver date plus 30 days), apply the payment on its received date.

Note:

A payment or credit received during the interest free period will not affect the interest computation. The balance due on the 23C Date is reduced by the payment or credit. Additional interest on the remaining balance due will begin to accrue on the 23C Date.

3.14.2.4.22 (01-01-2009)
Reprocessing Returns

A "Reprocessable" return is a return that posted to an incorrect tax period or TIN and needs to be corrected and re-entered through the processing system.
Definitions:
- Receiving module—The module the return will be reprocessed to
- Losing module—The module the return will be moved from
- Zeroing-out the module—Adjusting the TC 150, withholding, AEIC, TC 766, Reference Numbers, and certain penalties to zero
If the return is an Electronically Filed (Electronic File (ELF)) return, refer to IRM 3.14.2.4.22.1 , Reprocessing/Adjusting E-Filed Returns.
Form 13596, Reprocessing Returns, is used to process a return to the correct account or module that had previously posted to the wrong account or module.
If a return was not edited according to current processing instructions, circle out any action codes, Computer Condition Codes (such as CCC "G" and any other edited marks that are no loner applicable. Re-edit according to current processing instructions.

Note:

Do not edit CCC "G" on an amended return.

If the return was edited according to current processing instruction, then ensure that the information from Form 13596 is correct on the return.

Form 13596:	Action Taken:
TIN correction	Edit correct TIN on return
Tax Period correction	Edit correct tax period on the return
Reasonable Cause,	Edit appropriate Computer Condition Code: Edit CCC "R" if the "FTF" box is checked. Edit CCC "D" if the "FTP" box is checked.

Examine returns that have any color other than green edit in the tax data section to decide if the corrections are the results of improper perfection of taxpayer error.

IF	THEN
Improper perfection,	Edit the same correction in green.
Taxpayer error,	Leave the entries as shown on the document.

A receive date must be present on all reprocessed returns.

IF	THEN
Receive date is not present,	Edit a receive data to the middle of the return.
Multiple receive dates are present,	Circle all but the earliest date.

Circle out the green rocker and edit marks that may indicate a receipt of remittance.

Certain circumstances prevent a return from being reprocessed:

Reprocess Decision Table

If		Then
A TC 150 has posted to the receiving module		Request both returns. Do not zero-out the posted tax and reference amounts. Adjust them on both modules to agree with the information from the proper return. Transfer the TC 610 payments if necessary. Pull all current cycle notices for both modules. Follow normal notice disposition procedures in IRM 3.14.2.4.27, (Notice Disposition).




The return posting incorrectly to the losing module is a duplicate return of the TC 150 posted to the receiving module.		Zero out the tax on the losing module. Input TC 971 Action Code 001 Do not reprocess return using F3893. Input TC 290 .00 using Blocking Series 10, 15 or 17 as appropriate, on the receiving module. 5. Use the return that posted incorrectly as the source document.



Either module has: A pending or posted Doc Code 47, 51, or 54 transaction A pending or posted TC 976 on TXMOD or BMFOLT An erroneous refund		Void the notice. Recharge and route the return to Accounts Management.

Note:

If the notice module has a pending or posted TC 150, the transaction will post as TC 976.

If the Assessment Statute Expiration Date (ASED) is within six months of expiring, do not use Form 3893 to reprocess the return. The Statute Unit must clear and stamp the case to avoid barred assessments. Do not abate tax on the incorrect module before referring the case to the Statute Unit.

Caution:

Hand-carry returns with an ASED that has expired, or will expire within 120 days to the Statute Unit immediately.

When reprocessing a return edit the following:

Received Date: see IRM 3.14.2.4.6.2.4, Return Receive Date to decide correct received date.

Caution:

Do not edit Return Received Date based on the TC 610 date of the losing module.

Return Received Date

If	And	Then
The return is timely filed (for the receiving module)		Do not enter the Received Date unless reprocessing to a prior period. (See note below.)
The return is timely filed for the receiving module	The return date is stamped or edited on the return	Edit the received date (circle the received date).
The return is received after the due date of the receiving module		Enter the received date in the center of the first page of the return.
The return is received after the due date of the receiving module	The return date is stamped or edited on the return	Do not edit the received date.

Note:

All prior period returns must have a received date stamped or edited on the return.

Edit other necessary information as follow:

Editing Return Information

Editing Return Information
Remittance	Circle out RPS money amount (TC 610) or the green rocker to indicate a non-remittance return. Reminder: Transfer the TC 610 to the receiving module on IDRS.
Tax Period Note: Hand written entries from the taxpayer must be considered when determining the correct tax period.	Circle the incorrect tax period. 1. Quarterly returns -- Enter correct quarter in YYMM format. All quarterly returns must be edited. 2. Annual returns -- Enter correct year in YYYYMM format. All prior year returns must be edited even if the return clearly indicates the correct year. Note: Reprocessing Form 941 or 945 -- Circle out any entry in the Optical Character Recognition (OCR) box #9.
Name and Address	Circle out incorrect name and/or address and enter the correct information directly above the circled information. Underline the name control if name changes.
TIN	Circle out incorrect TIN and enter correct TIN in entity section of the return if reprocessing return to a different TIN.
Income, Tax and Credits	Enter any changes to the tax information and credits by placing an "X" to the left of the incorrect amounts. Enter the correct amounts to the left of the "X" . Note: Changes to taxpayer entries must only be made for corrections to obvious taxpayer transposition or line entry errors.
Preparer Information	Circle out information to prevent duplication.

If a remittance amount (TC 610) is present, circle out the money amount to the left of the DLN, or the green rocker on the balance due line.

Reminder:

Use IDRS to transfer the TC 610 to the receiving module.
Correct any other necessary information:

Caution:

Never erase, line through, or in any way obscure taxpayer entries.

Prepare a Form 13596 (See Figure 3.14.2-12) a Reprocessing Document Control Sheet).

Reprocessing Returns
IDRS Employee Number: _________________________ � Date: __________
Complete applicable items below
Correcting the TIN to: Correcting yearly return tax period to _____________ or Quarterly returns year _______ 1st qtr. ✓ 2nd qtr. ✓ 3rd qtr. ✓ 4th qtr. ✓ (EP/EO only)
Correcting the Plan/Report number to: ✓ CP 190/29 - Requestor must Input TC 971 with AC 002 to prevent CP 193/36 and - A freeze generating. (Reprocess as the original to the same TIN and tax period)
Reasonable Cause:___________✓ FTD ✓ FTF ✓ FTP ✓ DDP (EP/EO only)
Remarks (optional):





Form 13596 (6-2004) Catalog Number 38636Y Department of the Treasury-Internal Revenue Service

Figure 3.14.2-8

This image is too large to be displayed in the current screen. Please click the link to view the image.

Form 3893 — Re-entry Document Control Sheet

Input a REQ54/ADJ54 to zero out the incorrect module. (See Figure 3.14.2–9 Check List for Return Reprocessing).

Figure 3.14.2-9

This image is too large to be displayed in the current screen. Please click the link to view the image.

Check List for Return Reprocessing
Transfer the credits claimed on the return to the correct TIN or Tax Period. Input TC 570 on transfer to hold any remaining credit on the losing module. Delete refund if applicable.
Use CC REQ77/FRM77 to input a TC 971 on the losing module to identify a cross-reference TIN or tax period when an original, amended or duplicate return posted to an incorrect TIN or tax period and is being reprocessed.
1. TC 971 requires an Action Code. Always use valid Action Code 001 to indicate that the TC 150 posted to the wrong TIN or tax period.
2. The transaction date of the return being reprocessed (TRANS-DT>) is the return received date indicated on RET-RECD-DT field on CC TXMOD screen; not the TC 610 date shown on NRPS notice module. (See Figure 3.14.2–10 CC REQ77/FRM77 with TC 971).
  
  Figure 3.14.2-10
  
  This image is too large to be displayed in the current screen. Please click the link to view the image.
  
  Format REQ77/FRM77 with TC 971
When reprocessing a return to a prior year module that has a TC 14X or Master File (MF) status of 02 or 03, use CC FRM49 to input a TC 599 with Closing Code 18. This will prevent any further Tax Delinquent Investigation (TDI) action.
Input TC 971 with the appropriate Action Code (AC) on the incorrect module (to identify cross reference TIN's/tax period data) whenever an original or amended/duplicate return posted to an incorrect TIN/tax period and is being reprocessed to a correct module (see IRM 21.7.9.4.4, BMF Duplication Filing Conditions). Input TC 971 AC 017 on the receiving module regardless of the MF status. When inputting TC 971, use the correct TRANS-DT on REQ 77:
- 971–001 indicates reprocessing TC 150; use the return received date on TXMOD for the TRANS-DT
- 971–002 indicates reprocessing TC 976; use the posted TC 976 date on TXMOD for the TRANS-DT
- 971–0017 indicates a processed return is being reprocessed to this period; date depends on whether the original TC 150 is being reprocessed or the TC 976
Note:

If the tax return posted to an earlier tax period with an incorrect date, or to a later tax period whose due date has not yet arrived, use the actual received date of the return as the transaction date of the TC 971 AC 017.
After completing all of the above:
1. Void the notice.
2. Input the appropriate history item on IDRS for notice disposition. (e.g. "CP 102 VOID" ).
3. Attach Form 3893 or Form 13596 to the front of the return and release with the NRPS package. Clerical will route the Form 3893 to Receipt or Form 13596 and Control for processing.

3.14.2.4.22.1 (01-01-2009)
Reprocessing/Adjusting E-filed Returns

Use CC TRDBV, or CC BRTVU if TRDBV is unavailable, to verify return information in lieu of requesting an Electronic File (ELF) return (hard copy print).

Caution:

CC TRDBV or CC BRTVU prints cannot be sent to the taxpayer.
Only obtain a hard copy of the Electronic File (ELF) return if it must be reprocessed or reinput.
1. For tax years before 1998, use CC ESTAB or CC ELFRQ.
  
  Note:
  
  ELFRQ may only be used in the Campus that processed the electronic return and the Form 8453–P (Form 1065).
2. For tax year 1998 and subsequent, use CC TRPRT for requesting graphic (form image) prints. The TRPRT graphic will be available nationwide regardless of where the return was filed. The TRPRT print is not considered the original return. The print will be labeled "TRPRT PRINT DO NOT PROCESS." However, when the return must be reprocessed, the TRPRT print will be used.
3. If an adjustment is made as the result of case closure, use Blocking Series 05/15 (non-refile DLN) for BMF. Do not use Blocking Series 18.
  
  Caution:
  
  Use Universal IDRS to verify that no one else is taking action on the account.
Request Form 8453–P, if needed. When using:
- CC ESTAB, enter "Form 8453–P needed" in the remarks section
- CC ELFRQ, use action "2"
Information (e.g., loose forms, schedules, and correspondence) may not be attached to an Electronic File (ELF) return.
1. File the information using TC 290 in block series 05/15 (non-refile DLN).
2. DO NOT use an "attachment" or "association form."
3. Electronic File (ELF) may forward Forms 3465 to the Accounts Management (Adjustments) Function with a problem annotated. Take normal adjustment action.
Follow local editing procedures.
Route the case to the Processing Function and request a new DLN.
Zero out the module. (See Figure 3.14.2–9 Check List for Return Reprocessing).

3.14.2.4.23 (01-01-2009)
Case Resolution

Pending transactions may require some cases to be monitored before an adjustment.

3.14.2.4.23.1 (01-01-2009)
Controlling Cases

Establish a control on all cases held in suspense past the notice cycle. This will cause the case to appear on the weekly Adjustment Overage Report.

To control a Refund Deletion (P– Freeze) Case:

Use Category Code RFDL, and Activity Code RR (cycle) (deletion reason code).

Example:

C01,RR2005407,A,RFDL
Send the appropriate letter.

Immediately perform all necessary research.

Note:

The Regional Financial Center issues a listing of refund cancellations (refund deletions) that indicates which refunds were canceled and which were missed.

Refund Decision Table

If a Refund Was	Then
Missed	Use HAL system to intercept the refund. If unable to pull check, change activity to RM.
Stopped	The TC 841 will post in three to four weeks. The Category Code will automatically change from RFDL to 841P.

Note:

Before initiating a HAL stop request, insure that the refund was not for an out of region TC 846 or direct deposit.

Monitor the overage listing so the case can be worked and closed within one week of the TC 841 posting. After one week, the case will count as an "aged" case. (See IRM 3.30.123, Processing Timeliness).

Note:

These cases can be worked in the current cycle by using a posting delay code. Monitor the account and maintain the "M" or "B" status. Use this procedure at the discretion of local management.

Intercept cases requiring adjustments worked in cycle. If no adjustments are pending, take the following action:

Decision Table

Decision Table
1.	Input your original adjustment WITHOUT a posting delay code and using the appropriate hold code, blocking series, etc.
2.	If the taxpayer will receive a refund, input a TC 290 .00, Hold Code 3, and Blocking Series 15/17, no source document. Use the proper Posting Delay Code.
3.	Input your NOREF, leaving your control open in"B" status.

If the case is controlled by another tax examiner:
1. Contact the tax examiner with the open control to decide who will resolve the case.
2. If the other tax examiner agrees to accept the case, transfer the case and close your control base. Use CC ESTABDT to recharge the return. Route the return and all pertinent documents to the controlling examiner.
  
  Note:
  
  Include documentation of your discussion as part of the case.

3.14.2.4.23.2 (01-01-2009)
Documenting Adjustment Cases

Follow local procedures to attach documentation of all telephone contacts to the return.

Decision Table

If	Then
The return or other documents, such as a taxpayer letter, is available as a source document (SD)	Attach an explanation which might include calculations, adding machine tapes, etc., to the document to leave a "paper trail" for other tax examiners to follow. Enter the explanation in the remarks section of the CC REQ54 or credit transfer screen.
A document is not available as a source document (NSD)	Enter a complete explanation of the adjustment in the remarks section of the CC REQ54 or credit transfer screen on IDRS.

3.14.2.4.23.3 (01-01-2009)
Taxpayer Correspondence/Reply Procedures

Use letters and telephone calls to contact taxpayer to request missing information that is necessary to resolve a case:

All cases must be controlled and held in a suspense file while awaiting a taxpayer's reply.
Send all letters in the notice cycle to allow adequate time for the taxpayer to respond.
Continue processing the case when the reply is received.

Requests for Missing Information or Verification of Payments

If	Then
The taxpayer replies within 45 days and the refund is frozen which now needs to be released	Input a TC 290 .00, Hold Code 3, and Blocking Series 05 /15, to release the refund. If the reply was received after the normal or extended Return Due Date, overlay the RET-PROC-DT with the IRS received date stamped on the reply to set a new 45-day interest-free period.
The taxpayer replies within 45 days to a payment verification letter and states that the payment is for a forthcoming amended return	Input a TC 290 .00 with a Hold Code 4 to set a –K Freeze. Close the control base as "AMENDRTN" and mail the notice.
The taxpayer does not reply within 45 days to a request for missing information and the account requires no adjustment	If a P– Freeze is holding an overpayment then input a TC 290 .00 with a Hold Code 4 to set a or If a –K freeze.–K or –R Freeze is holding an overpayment then close the control base. Do not release the freeze. *Note:* Both the –K and the –R Freeze will generate a transcript to the Accounting Function.



The taxpayer does not reply within 45 days, the account requires an adjustment, and a P– or –R Freeze is holding an overpayment	Use a Hold Code 4 on the CC REQ54 adjustment to set a –K Freeze to hold any credit balance. Retype and mail the notice.
The taxpayer does not reply within 45 days to a payment verification letter, or denies having made the payment	See IRM 3.14.2.4.8 (Unidentified Remittance and Excess Collections Files) to move the payment to one of two special files if you cannot identify the correct taxpayer.
The taxpayer replies after 45 days and the control base is already closed	Complete Form 3465, requesting that the return processable date be updated. Route the case to the Accounts Management (Adjustments) Function.

3.14.2.4.23.4 (01-01-2009)
Entity Adjustments

A non-critical entity adjustment is when the taxpayer will receive the notice or be able to cash the refund as addressed.
A critical entity adjustment is when the taxpayer will not receive the notice or be able to cash the refund unless the name or address is corrected:
1. Delete a current cycle refund only if the taxpayer will not receive or be able to cash the check.
2. Correct the entity in the current cycle. After the TC 841 posts, release the P– Freeze with a TC 290 .00.
Review the tax return and the entire module to decide the most current taxpayer information:
1. Use CC ENREQ to correct the name lines, address, and name control. Update the address if necessary. Correct any misspelled or transposed information.
  
  Caution:
  
  Never update a prior year name line with current processing year information.
2. Correct the notice entity.

3.14.2.4.23.5 (01-01-2009)
Tax Adjustments

Input CC REQ54 on IDRS to generate ADJ54, which is used to correct the tax, penalty, interest, refundable credits, income, and other information.

3.14.2.4.23.5.1 (01-01-2009)
Blocking Series

The Blocking Series decides whether a DLN will be a "refile" or a "non-refile" DLN. When an incorrect Blocking Series is used on an adjustment, the Files Function will return the source document and adjustment printout (Form 5147) for correction.
Use Blocking Series 00 when entering an adjustment that uses the original return as the source document.
1. The original return will be renumbered using the adjustment DLN.
2. Line through the original DLN on the return unless local procedures dictate otherwise.
Use Blocking Series 05/15 when making an adjustment that does not use the original return as the source document.

Note:

Blocking Series 05 is also used when adjusting Electronically Filed Returns.

Example:

An adjustment to penalties, interest, or to release a freeze.
1. The original return will not be renumbered.
2. Do not line through the original DLN.
Effective 2007, please do not use Blocking Series 18 any more when making an adjustment that does not use the original return as the source document.

Note:

Adjustments made to electronically filed return accounts must be done using Blocking Series 05 (do not use Blocking Series 18).
Use Blocking Series 77 whenever the taxpayer's original, amended, superseding, or supplemental return is corrected (regardless of whether the correction is an increase or a decrease) if the resulting final tax amount is greater than that shown by the taxpayer.

Note:

Use Blocking Series 78 instead of 77 if making the adjustment without the original return.
1. This will set a –G Freeze or extend an existing one, allow the taxpayer 60 days from the 23C Date to appeal the assessment, and suspend Collection activity for 12 cycles.
2. Retype the notice. Include the appeal rights indicator "A" at the top of the notice.

3.14.2.4.23.5.2 (01-01-2009)
Reason Codes

Reason Codes appear on IDRS to describe adjustment or other changes made to taxpayers account.
- Reason Code 062 is valid for penalty abatements/adjustments , based on reasonable cause
- Reasonable cause codes are used in the 1st position of RSN-CDS field in the REQ54/ADJ54 format
- When adjusting FTD penalties, Penalty Reason Codes 003, 011, 041, 042, 043, and 044, are used in the 4th position of the RSN-CDS field in the REQ54/ADJ54 format
- See Document 6209 for additional valid 4th position Penalty Reason Codes
Caution:

Do not enter Source Codes, Reason Codes, or Item Reference Numbers on a TC 290 .00 input to release a P– Freeze.

3.14.2.4.23.5.3 (01-01-2009)
Hold Codes

Use a Hold Code for one or both of the following reasons:
- To prevent a refund by freezing an overpayment
- To suppress the Adjustment Notice (CPs 210 or 220)

Use a Hold Code 0 when the taxpayer needs to receive an adjustment notice.

Use of Hold Codes

If an	Then the taxpayer needs an Adjustment notice to explain
Adjustment will create a second refund	The adjustment and the second refund.
Original notice was mailed in error	The change to the taxpayer.

Notice Review may only use the following Hold Codes:

Use of Hold Codes

Hold Code	Prevents Notice	Prevents Refund	Description
0	No	No	Use when no other hold code is needed.
1	No	Yes	Sets a –K Freeze to hold the overpayment until one of the following: Doc Code 24 or 34 credit transfer posts. A TC 830 or TC 820 posts. A Doc Code 51 TC 300 posts. The module balance becomes zero or a debit. A TC 29X or TC 30X posts. Caution: The –K Freeze will not be set if any of these conditions post in the same cycle as the adjustment with the Hold Code. Example: A Doc Code 24 transfer posting in the same cycle as a CC REQ54 adjustment needs a TC 570 to hold the credit.





3	Yes	No	Use when retyping the original notice to reflect an adjustment. Note: Hold Code 3 will not accelerate IDRS balance due Collection (500 series) notices.
4	Yes	Yes	Sets a –K Freeze. See Hold Code 1, above.

3.14.2.4.23.5.4 (01-01-2009)
Priority Codes

Priority Codes bypass certain unpostable checks.
Use Priority Code 1 when entering a CC REQ54 adjustment on an account with a –L Freeze (open TC 420 or 424).

Note:

Use Priority Code 1 if both 1 and 8 are required to adjust an account.
Use Priority Code 4 to:
- Release the —Q Freeze when inputting TC 290 .00
- This allows the credit to refund
Use Priority Code 8 when entering:
- A TC 29X adjustment within $10.00 of a previous adjustment to bypass UPC 328 Condition RC 1.
  
  Exception:
  
  Priority Code 8 is unnecessary if the previous TC 29X is a TC 29X .00 with Priority Code 6.

3.14.2.4.23.5.5 (01-01-2009)
Debit Interest To Date (DB-INT-TO-DT)

Input the "Debit Interest To Date" when entering a TC 34X on a CC REQ54 adjustment.
Overlay the DB-INT-TO-DT field with the "Interest-To" date.

Note:

The computer will not accept a TC 34X adjustment unless the DB-INT-TO-DT field is overlaid.
If no interest is assessed, but a TC 340 .00 is needed to address an –I Freeze:
1. Input a TC 340 .00.
2. Overlay the DB-INT-TO-DT field with the "Interest-To" date.
The "Interest-To" date is usually the 23C Date of the adjustment.

3.14.2.4.23.5.6 (01-01-2009)
Return Processable Date (RPDT)

A return is not considered complete and processable until all taxpayer information (such as missing signatures, Form 1310, or any missing forms or schedules) is received.
When the taxpayer sends the necessary correspondence, enter the correspondence received date in the RET-PROC-DT field on IDRS to update the Return-Processable-Date field on CC TXMOD.
This will also restrict credit interest for 45 days. Future computations of credit interest will be figured from this date.

3.14.2.4.23.5.7 (01-01-2009)
Numbers/Item Adjustment Codes

If you have further questions on credit reference, See IRM 21.7.1, BMF/NMF Miscellaneous Information IRM. Listed below are credit reference numbers or item adjustment codes:
1. CD — Credit reference numbers and codes. A maximum of four credits reference numbers can be input at one time on MFTs 02, 05, 33, 34 and 61. All other MFT's accept a maximum of 8 credit reference numbers. Refer to the Credit Reference Numbers and Item Adjustment Codes figures for valid reference numbers for each MFT.
2. Form 940: On Form 940 adjustments, all increases and decreases in tax must use reference numbers associated with the State indicated on the return. (Example: TCA and WCA for the tax and wage reference items). The total of the tax reference amounts must equal the TC 290 or the TC 291 tax adjustment. If the adjustment is due to an increase or decrease in wages, a wage reference is required.
3. Form 941: On all Form 941 series adjustments, all increases and decreases in tax must use reference numbers for employment tax returns. The sum of the reference numbers 111, 112, and 113 must equal the TC 290 or TC 291 amount. The sum of the reference numbers 104 through 110 must equal 113. The Item Reference Number (IRN) 008 is not applicable for Form 941.
4. Form 943: On all Form 943 series adjustments, all increases and decreases in tax must use reference numbers for employment tax returns. The sum of the reference numbers 003 & 007 must equal the TC 290 or TC 291 amount. The IRN 008 is not applicable to Form 943.
5. Form 944: On all Form 944 series adjustments, all increases and decreases in tax must use reference numbers for employment tax returns. The sum of the reference numbers 111, 112, and 113 must equal the TC 290 or TC 291 amount. The sum of 104, 105, 106, 109 & 110 must equal 113. The IRN 008 is not applicable for Form 944.
6. Form 945: On all Form 945 series adjustments, all increases and decreases in tax must use reference numbers for employment tax returns. The sum of the reference numbers 003, 008 and 184 must equal the TC 290 or TC 291 amount.
7. Form 720 — is filed to report and pay excise taxes levied on specific services and the manufacturing and sale of certain items. The items are identified by an IRS Abstract Number on the return. When the tax is adjusted on Form 720 the IRS Abstract Number must be adjusted also.
8. Form 1041: Input IRN 806/807 for the amount of withholding affected by the adjustment.
9. Forms 1120, 1041, 1120-C and 990–T: Anytime taxable income is changed due to an adjustment, use IRN 886 to correct. When decreasing taxable income, use IRN –886 with a minus (-) after the money amount. To adjust refundable credits, input a TC 290 .00 with Credit Reference Number 767 for a decrease. AMT (Reference amount) — Input in dollars and cents format with a comma and decimal point inserted. A minus (-) following the amount indicates a decrease. An adjustment input (TC 290 .00) with Reference Numbers 886 and/or 888 does not generate an adjustment notice.

3.14.2.4.24 (01-01-2009)
Credit Transfers

Use a credit transfer to transfer credits from one tax module to another. Keep the following in mind when transferring a credit:
1. Check TXMOD and BMFOL to make sure the credit is available for transfer and has not previously been transferred or offset.
2. Do not transfer a pending credit unless it has posted on BMFOLT.
3. The date of the debit reversal must be exact if transferring a payment, since any discrepancy will cause an unpostable.
  
  Note:
  
  ADD/ADC24 can be used to change the date of the TC 610 when required. (Use Override Code 2)
4. Money amounts must be exact unless splitting a payment.
  
  Note:
  
  Any credit amount input greater than the posted credit will cause an unpostable.
5. When transferring two or more credits with the same date, and the credit reversals amounts are exact matches of the posted credit transactions, they may be transferred in any order.
6. When splitting two or more credits with the same date, input the transaction from the largest to smallest to avoid creating an unpostable.
  
  Note:
  
  The computer will look for and reverse an exact match before it will split a payment. If there is no match, the first payment with a sufficient amount will be split.
There are three Credit Transfer Doc Codes. Use them in conjunction with the credit transfer Command Code format ADDnn/ADCnn, where nn is the Document Code. Each Document Code identifies the different types of credits to be moved:
1. Use Doc Code 24 to transfer a single payment, a lump sum, an overpayment, or to reverse an offset. Both the debit and credit sides of the transfer post in two or three cycles (depending on the day of input), unless a Posting Delay Code is used.
2. Use Doc Code 34 to transfer up to four payments at once. The debit side of the transfer posts in two or three cycles (depending on the day of input). The credit side posts one cycle later.
  
  Caution:
  
  When using Doc Code 34 in conjunction with other Doc Codes (24, 48, or 54), make sure that the multiple transactions will all post in the same cycle. Use a Posting Delay Code "1" on the credit side of both the 24 and 48 transactions and on CC ADJ54 to prevent erroneous notices, offsets, and refunds.
3. Use Doc Code 48 to transfer or reverse Credit Elect. Both the debit and credit sides of the transfer post in the same cycle unless a Posting Delay Code is used. Both sides normally post in two or three cycles, depending on the day of input.
Be aware of timing issues unique to Doc Code 34 transfers. The credit side of a Doc Code 34 transfer posts one cycle after:
- A CC REQ54 adjustment
- Both sides of Doc Code 24 and 48 transfers
- The debit side of a Doc Code 34 transfer
- A CC REQ77 transaction
Note:

If the credit side of a Doc Code 34 transfer needs to post in the same cycle as any of the above transactions, use a Posting Delay Code 1 immediately after "POSTNG-DLAY-CD>__" to avoid erroneous notices, offsets, and refunds.
A credit transfer affects two different tax modules unless the only purpose of the transfer is to change the payment date.
1. The debit side, which always appears on the upper part of the screen, reflects the module the credit will be transferred from (ADD).
2. The credit side, which always appears on the bottom part of the screen, reflects the module the credit will be transferred to (ADC).

The last module requested with CC TXMOD (the primary module) decides which command code to use to move the credit. To reduce the chance for errors, use the notice module as the primary module. decide if the module shown on the IDRS screen is to be debited or credited:

Command Code Usage

If the module is to be	Then use
Credited	CC ADCnn (nn=Doc Code 24, 34, or 48).
Debited	CC ADDnn (nn=Doc Code 24, 34, or 48).

When reversing an offset, the debit and credit sides may have different dates. Input an Override Code 2 when using different dates. Use the TC 826 date for the TC 821 and the TC 706 date for the TC 701.
Reverse multiple offsets separately. Do not lump them together.
Use a Posting Delay Code to delay the posting of a transaction by up to six cycles.
When transferring a credit into a zero balance (full-paid) module, or a balance due module that will create an overpayment, use a Bypass Indicator 1 on the credit side of the transfer to prevent an Unpostable Condition. A Bypass Indicator 1 is not needed on Forms 1041, 1120, and 990, as long as it is still within one year of the original tax period ending date.

To hold a credit (prevent the credit from refunding or offsetting), enter a Credit Freeze Code 1 on FRM 34 (CR-FR>). On FRM 24, enter TC 570 as the secondary transaction immediately after the second TC>_ on the credit side of the transfer.

The posting of TC 570 will set a -R Freeze Code on the module.

Never leave an unnecessary –R Freeze on a module. Input TC 571 on CC REQ77 with the appropriate Posting Delay Code to reverse TC 570 and release -R Freeze if any remaining credit will refund after the credit posts.

Use of Posting Delay Code

If the Transfer is Doc Code	Then use a Posting Delay Code
24 or 48	1
34	2

Use the correct reversal Transaction Codes when transferring payments. Use:
- TC 662 to reverse TC 660 or 430
- TC 672 to reverse TC 670
- TC 821/701 to reverse TC 826/706
  
  Note:
  
  See Document 6209 for a complete list of transaction codes.
TC's 640, 670, and 700 must have a Designated Payment Code (DPC) used only for terminal input.
1. When transferring these payments, input "00" on the credit side of the Doc Code 24 or 34 screen immediately after "DESG-PYMT-CD>__" unless the payment has another code (01–14 or 99).
2. See Document 6209 for a complete listing of DPCs.
A TC 820 or 830 on a Doc Code 24 or 48 transfer will release –K and P– Freezes. Make sure the transfer does not inadvertently release a freeze and cause an erroneous refund. When using CC REQ54 to adjust the tax and transferring a credit into the module, use either a Hold Code 4 or a Posting Delay Code "1" to prevent an erroneous refund or notice or both.
If a misapplied credit posted to a settled module (containing a TC 150), input a TC 570 on the debit side of the transfer to suppress the CP 260 if transferring the credit will leave a debit balance of $5 or more.
If transferring a credit into the notice module will resolve the credit discrepancy with no other misapplied credit, do not input a TC 570 on the credit transfer. Use CC REQ54/ADJ54 to input a TC 290 .00 with Hold Code 3 to prevent an adjustment notice.
If transferring a TC 650, 660 or TC 670 into a module will create an overpaid condition, See IRM 3.14.2.4.24 (Credit Transfers) to avoid creating an unpostable condition.
1. Use a Bypass Indicator 1 on the Doc Code 24 or 34 IDRS screen, if necessary.
2. If the credit will be held and not refunded, input a TC 570 as a secondary transaction on the credit side of a Doc Code 24 transfer or a Credit Freeze on the credit side of a Doc Code 34 transfer.

3.14.2.4.24.1 (01-01-2009)
Penalty Recomputations Caused by Credit Transfers

Transferring timely credits into a module containing a TC 166 (FTF penalty), TC 176 (ES penalty), TC 186 (FTD Penalty), or TC 276 (Failure to Pay) will cause these penalties to recompute and generate an adjustment notice CP 210/220. Other penalties may also recompute but will not generate an adjustment notice.
Review CC PIEST or INTST to decide whether the penalties will recompute. (See IRM 3.14.2.4.21.6, Estimated Tax (ES) Penalty).

Note:

You may need to manually address Estimated Tax Penalty.
When transferring timely payments into the module to resolve an ES or FTD discrepancy condition causes the TC 166, TC 176, TC 186 or TC 276, to recompute, input a TC 290 .00 in Blocking Series 05/15 using a Hold Code 3 to prevent the subsequent CP 210/220.
1. If the credit transfer is under Doc Code 34, use a Posting Delay Code 1 on the TC 290 so both adjustments will post in the same cycle.
2. If the credit transfer is under Doc Code 24 or 48, a Posting Delay Code is unnecessary. Both sides of the credit transfer will post in the same cycle as the CC REQ54 transaction.

3.14.2.4.25 (01-01-2009)
Command Code STAUP

Use CC STAUP to interrupt the normal IDRS balance-due notice routine (CP 500 series) and delay, accelerate, or skip notices. This will generate a history item on the module and change the campus status to 48.

Note:

CC STAUP is unnecessary if a notice is labeled and a balance due remains, voided, or is mailed in the current cycle.
When adjusting a balance-due account and the account will remain in balance-due status:
1. Retype the original notice.
2. Use Hold Code 3 on the adjustment to suppress the adjustment notice.
  
  Note:
  
  Hold Code 3 will not accelerate IDRS balance-due notices. Use CC STAUP to input the cycle delay needed to compensate for retyping the original notice per local procedure.
3. Input CC STAUP for 6 cycles.
When a module contains one or more pending payments (AP, PN, UP, CU, or TEP) that will cause FTF or ES penalty recomputation, enter CC STAUP for 8 cycles to allow the taxpayer adequate time to respond to the recomputation notice.
A STAUP will automatically release after nine cycles if there has never been an open control on the module.
1. If a control is opened on the module after STAUP is input, it will release nine cycles after the control base is closed.
2. A STAUP will never remain for more cycles than the number originally input.

Use CC STAUP when a balance due account requires corrective action that cannot be accomplished within the notice cycle.

Delay CP 50X notices by inputting CC STAUP for 9 cycles.

After working the case, input CC STAUP to the same status used in the 9 cycle input but for the following number of cycles:

Use of Staup

If the Original Notice was	Then input CC STAUP for
Labeled	5 cycles.
Retyped	6 cycles.

Do not accelerate notices by skipping statuses using CC STAUP.
Input the next status and the number of cycles that IDRS would normally delay the next notice.

Caution:

Use the current status (other than 19 or 21) if the IDRS notice is voided or mailed erroneously.
Check the History Section of the module.
Check for any Pending transactions or any current Status 48.

Caution:

Never use CC STAUP to update the Status to 22 for zero cycles. This causes the account to immediately become TDA.

Input CC STAUP for 9 cycles when routing a balance due case or its correspondence to another area.
Never input CC STAUP for fewer cycles than the normal interval to the next notice. Be aware of the posting cycles of each notice, especially if using the same status.
A STAUP cannot be input when:
1. The Collection Statute Expiration Date (CSED) is within 6 months of expiring.
2. An Account is in Status 22, 24, 26, 64, 60, 71, or 72.
A STAUP will only prevent an erroneous IDRS notice if it is input by the Friday before the erroneous notice is scheduled to generate (10 days before the 23C Date).
1. If the Campus status has just updated, it is too late to use CC STAUP.
  
  Note:
  
  If a STAUP is input before the 23C Date, the notice will be selected for review on the IDRS Notice Review Register under the category 48 Status Update and will be voided. If the same notice needs to be regenerated, input CC STAUP in the same SC Status.
2. If an erroneous notice has been mailed, send an apology letter instructing the taxpayer to disregard the notice and that either the case has been resolved or that a correct notice will be sent, whichever is appropriate.
If the Campus Status is blank or 99, the account is "out-of-region" . Use Universal Access to input CC STAUP.
If a CP 50X is issued and the current cycle Status is 58, follow instructions in IRM 3.14.2.4.28.1.1(CP 504 Disposition) to use CC STAUP with definer "R" or "D" .

3.14.2.4.26 (01-01-2009)
Extensions

Check for a misapplied extension of time to file (TC 460) that belongs on another account.
1. Use CC REQ77 to input a TC 462 to remove the extension from the incorrect account.
2. Use CC REQ77 to input a TC 460 to post the extension on the correct account. Input the Extension Date (use the latest extension date), the Transaction Date (use the received date of the extension), the DLN-CD:
  
  • Enter 20 for MFTs 02, 33 and 34
  • Enter 45 for MFTs 05 and 06
  
  Note:
  
  If penalties will recompute, input a TC 290 .00 with a Hold Code 3 to suppress the recomputation notice.
3. Input only one TC 460.
4. Retype, label, or void the notice according to the effect that the posted TC 460 will have on the module. The TC 460 will cause a recomputation of the FTF penalty (TC 166 if posted) if the return is filed before five months after the extended due date.

3.14.2.4.27 (01-01-2009)
Notice Disposition

Computer Paragraph (CP) notices are the most common form of communication with the taxpayer regarding their account. A notice must have accurate and timely information. All tax examiners are responsible for understanding the tax module conditions that generate a notice, the notice elements, and what effect any change to the module will have on a notice.

Note:

Notices that are retyped, labeled, or mailed must be released in the notice cycle.
The taxpayer may receive a notice when there is:
- A debit balance on the module
- A math error on the return
- An Estimated Tax (ES) payment discrepancy
- Penalty and interest assessed on the module
- A subsequent change to the taxpayer's original figures for tax, credits, or penalties
- An overpayment offset to another module
- A reduced Credit Elect
Notice elements can help describe the conditions which characterize a notice. The principal element types most viewed in Notice Review are:
- Overpayment
- Balance due
- Even balance
- Credit discrepancy
- Math Error
- Adjustment of tax, credits, and penalties
- Reduced credit elect
- Offset to other modules, accounts, or government agencies
If a tax return is processed and meets math error criteria, even if the refund or balance due is what the taxpayer expects, the appropriate math error notice will generate. The exception would be if the notice module is adjusted back to the taxpayers original figures. Then the notice would be voided.
If an incorrect notice was mailed, a corrected notice and an apology label, if applicable, must be sent to the taxpayer. For special situations, contact your Work Lead.
Every tax examiner who inputs:
1. A Doc Code 54 adjustment must decide (before the adjustment) whether to generate or suppress the subsequent notice
2. An adjustment or credit transfer that will cause the FTF, FTD, or the FTP or the ES penalties to recompute must decide if a subsequent notice will generate
Note:

Proper use of Hold Codes is important during the adjustment process. (See IRM 3.14.2.4.23.5.3, Hold Codes). Proper use of the Local Control File (LCF) is important when a Hold Code or a TC 570 cannot be used to prevent a subsequent notice.
Consider how the adjustments made to the notice module will affect the notice elements when determining whether to mail, void, retype, or label an original notice.
An adjustment notice, CP 210 or 220 will generate when:
1. A Doc Code 54 or 47 adjustment posts with no Hold Code or with a Hold Code 1
2. A payment is transferred into or out of a module and FTF, FTD, FTP or ES penalties will assess or recompute on the FTP Penalty; only a decrease (TC 277) will generate an adjustment notice
3. A payment is transferred out of a settled (Full Paid) credit balance module and creates a balance due (generates a CP 260)
If an account action will generate a subsequent notice, label the original notice. If the original notice must be voided or retyped, prevent the subsequent notice:
1. Use Hold Code 3 with a CC REQ54 adjustment to prevent a subsequent notice. Use Hold Code 4 to prevent a notice and to prevent an overpayment from refunding.
2. Use a TC 570 on the debit side of a credit transfer to prevent a CP 260 from generating on a settled module.
3. Use CC REQ54 to input a TC 290 .00, Blocking Series 05/15, Hold Code 3, to prevent an adjustment notice from generating on a penalty recomputation caused by a credit transfer. Time the adjustment to post in the same cycle as the credit transfer.
  
  Note:
  
  Use a Posting Delay Code "1" if the credit transfer was a Doc Code 34.
  
  Exception:
  
  An adjustment with a Hold Code 3 will not suppress a CP 260.
See IRM 3.14.2.4.24 (Credit Transfers), regarding procedures when inputting multiple corrective actions (such as a tax adjustment and a credit transfer or an "in and out" credit transfer).
Any tax examiner reviewing a pending transaction on the notice module must decide:
- Which penalties will recompute?
- Which subsequent notices will generate?
- Will the subsequent notices be mailed?
- Will the notice module be overpaid, refunding, underpaid, or even-balance?
- What is the proper disposition of the original notice?
Note:

Use CC BMFOL to view the posting of some transactions one cycle in advance of the current cycle on CC TXMOD.
- Review the CC BMFOL notice module for the posting of pending credit or debit transactions
- If a transaction posts on CCs BMFOL, any recomputation of penalties and interest will also show on that module. However, any balance showing on CC BMFOL is computed to the date indicated on that module and will not be used on a retyped or labeled notice. Use CC INTST or CC COMPA/COMPAF.
- If a transaction is posted on CC BMFOL, any refund or offset occurring as a result will also show
  
  Note:
  
  Use CC BMFOL to verify the result of a pending transaction whenever possible.
When making any adjustment to an account, review all affected associated notice modules as part of the resolution process. Tax Examiners are responsible for the disposition of all affected associated notices in addition to the selected notice module.
DO NOT HOLD A BALANCE DUE NOTICE PAST THE NOTICE CYCLE FOR RESEARCH. If it cannot be decided whether any corrective action will be made, MAIL THE NOTICE IN CYCLE. If a corrective adjustment is done on the account at a later time, allow a subsequent notice to generate to tell the taxpayer of the correction.

3.14.2.4.27.1 (01-01-2009)
Notice Disposition Categories

There are five Notice Disposition categories:
- PRINT
- VOID
- RETYPE
- LABEL
- ENTITY
Input a history item whenever voiding, retyping, or labeling a notice, but do not create a dummy module solely to input a history item.

3.14.2.4.27.2 (01-01-2009)
Printing Notices

Print the notice when:
1. All the notice elements are correct, no adjustment is pending, and no correction will be made to the account.
2. There is a requirement to mail the notice.
  
  Note:
  
  Do not input a history item on IDRS for mailing a notice.

3.14.2.4.27.3 (01-01-2009)
Voiding Notices

Void the notice when:
1. The taxpayer does not need to receive the notice information.
  
  Example:
  
  Returning to the taxpayer's original tax figures and the resulting refund is what the taxpayer expected or there is no balance due.
2. After the adjustment action, the account will have no math error or ES discrepancy, will be overpaid, even balance, or have a balance due of less than ≡ ≡ ≡ , match the taxpayer's figures, AND any incorrect refund was deleted or the module will be overpaid with a resulting refund or credit elect as the taxpayer expected.
3. It would cause a misunderstanding by the taxpayer.
  
  Example:
  
  Due to a previous notice being sent to the taxpayer in error.
4. Reprocessing a return. (Use Hold Code 4 on the tax adjustment.)
If voiding the original notice, prevent the subsequent notice or use the Local Control File to intercept and void the subsequent notice.
Do not void an Adjustment Notice unless one of the following is true:
1. The original notice was voided and the conditions in IRM 3.14.2.4.27.2(Printing Notices) are not met.
2. The original notice is retyped to include the corrected information.
If the original Balance Due Notice was voided in error and the subsequent CP 210/220 is selected, release the CP 210/220 with the current notice module information. If the taxpayer contacts Customer Service to inquire why a previous notice was not sent, the Customer Service Representative will be able to read the account history and explain the account activity to the taxpayer.

3.14.2.4.27.4 (01-01-2009)
Retyping Notices

Retype a notice when changes to the notice module requires the updating of the notice elements to correctly reflect the updated tax module information. Listed are some of the conditions which require a retype of the original notice:
1. An adjustment to the taxpayers original figures increases tax or decreases credits
2. The original balance due amount is increased
3. An adjustment to the notice module changes the module balance from balance due to overpaid
4. The original TPNC(s) requires correction
5. The original refund interest allowed is reduced or no longer applicable
  
  Example:
  
  A CP 210 generated and the amount refunding was requested as a credit elect. If the credit is transferred to another module, the interest shown on the notice will be incorrect. The notice must be retyped to (1) remove the credit interest amount; (2) deduct the erroneous credit interest from the overpayment amount; and (3) apply Label #7 to notice before mailing.
  
  Note:
  
  If the entire overpayment is removed from the module; remove the following statement from the notice: "interest allowed must be reported as income on your next income tax return."
Retype a notice to a CP 173 when the computer assessed an ES penalty and there is no ES discrepancy or math error on an overpaid module.
Use a Hold Code when retyping the original notice to prevent the subsequent notice or use the Local Control File to intercept the subsequent notice.
Use CC ACTON to enter a history item on IDRS when retyping a notice. If retyping to a different notice, include both CP numbers in the history item, such as "CP 112 to CP 161."
If a Balance Due Notice is held past the notice cycle, update the "Pay by" date to the current cycle "Pay by" date. Update the balance due, penalties, and interest as well.

Note:

Do not retype the entire notice just to change the "Pay by" date. If no other changes are needed, place a label over the old date and type in a new date. Input a history item and CC STAUP.
1. Change the balance due amount only if there is a ≡ ≡ or greater increase over the original balance due. Use CC INTST to obtain an updated balance when no restrictive conditions exist on IDRS.
2. Use CC ACTON to enter a history item on the notice module, e.g. "UPDATECP__" or "RETYPECP__" . Also input a CC STAUP for 6 cycles on Balance Due Notices.
  
  Caution:
  
  Change the "Pay by" date printed on a CAF Mismatch notice only when the "Pay by" date printed on the original taxpayer notice is also changed. The CAF Mismatch notice must always be an exact duplicate of the taxpayer copy. (See IRM 3.14.1.4.2.1, Central Authorization File (CAF) Mismatch–Code 01).
The date printed on the notice is the 23C Date (current cycle assessment date). This date is rarely changed.

Exception:

If you delete a refund to increase tax, change the notice date to match the 23C Date of the adjustment. Use the posting cycle calendar in Document 6209 to decide the 23C Date for the posting of the adjustment. In all other cases do not change the notice date. The 23C Date decides the assessments of penalty and interest, collection notices, and TDA issuances. The computer will not recognize a notice date change. The computer does recognize a subsequent tax assessment, which starts a new assessment time period.
Sometimes a stuffer is included in the envelope with a notice to give additional information to the taxpayer. These stuffers are identified by an alpha code at the top of the notice.
1. The most common stuffer is the 746 which explains Math Error Appeals Rights. It is identified by an "A" at the top of the notice. This code must be present on a retyped notice if it was on the original notice. It must also be on the notice if a tax increase above the taxpayer's figures was input in Blocking Series 77 or 78 DLN, using CC REQ54. (See IRM 3.14.2.4.23.5.1, Blocking Series ).
2. If other codes were on the original notice, include them on the retyped notice.
3. If a multi-page notice is retyped, use local procedures to correct the erroneous information on the notice.

3.14.2.4.27.5 (01-01-2009)
Labeling Notices

Under certain conditions, a label may be used to update information on the notice or to notify the taxpayer to expect additional account actions. Use computer printed labels on standard adhesive-backed label stock.
Apply labels carefully. Use black ink when labels require fill in information. Fill in information must be written using the form number and period ending in Month, Day, and Year format.

Example:

Form 1120 for tax period ending Dec. 31, 2004.
Use caution when applying a label for a pending (AP, PN, RS, UP, CU, or TP) credit transaction.
1. A TC 650/660 on the NRPS contents page that overpays the notice module and is dated later than the last day of the tax period may not post to the notice module due to computer rollover analysis. (A TC 650/660 .00 will be displayed on BMFOLT to indicate a credit has "rolled" when attempting to post to the module). If the payment overpays the module, but does not appear on BMFOLT as a posted payment, decide if the payment will post. If the payment will post to the notice module, label the notice. If unable to decide, do not use a label.
2. If the transaction is unpostable, do not apply a label if unable to decide if the transaction will post.
3. If the transaction is RS, TP, or UP, CC INTST will not reflect the transaction correctly. If the RS or TP transaction has posted on BMFOLT, penalty recomputation will be reflected. Do the following if the correct balance on the module is required: Use CC RECON to update the TXMOD module with the current account information; then input CC INTST to obtain the correct balance. If the transaction is UP or not reflected on BMFOLT, use CC COMPA to decide correct FTP penalty and interest amount.
  
  Reminder:
  
  The correct module balance is not reflected on CC BMFOLT since grace is not taken into consideration.
Do not label a notice when the balance due is being increased. Always retype the notice.
Do not retype the notice if there is a change to the name or address on the notice and the other information is correct. Resolve the issue as follows:
1. Update the entity on IDRS with CC ENREQ.
2. Indicate the correct name and address on the quick print, select Disposition "E" and correct the name and/or address information on the OLNR Entity display screen.
The labels shown in this text have been approved for the situations listed. A label must not be used for any other situation unless the label conveys the correct information to the taxpayer.
Campus management has the option of requiring a notice to be retyped instead of labeled.
Headquarters must approve any additional labels before use.

The following labels are approved for use:

Figure 3.14.2-11

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Label #1

Figure 3.14.2-12

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Label #2

Figure 3.14.2-13

Labels #3 and 4

Label #3

English:

WE APPLIED A CREDIT OF $_________ TO YOUR ACCOUNT. YOUR NEW BALANCE IS $ __________.

Spanish:

NOSOTROS LE APLICAMOS A SU CUENTA UN CRDITO DE $___________. SU NUEVO BALANCE ES DE $______________.

USE WHEN ALL THE FOLLOWING APPLY:

The notice module is in balance due status.

Payments or credits are pending (AP, PN, UP, CU, TP or RS) but are not showing on the notice.

The resulting balance on the notice module will be a reduced balance due.

Failure to File (TC 166), Failure to Deposit (TC 186), Failure to Pay (TC 276), or Estimated Tax (TC 176) penalty will NOT recompute.

A subsequent notice will NOT generate.

Note:

Use CC INTST or CC COMPA to compute the new balance.

Caution:

VOID a settlement notice if the resulting balance due will be less than ≡ ≡ ≡ ≡ ≡ with no math error or credit discrepancy.

Reminder:

Do not void an adjustment notice when the balance due will be less than ≡ ≡ , If the balance is less than ≡ ≡ , enter.00on the label as the amount due

.

Label #4

English:

WE APPLIED A CREDIT OF $_________ TO YOUR

ACCOUNT. YOUR ACCOUNT HAS A CREDIT OF $ __________.

Spanish:

NOSOTROS LE APLICAMOS A SU CUENTA UN CRDITO DE $___________. SU CUENTA TIENE UN CRDITO DE $ ___________.

USE WHEN ALL THE FOLLOWING APPLY:

The notice module is in balance due status or an overpayment is not refunding.

Payments or credits are pending (AP, PN, UP, CU, TP or RS) but are not showing on the notice module.

The resulting balance on the notice module will be an overpayment.

Failure to File (TC 166), Failure to Deposit (TC 186), Failure to Pay (TC 276), or Estimated Tax (TC 176) penalties will NOT recompute.

A subsequent notice will NOT generate.

Caution:

If the notice is CP 161, void the notice if the resulting overpayment returns to the taxpayer's figures.

Labels #3 and 4

Figure 3.14.2-14

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Labels #5 and 6

Figure 3.14.2-15

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Label #7

Figure 3.14.2-16

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Labels #8 and 9

Figure 3.14.2-17

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Labels #10 and 11

Figure 3.14.2-18

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Labels #12 and 13

Figure 3.14.2-19

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Labels #14 and 15

Figure 3.14.2-20

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Labels #16 and 17

Figure 3.14.2-21

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Label #18

Figure 3.14.2-22

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Label #19

Figure 3.14.2-23

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Figure 3.14.2-24

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Label #22

3.14.2.4.27.6 (01-01-2009)
ENTITY

The Entity disposition is to be used when entity information is the only change required on the notice. It is not to be used in conjunction with any other notice disposition.
Entity changes includes name and address corrections, as well as Manual Intervention (CAF/RAF Mismatches) changes.

Note:

BMF Retypes Phase II has been implemented, therefore Entity Disposition can also be used, and selected for associated notices.

3.14.2.4.28 (01-01-2009)
Reviewing IDRS Notices

IDRS Taxpayer Notices (CPs 504 and 523) generate weekly. (The CP 600 series are Spanish notices that generate only in the Ogden Campus.) These notices print in order of Notice Number, Notice Review indicator, and ACS-Indicator. CP 501/601 and 503/603 notices are further sorted by File (BMF, IMF, EPMF), DOAO (Territory Office, Area Office), and ZIP code. A sequence number prints at the top center of each notice. Each set of CP Notices begins with sequence number one.
The IDRS Review Notice Register generates every Sunday night. The register lists the IDRS notices that need review for other than obvious errors. The Computer Function can give additional copies of the register if needed.
An IDRS file analysis produces the register during the weekend update before the date on which notices must be processed for mailing.
Notices on the register print in the same sequence as the actual notices. Totals for each type of notice and the total selected are printed at the end of the register.
The register will select a notice if one or more specific conditions are present on the notice module. The NOTICE-SUPPRESS-CODE in the Notice History Section of TXMOD changes to "2" and a Selection Category Code prints in the "Category" column of the IDRS Review Notice Register for each type of condition found.

Note:

NOTICE-SUPPRESS-CODE"2" indicates that the notice was selected for review, but does not specify whether the notice was mailed. (See IRM 3.14.2.4.28.1.1, CP 504 Disposition).
Resolve each condition using the procedures in IRM 2110.2.4.28.3 (Specific Review Procedures for Other Categories).

3.14.2.4.28.1 (01-01-2009)
IDRS Review Notice Register

The IDRS Review Notice Register is a listing of notices selected for review through computer analysis. Use the register as a tool to assist in identifying and researching tax modules and for pulling notices to be voided or retyped. The entries on the register are in the same sequence as the actual notices. The following notices may appear on the register:

Note:

CP 6XX is the Spanish-Language equivalent of the CP 5XX.
- CP 504/604—Issued as an urgent notice to remind a taxpayer of a balance due. This is a notice of intent to levy state tax refunds, begin a search for other assets to levy or file a notice of federal tax lien.
- CP 523/623—Issued to tell a taxpayer that they have defaulted on their monthly installment agreement and that the IRS intends to levy state refunds, begin a search for other assets to levy or file a notice of federal tax lien.
All of the above notices (except CP 523/623) appear in the following sort order:
1. CP Notice Number
2. Notice Review Indicator
3. ACS Indicator
4. Territory Office/Area Office (TOAO)
5. ZIP Code
6. TIN
CP 523/623 is sorted in the following order:
1. CP Notice Number
2. TOAO
3. ZIP Code

3.14.2.4.28.1.1 (01-01-2009)
CP 504 Disposition

Since January 19, 1999, the CP 504 does not allow for routine levy issuance at TDA issuance time (Status 22 or 26). However, the issuance of the CP 504 does permit a module to be selected for state income tax levy (SITLP). The issuance of the notice causes systemic research for the levy sources, for example, against the Information Returns Master File (IRMF). If the NOTICE-SUPPRESS-CODE is 0 or 2, the issuance cycle will appear on ACS, ICS, and paper TDA's.

Take the following steps so that IDRS will reflect the correct notice disposition when a selected CP 504 will be:

MAILED AS GENERATED after review, no action is necessary
Notice Suppress Code 2 will cause the CP 504 cycle to appear on ACS or field TDAs
VOIDED AND NOT MAILED, use CC STAUP with "D" in the Status Request field
The CP 504 cycle will not appear on ACS or field TDAs because the notice was never mailed
VOIDED BUT REISSUED, use CC STAUP with an "R" in the Status Request field (to re-request or repeat the CP 504)
The number of cycles (00–15) must be input with this request

After this number of cycles have expired, IDRS will analyze the module for possible re-issuance of the final notice

Note:

CC STAUP with "D" or "R" in place of the Status Request causes the NOTICE-SUPPRESS-CODE to change to 4, meaning that the notice was destroyed. This suppress code will cause blanks to be sent in the 4th notice cycle field if the module goes to TDA status.

STAUPS

IDRS Terminal Input for Voiding a CP 504 without Reissuing it:		IDRS Terminal Input for Voiding a CP 504 and Reissuing it after 3 Cycles:
STAUPS		STAUPS
DEC		R 03EC
Notice that an entry for the number of cycles to delay is *not* required.
*Note:* When entering a batch request for multiple accounts, enter the "R" or "D" in the STS REQ column.

3.14.2.4.28.2 (01-01-2009)
Operational Systemic and Error Conditions

Review the notices for operational errors. Research the accounts and retype the notices with corrected data if operational errors occur. Notify the IDRS Control Staff if an account needs to be corrected on the IDRS file. Research MRS for correct information on notice with incomplete addresses. The following are examples of operational errors:
- Incomplete/incorrect name and/or address
- Incomplete/incorrect ZIP code
- Erroneous/extraneous data
- Outrageous amounts
Review at least ten of each type of notice generated. Notify IDRS Control Staff if a systemic error appears to have affected all notices of one type from one or more files.
The IDRS Review Notice Register will only analyze an account if a notice is present on the IDRS Notice tape. If an error condition exists that prevents analysis of a notice module, the notice will appear on the register with one of the following error category codes:
- NO ACCOUNT
- NO TAX MODULE
- NO IDRS STATUS
- NO TC 150
- NO TIF NOTICE
- LENGTH ERROR
- READ ERROR
- REAL-TIME RESERVE
- OTHER ERROR
If the notice module is on IDRS and none of the above conditions appear to exist, decide if any of the conditions in IRM 3.14.2.28.3 (Specific Review Procedures for Other Categories). If so, follow the appropriate review procedures. Otherwise, release the notice.

Note:

Notify the IDRS Control Staff so the problem with the register analysis can be corrected.
If one of the following conditions is true, contact IDRS Control Staff IMMEDIATELY:
- The module is not on IDRS
- The module has no IDRS status
- The module is not a civil penalty module and does not contain a TC 150
- The module shows one or more transactions which will carry a credit amount, but carry a debit amount instead

3.14.2.4.28.3 (01-01-2009)
Specific Review Procedures for Other Categories

If a notice is selected under multiple categories, follow the procedures for all applicable categories. The selection sequence is:
1. Status Change
2. Manual Refund
3. Restricted Interest and FTP Penalty
4. Reject Transaction
5. Case Control

3.14.2.4.28.4 (01-01-2009)
Status Update

An IDRS Command Code or a pending status change transaction code causes IDRS Tax Module statuses to change from Status 20, to Status 58, Urgent Notice (CP 504) issued.

Note:

Tax Modules in Status 60—Installment Agreement, change to Status 63—Deferred Installment Agreement, or Status 64–Defaulted Installment Agreement, instead of Status 58.

If a notice on the IDRS Review Notice Register was selected for a "Status Update," review the Tax Module:

Notice Status Disposition

Module	Cause	Result	Resolution
50	CC STAUP to Status 20, 22, 56, or 58 for 00 cycles	Initiates analysis to generate the requested IDRS Status and Notice. If the taxpayer had a previous TDA account, the Status will accelerate to TDA (Status 22 or 26) instead.	Void the notice if it is a CP 501. Mail the notice if it is a CP 504.
51	CC STAUP to Status 51 for 00 cycles	Sets the NOTICE-SUPPRESS-CODEto "2" . If the prior Status was 20 or 56, a final notice (CP 504) generates in the next cycle. If the prior Status was 58, the module progresses to the next TDA Status.	Void the notice if it is a CP 501.
53	A PN TC 470 CC 90 or 93, or a PN TC 530	Suppresses all IDRS Balance Due Notices. The notice routine will resume when the TC is reversed (with a TC 472 or 531, respectively) or the module balance becomes zero or a credit	Void the notice. Input a History Item (VOIDCP5_). Do not input CC STAUP.
60	CC IAORG or IAREV is input to an account. Establishes an active Installment Agreement	Suspends all notices except those for Installment Agreements.	Void the notice. Input a History Item (VOIDCP5_). Do not input CC STAUP.

If the status change accelerates the account, and seems questionable, contact the tax examiner who input the STAUP.

3.14.2.4.28.5 (01-01-2009)
OPEN CONTROL (CTRL) BASE

The tax module has an open IDRS case control that was opened before the notice generated.

Example:

18606021XX IRRQ.
The OPEN CTRL BASE category indicates that a tax examiner probably neglected to input or update a STAUP. That tax examiner is responsible for determining whether to issue or void the notice, and must input a STAUP.

Contact the tax examiner by phone (or follow local procedures) and take the requested action. Unless otherwise instructed, mail the notice.

Open Control Base

Module Status	Cause	Result	Resolution
47	TC 470 with no Closing Code pends to a module in IDRS notice status	Suppresses all IDRS balance due notices up to a maximum of 15 cycles, unless reversed by TC 472 or released by 29X, or 30X.	Void the notice. Input a History Item (VOIDCP5_). Do not input CC STAUP.
48	CC STAUP to Status 20, 22, 54, 56 or 58 is requested with a significant (non-zero) number of cycles to delay.		Void the notice. Input a History Item (VOIDCP_5). Do not input CC STAUP.

Keep functional management informed of the volume selected under this category.

3.14.2.4.28.6 (01-01-2009)
Pending Transactions

Pending transactions are present in the module.

Pending Transaction Decision Table

If the Pending transaction(s) is	Then
A tax, penalty, or interest abatement, or a TC 460 that will result in an abatement or One or more credits that do not equal or exceed the notice balance	Void the notice and input CC STAUP for 3 cycles to the same notice status.

An unpostable transaction	Use CCs UPTIN and UPCASZ to indicate whether the transaction belongs on the module. If it does: ThenVoid the notice. Input CC STAUP for 3 cycles to the same notice status. Otherwise Mail the notice.

Note:

Treat all PN 976/977s as pending adjustments.

Pending Transaction Dispositions

If the Pending Transaction(s) are	Then
TC 360, 420, 521, 550, 582, 620	Mail the notice.
TC 460, 470, 480, 520, 590, 596, 599 or 971 with action codes 010 or 012-016, 976/977	Void the notice, input history item, and input CC STAUP for 3 cycles.
TC 530	Void the notice and input a history item. Do not input CC STAUP.

Caution:

Route any CP 523 that is on the register for pending transactions to Service Center Collection Branch (SCCB).

3.14.2.4.28.7 (01-01-2009)
REJ Transaction

A campus reject payment transaction (TC's 610, 620, 640, 650, 660, 670, 680, 690 or 694 for other than .00) is pending on the entity module.

Example:

REJ640 CY 9841.
Research ENMOD to decide the tax module to which the payment tried to post.

If the payment tried to post to the notice module, use CC ERINV to decide the status of the reject.

REJ Transaction

If the payment	Then
Is no longer in ERS' inventory	Use CC SCFTR to decide when the payment will post. Void the notice. Use CC STAUP to reissue the notice in the cycle indicated by CC SCFTR.
Remains in ERS' inventory status by Thursday	Void the notice. Input CC STAUP for 3 cycles.
Is in REJECTS inventory	Contact the Reject Function to decide the appropriate disposition of the payment.

If the payment did not attempt to post to the notice module, mail the notice.

3.14.2.4.28.8 (01-01-2009)
Manual Refund

The tax module contains a TC 840 transaction not followed by a subsequent TC 846, 29X or 30X transaction. decide if the balance due can be readily resolved:
1. If a pending adjustment or credit transfer will satisfy the balance due, void the notice and input CC STAUP for enough cycles to allow the transaction to post.
2. If an adjustment or credit transfer needs to be input to resolve the debit balance, void the notice. Take the necessary account action. Input CC STAUP for enough cycles to allow the action to post.

If the TC 840 caused the balance due, decide the blocking series:

If the TC 840 Blocking Series is 6XX, it posted to the module in anticipation of a TC 841 being issued by Financial Management Service (FMS) to cancel a prior TC 846. Take the following steps:

TC 840 Blocking Series

TC 840 Blocking Series
1. Void the notice. Input CC STAUP for 6 cycles. Input a TC 470 to hold the Balance Due Notices until the TC 841 post. Prepare Form 3465, indicating the following:"TC 841 has not posted to this module. Please monitor until the TC 841 posts." Attach a TXMOD print and forward the case to Refund Inquiry. If the TC 840 Blocking Series is 9XX, it posted when Form 3753 was input to post a previous refund from another module to the notice module. Insufficient credit on the notice module means the taxpayer received an erroneous refund from the other module, but the originator billed the taxpayer on the notice module. Compare the TC 840 amount to the total tax on the notice module:

Notice Disposition

If the TC 840 is	And the TE responsible	Then
Less than the total tax		Mail the notice.
More than the total tax	For the TC 840 can be decided	Void the notice. Input CC STAUP for 6 cycles. Route the case and a TXMOD print to the TE, requesting case completion.


	For the TC 840 cannot be decided	Void the notice. Input a TC 470 with no Closing Code. Follow the Category D Erroneous Refund procedures in IRM 3.14.2.4.5.2(Erroneous Refunds).

If the TC 840 Blocking Series is other than 6XX or 9XX, review the account to decide if the TC 840 is an erroneous refund. If it is not an erroneous refund, mail the notice. If the TC 840 is an erroneous refund decide whether the TC 840 meets the CP 195 criteria and use the following chart to decide the disposition:

CP 195 Criteria

If the CP 195 criteria	And the TE responsible	Then
Is met		Void the notice. Input CC STAUP for 8 cycles to allow the CP 195 to generate.
Is met
Is not met	For the Erroneous Refund can be decided	Void the notice. Input CC STAUP for 6 cycles. Forward the case and a TXMOD print to the TE, requesting case completion.


	For the Erroneous Refund cannot be decided	The erroneous refund needs to be referred to the Accounting Function: Then void the notice. Input TC 470 with no Closing Code. Follow the Erroneous Refund Procedures in IRM 3.14.2.4.5.2(Erroneous Refunds).



		The erroneous refund does not need to go to the Accounting Function and Erroneous Refund procedures have not yet been followed: Void the notice. Input CC STAUP for 6 cycles. Send a 510C Letter. Follow the Erroneous Refund procedures in IRM 3.14.2.4.5.2 (Erroneous Refunds). DO NOT LABEL THE IDRS NOTICE. Erroneous Refund Procedures have already been followed: Mail the notice.

3.14.2.4.28.9 (01-01-2009)
914 CID

This category indicates that the notice module has a TC 914 (—Z Freeze) or a TC 916 (Z— Freeze) posted. Contact the Fraud Detection Area to decide the notice disposition.

3.14.2.4.28.10 (01-01-2009)
534 Statute

These instructions may be revised by Headquarters. Until they are revised please follow these instructions:
On IDRS check the CSED date:

Notice Disposition

IF	THEN
The CSED date is within 6 months of expiration	Mail the notice.
No date is in the CSED field	Check for an open TC 480/780 on TXMOD. IF there is an open TC, 480/780 then void the notice, input STAUP for 9 cycles, and put in basket marked "Open 480/780" .


None of the above applies	Mail the notice.
A TC 480 is followed by a TC 481	Mail the notice.
A TC 780 is followed by a TC 781	Mail the notice.

With this category Notice Review is alerting Collections that the CSED is about to expire and they must take whatever action to extend the collection date if needed.

Part 3. Submission Processing

Chapter 14. Notice Review

Section 2. BMF Notice Review (Cont. 2)

3.14.2 BMF Notice Review (Cont. 2)

3.14.2.4 Procedures

3.14.2.4.18 (01-01-2009)Adjustment Notices

3.14.2.4.18.1 (01-01-2009)CPs 210 and 220

Reminder:

Note:

Note:

Example:

Note:

Note:

Caution:

Note:

Note:

Example:

Note:

Note:

Note:

Reminder:

Note:

Note:

Note:

3.14.2.4.18.2 (01-01-2009)CP 225 — Notice of Credit Transfer

Note:

Note:

Note:

3.14.2.4.18.3 (01-01-2009)CP 260 — Credit Reversal Adjustment Notice

Reminder:

Note:

Note:

Reminder:

3.14.2.4.19 (01-01-2009)Selection Keys — Additional Review Required for Notices Generated Under Keys 09, 33, 52, 54, 55, 90 and 91

Note:

Note:

Note:

Note:

Caution:

Note:

Reminder:

Caution:

Note:

3.14.2.4.20 (01-01-2009)CP 173 — ES Penalty

Reminder:

Note:

Reminder:

3.14.2.4.21 (01-01-2009)Types of Penalties and Interest

Note:

3.14.2.4.21.1 (01-01-2009)Recomputation of Interest and Penalties — General

Note:

3.14.2.4.21.2 (01-01-2009)Failure to File (Delinquency) Penalty Recomputation

Note:

Note:

Note:

Note:

Example:

Note:

Note:

Example:

3.14.2.4.21.3 (01-01-2009)Failure to Pay Penalty Recomputation

Note:

Note:

Example:

Note:

3.14.2.4.21.4 (01-01-2009)Definitions

Example:

Example:

Note:

Note:

3.14.2.4.21.5 (01-01-2009)FTP Penalty Command Codes

Note:

3.14.2.4.21.6 (01-01-2009)Estimated Tax Penalty

3.14.2.4.21.7 (01-01-2009)Failure to Deposit Penalty

Note:

Note:

Note:

3.14.2.4.21.8 (01-01-2009)Computing Normal and Restricted Interest — General Rules and Information

Note:

Note:

3.14.2.4
Procedures

3.14.2.4.18 (01-01-2009)
Adjustment Notices

3.14.2.4.18.1 (01-01-2009)
CPs 210 and 220

3.14.2.4.18.2 (01-01-2009)
CP 225 — Notice of Credit Transfer

3.14.2.4.18.3 (01-01-2009)
CP 260 — Credit Reversal Adjustment Notice

3.14.2.4.19 (01-01-2009)
Selection Keys — Additional Review Required for Notices Generated Under Keys 09, 33, 52, 54, 55, 90 and 91

3.14.2.4.20 (01-01-2009)
CP 173 — ES Penalty

3.14.2.4.21 (01-01-2009)
Types of Penalties and Interest

3.14.2.4.21.1 (01-01-2009)
Recomputation of Interest and Penalties — General

3.14.2.4.21.2 (01-01-2009)
Failure to File (Delinquency) Penalty Recomputation

3.14.2.4.21.3 (01-01-2009)
Failure to Pay Penalty Recomputation

3.14.2.4.21.4 (01-01-2009)
Definitions

3.14.2.4.21.5 (01-01-2009)
FTP Penalty Command Codes

3.14.2.4.21.6 (01-01-2009)
Estimated Tax Penalty

3.14.2.4.21.7 (01-01-2009)
Failure to Deposit Penalty

3.14.2.4.21.8 (01-01-2009)
Computing Normal and Restricted Interest — General Rules and Information

3.14.2.4.21.9 (01-01-2009)
Interest and Examination Issues

3.14.2.4.22 (01-01-2009)
Reprocessing Returns

3.14.2.4.22.1 (01-01-2009)
Reprocessing/Adjusting E-filed Returns

3.14.2.4.23 (01-01-2009)
Case Resolution

3.14.2.4.23.1 (01-01-2009)
Controlling Cases

3.14.2.4.23.2 (01-01-2009)
Documenting Adjustment Cases

3.14.2.4.23.3 (01-01-2009)
Taxpayer Correspondence/Reply Procedures

3.14.2.4.23.4 (01-01-2009)
Entity Adjustments

3.14.2.4.23.5 (01-01-2009)
Tax Adjustments

3.14.2.4.23.5.1 (01-01-2009)
Blocking Series

3.14.2.4.23.5.2 (01-01-2009)
Reason Codes

3.14.2.4.23.5.3 (01-01-2009)
Hold Codes

3.14.2.4.23.5.4 (01-01-2009)
Priority Codes

3.14.2.4.23.5.5 (01-01-2009)
Debit Interest To Date (DB-INT-TO-DT)

3.14.2.4.23.5.6 (01-01-2009)
Return Processable Date (RPDT)

3.14.2.4.23.5.7 (01-01-2009)
Numbers/Item Adjustment Codes

3.14.2.4.24 (01-01-2009)
Credit Transfers

3.14.2.4.24.1 (01-01-2009)
Penalty Recomputations Caused by Credit Transfers

3.14.2.4.25 (01-01-2009)
Command Code STAUP

3.14.2.4.26 (01-01-2009)
Extensions

3.14.2.4.27 (01-01-2009)
Notice Disposition