Tax intercept program

There are a number of conditions that may prevent refunds from being worked even when the interest-free period is open or the last day for input has not passed. These conditions can be checked at the same time as the received date review. Other limitations may not be found until further research is performed. RICS identifies individuals filing false returns claiming refundable credits, income and withholding as part of schemes.

These programs are implemented at the beginning of every filing season. Research transactions codes to determine if credits should be released. Contact with RICS may be required. The following examples of QRP account identifiers:. If you see this specific activity control prior to performing NOREF, continue normal processing to avoid the issuance of two refunds.

If contacted by RICS, inform them the only way to get the money back is to contact the taxpayer. If there is an open control base on a module, employees are required to contact the area with the active control base prior to initiating a manual refund.. The other work area may request that you stop the generated refund and not issue a manual refund.

If this occurs, count the interest as savings. If you are unable to take action on the account, annotate the listing as NMF. If they do, count the interest as savings. There may be more than one tax adjustment transaction posting at the same time as TCB refund account.

Credits against taxable income or credits against tax are allowable in the same cycle as the refund. These credits must be included in the overpayment amount. Some TCB adjustment refunds have manually computed credit interest TC posting the same cycle as the refund. If there is no history item and the TC appears questionable, call the employee to verify the correct action. If there is a TC with money present, annotate the listing as TC Check for any pending assessment transactions, credit transfers or credit reversals that may affect the availability of the credit that is being refunded.

Stop the generated refund and claim the interest saved if all of the available credit is being reversed. If only part of the credit is being reversed, claim the savings on the portion that is being reversed and issue a refund for the remainder credit. These reversals will require restricted interest computations. Some refunds may include interest on offset credits or abated penalties and interest i.

Research may indicate a manual refund was issued. Coordinate with the initiating function to determine if the potential refund is due to the taxpayer. Cases identified with TC as direct deposits DD. Do not attempt to issue manual refunds on these cases. Manual refunds TC may also be issued via direct deposit in certain situations, i. The response will be a summary screen, which can be used to retrieve each page of the return information.

Enter a 1, 2, etc. Look for inconsistencies in the submitted return information compared to the posted information. Evaluate the amounts claimed in relationship to other entries. Question entries, such as the reported income being low compared to the amount claimed as withholding or the amount entered on the refund line being less than the generated amount.

If the amount being refunded exceeds the amount claimed on the BRTVU display, compare the estimated payments or other credit amounts claimed, to the posted amounts. Periodically a payment intended for the next tax year will be applied to the current year account. If the refund is based on a payment that is not claimed by the taxpayer and there is no indication it was intended for a future period, research the credit using the Remittance Transaction Research RTR database.

If this application is not available to the employee s performing the review, contact one of the following Accounting functions for assistance: Payment Tracer or Erroneous Refund. This step is also required to allow identification of any math errors reflected at the start of the review process for inclusion on the Notice Retype Fax List.

These times vary depending on local requirements. The cut-off time frame must be verified with the local Notice Review staff. A notice will be issued to the taxpayer when TCB or math error adjustments appear on the account. Any notice generated must be corrected by Notice Review NR to reflect the correct refund and interest amount.. NR must be alerted to request the applicable notices on the local control file before the BMF Refund Intercept Program report is available.

Selections can be made by MFT or notice type. Coordinate with Notice Review by providing a list to request selection of the notices each week before noon EST on Thursday. If a restricted interest computation is required, annotate the listing with an NR next to the ME math error entry. Annotating the listing will provide a quick visual confirmation of the notices that need to be corrected.

It will be necessary to manually compute credit interest on accounts that include abatements of interest and or penalty TC or TC , or have TC credit offsets with TC credit interest that are posted in the same cycle as the generated refunds. The IRS is required to pay credit interest on penalty and interest abatements only when the taxpayer has paid the assessed penalty or interest and it is subsequently abated. There may be occasions when part of the overpayment being refunded on an account needs to be held for a pending adjustment or dishonored check or credit reversal.

This can occur when a locally input action comes onto an account right after the Master File analysis has been completed. This happens very infrequently so no description of the interest computation is included in this procedure. When the abated amount is more than the most recent assessment, there will be more than one computation line on the COMPA. The total of the abated amount or amounts, if combined will be shown on the last line of the COMPA screen with each preceding line showing the balance after subtracting the last assessment.

Continue this sequence by always subtracting the assessment prior to the last. These computations are based on the assessment dates and the manual refund input date without consideration of payments on the account following the assessment dates.

The following table is an example of this type of manual credit interest computation. The table below displays posted transactions. The original return was filed and full paid before the audit assessment posted. Below is a display of posted transactions where the original return was filed and full-paid before the Audit assessment posted:.

All of the abatement transactions considered in this type of computation must be posted in the same cycle as the TC and TC First, start with establishing the date the manual refund will be input, then add one workday to get the final TO date for the last line of the COMPA.

Review the posted assessment transaction dates, recording each date, subtracting each assessed amount from the abated amount and repeating this step until the total abated amount is eliminated.

In this example, the abated interest and penalty can be combined on the COMPA because they share the same assessment date All of the penalty amount will be reversed as of this date. If the assessment dates are not the same on the abated interest and penalty, the computations will have to be done separately using the same procedure on both types.

Refund input date , plus one work day: Most recent assessment date: Both are assessed on the same date and the penalty amount will be eliminated as of that day so they can be combined. This can be performed if the penalty was not completely eliminated. Subtract the combined amount assessed on from the total abated amount.

This is the amount to compute interest, in the next step. Use the start date of the last COMPA line as the to date for the next preceding line, and the next most recent assessment date as the start date. The amount assessed on eliminates the remaining abated amount, and the IDRS interest computation will be captured on two lines. Note that the TC interest reversal paired with the TC refund cancellation totals the full amount shown on the TC paired with the TC refund. The interest on the credit offset interest is combined into the TC amount that is paired with the TC refund transaction.

The TC interest transactions, paired with the TC offsets, will not be reversed when the refund reversal posts. Note in the remarks section that the total TC amount on the offsets is included in the overpayment amount. In the abatement example, all of the transactions will be posted in the same cycle as the TC Occasionally, more than one offset amount may be paired with a single TC amount.

This occurs when the offsets are split to pay separate accruals on the gaining account and post with the same transaction date on the gaining account. The posting dates on the TC paired with the offsets will match the posting dates of the offsets on the gaining module.

The interest savings claimed for the refund must be reduced by the TC amounts paired with the offsets and any additional interest paid on this interest. Listed below is an example of the manual credit interest computation on accounts with TC interest paired with TC offsets. See the display of posted transactions. The original return was filed and full paid before the TCB adjustment posted. Note that the transactions included in this computation must be posted in the same cycle as the TC and TC The offset, interest and refund transactions that are paired together are separated by a space from the others to emphasize their relationship to each other.

Start with establishing the date the manual refund will be input then add one work day to get the To date. Use this date as the To date for each of the individual computations.

See example display of posted transactions where the original return was filed and full-paid before the TCB adjustment posted, below:. Unlike the computations set up for the interest on the abated interest and penalty, each of the offset transactions are independent of the others. Total the interest amounts together to determine the interest that must to be paid on the posted offset interest. This example is of a Form , U. The TC following the interest on the fifth offset amount is paired with the TC generated refund and is comprised of the interest on the remaining overpayment TC amount less all of the TC offset amounts and the interest on the posted TC interest paired with the offsets.

The TC paired with the TC offsets have not been reversed. Employees must document monitoring actions. Documentation should be reflected on the EMT listing along with locally developed history sheet. The Refund Intercept Program RIP employees work from cycle folders containing all related case work, including monitoring activity.

Managers are required to confirm employees are leaving the IDRS control base open after refunds are input and are properly monitoring accounts until refund transactions post. Also, managers are required to document the review of the monitoring on a weekly basis.

Managers will review monitoring documents and annotate with initials and date of review. Management will maintain this documentation in the cycle folder along with the required managerial monitoring of the monitoring on Integration Automation Technologies IAT , EMT. Monitoring activity is intended to prevent erroneous refunds from being issued as a result of Master File processing, or other local actions, pending posting of the manual refunds.

After the TC posts, the accounts should be monitored to verify the posting of the refund reversals TC and TC The inventory report should be used to check for credit or outstanding balances other than the refund amount during the monitoring period. Monitoring documentation must be maintained for a period of 90 days. A complete documentation file will include weekly monitoring actions completed by the employee, as well as the manager's completed review.

RIM means the refund interception was missed. If this occurs, there has been a duplicate refund issued and the account should be worked as an erroneous refund. If an erroneous refund is identified, follow IRM The control base information reflected on IDRS should be used to track the status of account until all transactions are posted. It automatically generates an Activity description. The Status Code is included on the refund input screen as part of the Line 4 entries.

The literal C on Line 4 should be overlaid with B to establish the control base in background status. The Category Code is also included on Line 4. It will be established as when the refund is input.

The Status Code is included on the refund stop screen as part of the Line 2 entries. Status Code B should be entered in the designated field to leave the control base in Background status. The resulting update on the control base activity display will be RR20XX A manual refund input will cause the taxpayer account to reflect a balance due status, pending the posting of the refund reversal TC This must be completed prior to the posting of the proposed assessment, offset or credit reversal.

Do not issue a manual refund if this occurs. In the event the refund reversal TC posts prior to the proposed assessment, offset or credit reversal, an erroneous refund may generate. The TC initiates a module freeze code "R" , preventing the issuance of an erroneous refund. This situation is most likely to occur on Examination and Underreporter cases. It is a spreadsheet maintained by fiscal year ending, with weekly results and broken down by posting cycle for BMF Accounts. It also provides combined totals.

Jackson IRS. Gov, Annette. Lloyd IRS. GOV, Stuart. Simpson IRS. GOV, JoAnna. Oropeza IRS. Crosby IRS. The Refund Interception Savings log is designed to automatically provide weekly and monthly receipt totals,, the number of refund stops input and the total interest saved. Also, the Log generates quarterly, half-year and full year totals. The log is designed to automatically modify all of the totals when corrections to previously entered data are made.

The transaction dates 23C of the TC is used to designate the month the results are reported to. All work and volumes will be charged to organization, function and program OFP — During receive date review of the Refund Intercept listings it may become apparent returns have posted with incorrect received dates.

Research for inconsistencies such as the received date is earlier than a previously posted TC or a TC posted later than the IRS received date. Other examples may be a number of returns posted. Order the questionable returns from Files within two weeks following the receipt of the cycle listing. Subtract the savings and volume from the Refund Intercept Report. If you determine the posted received date is in error, issue the manual refund without interest and stop the generated refund.

The collection statute expiration date CSED does not need to be corrected. They are established by the 23C posting date of the TC and are correct as shown in the table below. Home IRM Part3 3. Part 3. Submission Processing Chapter Accounting and Data Control Section Refund Intercept Program. Roles and Responsibility. See Exhibit 3.

Internal Controls. Every IRS employee plays a critical role in the assurance process. This administrative procedure does not affect any existing monthly payment arrangements in lieu of court action. If you believe that under the law your name should not be certified, you have the right to request that the Central Collection Unit investigate the circumstances and confirm or modify the existence or amount of the debt.

Please be specific, giving pertinent dates, amounts, case numbers, and contact persons. Please provide copies of cancelled checks, invoices or correspondence. Matters already determined by a court are not subject to redetermination. An investigation must be requested in writing to the Central Collection Unit, at the above address within fifteen 15 days of the above date. Following the completion of an investigation, you may request an appeal hearing to further contest this debt.

You have the right to appeal an adverse hearing decision to court. You cannot request a hearing until after the investigation has been completed. To discuss payment or to make any inquiry regarding the Tax Refund Intercept Program, you may call the telephone number shown above or write to the above address. Contact will not serve as notice for CCU to investigate your account. Please note our phone hours are Monday thru Friday 8 a.

If married, you should advise your spouse that your State income tax refund is subject to interception. Box Baltimore, Maryland