These are due process notices and there is no requirement that IRS return them to the agency or forward them to the taxpayer. See IRM 21.4.6.5.8.4, Review the Form 8379 for Completeness, and allocate the form per IRM 21.4.6.5.10.1, Allocation of Tax, and IRM 21.4.6.5.10.2, Allocation of EITC. Input any adjustment needed for the UCE before processing the Form 8379, Injured Spouse Allocation. If a taxpayer believes they have been discriminated against on the basis of sex, race, color, national origin (including limited English proficiency), disability, reprisal, religion, or age, advise the taxpayer that he/she can forward an email to *EDI.Civil.Rights.Division@irs.gov, or send a written complaint to: Internal Revenue Service, Office of Equity, Diversity and Inclusion, CRU , 1111 Constitution, NW, Room 2413, Washington, DC 20224. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. All manual refunds from IMF accounts require the input of the appropriate BPI, except as noted in paragraph (5) above. See IRM 25.15.5.2 Community Property States. Form 8379, Injured Spouse Allocation, is not a separate claim. Advance payments are not subject to reduction or offset. Refer to Document 6209, Section 8A, Master File Codes. If Combat indicator is "1", then the taxpayer is still serving in a combat zone. Bypass TOP offset for primary TIN's debts and may offset to the Office of Child Support Enforcement for secondary TIN when an automatic stay is in effect or when the creditor agency has obtained relief from the automatic stay. One additional week should be added to cases that will be held and released one week later with TC 810/811. Do not input a TC 571 as it will create an UPC 168 RC 0. Whether a State recognized same-sex marriage during the tax year on the Form 8379 does not affect if a taxpayer is entitled to injured spouse relief. 1) Taxpayer inquiries about existence of a debt. Bureau of the Fiscal Service maintains these debts and affects the offset through TOP. Use HC 3, RC 087, and PC 8 when applicable and use the appropriate post delay code. Follow normal IRM procedures to work the case. The American Rescue Plan Act of 2021 allows the taxpayer "subject to income limitations," to exclude $10,200 (MFJ - $10,200 per spouse) of Unemployment Compensation from income for tax year 2020. 1) Taxpayer indicates Form 8379, Injured Spouse Allocation, was filed, Initiate procedures to verify offset and receipt of Form 8379. If you think you qualify, determine which agency withheld your tax return. In some instances, a TC 899 will unpost due to an erroneously deleted TC 898. All Forms 1040 series indicating "Injured Spouse" in the upper left corner are blocked in BS 920929. When working an injured spouse case after offset of the original overpayment and the stimulus payment, you will input two adjustments. the main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2 and the taxpayer was displaced from that home because of the severe storms, tornadoes, or flooding. The date of the offset by the IRS or BFS is not relevant for the purposes of determining timeliness of the request to reallocate the overpayment. Be sure to Indicate "TC 766REJ" on the adjustment. If Form 8379 was filed for any filing status other than Married Filing Joint (FS 2) release the refund with a TC 571. When the Form 8379, posts to the wrong spouse's TIN, work the form under the correct TIN, before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. If there is an outstanding IRS obligation for the primary or secondary taxpayer, compute the Injured Spouse refund. Most of refunds are canceled for the original amount issued. See IRM 21.4.6.5.12.3, TC 766 Reject Listing. Refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339, for agency address and phone number. The debt may be activated, inactivated or deleted within TOP before a refund is issued. Agency inquiries must be answered by the IRS campus or territory office receiving the correspondence. The debt may be activated, inactivated or deleted within TOP before a refund is issued. 7) Taxpayer's overpayment is being held by -Q Freeze. You may encounter situations that require an opinion by IRS Chief Counsel. Issue a manual refund to the Injured Spouse if a debt is owed by the other spouse to Child Support. If Insolvency states not to issue the refund, send Letter 3179C, "Refund Offset to Treasury Offset Program (TOP) and Injured Spouse Inquiries" , informing the injured spouse the result of the allocation and advise the injured spouse to contact Insolvency. Before reversing any offset to Office of Child Support Enforcement (Agency Codes 1 and/or 2), see IRM 21.4.6.4.2.4, Child Support TOP Offsets. The amount of credit elect is reduced by the total amount of debt owed. If there was an Agency Refund for a partial amount reverse any remaining amount TC 898/TC 971 AC 598 minus any TC 899/TC 971 AC 599. Refund offsets to child support, TOP debts, State income tax obligations, and Unemployment Compensation debts are handled by the Treasury's Bureau of the Fiscal Service, (BFS) formerly Financial Management Service (FMS), through the Treasury Offset Program. An error was made when calculating the EIP, and we are working to correct the impacted accounts. Also covered is the processing of Form 8379, Injured Spouse Allocation, and Offset Bypass Indicator (BPI), and processes for reversing offsets when Mixed Entity, Mixed Period, ID Theft, Hardship and Offset Bypass Refunds, and First-Time Homebuyer Credit Recapture is involved. Calculate each spouse's share at a rate of 6.2 percent up to $400.00 for each spouse. For non-filer returns, see IRM 21.4.6.5.33.2, Non-Filer Returns for Economic Impact Payments (EIPs). Have the manual refund document signed by the authorized approving official. The offset notice will show: Original refund amount. See IRM 21.6.3.4.2.12, Premium Tax Credit. 7) Taxpayer is aware of offset made, but claims the remainder of the refund not received. Refer the taxpayers to the TOP Call Center at Bureau of the Fiscal Service at 800-304-3107, Telecommunication Devices for the Deaf (TDD) 8008778339 for information. Form 8379, Injured Spouse Allocation can be worked whether the Combat indicator is "1" or "2" . The credit balance on the module must be held so the taxpayer can reply to the no consideration letter with the information needed to make the return processable. If credits are applied back to the IMF account and then refunded because there are no other tax, penalty or interest obligations, the taxpayer may void the check and return with instructions to apply the funds back to the LLC tax period(s). Please follow IRM 21.4.6.5.8.4 (5) Note Review the Form 8379 for Completeness regarding when the exemptions and/or the total credits are not allocated. Complete thorough research of the account and modules to identify the E- TTP Freeze status. Room 556 C Therefore, discrepancies may arise from one cycle to the next and IRS may not be aware of a TOP debt. Typically, a mixed entity case involves the filing of returns by both the owner of the TIN and the non-owner. If the Agency Code is 1 or 2 offsets due to delinquent child support occurring during processing years 2012-2015 will be identified by the posting of Transaction Code (TC) 971 Action Code (AC) 126. Form 8379 was not filed with the original return. Rul. Advise the taxpayer to contact the agency on the notice if an offset occurs. To the latest of these three dates, add 45 calendar days. If your unit or office processes several of these refunds daily, the work leader will contact Bureau of the Fiscal Service to research each of the cases at the same time, thereby reducing the time spent encountering busy signals or waiting for the next available CSR. See IRM 21.4.6.5.12.2, Manual Reversal of TOP Offset. 1. Send the taxpayer a Letter 916C, Claim Incomplete for Processing; No Consideration, letter advising the taxpayer why the allocation is not being considered. IRS determined that Earned Income Tax Credit (EITC) must be allocated without regard for community property laws. 1. Net all TOP offset transaction codes with the same Offset Trace Number (OTN) to determine the TOP offset amount available to reverse. If a TC 898 appears on the account after the manual reversal request (MRR) has been submitted. Community property allocations are dependent upon whether the states recognized community property rights for same-sex marriage. If the taxpayer calls or corresponds and would like to leave the funds on the LLC account: use taxpayer correspondence as the source document (SD), or. A manual refund is needed if the taxpayer owes a debt to an agency other than Child Support. If the secondary spouse owes the debt, the debtor TIN will also be shown DEBTOR-TIN. Use CC COMPA to compute the injured spouse's portion of the amount of credit interest based on the injured spouses reversal amount. It generates on the first refund (TC 846) issued after the reversal of a TOP offset to a primary TIN's debt. Once the RRC offsets to pay a TOP debt, it loses its identity as a RRC payment. (I) Credit Interest Freeze, sometimes set by the posting of TC 150, CCC U, indicating no reply by taxpayer to IRS letter requesting missing information. The Telephone Transfer Guide directs you to this specific IRM reference to ensure the above criteria is met before transferring to Application 35 using ACD = 92035 or IUP = 1035. Taxpayers may file an Injured Spouse Allocation by attaching a Form 8379, Injured Spouse Allocation, to their tax return and noting Injured Spouse in the upper left corner of the Form 1040 series. When you have an unusual situation and the figures cannot be plugged in the SERP Accounts Management Services (AMS) electronic worksheets, use the paper version to determine the injured spouse share of the refund. The OTN input with TC 766 must match an OTN of a prior posted TC 898. You should verify the computation is correct, before sending the Form 8379 Injured Spouse Allocation Worksheet to the taxpayer. The new regulation does not apply. Also, the refund name line may not match the debtor's name in TOP, allowing a refund to be issued despite the presence of a TOP debt. See exception below. 2020 Recovery Rebate Credit: Must file a 2020 tax return to claim, if eligible. Satisfy a balance due that resulted from an amended return received after the due date on the module where the offset occurred. BPI 4 allows for the TOP offset to any child support debts. A UPC 134, RC 05, occurs when a TC 766 with an Offset Trace Number (OTN) attempts to reverse a TC 898 with the same OTN, and the 23C date of the offset is more than six years from the date of reversal. Injured Spouse Claim OBR Significant Hardship should be notated in the remarks section. Input a TOP offset reversal to reverse the net offset amount remaining on any/all tax modules. 11-2016 (MeF) and Rev. Monitor the account for the TC 898/TC 899 to post, do not close the IDRS control base. The amount may be for all or part of the TC 898 with the same OTN. Your Lead Tax Examiner must contact Bureau of the Fiscal Service at 8003043107, TTD 8662970517 Monday through Friday from 7:30 AM to 5:00 PM CST, to determine if a TOP liability exists for the primary TIN or the secondary TIN, if it is a joint return. 8) Taxpayer claims agency has no record of offset. The status of a debt, at Bureau of the Fiscal Service may change daily. The manual reversal request cannot be cancelled once initiated. The AM Function may receive copies of legal documents regarding support obligations. Master File reversed $550, TC 766, and the agency refunded $450, TC 899 type 2, leaving only $586 for Bureau of the Fiscal Service to return. This occurs after a refund is certified by Internal Revenue Service (IRS) for payment by BFS, but before the refund check is issued. Input a TC 290 for .00 without the corresponding RN 808/809/810/811 to release the overpayment. Under IRC 6402 (a), the Service has discretion whether to offset an overpayment against a liability, but only when it is with respect to an internal revenue tax. Review procedures in IRM 11.3.1, Introduction to Disclosure, for official disclosure information. There is an open control base to a CSR and 8 weeks has passed and the case has not been worked. If you do qualify for a tax refund offset hardship exception, you may not ever be able to get one again. Your Lead Tax Examiner or an employee of the Taxpayer Advocate Service must contact Bureau of the Fiscal Service at 8003043107, Monday through Friday from 7:30 AM to 5:00 PM CST, to determine if a TOP liability exists for the primary TIN and secondary TIN if it is a joint return. A letter is not needed for Community Property allocations when joint credits are involved. Care must be taken to determine which laws apply in each circumstance. Advise the taxpayer to allow 30 days to process. TOP offsets on condition 1 scrambled SSN cases are reversed only if the wrong taxpayers money offset to the debt. ", RC 090 - "the offset resulted from a payment which was specifically intended for application to an outstanding IRS balance. See IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals, for levy proceeds. The Form 8379, Injured Spouse Allocation, is an allocation of the taxpayers joint income, payments, deductions, exemptions, and credits used to determine each spouses share of the joint overpayment subject to offset for any eligible individual or joint, Federal tax debt or TOP debts. If TXMOD shows an open base with MRR/NHQ do not submit request for a manual reversal. Prepare Form 3753 for amount of overpayment more than the TOP liability. Once you know which agency. If an agency refund has occurred, do not reverse the TC 898 or TC 971 AC 598 (manual input of TOP offset record) for any amount refunded by the agency. See IRM 25.12.1.12.4, Processing Injured Spouse Allocations for instructions. If either spouse's share of the RRC was reversed in cycle 200852, the amount reversed should be allocated to that spouse. For the X-REF, input the TIN of the person whose name is on the refund. ECC-MTB searches this file after any applicable tax offsets are determined but before crediting the credit elect amount. If the above timeframes have passed, and the case has not been worked, is assigned to a CSR, and you have access to CIS, leave a Case Note for the CSR working the case. Contact Insolvency at the Centralized Insolvency Operation (CIO) or fax Form 4442, (see (1) above for faxing instructions) to determine if the Injured Spouse's refund can be issued. The injured spouse's portion of tax exceeds their refundable credits. If a TOP debt exists, the IRS has no authority to issue an OBR. Split the credit 50/50. Input a TC 290 .00 with a hold code 4 to hold the credit when sending a no consideration letter. ", RC 091 - "based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.". The taxpayer must have specified that the payment is a cash bond. See IRM 20.2.4.7.5.2, 45-Day Rule and All Original Tax Returns, for the dates of systemically generated refunds. SC 7 results in the following statement on the notice: "All or a portion of your Federal Income Tax Refund offset which was previously applied to an outstanding child support or federal agency debt is now being reversed because". BPI (1) (2), (8) and (9) are not valid when the BPI was set to (4). If you need to reverse a TC 898/TC 896 that is over six years contact the TOP Liaison , for a manual reversal. Audience: The primary users of the IRM are all IRS employees in Business Operating Divisions (BODs) who are in contact with taxpayers by telephone, correspondence, or in person. A refund offset to an outstanding IMF, BMF, or NMF tax debt is referred to as a tax offset. TC 150 is not blocked 92 and a paper return was filed. When the taxpayer disagrees, or does not understand the injured spouse allocation by the IRS: If you work injured spouse allocations, verify the Form 8379, Allocation Worksheet. After an offset occurs, there are situations when we ask the Bureau of the Fiscal Service to reverse it. This credit is reported on Schedule M of the Form 1040/Form 1040A, U.S. If CP 21B, Data Processing Adjustment Notice, Overpayment of $1 or more, is not generated or Priority Refund Transcript criteria is not met, the back-off period is 18 calendar days. If you do not work injured spouse, send a Form 4442, Inquiry Referral, to the campus where the case was originally worked. Rev. Use CC INOLE for cross- reference Taxpayer Identification Number (TIN) OBL checks. Issue a manual refund using BPI 2 and BS 9. The refund generated from this reversal has a BPI of 1. Take any action necessary to resolve an erroneous refund condition. The following conditions do not require a manual refund: If both taxpayers owe a married filing joint debt and it is the only Federal tax debt owed, input RN 808/RN 809 or RN 810/RN 811 for the difference of the Injured Spouse's portion of the overpayment and joint liability. Continue to adjust the account using normal Mixed Entity procedures as outlined in IRM 21.6.2.4.2., Mixed Entity Procedures. A subsequent transaction with CRNs 808/809 is not needed to issue the refund in both names. The American Recovery and Reinvestment Tax Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009 extended the first-time homebuyer credit and provided a waiver of the requirement to repay the credit, except when taxpayers dispose of the new residence within 36 months of purchase. That notice provides the creditor agency contact information. For late filed returns with pre-paid credits, you must figure the 2-year period from the date the tax is considered paid. See, Continue computing the injured spouse's refund based on Tax offset instructions. 2) Taxpayer claims he/she didn't receive a refund of overpayment. To determine the appropriate campus, use the 8th and 9th position of the RSN. Work any EIP 3 portion on the 2021 account. Contact the TOP Liaison at , for a manual reversal. IRS personnel do not have access to the TOP debtor database and cannot tell if a debt exists before a TOP offset occurs. Any application requiring specific criteria to be met before transferring the call is only listed in the IRM. When working an injured spouse allocation with a Federal tax offset "I" debt, the control base must be changed from DMFC (97140 paper)/DMFE (97144 electronic) to DMFT (40110 Tax Debt). The BPI is a one-digit indicator that identifies for BFS whether the refund is eligible for offset by TOP. Bureau of the Fiscal Service provides the debtors name only. In all instances related to injured spouse if you are unable to determine the actual received date of the return use the TRDBV date. If the allocation using the above formula results in no EITC for both spouses due to a loss claimed on the joint return, the EITC is allocated to the spouse claiming the loss, since it is that loss that qualified the joint account for the EITC. Also, check for any OBL that may have occurred with a prior year-spouse. The Refund for both taxpayers on a joint return (FS2) could be offset for separate debts that are reported to IRS and shown as separate TC 898(s) or TC 971 AC 598(s). He/she may contact the TOP Call Center at 800-304-3107, TDD 8008778339 to determine if a debt is owed and whether an offset will occur. Return processable date (RPD) (date return was received in processable form). Research the account to determine if a manual reversal is needed and the offset cannot be reversed via a TC 766. When the original Form 1040, U.S. Information indicates taxpayer may have resided in both types of states, or in two or more community property states. Refer to IRM 21.4.6.5.9 (3), Community Property Allocation, for a list of community property states. Use the shortcut method and annotate the case 50/50 split for the credit. Individual Income Tax Return, or Form 1040-X, Amended U.S. The wife later files an income tax return for 2012 that claims a $500.00 overpayment. See IRM 21.4.6.4.2.4, Child Support TOP Offsets. If OTN does not match, input a TC 767 with the invalid OTN, and a TC 766 with the correct OTN. This application of a tax overpayment is called a refund offset. Do not call the agency. The Department of the Treasury (Treasury), Bureau of the Fiscal Service (BFS), amended its regulation governing the offset of tax refund payments to collect past-due child support obligations.

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