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Part 21. Customer Account Services

Chapter 4. Refund Inquiries

Section 2. Refund Trace and Limited Payability

21.4.2  Refund Trace and Limited Payability

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21.4.2.1  (10-01-2006)
Refund Trace and Limited Payability Overview

  1. When a refund check is lost, stolen, destroyed or not received by the taxpayer, a refund trace can be initiated. This section of the Internal Revenue Manual (IRM) provides information and instructions for tracing. For Command Code (CC) CHKCL instructions, see Exhibit 21.4.2-1. , Command Code (CC) "CHKCL" Input . To access CC CHKCL, you must be able to access Integrated Data Retrieval System (IDRS). See IRM 21.4.3, Returned Refunds/Releases if there is an "S-" Freeze (Undelivered Refund) on the module. Additional IRM reference is IRM 21.5.6, Freeze Codes.

  2. The IRS works with other Federal agencies to trace refunds. Financial Management Service (FMS) and the Regional Financial Centers (RFCs) play key roles.

  3. Financial Management Service, an agency in the Treasury Department, issues and maintains records relating to United States (U.S.) Treasury checks and Electronic Funds Transfer (EFT) deposits. FMS headquarters are located in Hyattsville, MD.

  4. The Department of the Treasury delegates to FMS the authority to certify second payments to payees who did not receive their refund checks or whose check was lost, stolen or destroyed. In case of forgery, FMS certifies second payments, issues a refund check, and notifies the IRS to input Transaction Code (TC) 971, Action Code (AC) 078 or 079 (TC 971-078/TC 971-079) on Master File.

  5. Effective January 1, 1999, FMS is responsible for making refund offsets for child support and federal agency non-tax debts. This is referred to as the Treasury Offset Program (TOP), formerly the Debtor Master File Program (DMF). Refunds will be offset after IRS certifies them to FMS for payment but before the refund check or direct deposit is issued/made. See IRM 21.4.6, Refund Offset, for information on the TOP.

  6. Austin Financial Center (AFC) prints and mails the refund checks for all campuses. Sometimes during peak processing, AFC may ship to other FMS sites for check printing.

  7. The Regional Finance Center (RFC) keeps records for Treasury checks for seven years and on EFT deposit refunds for six years on the following information:

    • Check Number

    • Check Symbol

    • Social Security Number or Employer Identification Number

    • Amount of refund

    • Date refund was issued

    • Name and address on check

    • Routing transit number and account number

  8. If the actual refund amount differs from the amount the taxpayer claimed, the RFC inserts Notice 54, About Your Refund Check, into Individual Master File (IMF) refund checks and Notice 134, About Your Refund Check, into Business Master File (BMF) refund checks. In addition, FMS will attach a notice of offset if the original amount was reduced due to a TOP Offset.

  9. The Financial Processing Division (FPD) in Hyattsville, MD encompasses the total check claims process.

21.4.2.2  (10-01-2002)
What is a Refund Trace?

  1. A refund trace is the name of the process to track a stolen, lost, or misplaced refund check and replace an authorized refund to the taxpayer. Refund trace also includes initiating a forgery claim and verifying a direct deposit.

21.4.2.3  (11-15-2005)
Refund Trace Process

  1. The refund trace process is as follows:

    1. The taxpayer contacts the IRS and states his/her refund was lost, stolen, destroyed, or never received.

    2. An IRS employee inputs the trace Command Code (CC) "CHKCL " to IDRS (if oral statement criteria is met) or sends a Form 3911, Taxpayer Statement Regarding Refund, to the taxpayer (CC "CHKCL" is input when the taxpayer returns the Form 3911).

    3. CC "CHKCL" initiates the refund trace inquiry to the Financial Management Service (FMS).

    4. The original check is replaced or a photocopy of the cashed check along with a claim form is sent to the payee (taxpayer).

      Exception:

      If more than 4 weeks have passed since the TC 846 posted and the taxpayer is in bankruptcy, instruct the taxpayer to call the Insolvency Unit at 1-800-913-9358.

  2. The Spanish Form 3911 is now available. Customer Service Representatives (CSR) and Tax Resolution Representative (TRR) should offer this form when they determine it's the appropriate form and will provide the best service to the taxpayer.

21.4.2.3.1  (10-01-2005)
Processing and Controlling Refund Inquiries — Timeliness of Actions

  1. The processing steps on tracing a refund check will depend on whether the cutoff date for processing of the "check claim" has passed at Financial Management Service (FMS). If the cutoff date has passed, the case is referred to as a Limited Payability (LP), see IRM 21.4.2.4.7, Limited Payability (LP) Rules .

  2. The number of days allowed for timely processing of these cases is prescribed in IRM 3.30.123,Processing Timeliness: Cycles, Criteria and Critical Dates. At the campus option:

    1. Inquiries may be processed on a first-in, first-out basis.

    2. If the check claim involves an issued non-receipt refund check, a first read is acceptable to expedite processing.

  3. Cases resulting in check tracing actions must be (either a " check claim" or "LP Trace" ):

    1. Controlled within 14 calendar days of receipt by IRS.

    2. Controlled on Integrated Data Retrieval System (IDRS) within 3 work days of receipt from another function (include day of receipt).

    3. Initiated within 17 work days of the IRS received date.

      Note:

      Control using the earliest IRS received date.

    Send an interim response Letter 2645C, Interim Letter, when the check claim is not resolved within 30 days of the IRS received date, unless IRS has advised the taxpayer they will receive a response in a specific time frame. If the specific time frame is not met, send taxpayer an interim response.

21.4.2.3.2  (10-01-2006)
Non-Master File Refund Tracing

  1. If you cannot find a refund on the master file, it may have been a Non-Master File (NMF) refund. Use local established procedures to locate refund information. If no information is found using the following research procedures, ask the taxpayer to send copies of any correspondence about the refund. Information received may contain the necessary Document Locator Number (DLN). The Non-Master File DLN is tax class "6" and all refunds from NMF accounts must be manual refunds. Refer to IRM 21.4.4, Manual Refunds. Refund Inquiry employees can also find the required check information on Payments Claims and Enhanced Reconciliation (PACER) or Treasury Check Information System (TCIS).

  2. Most NMF accounts will now be found on the Automated Non Master File (ANMF). Depending on the location of terminals, Refund Inquiry employees may be able to do their own research on the ANMF accounts. Call sites should contact (by phone) their servicing center and request ANMF research. The center should FAX the research results back to the call site requesting the information.

  3. Employees must obtain a unique "login" through On Line 5081 requesting ANMF for research only. Request must be submitted through local management.

  4. The ANMF allows employees to read any entity or transaction on the file by following the instructions displayed with the "Research NMF " option.

    1. With the "Query" command, employees can research for a desired entity by entering the DLN or taxpayer identification number (TIN), Master File Transaction (MFT), and tax period of the desired record. If only partial information is available, enter the data for any fields shown on the screen page for the record you need.

    2. Use the "NMF Transcript" option to request a printed transcript (not a certified transcript) that will be delivered from the NMF unit on the following day. The ANMF system does not provide the " print screen" capability that would allow you to copy what you see on the research screen.

21.4.2.3.3  (10-01-2006)
Form 8599, Request for Missing Information Regarding Refund

  1. At times, taxpayers neglect to provide all necessary information when they return Form 3911, Taxpayer Statement Regarding Refund. Employees may either send the taxpayer the appropriate letter or may request the missing information by using the Form 8599, Request for Missing Information Regarding Refund.

  2. Upon receipt of incomplete Form 3911, (or Form 1310 or FMS 1133, etc.) action must be taken to return the form(s) to the taxpayer for the missing information. For example, when taxpayers file a joint return, both parties must sign the Form 3911. If only one signature is present, the Refund Inquiry Unit will return the Form 3911 and advise the taxpayer that both parties must sign the document.

  3. Refund Inquiry Unit will update the IDRS Activity Code with the form number, and "TOTP" (e.g., "3911TOTP" , "1310TOTP" , etc.). If this is the initial contact with the taxpayer and you have not initiated a claim with the Financial Management Service (FMS), "X" out the received date and close the case.

  4. If a claim has been initiated with FMS, Refund Inquiry Unit will use the appropriate Category Code and keep the case open in "B" status until the final disposition is received. This will provide an audit trail for any subsequent contact by the taxpayer that IRS returned the form as incomplete.

  5. The Form 8599, Request for Missing Information Regarding Refund is a two part form. Both parts will be forwarded to the taxpayer along with the incomplete form(s). Always include:

    • A PRE-ADDRESSED return envelope.

    • Unit Stop Number on the face of the return envelope.

21.4.2.4  (10-30-2007)
Refund Trace Actions

  1. The procedures for processing a refund trace request are the same for telephone, Taxpayer Assistance Centers, or written inquiries.

    1. If the refund is less than one year old, input of the Command Code (CC)"CHKCL" is required to begin the refund trace. See Exhibit 21.4.2-1, Command Code (CC) "CHKCL" Input.

    2. Beginning October 1, 2004, Limited Payability refunds over one year old no longer must be worked by the issuing center. Refunds over one year old must be processed by a Refund Inquiry Unit, because they do not meet oral statement criteria. Send taxpayer a Form 3911, Taxpayer Statement Regarding Refund, with a return envelope of your affiliated Refund Inquiry Unit. DO NOT input CC CHKCL. Advise the taxpayer they can either mail or fax their request. Provide the address and fax number of your affiliated Refund Inquiry Function. For fax numbers see the Campus Directory http://serp.enterprise.irs.gov/databases/who-where.dr/natdirectory.dr/srv-cntr-toc.htm located on Servicewide Electronic Research Program (SERP) under the Who/Where tab. Refund Inquiry employees see IRM 21.4.2.4.7 , Limited Payability (LP) Rules.

  2. The following refund issues must be worked at the campus that issued the refund check. Send completed Form 3911 with taxpayer's signature or Form 4442, Inquiry Referral (those based on oral statement) to the appropriate campus.

    • Manual refunds (transaction code TC 840)

    • Incorrect taxpayer shown on ENMOD

    Note:

    When case must be sent to the center which originated the refund DO NOT request the original return. The center receiving the case must request the return. You may notify the center you are sending the case so they may immediately request the original return thereby reducing the time the taxpayer must wait for a response.

  3. All taxpayer inquiries concerning direct deposit should be treated as any other inquiry, except refunds issued through a Refund Anticipation Loan (RAL) or Refund Anticipation Check (RAC). Refer the taxpayer to the financial institution that issued the RAL/RAC. The input of the CC "CHKCL " will cause the generation of an Financial Management Service (FMS) Letter 150.2 (issued if trace request is within 60 days of the refund issue date) or 150.1 to the financial institution. This serves as an official request of the bank to search for the electronic funds transfer. See IRM 21.4.1.4.7.1, Direct Deposit of Refunds for more information on direct deposit refunds.

  4. Command Code (CC) CHKCL can be used to begin refund trace action if the taxpayer meets oral statement criteria and any one of the following conditions occur.

    • Research shows the refund was issued and taxpayer states the refund was lost, stolen or destroyed.

    • Research shows the refund check was issued four weeks ago and taxpayer has not received their refund.

    • Research indicates the refund by direct deposit was issued 5 days ago and the taxpayer has not received their refund and the financial institution has no record of the deposit.

      Reminder:

      The above criterion also applies to accounts on Customer Account Data Engine (CADE).

  5. You may accept an oral statement from only Individual Master File (IMF) taxpayers if all of the following conditions are met.

    • Refund issue date TC 846 date is within 12 months of the current date.

    • Caller is the taxpayer or the taxpayers authorized representative.

    • Tax return filed is an Individual tax return.

    • Filing Status is other than Married Filing Joint (MFJ).

    • Issuance of the refund check was at least four (4) weeks prior to inquiry, direct deposit issued at least 5 days prior to inquiry, or the taxpayer states the check was lost, stolen or destroyed, then no time frame would be involved.

    • Taxpayers with valid Taxpayer Identification Number (TIN).

    • Taxpayers module does not contain a TC 841 or TC 740 on the module for this specific refund.

    • Taxpayer resides at the address currently on record (ENMOD). If taxpayer resides at a different address DO NOT change the address. DO NOT input CC CHKCL. Advise taxpayer you are mailing them a Form 3911, Taxpayer Statement Regarding Refund to complete, sign and return the form in the envelope provided. Advise taxpayer they can either mail or fax their request. Provide the address and fax number of your affiliated Refund Inquiry Function. For fax numbers, see the campus directory located on SERP under the Who/Where tab, http://serp.enterprise.irs.gov/databases/who-where.dr/natdirectory.dr/srv-cntr-toc.htm . If Married Filing Joint, advise taxpayer both spouses must sign. Send taxpayer a return envelope with the address of your affiliated Refund Inquiry Function.

    Note:

    A written statement can be accepted for CC CHKCL input provided all oral statement criteria are met and the correspondence is signed by the taxpayer or their authorized representative.

    Reminder:

    Form 3911 can be used as written documentation to change a taxpayer's address. Upon receipt of Form 3911, update the address and input CC CHKCL. However, if the refund check was returned undelivered by the Postal Service, do not input CC CHKCL. See IRM 21.4.3.4.3, Undeliverable Refund Checks.

    Note:

    Refer to IRM 21.1.3, Operational Guidelines Overview, for the appropriate disclosure authorization procedures.

  6. If oral statement criteria is met, see Exhibit 21.4.2-1, Command Code (CC) " CHKCL" Input.

21.4.2.4.1  (10-01-2008)
Form 3911, Taxpayer Statement Regarding Refund

  1. If the contact does not meet oral statement criteria.

    1. If the refund time frame prescribed in IRM 21.4.1.3.4 , Refund Issued But Lost, Stolen, Destroyed or Not Received, has been met, send taxpayer a Form 3911, Taxpayer Statement Regarding Refund. Be sure to verify the taxpayer's mailing address. If taxpayer has moved since filing their return and their current address is not on record (ENMOD), send Form 3911. DO NOT UPDATE ADDRESS ON ENMOD.

    2. Advise taxpayer the Form 3911 is available through the internet on irs.gov. See IRM 21.3.6.4.2 , Other Methods of Obtaining Forms and Publications .

    3. Advise taxpayers they must sign the Form 3911. If joint return, both taxpayers must sign.

    4. Advise taxpayer they can either mail or fax their request. Provide the address and fax number of your servicing Refund Inquiry function.
      For fax numbers, see the campus directory located on SERP under the Who/Where tab, http://serp.enterprise.irs.gov/databases/who-where.dr/natdirectory.dr/srv-cntr-toc.htm .

    5. Using Command Code (CC) "ACTON" ; input a History Item on Integrated Data Retrieval System (IDRS) - "H,39112TP."

    6. If forwarding the Form 3911 to another campus with an open Refund Inquiry Unit control, create a history item stating - 39112SC.

  2. If the taxpayer returns the Form 3911, review the form for completeness. If a joint return, both taxpayers must sign. Update ENMOD if an address change is required.

  3. If a Form 3911 mailed to the taxpayer is returned by the United States Postal Service as undeliverable, the Refund Inquiry function will research for a new or corrected address or a phone number to contact the taxpayer. If a corrected address is found, re-mail the Form 3911. If no new address is located, destroy the Form 3911.

21.4.2.4.2  (10-01-2006)
Input Command Code (CC) "CHKCL"

  1. CC "TXMOD" must precede input of CC " CHKCL" . If "TXMOD" is not available, use CC "MFREQC" . Input CC "CHKCLR" to request the "CHKCL" screen format. The following items generate from the preceding "TXMOD" :

    • CC "CHKCL"

    • Social Security Number (SSN)

    • Master File Transaction (MFT)

    • Tax Period

    • Name Control

    Caution:

    DO NOT input CC "CHKCL" if one or more Treasury Offset Program (TOP) offsets, TC 898s, were done for the full amount of the refund TC 840/846. Refer the taxpayer to the Financial Management Service (FMS) Help Desk as described in IRM 21.4.6.5.1, Taxpayer Inquiries on TOP Offset. The FMS Help Desk telephone number to be provided to the taxpayer is 1-800-304-3107. This is the only FMS number that can provide the taxpayer information regarding their TOP issue. Do not provide the taxpayer with other FMS numbers to call.

  2. For the input of the CC "CHKCL" , see Exhibit 21.4.2-1, Command Code (CC) " CHKCL" Input.

  3. Input information on the CC "CHKCL" format. Advise taxpayers they will receive either a replacement refund check or a copy of the check with a claim form within six weeks.

21.4.2.4.3  (10-01-2005)
Processing the Command Code (CC) "CHKCL" Trace Request

  1. When CC "CHKCL" is input, the request is sent electronically to the Regional Finance Center (RFC). The request is then forwarded to Hyattsville, Maryland, where Financial Management Service (FMS) determines the status of the check, cashed or not cashed. Trace request for direct deposits are processed at RFC. Refer to the table below for resulting action.

    If And Then
    Check has not been cashed. Check is less than one year old. Credit is returned to the taxpayer’s account and a new refund is issued.
    Check is more than one year old. Check is automatically cancelled (TC 740) and reissued.
    Check has been cashed. Check is less than one year old. FMS will send photocopy and claim Form 1133 to the taxpayer.
    Check meets Limited Payability criteria. A photocopy of the cashed check is sent to the Refund Inquiry Unit to determine forgery.

    Note:

    Unlike the processing of regular check traces, "Limited Payability" procedures do not apply to direct deposit cases. It does not matter if the direct deposit is older than 14 months old. A "Non-receipt Code" of " N" should be used regardless of the age of the direct deposit.

    Reminder:

    When a taxpayer states he is inquiring about his refund and the refund was a Refund Anticipation Loan (RAL) or a Refund Anticipation Check (RAC), refer taxpayer to their preparer or the financial institution where their refund was deposited.

    Caution:

    Remember, all taxpayer authentication rules and security requirements are the same for all refund accounts. It does not make a difference how the refund was issued, either direct deposit to the taxpayer's account, a "RAL or RAC" from the preparer, or issued via paper check.

21.4.2.4.4  (10-01-2006)
Responding to Taxpayers Subsequent Inquiries

  1. The taxpayer may subsequently inquire after initiation of a refund trace on their missing refund check or non-receipt of a direct deposit refund. Use the following table in your attempt to resolve the taxpayer's issues.

    If Then
    Taxpayer calls to check the status of his/her case. 1. Research Integrated Data Retrieval System (IDRS) to determine the Disposition Code of the claim.
    2. Customer Service Representative (CSR) should only refer case to the tax examiner with control if after complete research, he/she cannot answer the taxpayer's inquiry.
    Taxpayer finds his/her refund after Form 3911, Taxpayer Statement Regarding Refund, was sent. Check the Disposition and Status Codes to determine if the taxpayer can cash the check. See Exhibit 21.4.2-2 , Disposition Code Chart Non-Receipt Claims CHKCL Claims Only.

    Note:

    A refund trace cannot be interrupted if the campus deadline to "DQ" the trace has passed. If it is too late to cancel the trace and the trace was valid, advise the taxpayer to wait for a replacement check and return the original when the replacement is received.

    More than three weeks from the History item "3911TORDCC" . 1. Advise taxpayer you are checking the status of their claim.
    2. Advise taxpayer he/she will receive a contact within 30 days.
    3. PrepareForm 4442, Inquiry Referral, and send to the responsible Refund Inquiry Function.
    Six weeks after taxpayer sends Form 3911, Taxpayer Statement Regarding Refund. 1. Research IDRS for the claim status.
    2. Determine the latest disposition or status code. Frequently used disposition and status codes are described in Exhibit 21.4.2-5, Disposition and Status Codes - Additional Action Time Frames.
    3. If you are a CSR at a call site and you cannot resolve the taxpayer's inquiry, you may need to refer (FAX) the case to the Refund Inquiry Unit which either now controls or had a prior control on the account. Advise the taxpayer to expect a response within 15 days.
    Taxpayer received FMS Form 1133 and check was cashed by someone other than the taxpayer. Advise the taxpayer to complete the claim form (FMS Form 1133) and return it to FMS to pursue the claim.
    Taxpayer received FMS Form 1133 and does not wish to pursue the claim. Advise the taxpayer no further action is required. Taxpayers may keep the copy of the check for personal records.
    Taxpayer finds the original check and also receives a replacement. Advise the taxpayer to return the original as soon as possible. Input a History Item on TXMOD:H:CHKFOUND.

  2. Upon receipt of cases from the field where it has been more than three weeks since the CC "CHKCL" was input and no Disposition Code received, the Refund Inquiry Unit is to reinput the CC " CHKCL" and advise the taxpayer of the action.

21.4.2.4.4.1  (10-01-2007)
Subsequent Inquiries, With Status Codes, Without Prior Forgery Determination (CSR's and Refund Inquiry Unit)

  1. If a subsequent claim has been initiated, Command Code (CC)" CHKCL" was input, complete the following:

    1. If the Disposition Code "11" is on IDRS, provide the check information (check and serial numbers) using CC IMFOL# and have the taxpayer contact the Financial Management Service (FMS) by phone (800) 826-9434 (only English speaking assistance is available on the Check Claims toll free number) or by sending a letter to FMS at the following address:

      Department of Treasury
      Financial Management Service
      Check Claims Branch
      P.O. Box 515
      Philadelphia, PA 19106

    2. If you cannot determine the Disposition Code (history has fallen off of IDRS), a "Transaction Code (TC) 971-011" is on the module and the refund does not meet Limited Payability criteria, provide the check information (check and serial numbers) using CC IMFOL# and refer the taxpayer to FMS per paragraph (1) (a) above.

    3. Close the case.

  2. This applies only to refunds checks issued within 14 months of the TC 971-011 date and there is not a TC 841 or TC 740 matching the TC 846/840 date.

  3. For more information on refund checks issued more than 12 months from the current date, see IRM 21.4.2.4.7, Limited Payability (LP) Rules.

  4. If a refund was direct deposit, refer to IRM 21.4.1.4.7.1 , Direct Deposit of Refunds.

21.4.2.4.5  (10-01-2006)
Disposition Status Codes

  1. The Refund Inquiry Unit will monitor cases after input of Command Code (CC) "CHKCL" to ensure proper actions. See Exhibit 21.4.2-2, Disposition Code Chart Non-Receipt Claims CHKCL Claims Only and Exhibit 21.4.2-5., Disposition and Status Codes Additional Action Time Frames to determine if follow-up action(s) is required.

  2. The following actions occur once the refund trace reveals the check has been cashed:

    1. Financial Management Service (FMS) sends a copy of the check with a FMS 1133 Claim Form directly to the taxpayer.

    2. The taxpayer returns the Form 1133 directly to FMS, except in case of Limited Payability.

    3. IRS will receive a Disposition Code "11" and, if no prior letter advising taxpayer of the trace was sent, Refund Inquiry will send Letter 206C, Refund Inquiry; Copy of Check Requested/Check Being Traced (Form 1133), with paragraph "K" . Provide the check information and close case.

    4. Refund Inquiry will forward subsequent claims received to FMS and notify the taxpayer.

    5. Depending on FMS' response, taxpayer may receive either a replacement refund, denial letter, or interim response.

  3. FMS sends a Claims Disposition Notice to the IRS showing the final or interim disposition. In addition, FMS notifies taxpayer of the status of the claim.

    Note:

    For more information on the Claims Disposition Notice, see IRM 21.4.2.4.13, Financial Management Service (FMS) Claims Disposition Notice (CDN).

21.4.2.4.6  (10-01-2006)
Refund Inquiry Unit Processing

  1. Input of Command Code (CC) "CHKCL" generates a request of non-receipt claims and stop payment information. This information is transmitted to the Regional Finance Center (RFC) for processing. The RFC will:

    1. Compare information with their records.

    2. Transmit information to IRS indicating status or disposition of claim.

  2. RFC procedures for processing the request are given in the table below:

    If Then
    RFC is unable to read the information transmitted. RFC requests the campus to transmit again.
    RFC is able to read the information. RFC retains the information for 15 days.
    Claims information is processed by RFC. Information is used to update open control bases with Status of claim.

  3. The non-receipt claim must:

    1. Be processed in five (5) working days.

    2. Include date of receipt, releasing stop, and disposition.

    3. Determine status of payment or any previous action taken.

    Note:

    The Disposition Code listing goes back to the Refund Inquiry Unit of the center that inputs CC "CHKCL " or center affiliated with the office which input the CC " CHKCL" .

    Note:

    When there is a discrepancy between the payee name on the refund check and non-receipt claim, the RFC will use the payee name.

  4. Depending on the Status of the refund check one of the following occurs:

    If And Then Generated Code at FMS
    Non-receipt Codes: "N" , "L" , "D" , "S" , or "E" . Check is outstanding. A recertified refund is automatically issued. D
    Non-receipt Codes: "H" or "X" Check is outstanding. Sets "P" Freeze. Credit must be released (i.e., manual refund, credit transfer).
    Note: If the trace involves an Advance Child Tax Credit refund, refer to IRM 21.6.3.4.1.36.2,Refund Issues. If the trace involves an Economic Stimulus Payment, refer to IRM 21.6.3.6.6, Refund Issues.     		D
    "P" for Photocopy request for spousal dispute. Check outstanding Disposition " 33" . Send Letter 1219C , Refund Inquiry; (Joint Form 3911) Requires Certification: Form 1040, with appropriate paragraphs. K
    "P" for Photocopy request for taxpayer’s records. Check outstanding Disposition " 33" . 1. Send appropriate "C" letter.
    2. Advise the taxpayer the check has not been paid.
    3. Include a Form 3911, Taxpayer Statement Regarding Refund.
    4. Advise the taxpayer if they wish to request a replacement check to complete the Form 3911 and return it to the center which issued the check.
    5. If an open control base, close with Activity Code "3911TOTP" .     		K
    Non Receipt Code of " C" . Check Cashed FMS sends Certified photocopy of the cashed check. L
    All non-receipt codes except " C" or
    "P" .     		Refund less than 14 months old and check cashed. FMS sends photocopy and 1133 Claim Form to taxpayer.  
    Non-receipt code "P" and Limited Payability.
    Note: Use of any other non-receipt code on a Limited Payability check will cause a Disposition 18 and FMS will not send a check copy.     		  1. FMS sends photocopy only to the campus.
    2. The campus determines whether the check was forged or sends a Form 13818, Claim Against the United States for the Proceeds of an Internal Revenue Refund Check, and the check photocopy to the taxpayer.     		 

21.4.2.4.7  (10-01-2006)
Limited Payability (LP) Rules

  1. The Competitive Equality Banking Act of 1987, commonly referred to as Limited Payability (LP), established rules for cashing government checks:

    • All government checks issued on or after the effective date of October 1, 1989, are valid for 12 months after the issue date of the check.

    • Refund checks issued prior to October 1, 1989, were to be cashed by September 30, 1990.

    • After 12 months and the cancellation of the refund checks, the credits are returned to the taxpayer’s accounts.

    • The law also places a limitation on the time IRS can recover funds from the banks or financial institutions.

  2. Prior to the Competitive Equality Banking Act, a government check could be cashed regardless of the time lapse since its issue. The act did not erase the underlying responsibility to pay.

  3. Under the Limited Payability provision, checks expire (are not negotiable) the last business day of the 12th month from the issue date. See table in paragraph (5) below.

  4. Taxpayers may submit claims for refund checks after the one-year time limit has expired. These claims are subject to Limited Payability provisions. Claims must be submitted to the Financial Management Services (FMS) by the 15th day of the 14th month, by using command code (CC) CHKCL with Non-Receipt codes N, L, S, D, E, H, or X. See chart in paragraph (5) below.

  5. The chart below provides the refund issue date, the date a check can no longer be negotiated, and the last date an LP claim can be submitted.

    Refund Issue Date is 12 Months after check date. Check cannot be cashed 15th day of the 14th month after issue date
    January February 1 March 15 (of the following year)
    February March 1 April 15
    March April 1 May 15
    April May 1 June 15
    May June 1 July 15
    June July 1 August 15
    July August 1 September 15
    August September 1 October 15
    September October 1 November 15
    October November 1 December 15
    November December 1 January 15
    December January 1 (second subsequent year) February 15

  6. The CP 32, IMF New Refund Check, and CP 32A, BMF New Refund Check, is sent to the taxpayer when an expired check is reissued. Refer to IRM 21.3.1, Taxpayer Contacts Resulting From Notice Issuance.

  7. LP claims received after the 15th day of the 14th month, Non-Receipt code P or C must be used. FMS will only provide a photocopy of the check. Before inputting CC CHKCL to request a photocopy on an LP check, research the Payments Claims and Enhanced Reconciliation (PACER) or TCIS systems. If not available on either system, input CC CHKCL. All LP claims must be processed by IRS.

  8. Any CC CHKCL input after the 15th day of the 14th month with a Non-Receipt code other than P or C will receive a Disposition Code 18 (if check is cashed) and will NOT create an FMS claim. See Exhibit 21.4.2-2, Disposition Code Chart Non-Receipt Claims CHKCL Claims Only, for Disposition Code 18.

    Note:

    FMS only keeps records of Treasury checks for seven years after the issue date and six years for Electronic Funds Transfer (EFT) deposits. A forgery claim submitted after seven years cannot be honored.

  9. If FMS records show the refund check is still outstanding on the 15th day of the 14th month, then FMS will cancel the refund and return the credit to IRS. It takes about three weeks for the credit to post on the tax module as a TC 740 with Blocking Series 66666. See IRM 21.4.2.4.7.2, Limited Payability Computer Paragraph (CP) 32/237.

    Note:

    The Limited Payability limitations do not apply to direct deposit traces. Use Non-Receipt code N on all direct deposit traces using CC CHKCL, regardless of the age of the refund.

21.4.2.4.7.1  (10-01-2006)
Refund Credits/Debits TC 740/TC 841/TC 843 — Financial Management Service Reason/Cancellation Codes

  1. Financial Management Service (FMS) returns credits to IRS through the Government On-Line Accounting Link Systems (GOALS). FMS Headquarters Operations in Hyattsville, Maryland sends detailed supporting information to Martinsburg Computing Center (MCC).

  2. The Treasury Receivable, Accounting and Collection System (TRACS) replaces the SF1081 and includes three types of transactions:

    • Limited Payability.

    • Reclamation credits.

    • Payment Over Cancellation (POC) debits.

  3. MCC sorts the transactions as either Individual Master File (IMF), Business Master File (BMF), or Miscellaneous. IMF and BMF transactions are directly posted to taxpayer's Master File accounts and MCC forwards three separate listings for each of the three categories to the campus for further processing. These listings are to be used by the Refund Inquiry employees as research tools.

  4. The listings are titled as follows:

    • TRACS LISTINGS: RECLAMATIONS (REC)

    • TRACS LISTINGS: UNAVAILABLE CHECK CANCELLATION (UCC)

    • TRACS LISTINGS: PAYMENT OVER CANCELLATION (POC)

  5. Transactions are posted as:

    • Transaction Code (TC) 740 – Limited Payability (LP) cancellations — Block and Serial "66666" , "S-" Freeze is set. Credit returned on checks automatically cancelled after expiration of one (1) year negotiability period as provided by the Limited Payability Law.

      Exception:

      Must be the same credit, see paragraph (8) below.

    • TC 841: – Reclamation Credits — Block and Serial " 88000" , "P-" Freeze is set.

    • TC 841: – Unavailable Check Cancellations ( Form 1184 request) — Block and Serial "88111 " , "P-" Freeze is set.

    • TC 841 - Unavailable Check Cancellations (non-receipt codes H or X) -- Block and Serial "88888" , no P- Freeze set.

    • TC 843: – Payments Over Cancellations — Block and Serial "55111" .

      Note:

      See Exhibit 21.4.2-3, Reason for Cancellation Codes and Generated Account Information.

  6. The Reason Codes for the TC 740 are:

    • Code 02 – Checks returned to the Regional Finance Center (RFC) by the Postal Service as undeliverable. Credits will post as TC 740 with the Block and Serial Number "99999" and set an "S-" Freeze.

    • Code 40 – (Used in 1992 only) Credit returned on checks automatically cancelled after the expiration of 1-year negotiability period as provided by Limited Payability Law. Credits will post as TC 740 with a Block and Serial Number "666XX" . Credits under $10.00 and over $1,000 will set an "S-" Freeze.

  7. The Reason Codes for the TC 841 are:

    • Code 01 – Checks intercepted per IRS request. Credits will post as TC 841 with the Block and Serial Number "55555" and set a "P-" Freeze.

    • Code 03 – Checks returned to the RFC for reasons other than undeliverable. Credits will post as TC 841 with the Block and Serial Number " 99999" and set a "P-" Freeze.

    • Code 08 – Checks returned on outstanding check as a result of a Check Claim ( "CHKCL" Status "32" ), input with non-receipt codes "H" or "X" . Credits will post as TC 841 with the Block and Serial Number " 88899" and set a "P-" Freeze.

    • Code 09 – Credits returned as the result of a check claim when the check is outstanding. Credits will post as TC 841 with the Block and Serial Number "88888" and does NOT set a freeze.

    Note:

    IMFOL and TXMOD will display Financial Management Service (FMS) Cancellation Dates for TC 740 and 841.

  8. Limited Payability (LP) cancellation credits between $10 and $1,000 will not set a freeze unless the same credit was previously returned as an LP cancellation credit. A refund check is automatically reissued on first time LP cancellations. A second or subsequent LP cancellation remains frozen on the account and eventually results in a TC 388 "Statute Expiration Clearance" to zero balance if credit is never released.

21.4.2.4.7.2  (10-01-2005)
Limited Payability Computer Paragraph (CP) 32/237

  1. Credits between $10 and $1,000 will automatically release to the taxpayer. A CP32, New Refund Check or CP 237, Limited Payability is issued to the taxpayer explaining the original check was not cashed and a replacement check is being issued. If the credit is less than $10 no notice is generated and no further action will be taken unless the taxpayer contacts IRS.

  2. Credits over $1,000 will generate CP 32A, New Refund Check or CP 237A, Limited Payability notice to the taxpayer and set an "S-" Freeze. Taxpayers must contact IRS for the refund to be released. If the taxpayer responds by phone, notice, or letter, see IRM 21.4.2.4.10, Processing Limited Payability (LP) Responses.

  3. CP 32 and CP 32A will no longer be routed to the Refund Inquiry Unit for 100% review. These notices will be mailed directly from Machine Services. The new notice format sufficiently explains the Limited Payability (LP) expired check and subsequent refund to the taxpayer. Taxpayers receiving a CP 32A or CP 237A, Limited Payability notice must respond by phone or mail before a refund can be re-issued.

    Note:

    LP Cancel transcripts are identical to CP 32A or CP 237A. Transcripts can be destroyed when received.

21.4.2.4.8  (10-01-2005)
Responding to Inquiries about Expired Refund Checks

  1. Employees other than those at the Refund Inquiry Unit must follow the table below:

    If Then
    Taxpayer wishes to return an expired check. Follow returned check procedures in IRM 21.4.3.4.6, Resolving Returned Expired Refunds Limited Payability.
    Expired check on the account with an "S-" freeze. Follow "S-" Freeze procedures in IRM 21.4.3, Returned Refunds/Releases.
    Expired check with no credit on the module. Notify the taxpayer of the status and follow normal refund inquiry procedures if taxpayer indicates check was not received. See IRM 21.4.1, Refund Research .

    Note:

    If original refund was a manual refund, it may need to be reissued manually. Refer to IRM 21.4.4 , Manual Refunds.

    Note:

    Refer to IRM 21.4.1, Refund Research and IRM 21.4.4, Manual Refunds.

21.4.2.4.9  (10-01-2006)
Processing Limited Payability (LP) Cancellations on Checks Dated After 9/30/1989

  1. The following account actions occur automatically:

    If And Then
    First-time LP cancellation $10 to $1,000.   1. Refund is automatically reissued (unless other freezes on the account that prevent refund).
    2. A Computer generated notice CP 32, New Refund Check or CP 237, Limited Payability, is generated.
    There is a second or subsequent LP cancellation of $10 to $1,000. Taxpayer does not contact the IRS. 1. No further action is taken.
    2. LP cancellation remains frozen
    3. Transaction Code (TC) 388 statute expiration clearance posts.

    Note:

    TC 389 will post and reissue the refund when the account is brought back from retention.

    LP cancellation under $10.   1. No automatic release.
    2. Will post as "S-" Freeze.
    3. A CP 32 or CP 237 is not issued.
    4. No further action is taken.
    LP cancellation over $1,000.   No automatic release. A CP 32 or CP 237 is issued.

  2. LP cancellation credits post to an account as a TC 740. The posted credits have a Document Location Number (DLN) with a blocking series-serial number "66666" .

  3. Credits over $1,000 and credits between $10 and $1,000 that are frozen for other reasons, including second LP cancellations, will generate complete master file transcripts and CP 32, New Refund Check, and CP 237, Limited Payability. These CP notices are identical to CP 32A and CP 237A except for the routing instructions.

21.4.2.4.10  (10-01-2006)
Processing Limited Payability (LP) Responses

  1. If taxpayer contacts IRS by phone, or paper, use the following table to release a refund on a LP response.

    If And Then
    Original refund was a generated refund, Transaction Code (TC) 846. 1. S- Freeze and credit on module, and no open control present on the account (credit tax period or other tax periods). 1. Release the credit using Command Code (CC)CHK64 or a manual refund, if appropriate.
    2. See Note Below.
    Original refund was a manual refund.   1. Further research may be necessary.
    2. Replacement refund may need to be manual.

    Note:

    CC "CHK64" input without further action requires no source document. Enter " No Source Document (NSD) LP Release" or other appropriate remarks. If IRS is not at fault, DO NOT allow additional interest. Suppress the undeliverable notice. See IRM 21.4.3.4.6 , Resolving Returned Expired Refunds Limited Payability for additional information.

    Reminder:

    CC "CHK64" does not allow for the input of a Bypass Indicator (BPI). Injured Spouse refunds must be issued via Manual Refund. A manual refund is also needed for a deceased taxpayer along with the appropriate documentation. Refer to IRM 21.4.4 ,Manual Refunds and IRM 21.4.6, Refund Offset.

  2. Take further action on the account if needed:

    1. Contact other functions of IRS.

    2. Contact the taxpayer. See Letter 533C, Refund Check Undelivered or Not Negotiated. Suspend the case and give the taxpayer 30 days to respond.

21.4.2.4.11  (10-04-2006)
Check Cashed/Limited Payability (Possible Forgery)

  1. The following directions are for processing claims on cashed refund checks that are now Limited Payability (LP). If a copy of the check is needed, use Payments Claims and Enhanced Reconciliation (PACER) or Treasury Check Information System (TCIS). When securing a check copy using TCIS/PACER, input a TC 971-011 on TXMOD using the date you secure the check.

  2. Employees may deny the taxpayer's claim based on the check copy or other information. If the check meets Limited Payability criteria and the taxpayer indicates the check involves forgery, the claim should be denied unless the IRS erred in sending the check to the taxpayer, i.e., transcription error on the address. However; if the employee is unsure as to a specific determination, send the taxpayer a Form 13818, Claim Against the United States for the Proceeds of an Internal Revenue Refund Check, with a return envelope for your Refund Inquiry Function. When sending a forgery claim form or denying the taxpayer's claim:

    1. Close case with Transaction Code (TC) 290 .00 using case file as a source document. Attach a copy of the Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid. If a copy of the check was needed to work the case, a copy of the check must be included in the case file.

    2. Notate in Activity "F13818TOTP" or " 2218CTOTP."

  3. When the taxpayer returns the completed and signed Form 13818, the Refund Inquiry tax examiner must:

    1. Review the claim form for all required information and signatures. Compare endorsement(s) on the check to available samples of taxpayer signatures.

    2. Review the taxpayer's answers to questions on the Form 13818.

    3. Determine if the IRS erred in sending the refund check to the incorrect address.

    4. Decide to continue processing or deny the claim.

  4. If the IRS did not send the check to the correct address, follow the chart below.

    If ... Then ...
    It appears the taxpayer benefited from the check proceeds. 1. Deny the claim.
    2. Send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid, with appropriate paragraphs.
    It appears the check was cashed with taxpayer's permission. 1. Deny the claim.
    2. Send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid.
    Check is stamped with a business endorsement different from name on "ENMOD" and no connection to the taxpayer can be found. Allow the claim.
    There is no endorsement other than the bank's endorsement on the check. No signature appears on the check. The claim should be denied. Banks do not normally accept government checks without an endorsement unless, the check is being deposited to the taxpayer's account.
    There is indication the taxpayer is making a fraudulent claim. 1. Deny the claim.
    2. Send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid,with an explanation to the taxpayer.
    No check copy or endorsement is available for handwriting analysis. 1. Review taxpayer's account for any prior or subsequent year claims (TC 971-011).
    2. Request any documentation such as:

    • Bank Statements

    • Police Reports

    • Taxpayer Letters

    • Anything the taxpayer has that convinces him/her the check was not received or information you feel may be helpful.

    You are unable to deny the claim on the basis of items on Form 13818, or preceding boxes of this table. Allow the claim.

    Note:

    The above guidelines are for the most common occurrences. If you have a case that is not covered in the table above, consult with your manager, senior, or lead tax examiner.

  5. After all information is considered:

    If ... And ... Then ...
    Claim is valid.   Continue to process, see IRM 21.4.2.4.14 , Account 6565 Processing for Refund Inquiry Function .
    Additional processing is required. Examiner cannot make decision to settle. Prepare claim to send to National Forensics Laboratory (NFL). See paragraph (7) below.
    Denying the claim.   Send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid, with appropriate paragraphs.

  6. If you believe the taxpayer’s claim is valid or no specific reason to deny claim can be found, allow the claim following the procedures in IRM 21.4.2.4.14, Account 6565 Processing for Refund Inquiry Function.

  7. Send the case to the National Forensics Laboratory (NFL) for signature comparison only if you cannot determine if the endorsement on the U. S. Treasury check is a forgery. It may be necessary to request NFL assistance in the following instances:

    • The endorsement is written , while the samples are printed. Obtain written samples from the taxpayer before forwarding to NFL.

    • The endorsement is printed , while the samples are written. Obtain printed samples from the taxpayer before forwarding to NFL.

    • A stylized signature appears on the check and legible writing is used on Form 13818 or Form 3911,Taxpayer Statement Regarding Refund.

    • Legible writing is used for the endorsement and stylized signatures are used on the Form 13818 or Form 3911, Taxpayer Statement Regarding Refund.

  8. When sending the case to NFL, review the check copy to make sure the check number, symbol number, payee name and amount are correct. Send the case to the address below with the following information:

    • Photocopy check (front and back), completed Form 13818, and any taxpayer correspondence.

    • Photocopy three tax returns, if available.

    • Send to the IRS National Forensics laboratory on Form 3210, Document Transmittal, at the address below:

      IRS National Forensics Laboratory
      29 N. Wacker Dr.
      Room 300
      Chicago, IL 60606

  9. Requests for lab assistance are usually completed in less than 60 days. If you have not received a response and it is more than 60 days, you may contact (312) 886–5067, extension 3004. Tell them you are calling to follow up on a Limited Payability Trace. Provide the taxpayer’s last name and Social Security Number (SSN).

    Note:

    The phone number above is for internal IRS use only. This number is not staffed for public contact. Any taxpayer calls received are directed to a toll-free number for assistance.

  10. When the response is received from the NFL, the entire case file will be returned with a cover sheet entitled "Report of Laboratory Examination, IRS Claim Resolution (LP Trace)."

    If Then
    Response indicates the payee endorsed the check. Deny the claim, send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid.
    Response indicates the payee did not endorse the check. Allow the claim, if it otherwise appears valid.
    Response indicates that additional signature samples required. 1. Correspond with taxpayer using Letter 2219C, Refund Inquiry; Check Claim Received, Interim, Handwriting Sample Requested, using an open paragraph.
    2. Request copies of ten (10) documents signed within one year of date of refund check, if available, or
    3. Request taxpayer to sign his name ten times on the back of the "C" letter.
    4. When signatures are received, return case to " NFL" with "NFL" cover sheet on front or make the forgery determination if possible.
    Response indicates that a better copy of the check is needed. 1. Research PACER/TCIS or Call FMS for a better photocopy of check.
    2. When better copy received, return case to "NFL" with " NFL" cover sheet on front.
    3. If better copy not received, do not return to "NFL" .

  11. If claim on an Limited Payability trace is denied for any reason, send Letter 2218C, Refund Inquiry; Check Claim Disallowed, Check Endorsed/Paid. Keep a copy of the letter and a copy of the check with your case. Close case TC 290 .00 and file document.

  12. If taxpayer disputes denial, reopen case and reconsider decision based on the information provided by the taxpayer.

  13. If the request is for a check more than 7 years after the issue date and no check copy is available, inform the taxpayer the records do not exist for these accounts and we cannot consider the claim.

21.4.2.4.12  (10-01-2006)
Financial Management Service (FMS) Claims

  1. When a regular CHKCL trace finds the refund check has been negotiated, FMS will send a copy of the check with a FMS 1133 Claim Form directly to the taxpayer. FMS Form 1133 is used by the taxpayer to file a claim for replacement of a refund check that has been negotiated by someone other than the taxpayer and the taxpayer or FMS may send the forms to IRS. Forms 1133 on FMS claims received in the Refund Inquiry Unit should be processed as indicated below:

    If And Then
    Taxpayer confirms the signature on back of check is authentic or genuine. Taxpayer returns claim form to the IRS. Close control base: "TPRECCK " .
    1. Taxpayer returns the claim form to FMS.
    2. When FMS sends information to IRS.     		Close control base.
    Taxpayer states signature is not authentic. 1. Taxpayer returns Form 1133 to IRS.
    2. Refund Inquiry Unit will review the form for completeness and then send it to FMS. Send the taxpayer an acknowledgement Letter 206C, Refund Inquiry; Copy of Check Requested/Check Being Traced (Form 1133), advising them their claim was forwarded to FMS.     		1. FMS will make the claim determination, and
    2. Forward the determination to the IRS on the FMS Claims Disposition Notice (CDN).
    3. Refund Inquiry Unit will work case according to disposition on the CDN.
    The Form 1133 is incomplete. Refund Inquiry Unit will return it to the taxpayer, with appropriate "C" letter requesting they complete the form and return to FMS.

  2. If the taxpayer calls to check on the status of Form 1133 after it has been returned to the Bureau of Check Claims, advise them they must personally contact the Bureau at the toll-free number (800) 826-9434 (only English speaking assistance is available at this number). Provide the taxpayer with the check symbol and number. Use IMFOL# to find the check symbol and number.

21.4.2.4.12.1  (10-01-2008)
Undeliverable FMS Form 1133

  1. Upon receipt of an undeliverable Form 1133 from FMS, National Office or U.S. Postal Service, Refund Inquiry Unit will complete the following:

    1. Open control base with Activity Code "UNDEL1133C" .

    2. Use the received date of the undeliverable FMS Form 1133 as the received date.

    3. Put account into Status "B" , Category Code " 3858" .

      Example:

      ACTON
      CO1,UNDEL1133C,B,3858

    4. Research ENMOD for address update subsequent to the date of the taxpayer inquiry.

    5. Determine if there were transposition errors in the name/address.

  2. If you can locate an updated address or you can correct transposition errors in the address:

    1. Close the IDRS control base "REMAIL 1133" .

      Example:

      ACTON
      CO1,REMAIL1133,C

    2. Remail FMS Form 1133 to taxpayer

  3. If a current address is unavailable or transposition errors not found, update the control base with Activity Code "NONEWADDR" and close the base. Destroy the FMS Form 1133 as classified waste per IRM 21.5.1.4.10, Classified Waste.

21.4.2.4.13  (10-01-2008)
Financial Management Service (FMS) Claims Disposition Notice (CDN)

  1. Once it is determined a refund check has been cashed and FMS decides whether or not the payee endorsed the check, the disposition information is sent to the Refund Inquiry function on an FMS CDN. As of March 30, 1998, FMS issues replacement settlement checks directly to the taxpayer on refunds determined to be forged or when appropriate, issues denial letters.

  2. Using the Payee Identification (TIN) or check information on the CDN, research SUMRY, IMFOLT, or IMFOLC to locate the refund in question. If using IMFOLC (only on checks issued on January 1, 2004 or later) the correct tax module will appear.

    Note:

    If there is a control open to Accounting Function or the CDN is for a refund with a TC 843, route the CDN to the Accounting team that works Payment Over Cancellation (POC) case.

  3. If "Settlement Denied" or "Forgery Established" is noted on the CDN, input CC MFREQ(C) if the module is not up on Integrated Data Retrieval System (IDRS).

  4. If the explanation says "Forgery Established" , use Command Code (CC) REQ77 to input TC 971-078 on TXMOD. Input the date of the CDN as the transaction date. Input TC 290, Blocking Series 05 for electronic filed returns and Blocking Series 18 for paper returns. Use the CDN as your source document.

  5. Financial Management Service (FMS) may send more than one CDN on the same refund claim. The first CDN is to advise IRS they are settling with the taxpayer and another CDN with the settlement check information. If there is a previous TC 971-078 on the module, associate the CDN with the previous one in the file. Do not input more than one TC 971-078 for the same refund.

  6. If the CDN indicates the "agency will be credited" or similar wording, monitor for the posting of the credit and take appropriate action. If forgery is determined, FMS will pay the taxpayer out of the Check Forgery Insurance Fund (CFIF). See IRM 21.4.2.4.15.3 , Secret Service and Check Forgery Insurance Fund (CFIF).

    Note:

    IRS cannot provide the taxpayer any information about the status of the FMS settlement checks and cannot trace them.

  7. If the explanation says "Settlement Not Recommended and Case is Closed" , FMS has disallowed the claim and advised the taxpayer. Input a TC 971-079 and file the CDN with TC 290 as instructed in (4) above. Do not input more than one TC 971-079 for the same refund.

    1. If there is a previous TC 971-078 for the same refund, FMS has done further investigation and has disallowed the claim after previously allowing it. Input TC 971-079 and associate with the previous CDN.

    2. If claimant never lived at the check address (Form 1133 question 9 is "No" ), research the return. If the check address was incorrect due to IRS error, research for another taxpayer with the same name at the address shown on the check. If found, process as erroneous refund. If not found, send the case back to FMS with a note: "Please Adjudicate IRS error" . If the address on the check is the same as that on the return, return the form to the taxpayer with Letter 206C , Refund Inquiry; Copy of Check Requested/Check Being Traced (Form FMS 1133), using paragraph "X" . If the case is a mixed entity, further research may be required to determine if the claimant is entitled to the check. Correct the account if necessary.

    3. If "Settlement not recommended pending refund from bank, incomplete 1133 Claim Form, or further investigation" or similar wording, file the CDN. Input TC 290, Blocking Series 00 for electronic filed returns or TC 290, Blocking Series 18 for paper returns.

      Caution:

      If FMS advises IRS a settlement check has been issued to the taxpayer, do not issue a manual refund. This action will cause an erroneous refund. Anyone causing an erroneous refund must document the action and the employee must refer to IRM 21.4.5, Erroneous Refunds, and follow applicable actions.

  8. The CDN may have an unusual response and include copies of the Form 1133, check copies, or other forms. If it is not clear what FMS wants, contact the FMS examiner on the CDN and ask what action they intended for the taxpayer or IRS.

    Reminder:

    If after Disposition 11 is received and the taxpayer contacts IRS, they should be referred to FMS whether or not a CDN has been received. See IRM 21.4.2.4.4.1 , Subsequent Inquiries, With Status Codes, Without Prior Forgery Determination (CSR's and Refund Inquiry Unit), for the FMS address and phone number. Do not interfere with FMS claim process.

21.4.2.4.14  (04-03-2007)
Account 6565 Processing for Refund Inquiry Function

  1. If a decision is made to allow the Limited Payability (LP) claim, the "Account 6565" is debited and a refund is issued to the taxpayer. Prepare Form 3809 to debit "Account 6565" and post TC 841 to the taxpayers account. Be sure to use the Transaction Code (TC) 840/846 date of the applicable refund. Annotate "CAT 1" in the upper left of Form 3809, Miscellaneous Adjustment Voucher.

  2. When forwarding to Accounting include the following:

    • Completed Form 3809.

    • History sheet.

    • Complete transcript of account.

    • Copy of Form 3911, Taxpayer Statement Regarding Refund or taxpayer correspondence.

    • Form 13818, Claim Against the United States for the Proceeds of an Internal Revenue Refund Check response if one was sent to the taxpayer.

    • Photocopy (front and back) of the cancelled check. If photocopy not available, an explanation is required on Form 3809.

    • If case was sent to National Forensics Laboratory, include their response.

  3. Monitor for posting of TC 841. The TC 841 Document Locator Number (DLN) will carry a Document Code "48" and Block Series "88999" . Input TC 290 for .00 to release refund to the taxpayer. Limit interest to the amount on the original refund by including a TC 770 for .00 or the original credit interest amount along with the original CR-INT-TO-DATE of the original TC 776/770.

    Note:

    If the original was a manual refund, a manual refund may be required. See IRM 21.4.4, Manual Refunds

    .

21.4.2.4.15  (10-01-2005)
Miscellaneous Refund Trace Issues

  1. The following information covers miscellaneous refund trace issues. It also contains information on the Check Forgery Insurance Fund (CFIF), listings for monitoring cases, and Financial Management Service (FMS) Reports.

21.4.2.4.15.1  (04-03-2007)
Holder in Due Course

  1. When the taxpayer endorses the refund check and gives it to an individual or business, other than a commercial bank, in exchange for something of value (cash, services, payment of debt, etc.), the individual or business getting the check is known as a "Holder in Due Course."

  2. If the check is later lost by or stolen from the "Holder In Due Course" , or processed for an incorrect amount, the holder may be able to make a claim on the check.

  3. A credit union may be considered a "Holder-in-Due-Course " if it handles its finances through a commercial bank. Some very large credit unions deal directly with the Federal Reserve Board (FRB), and therefore would handle a lost in transit issue in the same way as a commercial bank.

  4. Claims sent to IRS by commercial banks for checks that have been cashed and then lost or stolen in transit between commercial banks or between a commercial bank and the FRB will be returned to the bank with all required check information.

    1. If check symbol and serial number are not available, request this information from the Regional Finance Center (RFC).

    2. The claim must be filed with the commercial bank’s Federal Reserve Bank, Government Check Department.

    3. Once the bank submits a claim to the FRB, the FRB will file the claim with FMS.

    4. Since Refund Inquiry function will be researching PACER/TCIS for check information, these cases will not be Taxpayer Advocate cases.

  5. A "Holder-in-Due-Course" claim must be submitted within one year of the issue date of the check.

    If Then
    Claim is submitted after the one-year period expires. Send a denial letter stating: " We are sorry, but we cannot honor your claim on (fill in check identifying information). Under the Competitive Equality Banking Act of 1987, any claim on account of a Treasury check is barred unless it is presented to the agency that authorized the issuance of the check within one year after the date of the issuance of the check. We cannot take any further action in this matter. "
    Claim is submitted within one year Inform the taxpayer to contact FMS by phone at 1-800-826-9434 or by sending a letter to:
    Department of Treasury
    Financial Management Service
    Check Claims Branch
    PO BOX 515
    Philadelphia, PA 19106

21.4.2.4.15.2  (10-01-2006)
Administrative Photocopy

  1. At times, a request for the disposition of a refund check is submitted by the United States Attorney’s office, a state attorney's office for court cases, or by the state's Attorney's Offices for court cases.

  2. Ask the requester if a subpoena can be served; if so, it should be served to:

    Financial Management Services
    Director, Financial Processing Division
    3700 East West Highway
    PO Box 1849
    Hyattsville, MD 20788

  3. If the requester states that a subpoena cannot be served, inform him/her that a formal written request must be sent to the campus and the copy may take several weeks.

  4. If a formal request is received and the requester did not state that a certified copy is needed, obtain a check copy from Payments Claims and Enhanced Reconciliation (PACER) or TCIS. If not on PACER/TCIS, input the request for photocopy on Integrated Data Retrieval System (IDRS) using Command Code (CC) "CHKCL" with type of non-receipt code "P" . If a certified copy is needed, input CC "CHKCL" with non-receipt code "C" . See IRM 21.4.2.4.2 , Input Command Code CHKCL.

  5. Area Offices use Form 4442, Inquiry Referral to request administrative photocopies. The area office will provide:

    • Taxpayer identification number.

    • Tax Period and MFT.

    • Type of refund issued TC 846/TC 840.

    • Amount of refund.

    • Date of Refund.

    • Name, address (where the copy will be mailed) and phone number of IRS employee requesting photocopy.

  6. The Refund Inquiry function will process these requests. If any of the required information is missing, the request will be returned to the requester. A photocopy for this purpose should not be regarded as a claim or used to follow-up on a prior claim action.

21.4.2.4.15.3  (04-03-2007)
Secret Service and Check Forgery Insurance Fund (CFIF)

  1. If an inquiry is received stating the Secret Service (SS) has informed the taxpayer that SS is in possession of the refund check, you must follow these procedures:

    1. Contact:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

      The above phone number is for internal IRS use only. This number is not staffed for public contact. Any taxpayer calls received are directed to the toll-free numbers for assistance.

    2. Identify yourself as an IRS employee.

    3. Tell the SS agent you have an inquiry stating that the SS has possession of the refund check.

    4. Provide all necessary taxpayer information regarding the check.

    5. Request verification that SS has possession of refund check.

    6. Obtain from the agent the check and symbol number as well as taxpayer information printed on check.

    7. Print a copy of the check from PACER/TCIS. Do not input command code (CC) "CHKCL" .

    8. When credit is returned, if manual refund criteria is met, follow instructions for preparing and issuing a manual refund.

      Note:

      If FMS forwards a Claim Disposition Notice (CDN) stating the Secret Service is investigating the negotiation of a refund check, do not contact Secret Service. Refer the taxpayer to FMS. See IRM 21.4.2.4.4.1, Subsequent Inquiries, With Status Codes, Without Prior Forgery Determination (CSRs and Refund Inquiry Unit).

21.4.2.4.15.3.1  (10-01-2006)
Check Forgery Insurance Fund (CFIF)

  1. The Check Forgery Insurance Fund (CFIF) was enacted into law April 26, 1996. The CFIF is a revolving fund established to settle payee claims of non-receipt where the original check has been fraudulently endorsed.

  2. FMS issues all responses to taxpayers whenever there are claims filed that are the result of the non-receipt of a refund check issued within the past year. Their response includes, settlement checks, denial letters and determination pending letters.

  3. The IRS will continue to receive credits for non-receipt claims when it is determined the refund check has not been negotiated. This will be for both undelivered refund checks and non-receipt claims resulting in Status "32" .

    Reminder:

    When FMS determines forgery they will send the settlement check to the payee. Do not issue a refund check to the taxpayer upon receipt of the FMS forgery determination, even when FMS authorizes settlement.

21.4.2.4.15.3.1.1  (10-01-2005)
Timeliness of Claim due to Forgery

  1. Claims involving a Treasury check shall be barred unless:

    1. The claimant presents a statement of non-receipt to the payment certifying or authorizing agency within one year after date of the issuance of the check (TFM Bulletin No. 90-03, Volume No. 1; Claimability); and

    2. The claimant files a claim within four months from the date on the claims package.

  2. For a timely filed claim, the Commissioner of Financial Management Services will pay out of the Check Forgery Insurance Fund (CFIF) to a payee or special endorsee of a Treasury check the amount of the check if the Commissioner determines that the payee or special endorsee has established:

    1. The presentment of a timely statement of non-receipt to the payment certifying or authorizing agency and the timely filing of a claim form with Treasury pursuant to 31 CFR § 245.3.

    2. The original check was lost or stolen without the fault of the payee or special endorsee, and whose endorsement is necessary for further negotiation.

    3. The original check was cashed and paid by Treasury on a forged or unauthorized endorsement of the payee's or special endorsee's name.

    4. The payee or special endorsee has not participated in any part of the proceeds of the negotiation or payment of the original check.

  3. Losses as a result of the negotiating of checks issued to deceased payees or to payees who were not entitled to payment will be charged to the CFIF.

21.4.2.4.15.3.1.2  (10-01-2006)
Forgery Financial Management Service (FMS) Claim Package and Taxpayer's Filing A Claim

  1. A claim may be filed by the payee/claimant after the receipt of a claims package, FMS 3858. The claims package includes the claim FMS Form 1133 copy of the paid check, and instructions for completing the claim form.

  2. The claim package is systemically sent if the check requested during processing of CC "CHKCL" has been paid. The FMS claim Form 1133 and copy of the negotiated check are sent to the payee/claimant by FMS for examination. After examining the copy, if the payee/claimant denies negotiating the check, the payee/claimant should:

    1. Respond to FMS within 4 months from the date on the claim package.

    2. Follow instructions for completing the claim package.

    3. Complete and answer all questions on both sides of Form 1133.

    4. Sign Form 1133 where indicated. Both payee/claimants must sign if check is drawn to co-payees.

      Note:

      If the payee/claimant signs by a mark, the mark must be witnessed.

  3. If the payee admits to negotiating the check or does not return the claim form, FMS will take no further action.

21.4.2.4.15.3.1.3  (10-01-2006)
Processing Forgery Payment Over Cancellation (POC) in Treasury Check Information System (TCIS)

  1. When FMS processes POCs on forgery cases, they will:

    • Charge the agency for the overpayment.

    • Send 3858 Claims Package to the agency.

    • Adjudicate the claim after receipt of the claim form from the agency.

    • Institute reclamation to the financial institution.

    • Refer to Secret Service if valid.

21.4.2.4.15.3.1.4  (10-01-2006)
Reversal of Forgery Determination

  1. Since Financial Management Service (FMS) started issuing settlement checks to payees upon an initial determination of forgery and before they complete the check tracing process, the forgery determination is often premature. When FMS reverses the original forgery determination, they resolve their error by sending to the campuses the Form SF 1081 debit, Payment Over Cancellation (POC). This action places the taxpayer accounts into balance due status.

  2. FMS at this time has no special means in which to identify the accounts. This action then limits the IRS' ability to collect the money owed, as it is not collectable through administrative means.

  3. The Accounting Function will manually post a TC 840 debit for these refunds to the account. The Refund Inquiry Unit can identify these accounts by the Accounting Function's use of the following special blocking series on these specific Individual Masterfile (IMF) and Business Master File (BMF) accounts:

    • For the IMF Tax Class 2 and BMF Tax Classes 1, 3, and 4, the blocking series on the TC 840 is 550 through 553.

    • For BMF Tax Class 2, the blocking series on the TC 840 is 554.

  4. Accounting will send a copy of the SF 1081 debits to the Refund Inquiry Unit located at their campus. The Refund Inquiry Units will attach the SF 1081 to their case. This will allow for the immediate identification of any Payment Over Cancellation Case where FMS was the initiator of the settlement check and the settlement check went to the Payee and not to the IRS.

  5. Upon identification, see IRM 21.4.2.4.15.3.1.3 , Processing Forgery Payment Over Cancellation (POC) in TCIS.

21.4.2.4.15.3.2  (10-01-2005)
Appeal Decision on Forgery Based Check Claims

  1. If Financial Management Services (FMS) decides that a claim is valid, they will notify the payee/claimant that the payee/claimant's appeal was successful. FMS will also notify the payment-authorizing agency or certifying agency that the payee/claimant's appeal was successful. Payment to the payee/claimant will be made in accordance with 32 CFR 235 and 31 CFR 245 within the Regulation relating to the CFIF (Settlement From the Check Forgery Insurance Fund).

  2. If FMS determines that a claim is not valid, they will notify the payee/claimant of it's denial of the appeal. In its notice of denial, FMS will notify the payee/claimant of the right to sue in federal court.

  3. The notice of denial of a claimant's appeal will serve as the final agency action on a claim. No civil suit may be filed until the claimant has filed an appeal and received an appeal decision.

21.4.2.4.15.3.2.1  (10-01-2005)
Appeals of Denials on Forgery Check Claims

  1. An appeal is appropriate when a claimant seeks review of a denied claim based on the same information used by Financial Management Service (FMS) in reaching its initial decision to deny a claim. The claimant may seek a review of the initial denial based on new or additional information not available at the time of the initial denial.

  2. Appeals shall be made in writing and must be mailed to FMS at the following address:

    Financial Management Services
    Check Claims Branch
    Exception Inquiry Unit, Appeal
    P.O. Box 1849
    Hyattsville, MD 20788

  3. Requests for appeal must include a reference check and symbol numbers identified in the notice of denial. To be considered, an appeal must be postmarked no later than 60 days following the date on the notice of denial.

21.4.2.4.15.3.3  (10-01-2006)
Check Forgery Insurance Fund (CFIF) Impact on the Agencies

  1. Under the CFIF, all agencies will be impacted by the following:

    • Generally Treasury will resume recertification for all agencies on non-receipt claims after forgery is substantiated and the settlement criteria have been met.

    • Financial Management Service (FMS) will issue settlement checks to the payees in a timely manner when forgery is substantiated.

    • Generally, agencies will not be responsible for recertifying payments out of their appropriations on non-receipt claims after forgery is substantiated and the settlement criteria has been met.

    • Agencies will receive credit from the CFIF on Payment Over Cancellations (POCs) for "A" , "B" , "C" , and "D" Stops after forgery is substantiated, and the settlement criteria have been met.

    • After CFIF implementation and a non receipt claim is received and the issue amount is less than or equal to $25.00, the Stop Reason Code is "E" and the check is paid, the following message will be submitted to the agency on the Daily Advise of Status (DAS), "Paid the issue amount is $25.00 or Less, no further action will be taken" .

    • After CFIF implementation, 3858 Claim Packages will be mailed to the Payee/Claimant on STOP CODEs "C" and "D " , unless otherwise instructed by the Agency. (For STOP CODEs, "A" , "B" , " F" , and "G" , the 3858 Claims Package will be mailed to the address provided by the agency).

  2. After CFIF implementation, the following messages will be included in addition to the Claims Disposition Notice (CDN) messages currently used to advise the agencies of an action taken in adjudicating claims:

    • "Forgery Established. A Settlement Check Is Being Issued To The Payee" .

    • "Forgery Established. Treasury Is Crediting Your Account " .

    • "Alleged Forgery Being Investigated. Settlement Check Has Not Been Issued To The Payee Pending Investigation" .

    • "Alleged Forgery Being Investigated. More Information To Follow" .

    • "Forgery Established. Treasury Will Not Pursue Reclamation Action Because The Cost Of Collection Exceeds The Check Amount. Case Closed " .

    • "Forgery Established. Claim Valid But Settlement Not Appropriate, Based On Your Non-Entitlement STOP CODE. Treasury Will Credit Your Account When The Funds Are Collected" .

    • "Claim Valid But Settlement Not Appropriate Based On Your Non-Entitlement STOP CODE. Treasury Is Crediting Your Account" .

21.4.2.4.15.4  (10-01-2006)
Law Enforcement Agencies Have Possession of Taxpayer's Refund Check

  1. If an inquiry is received stating a law enforcement agency other than the Secret Service has taken possession of a taxpayer’s refund check, obtain information for contacting the agency before inputting Command Code (CC) "CHKCL" :

    1. Obtain the name and phone number of the agency.

    2. Request a copy of the police report.

    3. Contact agency to verify it has possession of check.

    4. Tell the agency to destroy refund check when case has been completed. Do not have agency return the check to the IRS.

  2. When the United States Postal Inspection Service seizes a U.S. Treasury check during an investigation, their procedures require them to inform the Regional Financial Center that issued the check. They do this by sending a United States Postal Service (USPS) Form 2697. For checks authorized by IRS, the Regional Finance Center (RFC) forwards the form to the agency for recertification of a check.

  3. If USPS Form 2697 is received from the RFC, make sure it indicates the taxpayer is entitled to the check and that the check will not be given to the taxpayer. If sufficient information is available to process a check, initiate a check trace. The form must remain with the case to document the reason for initiating a check tracing action.

21.4.2.4.15.5  (04-03-2007)
Listings for Monitoring Cases

  1. As cases progress to each stage of processing required for final resolution, the category code(s) will be changed to reflect the current state of processing.

    1. In some cases, this is done automatically by the computer. In other cases, they are changed using command code (CC) "ACTON" .

    2. Each category code has its own "aging" time that determines when an asterisk appears in the HMMM column on the listings.

    3. The "aging" time is keyed to the minimum follow-up time for that step in the process. If an action is not taken on a case before the cutoff for the next aged case listings, the number "1" will appear in the HMMM column instead of an asterisk.

    4. If anything appears in the "HMMM" column such as an "*" , a number, or ">" symbol, the case is considered overaged.

  2. Category codes that allow aging from the last action date do so only when the case is in "B" Status. For this reason, it is important to maintain the case in "B" Status, unless otherwise directed, to allow easy monitoring of cases.

  3. See Exhibit 21.4.2-6, Category Codes for "category codes" used in Refund Inquiry cases. Please note that any category code generated by the computer can also be input manually by using Command Code (CC) "ACTON " if it is needed to reflect the true Status of the case.

  4. To prevent an excess of closed cases being left in the suspense file, a clerk or designated person must purge the file monthly. If the primary location code is not in the directorship you service, input Transaction Code (TC) 290 .00, Blocking Series "05" , using case as your source document.

  5. If a stop pay Disposition Code is not received within 14 days following CC CHKCL input, reinput request.

  6. Monitor cases on a weekly basis using IDRS Category Code listing below:

    Category Code Activity Code 1st day overaged Action to take if
    "HMMM " appears
    RFIQ Various 45 days from received date. Usually a raw unworked case. Find case and take action. If no case, research Integrated Data Retrieval System (IDRS) for a previous action. May be an error control (i.e. wrong Social Security Number (SSN), tax period).
    3911 Various 30 days from received date. Look for a case. If no case, contact taxpayer by phone to determine if oral statement criteria is met. If unable to contact taxpayer or oral statement criteria is not met, send a Form 3911 to the taxpayer. Apologize that we are unable to locate prior inquiry. See IRM 21.4.2.4.1, Form 3911.
    OOPS 07yyyymmdd 14 days from action date. Work immediately CC CHKCL input incorrectly. Research module to determine if request must be reinput.
    OOPS 04yyyymmdd 14 days from action date. Refund being traced is already cancelled. If the Transaction Code (TC) 841 or 740 has not posted to the account, check Payments Claims and Enhanced Reconciliation (PACER) or TCIS for a cancellation date. Research for an unpostable TC 841 or 740 under the old taxpayer identification number if the account has merged since the refund was issued.
    OOPS 06yyyymmdd 14 days from action date Duplicate CC CHKCL. A previous good CHKCL was input for the check and a Disposition 11 or 32 was received.

    Note:

    If you are tracing the 2nd refund issued in the same month, you must use PACER to trace the refund. Remember to update IDRS when tracing through PACER.

    OOPS 08yyyymmdd 14 days from action date. Second direct deposit trace. Will issue another FMS 150.1 to the bank. Close the control. If an FMS 150.1 is received, reopen a case control with Category Code
    "PAID" and follow Disposition 09 instructions.
    RCTF 3911TORDCC 30 days from action date CC CHKCL input. Research account for a TC 971-011. If no TC 971-011, the prior CC CHKCL request did not take. Determine if another CC CHKCL is required and take appropriate action.
    RFCK PHOTOREQ 30 days from action date Photocopy or Limited Payability trace CC CHKCL input. Look for a TC 971-011. If not present, CC CHKCL did not take. Obtain a check copy from PACER or reinput CC CHKCL.
    ACKN 01yyyymmdd and 65 or 7_ 30 days from action date Acknowledgement of refund trace. Should have updated to a final disposition: 11, 32, or 06. If the control shows a final disposition (11 or 32) posted before the acknowledgement, proceed with the taxpayer's instructions. If not, check PACER or TCIS for status.
    ST32 32yyyymmdd 45 days from action date Refund cancelled. TC 841 should have posted. If refund was reissued, close control. If the TC 841 has not posted, check PACER or TCIS to determine if refund is cancelled or research account for an unpostable.
    841P 32yyyymmdd 14 days from action date. Case is workable when the TC 841 posted. This is present if CC CHKCL input with an
    "H" non-receipt code, returned check, or a refund delete. Take action to resolve freeze.
    PAID 09yyyymmdd 30 days from action date. Direct deposit. If no 150.1 received, follow the Direct Deposit instructions.
    PAID 11yyyymmdd 30 days from action date. Cashed check. (FMS) to send claim form to taxpayer. Check ENMOD for a Letter 206CRefund Inquiry; Copy of Check Requested/Check Being Traced (Form FMS 1133). Issue Letter 206C if one has not been sent, use Paragraph K. Close case.
    PAID 14yyyymmdd 30 days from action date.

    1. Cashed check, Limited Payability (LP) trace or photocopy requested. If no check copy received, print one from PACER or TCIS. If not available on PACER or TCIS, contact FMS.

    2. CC CHKCL input after the Limited Payability (LP) credit posted. Research for TC 740 and take necessary action.

    PAID 18yyyymmdd 30 days from action date. Cashed check, regular CC CHKCL with stop code N, L, D, S, H, E, or X input on an LP check. Do not continue to work UNLESS you have a signed Form 3911, Taxpayer Statement Regarding Refund, or other written inquiry from the taxpayer.
    NLUN Unpostable code 45 days from action date. Nullified Unpostable, reject. Work immediately and never allow to overage. Check the unpostable code and TXMOD and/or ENMOD to determine if the transaction requires reinput.
    RFDL RRyyyycyrc 45 days from action date. Refund intercept date. If TC 841 has NOT posted, check PACER or TCIS for the cancelled refund. The check may have been missed.
    841P RRyyyycyrc 14 days from action date. Refund delete, TC 841 has posted. Take appropriate action on the case.
    840- Various 45 days from received date. Check IDRS and close case if TC 840 posted. If no TC 840, further research is required.
    TOAD Various 90 days from action date. If this category is for an LP claim form received from taxpayer, take immediate action. If the case was sent to the National Forensics Laboratory (NFL), a follow-up request is required.
    3858 Various 45 days from action date. If this category code is for an LP Claim Form received from the taxpayer, take immediate action. Perform necessary research (i.e. doc request, signature requests.) Analyze the Forgery Claim Form.
    1664 Various 45 days from received date. Find case and take action. If no case, research Integrated Data Retrieval System (IDRS) for a previous action.
    3913 Various 45 days from received date. Find case and take action. If no case, research Integrated Data Retrieval System (IDRS) for a previous action.
    3859 Various 14 days from received date. Find case and take action. If no case, research Integrated Data Retrieval System (IDRS) for a previous action.
    UDRF Various 45 days from received date. Find case and take action. If no case, research Integrated Data Retrieval System (IDRS) for a previous action.

21.4.2.4.15.5.1  (10-01-2005)
Financial Management Service (FMS) Reports

  1. The following reports will aid the Refund Inquiry Units in monitoring their Form 3911, Taxpayer Statement Regarding Refund, case inventory associated with case documentation and/or updating the Integrated Data Retrieval System (IDRS) history field.

    • Aging Reclamation Report — Report Number CCTRR341

    • SF 1081 Agency Listing (Credit Reversals) — CCTRR409

    • Outstanding Accounts (Form 3911) — CCTRR680

    • FMS Abandonment Notice — CCTRR359

21.4.2.4.16  (10-01-2006)
Automated Refund Trace Applications ICCE Refund Trace, Internet Refund Trace (IRTRC), and Internet Refund Fact of Filing (IRFOF)

  1. Taxpayers can initiate a refund trace through the automated telephone application or on the internet at http://www.irs.gov/http:"Where's My Refund " (IRFOF). Generally, these automated systems will only trace the first refund issued during the current processing year. The applications can be used by all taxpayers. Taxpayers who file Married Filing Joint returns cannot initiate a trace using automation, but the applications will issue them a Form 3911, Taxpayer Statement Regarding Refund, to get the process started.

  2. The caller first goes through the Refund Inquiry application that provides information regarding the status of their refund (including the mail date and math error information) and makes a determination on whether their refund is eligible to be traced in automation. If the caller has selected the option indicating the refund check was lost, stolen or destroyed, or the mail date was at least 28 days prior to the date of the call, the Refund Inquiry application will transfer eligible callers to the Refund Trace application. The following chart highlights the actions taken when an inquiry is initiated through Integrated Customer Communications Environment (ICCE) (formerly Telephone Routing Interactive System - TRIS):

    If Then
    The caller obtains "refund issued on" and the response and mail date is less than 28 days from current date and the caller did not indicate the refund check was lost, stolen, or destroyed The ICCE Refund Inquiry application will advise the caller the date the refund was issued, when to call back, and will not send the call to the Trace application.
    Certain conditions are met such as math error or freeze code Depending on the condition, the caller may be issued Form 3911, transferred to a customer service representative, or provided a call back number for assistance.
    Caller obtains "refund issued on" response and mail date is at least 28 days prior to current date or caller indicates check was lost, stolen or destroyed. The ICCE refund trace application will input CC CHKCL, and control the case to the Refund Inquiry Unit where the caller was routed.

    Exception:

    Married Filing Joint taxpayers will be mailed a Form 3911 to complete and send back. No P- freeze will be set.

  3. The IRFOF (Where's My Refund) web site allows the taxpayer to walk through a series of on-line screens. A refund trace cannot be input on any refund check until 28 days after it was issued. If 28 days has passed and the taxpayer indicates they have not received their check, they can initiate an on-line refund trace (except Married Filing Joint taxpayers). If the refund was returned as undeliverable by the Postal Service and an S- freeze is present, the taxpayer will be provided the opportunity to change their address, releasing the refund. If the taxpayer experiences difficulty in initiating a refund trace, they will be advised to call a Customer Service Representative for assistance.

  4. If refund trace criteria is met, IRFOF will automatically input CC CHKCL and control the case to a predetermined Refund Inquiry Unit through Integrated Data Retrieval System (IDRS). The case is controlled to an employee number beginning with 099.

  5. Both automated system traces proceed through the normal check trace dispositions, "3911TORDCC" and "01" and will end as a Disposition 11 (cashed check) or 32 (outstanding). Treat all other disposition codes like any other case.

  6. On joint returns, CC CHKCL is not input on either system. ICCE automatically mails a Letter 129C, Refund Inquiry; Form 3911 Required, and Form 3911 to the taxpayer. IRFOF allows the taxpayer to print the Form 3911 on-line. IRFOF provides the mailing address and fax number of the predetermined Accounts Management Campus to mail the Form 3911. Filing Joint taxpayers must complete and jointly sign the Form 3911 and return it to the IRS before a refund trace can be initiated by the Refund Inquiry examiner.

21.4.2.4.16.1  (10-01-2005)
ICCE Refund Trace Reports

  1. Two types of reports are generated by ICCE. They are:

    • Refund Trace CHKCL Report

    • Management Action Report Refund Trace CHKCL Request

  2. The Refund Trace CHKCL Report indicates the trace input was successful or that a Form 3911, Taxpayer Statement Regarding Refund, was sent to the caller. Upon receipt of this report, the Refund Inquiry Unit may need to take the following action for inventory control.

    1. Research Integrated Data Retrieval System (IDRS) for open control cases. If there is an open control contact the controlling employee or the employees manager.

    2. Only one check trace control must remain open, chances are the most recent control can be closed.

  3. Take appropriate action to begin the refund trace process. Input Command Code (CC) CHKCL when the signed Form 3911, Taxpayer Statement Regarding Refund, is received.

    Note:

    Both signatures are required on a Form 3911, Taxpayer Statement Regarding Refund, when filing status is Married Filing Joint.

  4. The ICCE report Management Action Report Refund Trace CHKCL Request indicates the trace did not take and the Refund Inquiry Unit employees need to follow-up:

    1. Review the tax module and take appropriate action to complete the trace. If there is not enough information to reinput CC CHKCL, send Letter 129C, Refund Inquiry; Form 3911 Required , with a Form 3911, Taxpayer Statement Regarding Refund, to the taxpayer.

    2. For taxpayers filing, other than a Married Filing Joint return, if the taxpayer's telephone number is available you may call the taxpayer for additional information.

21.4.2.4.17  (10-01-2006)
Payments Claims and Enhanced Reconciliation (PACER) and Treasury Check Information System (TCIS)

  1. These systems were developed by Financial Management Service (FMS) to enhance the check-claim process. These systems provide on-line access to the status of both electronic funds transfer and check payments and access to digital images of cashed checks. PACER/TCIS provides information on Treasury checks for seven years after the date of issue and six years for EFT deposits. At most campuses, access to the PACER/TCIS system is limited to Refund Inquiry, Taxpayer Advocate and Criminal Investigation.

  2. TCIS will allow the capability of initiating a claim on a check within 7 years of issuance, if you have the appropriate access.

  3. PACER will remain the only system which will house FMS 150.1 and FMS 150.2 information or allow you to initiate a claim on a direct deposit refund issued within six years.

Exhibit 21.4.2-1  (10-01-2008)
Command Code (CC) "CHKCL" INPUT

(1) For CC input see Servicewide Electronic Research Program (SERP) hyperlink to Integrated Data Retrieval System (IDRS) CC CHKCL.

(2) Assistors are authorized to input CC CHKCL based on an oral statement from the taxpayer if all the following conditions are met:

  1. Check was scheduled for mail out 4 weeks prior to taxpayer's contact or their direct deposit was issued 5 days prior to contact. Use the table below to determine the check mail out date or the direct deposit date. Input immediately if taxpayer states the check was lost, stolen or destroyed.

    Refund issued through Determine date issued
    Regular Cycle as a check TC 846 minus 3 days
    Direct Deposit TC 846 minus 10 days
    Accelerated Cycle as a check See dates in Item 10 listed below.
    CADE account check or direct deposit Paper refund issued on the day indicated by the TC 846, MMDDYYYY format. No calculation is required for refunds issued by check. For direct deposit refunds subtract two business days from the TC 846 to determine refund issue date.

  2. Individual taxpayer filing status other than married filed joint. Married filed joint taxpayers do not meet oral statement criteria. Form 3911, Taxpayer Statement Regarding Refund must be mailed to the taxpayer with a return envelope of your servicing Refund Inquiry Function. Advise taxpayer they can either mail or fax their request. Provide the address and fax number of your servicing Refund Inquiry function. For fax numbers see the Campus Directory located on SERP under the Who/Where tab.

  3. TC 846 refund date must be 12 months or less from current date.

  4. Valid Taxpayer Identification Number (TIN).

    Note:

    If the return has been resequenced, CC CHKCL must be entered on the original TIN the refund was issued on.

  5. Tax return filed is an individual tax return.

  6. Taxpayer resides at the address currently on record (ENMOD). If taxpayer resides at a different address, DO NOT change the address. DO NOT input CC CHKCL. Advise the taxpayer you are mailing them a Form 3911,Taxpayer Statement Regarding Refund to complete and sign. Advise the taxpayer they can either mail or fax their form back to the IRS. If the taxpayer prefers to mail the form, enclose an envelope with your affiliated Refund Inquiry address. If the taxpayer prefers to fax the form, provide the fax number of your affiliated Refund Inquiry Function. For fax numbers see the Campus Directory located on SERP under the Who/Where tab, http://serp.enterprise.irs.gov/databases/who-where.dr/natdirectory.dr/srv-cntr-toc.htm . If Married Filing Joint, advise taxpayer both spouses must sign.

    Note:

    Form 3911 can be used as written documentation to change a taxpayer's address. Upon receipt of Form 3911, update the address and input CC CHKCL. However, if the refund check was returned undelivered by the Postal Service, do not input CC CHKCL. See IRM 21.4.3.4.3,Undeliverable Refund Checks.

    Reminder:

    Advise taxpayer the Form 3911 is available through the internet on irs.gov. See IRM 21.3.6.4.2, Other Methods of Obtaining Forms and Publications.

  7. If Transaction Code (TC) 840, send taxpayer a Form 3911 with issuing Campus return envelope.

  8. Not a mixed entity account.

  9. Not a full Treasury Offset Program (TOP) offset matching the TC 846 amount. If TC 898 matches the TC 846 this is a full TOP offset. See IRM 21.4.6,Refund Offset, TOP procedures.

  10. No TC 740, TC 841 or TC 843 matching the TC 846 in question. If freeze codes are present, follow freeze release procedures.

  11. No TC 971-011 (indicates previous trace) posted after the TC 846 date. See IRM 21.4.2.4.4, Responding to Taxpayers Subsequent Inquiries.

(3) After determining taxpayer meets oral statement criteria or a completed Form 3911 has been received, follow the CC CHKCL procedures to start the refund trace (recertification) process.

(4) Access CC TXMOD for the period in question.

(5) Open a control base as follows. This base must be created prior to CC CHKCLR input:

  1. ACTON
    C#, CHKCLINPUT,B,3911
    *,* IRS received date

(6) See IRM 2.4.23, Exhibit 3, CC CHKCL, for additional information on CC CHKCL. Below is information regarding the input screen.

  1. Overlay TXMOD with CC CHKCLR, the response will be CHKCL.

  2. Line 1 is generated from TXMOD.

  3. Line 2–5 Enter taxpayer's name on Line 2 (Name Line 1). Use the additional name lines for any in-care-of or other information. If the check copy and/or claim form are to be sent to the IRS employee instead of the taxpayer, input Internal Revenue Service on Name Line 2.

  4. Line 6–7 Enter taxpayer's current address or the address where the claim form/check copy are to be sent if the check is paid.

    Note:

    Input of a name or address different from that on ENMOD will not update the master file Entity.

  5. Line 8 Check Number (used by Refund Inquiry Function ONLY. )

  6. Line 9 Overlay T with the type of non-receipt code:
    C = Request for certified photocopy check (no P freeze set).
    D = Destroyed, unendorsed check (no P freeze set).
    E = Lost stolen or destroyed endorsed check (no P freeze set).
    F = Non-entitlement (Used by Refund Inquiry Unit only) (no P freeze set).
    H = Unendorsed check freeze cancellation credit (P- Freeze set).
    J = Non-receipt of substitute check (Used by Refund Inquiry Unit only).
    L = Lost, unendorsed check (no P freeze set).
    N = Non-receipt of refund (no P freeze set).
    P = Request for regular photocopy of check (no P freeze set).
    S = Stolen, unendorsed check (no P freeze set).
    X = Endorsed check freeze cancellation credit (P- Freeze set).

  7. Line 9 Refund Schedule Number (RSN) = YYYYJJJSCTLLLL. On refunds issued in 2003 and later, input the refund schedule number shown on CC TXMOD as "RSN" below the TC 846. On CC IMFOLT the RSN is located to the right of the TC 846. Be sure to modify input using the campus number with which you are affiliated.
    YYYY = (1-4 position) Cycle YEAR of the refund TC 846. NOT the TAX PERIOD .
    JJJ = (5-7 position) Julian date refund is issued.
    SC = (8-9 position) Modify by inputting your affiliated service center.
    T = (10th position) File type "1" for IMF; "0" for BMF; "3" for CADE; "4" for IRAF; "5" for other; "6" for Non Master File.
    LLLL = (11-14 position) Alpha characters; Four blanks for paper refunds; "Z" followed by three blanks for direct deposit; " I" followed by three banks for International; "ZI" followed by two blanks for International direct deposit.

    ACTC checks may have two extra digits denoting the campus at the end of RSN, disregard these extra numbers.

  8. Line 9 Enter "Y" Generate TC 971 this generates a TC 971-011. Only the Refund Inquiry Unit can use "N" for this entry.

  9. Line 10 MMYYYY
    MMYYYY=Issue date of refund input. Input actual date of the refund
    MM= month; YYYY = year.
    IMF check date – Subtract 3 days from the TC 846 date.
    IMF direct deposit date – Subtract 10 days from the TC 846 date.
    IMF CADE accounts, paper refund issued on the day indicated by the TC 846 YYYYCCDD format. No calculation required for refunds issued by check. For direct deposit refunds subtract 2 business days from the TC 846 to determine refund issue date.
    Accelerated cycle check date, see dates in items 10 below.

  10. Line 10 Type of Payment code (P)
    I = IMF
    B = BMF
    D = IDRS (CC RFUND)
    M = Manual Refund

  11. Line 10 Sequence number of input from 001–999.

  12. Line 10 DO = leave blank.

  13. Lines 11, 13, and 15 Overlay the dollar signs with the full TC 846 amount of the refund you are tracing, even if a TOP partial offset has reduced the refund amount. If a TC 898 matches the TC 846, DO NOT input CC CHKCL.

  14. Lines 11, 13, and 15 Split Refund Indicator = Indicates the type of split refund. Values are:

    • 0 - Not a split refund.

    • 1 through 3 - Enter the SRI related to the TC 846 shown on account for the refund you are tracing.

(7) After CC CHKCL is input, reassign the control base to the Refund Inquiry Unit located at the Accounts Management Center serving your site. Use the control numbers listed below for processing the case:
Overlay CC TXMOD with:
ACTON (new line)
C01 (new line)
Reassign Refund Inquiry Unit number
Andover = 0836088888
Atlanta = 0735300044
Austin = 0636099058
Brookhaven = 0136033333
Cincinnati = 0235300000
Kansas City = 0935903000
Fresno = 1036000005
Memphis = 0336000000
Ogden = 0436400005
Philadelphia = 0536022222

(8) Advise taxpayer:

IF THEN
Their check was not cashed. They will receive a replacement check in approximately 6 weeks.
Their refund was a direct deposit. A letter will be issued to the banking institution from Financial Management Service (FMS) inquiring about their refund within 6 weeks.
Their check was cashed. They will receive a claim package within 6 weeks to complete and return to FMS in order to pursue their claim.
They do not wish to pursue their claim. No further action is required. They may keep the claim package with a copy of their check for their records.

(09) Category Codes Associated with Command Code (CC) "CHKCL"

Category
Codes		 Definition How
Updated		 When
Updated		 Overaged
RFIQ Correspondence received regarding Refund. CC "ACTON" When case controlled 45 days from received date
3911 Oral Statement/or Correspondence received regarding Refund. CC "ACTON" Case controlled or condition identified. 30 days from received date.
RCTF CC "CHKCL" input for check or direct deposit claim. Computer Generated. When CC "CHKCL " input. 30 days from action date.
RFCK CC "CHKCL" input for Photocopy. Computer Generated. When CC "CHKCL " input. 30 days from action date.

(10) Use the charts below to determine the correct issue date when inputting CC CHKCL for paper refunds that were issued during an accelerated refund cycle. CADE refunds are processed daily and do not fall into accelerated cycles.

  1. IMF accounts for 2002.

    Cycle 23C Date Check Date
    200222 06-10-2002 05-30-2002
    200239 10-07-2002 09-27-2002
    200248 12-09-2002 11-29-2002

  2. IMF accounts for 2003.

    Cycle 23C Date Check Date
    200322 06-09-2003 05-30-2003
    200339 10-06-2003 09-26-2003
    200348 12-08-2003 11-28-2003

  3. IMF accounts for 2004.

    Cycle 23C Date Check Date
    200421 06-07-2004 05-28-2004
    200438 10-04-2004 09-24-2004
    200447 12-06-2004 11-26-2004

  4. IMF accounts for 2005.

    Cycle 23C Date Check Date
    200521 06-06-2005 05-27-2005
    200538 10-03-2005 09-23-2005
    200547 12-05-2005 11-25-2005

  5. IMF accounts for 2006.

    Cycle 23C Date Check Date
    200621 06–05–2006 05–26–2006
    200647 12–04–2006 11–24–2006

  6. IMF accounts for 2007.

    Cycle 23C Date Check Date
    200721 06–04–2007 05–25–2007
    200747 12–03–2007 11–23–2007

  7. BMF accounts for 2002.

    Cycle 23C Date Check Date
    200216 (F1120) 04-29-2002 04-23-2002
    200221 (F1041) 06-03-2002 05-28-2002
    200230 (F1120) 08-05-2002 07-30-2002
    200243 (F1120) 11-04-2002 10-29-2002

  8. BMF accounts for 2003.

    Cycle 23C Date Check Date
    200317 (F1120) 05-05-2003 04-29-2003
    200321 (F1041) 06-02-2003 05-27-2003
    200330 (F1120) 08-04-2003 07-29-2003
    200343 (1120) 11-03-2003 10-28-2003

  9. BMF accounts for 2004.

    Cycle 23C Date Check Date
    200416 (F1120) 05-03-2004 04-27-2004
    200421 (F1041) 06-07-2004 06-01-2004
    200429 (F1120) 08-02-2004 07-27-2004
    200442 (F1120) 11-01-2004 10-26-2004

  10. BMF accounts for 2005.

    Cycle 23C Date Check Date
    200516 (1120) 05-02-2005 04-26-2005
    200520 (1041) 05-30-2005 05-24-2005
    200529 (1120) 08-01-2005 07-26-2005
    200542 (1120) 10-31-2005 10-25-2005

  11. BMF accounts for 2006.

    Cycle 23C Date Check Date
    200616 (1120) 05–01–2006 04–25–2006
    200621 (1041) 06–06–2006 05–30–2006
    200629 (1120) 07–31–2006 07–25–2006
    200642 (1120) 10–30–0006 10–24–2006

  12. BMF accounts for 2007.

    Cycle 23C Date Check Date
    200716 (1120) 04–30–2007 04–24–2007
    200721 (1041) 06–04–2007 05–29–2007
    200729 (1120) 07–30–2007 07–24–2007
    200743 (1120) 11–05–2007 10–30–2007

Exhibit 21.4.2-2  (10-04-2006)
DISPOSITION CODE CHART NON-RECEIPT CLAIMS CHKCL CLAIMS ONLY

DISPOSITION CODE CHART NON-RECEIPT CLAIMS (Refund Inquiry)
CHKCL CLAIMS ONLY

Note:

The Disposition Code can be located in the Activity Field of the IDRS Control History. The Disposition Code is displayed as the first 2 digits of the Activity Code followed by the date FMS provided the Disposition in YYYYMMDD format (i.e. 0120060324 = Disposition 01 provided by FMS on March 24, 2006.

DISPOSITION STATUS CODE CATEGORY CODE DEFINITION FOLLOW UP ACTION
01 ACKN Claim processed by Regional Finance Center (RFC) to Treasury Check Information System (TCIS). 1. Wait 30 days for second status.
2. No reply, resubmit Command Code (CC) "CHKCL" .
03 OOPS Rejected (Failed preliminary validity checks.) 1. Pull case .
2. Resubmit Command Code (CC) "CHKCL" .
04 OOPS 1. Previously processed as Available Check Cancellation (ACC).
2. Refund credit returned by Regional Finance Center (RFC), through the Electronic Funds Transfer (EFT) from the bank.
3. Refund check intercepted.
4. Undeliverable Transaction Code (TC) 740. 		Take action to release credit, if necessary.
05 OOPS Check previously mailed (within 5 days). Close Case
06 OOPS Previous "CHKCL " . Check Payments Claims and Enhanced Reconciliation (PACER) for previous claim. If present send a Letter 206C, Refund Inquiry; copy of Check Requested, Check Being Traced (Form FMS 1133), to taxpayer. Include check number and date along with the 800 telephone number for Financial Management Service (FMS).
07 OOPS No payment issued or unprocessable claim. 1. Pull Case.
2. Resubmit CC "CHKCL" .
08 OOPS Second trace input on DD. Close case.
No follow up action required. FMS will automatically follow up with the financial institution until the issue is resolved. FMS will send IRS a copy of the 150.1 when received from the financial institution.
Reopen case when 150.1 is received from FMS or Form 4442, Inquiry Referral is received. Take appropriate action to resolve issue.
09 PAID
1. RFC has contacted bank via 150.1 to trace refund.
2. Bank to send copies to TP and RFC.
3. RFC will forward to campus.
1. If FMS 150.1 is received, verify Routing Transit Number, Account Code (either C for checking or S for Savings), Bank Account Number on CC IMFOB.
2. Send letter to the taxpayer.
3. Close case.
4. If no 150.1 is received, Refund Inquiry Unit will query PACER to determine if a 150.1 is available.
5. If 150.1 is available on PACER, repeat steps 2 and 3 above.
6. If no 150.1 available on PACER, reinput CC CHKCL and send taxpayer Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office. Close case.
7. If 150.1 does not resolve taxpayer's issue, continue processing, if necessary.
10 OOPS Invalid Stop Reason Code 1. Pull Case.
2. Resubmit CC "CHKCL" .
2☆ OOPS Amount difference 1. Pull Case.
2. Resubmit CC "CHKCL" .
3☆ OOPS Claim submitted too early for RFC to process 1. Pull Case
2. Resubmit CC "CHKCL" .
4☆ OOPS Duplicate tape claims submitted. 1. Wait for update.
2. No reply in 30 days, resubmit CC "CHKCL" .
5☆ OOPS Invalid Direct Deposit information submitted. 1. Pull Case.
2. Resubmit CC "CHKCL" .
6☆ OOPS Duplicate Check issued.  
7☆ ACKN Photocopy request processed by RFC to TCIS. 1. Wait for 2nd status.
2. No reply in 30 days, research PACER/TCIS for copy. If not on PACER/TCIS, resubmit CC "CHKCL" .
9☆ PAID Direct Deposit trace input with Non-receipt Code "P" no FMS 150.1 will generate. Reinput trace with Non-receipt Code "N" no Limited payability on Direct Deposit. (Electronic File Transfer processed).
11 PAID 3858 Paid -Photocopy and claim mailed to taxpayer. FMS has sent claim package (Form 1133) to the taxpayer. Refund Inquiry Unit will send Letter 206C, Refund Inquiry; Copy of Check Requested, Check Being Traced (Form FMS 1133), to taxpayer if one has not already been sent indicating paragraph "K" and close case.
12   Date of event subsequent to date of payment (STOP CODES "E" , "T" , and "U" only.).  
13 PAID DCC reclamation no photocopy.  
14 PAID 1. Paid - Photocopy to follow, or
2. CC "CHKCL" input after an uncashed check has expired and the credit returned to IRS. 		1. Monitor for receipt.
a. Upon receipt continue processing. See IRM 21.4.2.4 , Refund Trace Actions.
b. If copy not received in 30 days, research PACER/TCIS for a copy or reinput CC CHKCL.
2. Research for TC 740 and release freeze if necessary.
14 PAID 1. Paid - Photocopy to follow, or
2. CC "CHKCL" input after an uncashed check has expired and the credit returned to IRS. 		If no photocopy within 30 days:
a. Integrated Data Retrieval System (IDRS) shows certified photocopy previously received, update Activity Code to reflect proper status of case, or
b. IDRS shows no indication that certified photocopy received, contact FMS.
15 PAID Paid - Certified photocopy to follow. Monitor for receipt for certified photocopy.
1. Upon receipt continue processing, See IRM 21.4.2.4, Refund Trace Actions.
2. If no photocopy within 30 days and IDRS shows certified photocopy previously received, update activity code to reflect proper status of case.
3. If IDRS shows no indication that certified photocopy received, contact FMS.
17 PAID Paid - Endorsed, photo/claim to follow. Monitor. If no photocopy in 30 days, contact FMS.
18 PAID Paid - Claim submitted after the Limited Payability cutoff date. If Form 3911, Taxpayer Statement Regarding Refund is available, research PACER/TCIS for a check copy. If not on PACER/TCIS, process as a Limited Payability (LP) Trace, reinputting the CC "CHKCL " with Nonreceipt Code "P" . If no Form 3911 is present, correspond with the taxpayer.
20 OOPS Payment declined due to alteration of check. Photocopy and claim to follow. Monitor if no photocopy in 30 days, follow up, contact FMS.
22 OOPS Insufficient agency information. 1. Pull case.
2. Resubmit CHKCL.
3. Use appropriate Stop Reason Code.
24 OOPS Treasury Check Information System (TCIS) reject. Regional Finance Center (RFC) will reprocess.  
31   Check Outstanding. Regional Finance Center (RFC) will issue recertified check. Monitor for TC 841.
32 ST32 Outstanding check cancelled credit will be returned to IRS. Monitor for TC 841.
33 OOPS Outstanding - No Photocopy. Send Letter 1219C, Refund Inquiry; (Joint F3911) Requires Certification: Form 1040.
34 OOPS Outstanding - Status only requested.  
35   Check outstanding. Recertified check issued before status.  
53 OOPS Reject - Duplicate Stop Contact FMS Check Information Section at 202-874-8400.
65 ACKN Refund associated with TOP Offset. 1. Wait for subsequent Disposition Code.
2. No reply within 30 days, contact FMS Birmingham.
71 PAID TOP Offset refund in full.
Advise taxpayer to contact FMS TOP Call Center. See IRM 21.4.6, Refund Offsetfor more information.
72 PAID TOP Offset partial refund.
Advise taxpayer to contact FMS TOP Call Center. See IRM 21.4.6, Refund Offset.
90 OOPS Payment referred to DCC.  
3B OOPS Decedent payee name disagree.  
☆ (Asterisk equals blank)  

Exhibit 21.4.2-3  (10-04-2006)
REASON FOR CANCELLATION CODES and GENERATED ACCOUNT INFORMATION

REASON FOR CANCELLATION CODES
CODE DESCRIPTION T/C BLOCK & SERIAL NUMBER
01 Intercepted checks, " P-" Freeze set. 841 55555
02 Undeliverable checks, "S-" Freeze set. 740 99999
03 Returned checks, " P-" Freeze set
(Other than Intercepted or Undeliverable). 		841 99999
08 Unavailable check cancellation credit (Credit returned on outstanding check as a result of check claim).
(CHKCL/STATUS-32) "P-" Freeze set. 		841 88899
09 Unavailable check cancellation credit
(Credit returned on outstanding check as a result of check claim). 		841 88888
09 Reclamation 841 88000
09 Payment Over Cancellation (POC). 843 55111
40 Limited Payability (LP) expired check credit, "S-" freeze set (1992 only). 740 666XX
40 Limited Payability (LP) expired check credit. 740 66666
Reason for Cancellation Code will appear as "RC" on only the Form 1098 listings.

Exhibit 21.4.2-4  (10-01-2005)
STOP REASON CODES CONVERSION GUIDE

INPUT CC "CHKCL" CONDITIONS GENERATED AT FMS RESULTING ACTION
Integrated Data Retrieval System (IDRS) Command Code (CC) "CHKCL" programming converts most types of Non-receipt Codes input on the IDRS terminal into different Stop Reason Codes used by Financial Management Service (FMS) for their processing. The only code not converted is "D" , which FMS uses to designate all IRS claims other than substitute checks.

Note:

Non-receipt Code "F" should not be input on CC "CHKCL" .

" C" 1. No indication of non-receipt, loss, theft, or other indication of claim being filed.
2. Ordinary photocopy will not satisfy requirements of requestor. 		" L" Used mostly by Criminal Investigation Division (CID) and some taxpayers for spousal disputes in court. Certified copy of paid refund check.
" D" Claim on destroyed check unendorsed. " D" No " P-" Freeze set.
" E" Taxpayer received and endorsed check, then it was lost, stolen, or destroyed. " D" No " P-" Freeze set.
" H" Non-receipt, destroyed, lost, or stolen and unendorsed. No automatic reissuance of refund. " D" " P-" Freeze Set.
" L" Taxpayer received and lost check without endorsing it. " D" No " P-" Freeze set.
" N" Taxpayer did not receive check. " D" No " P-" Freeze set.
" P" Photocopy of check needed for administrative purposes or to resolve taxpayer conflicts or Limited Payability (LP). " K" Photocopy of check only.
" S" Taxpayer received check and it was stolen without being endorsed by the taxpayer. " D" No " P-" Freeze set
" X" Endorsed check; no automatic reissuance of refund. " D" " P-" Freeze Set.

Exhibit 21.4.2-5  (10-01-2007)
DISPOSITION AND STATUS CODES — ADDITIONAL ACTION TIME FRAMES

DISPOSITION AND STATUS CODES-ADDITIONAL ACTION TIME FRAMES

Note:

The Disposition Code can be located in the Activity Field of the IDRS Control History. The Disposition Code is displayed as the first 2 digits of the Activity Code followed by the date FMS provided the Disposition in YYYYMMDD format (i.e. 0120060324 = Disposition 01 provided by FMS on March 24, 2006.


Code Definition Actions and Time Frames
01 Regional Finance Center (RFC) has requested the status of check from the Financial Processing Division. If there is no indication the check was cashed and no action after 28 days from the status 01 date, send Form 4442, Inquiry Referral, to the Accounts Management Center Refund Inquiry function.
04 Claim was previously processed as an available check cancellation. Check was sent, but returned as undeliverable or cancelled.
 Taxpayer should receive check within six weeks.
07 Unprocessable claim.
 If no other action indicated:
Send Form 4442 , Inquiry Referralto the campus
Advise taxpayer he/she will be contacted within 30 days.
08 For Direct Deposit Refunds - No response from the Direct Deposit designated financial institution. The subsequent CC "CHKCL" input generates an FMS 150.1 to the bank. Input when the taxpayer indicates that they have not received the requested information from the initial trace. Verify taxpayer has NOT received the FMS 150.1. If the taxpayer has not received FMS 150.1 and Transaction Code (TC) 841 is not present, refer to IRM 21.4.2.4.4.1, Subsequent Inquiries, With Status Codes, Without Prior Forgery Determination (CSR's and Refund Inquiry Unit).
If the taxpayer has not received FMS 150.1 and a TC 841 is posted, advise taxpayer of refund reissue or other disposition of credit.
09 For Direct Deposit Refunds - The Regional Finance Center (RFC) contacts the financial institution via 150.1 to trace the refund and to advise their customer about the direct deposit. Copies of the results are sent to taxpayer and RFC. RFC will usually forward a copy to IRS.
If no TC 841 is present, send Form 4442,Inquiry Referral to the Accounts Management Center Refund Inquiry function.
If TC 841 is posted, advise taxpayer of refund reissue or other disposition of credit.
11 Check has been cashed. The taxpayer must contact the Bureau of Check Claims at the toll-free number (800) 826-9434 (only English speaking assistance is available on the Check Claims toll free number). The TP needs to inquire about the status of the Form 1133, after it has been returned to the Bureau of Check Claims. Provide the taxpayer with check number, symbol and refund date, all are available on IMFOL#.
Taxpayer will receive a copy of the cancelled check and Financial Management Services (FMS) Form 1133 within 30 days of the Status"11" date.
If the taxpayer is in receipt of the FMS Form 1133, advise them to complete and return the form to FMS along with a copy of the cancelled check. Allow 90 days for processing.
32 Check cancelled - new check to be issued.
 Taxpayer should receive refund within 4 weeks.
65 Treasury Offset Program (TOP) offset of refund. The initial disposition code indicates the refund was associated with a "TOP offset " . Subsequent disposition codes will follow. Review the taxpayer's account to determine if refund was offset in full. Explain the offset to the taxpayer and have them contact FMS or the creditor agency per IRM 21.4.6, Refund Offset.
71 Full TOP offset. Advise the taxpayer to contact FMS TOP Call Center. See IRM 21.4.6, Refund Offset, for more information.
72 TOP offset - Unavailable Check Cancellation (UCC).
This code is passed for non-receipt claims when only the amount of the partial payment issued as a result of an offset being returned. 		The offset is not reversed. Generates a TC841 and is the equivalent of a "9" which generates a "Block 88888 "

Exhibit 21.4.2-6  (10-01-2006)
CATEGORY CODES

Category Definition How Updated When Updated Age Criteria
RFIQ Correspondence received regarding a refund. Command Code (CC) ACTON. When controlled. Asterisk appears 45 days from received date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
3911 Form 3911, Taxpayer Statement Regarding Refund, or oral statement received regarding a refund. CC "ACTON" When case controlled. Asterisk appears 30 days from received date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
RCTF CC "CHKCL" input for check claim. Computer generated. CC "CHKCL" is input. Asterisk appears 30 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
RFCK CC "CHKCL" input for photocopy request (including LP trace). Computer generated. CC "CHKCL" is input. Asterisk appears 30 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
OOPS CC "CHKCL" claim or photocopy request rejected by RFC, as indicated by "Reject Disposition Code" , corrective action required. Computer generated. When reject received from RFC. Asterisk appears 14 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
ACKN Claim or photocopy request processed by RFC to TCIS by " Disposition Code 01 or 2" . Computer generated. When "Disposition Code" is received from RFC. Asterisk appears 30 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
ST32 Check is outstanding. Computer generated. When Status Code "32" received from RFC. Asterisk appears 45 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
841P TC 841 posts and sets "P-" Freeze. Computer generated. When TC 841 posts. Asterisk appears 14 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged (unless 45 days have not elapsed from the received date of the check).
PAID 1. Check cashed, claims package and/or photocopy to follow, as indicated by "Status 11, 14, 15, 16, 17, 18, or 20" .
2. Direct Deposit verified and FMS 150.1 to generate at RFC, as indicated by " Status 09 or 9" 		Computer generated. When Disposition Notice received. Asterisk appears 30 days from action date.

Note:

If case has already been updated to "Category Code 3858" because the claims package came before the "Status 11" etc. and has already been mailed to the taxpayer, the computer will not change the " Category Code PAID" . The case will remain in "Category 3858" to reflect the true status of the case.

3858 1. FMS Form 1133 and check copy sent to taxpayer or
2. There is no check copy and taxpayer is denied. 		CC "ACTON" When items are mailed to the taxpayer. Asterisk appears 45 days from action date.
1 thru 9 would indicate how many weeks it has aged. When asterisk appears in "HMMM" column, case is overaged.
TOAD Completed FMS 1133 and check copy sent to FMS for adjudication. CC "ACTON" When items are mailed to FMS Hyattsville, MD. Asterisk appears 60 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
3859 FMS 3859, Claims Disposition Notice, (or computer generated version) received from FMS in Hyattsville, MD. CC "ACTON" When Disposition Notice received. Asterisk appears 14 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in HMMM column, case is overaged.
RECL TC 841 to post from "Account 6565" . CC "ACTON" When case submitted to the Accounting function. Asterisk appears 180 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.
1081 Reclamation Credit received from FMS. CC "ACTON" When 1081 "TRACS" listing received. Asterisk appears 30 days from action date.
1 thru 9 would appear to indicate how many weeks it has aged. When asterisk appears in " HMMM" column, case is overaged.

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