UPC 137 and UPC 437 are IMF and BMF UPC(s) unique to the posting of a TC 898 or TC 899. If separate returns were originally filed and each person claimed part of the credit, each person should recapture 6 2/3 percent on their separate returns. Special exceptions exist for many of the community property states identified above, Refer to IRM 25.15.5, Relief from Joint and Several Liability, Relief from Community Property Laws. Add two days to the date of Input to allow for the two-day suspense for review. Most of refunds are canceled for the original amount issued. 3) Taxpayer claims debt was discharged in bankruptcy. Clearance of overpayment for amounts less than $5.00. If there are any result codes not listed in the table above, please contact the IRS Headquarters Analyst. If the injured spouse is the primary taxpayer and Part II, line 11, box is checked on Form 8379 (Rev. Injured Spouse cases originally worked and closed in Philadelphia, send the Form 4442 to Memphis Accounts Management. "O" code the return for processing to prevent an erroneous refund. Inform the taxpayer of the actual amount offset from his/her refund and still outstanding. For Form 8379, compare the injured spouse's refund allocation with the TC 898 on the module and reverse only the portion needed. When working an injured spouse case after offset of the original overpayment and EIP is involved, you may need to input two adjustments. Be sure you are speaking with the taxpayer or authorized representative. Be sure that all TC 898(s) net to zero before attempting to merge the accounts again. A manual refund was issued for an amount greater than the credit available on the module (X Freeze). 2) Taxpayer claims he/she didn't receive a refund of overpayment. If you work at a remote call site and you don't have access to CIS or do not work injured spouse allocations, transfer the call to Application 35 using ACD = 92035 or IUP = 1035. The TC 766 posts with the date of the refund creating the offset when that refund includes credit interest. This includes offsets against past-due support (delinquent child support); past-due legally enforceable debts owed to Federal agencies; past-due legally enforceable State income tax obligations; and covered unemployment compensation debt (basically unemployment compensation received by fraud). See IRM 21.4.6.5.10.4 (2), Injured Spouse Refund-TOP Offset, for interest computation. Washington recognized same-sex marriages starting in late 2012. Issue a manual refund using BPI 1 and BS 9. Contact the TOP Liaison at , for a manual reversal. Once the funds are transferred, it will create a balance due plus interest on the LLC tax period(s) and a credit on the individual income tax year(s), from where the refund will be generated. Do not refer taxpayers calling about Form 8379, Injured Spouse Allocation, to the Innocent Spouse number. Hold until the -Q freeze is released with TC 572 by EXAM or IVO. But note that there are numerous exceptions which would allow a taxpayer more time to file a claim for refund, and consequently, more time to file the associated Form 8379 see IRC 6511. See IRM 21.4.6.5.10.5, Injured Spouse Refund - Tax Offset. A manual reversal is required when you have an IMF/BMF offset which was sent to Bureau of the Fiscal Service in error and cannot be reversed with a TC 766 (IRS reversal) or TC 899 (Bureau of the Fiscal Service reversal). When the interest payment is present on a tax module, including its associated accrued interest amount (also posted as TC 776), and the sum was offset with TC 898, compute TC 766 as follows: Compare the injured spouses share of the joint return overpayment with the total return overpayment, determining its percentage rounded to the fifth decimal point.Example: The total of the 2019 joint return overpayment for the taxpayers is $9,500, of which $4,200 is the injured spouses share. Upon completion of the return, work your case. a TOP offset has occurred and the TOP offset notice was received. A request for an OBR must be worked immediately upon receipt. See IRM 21.4.6.5.8.7(2), Incomplete Form 8379 Signed or Filed with Original Return. Continue to adjust the account using normal Mixed Entity procedures as outlined in IRM 21.6.2.4.2., Mixed Entity Procedures. Employees staffing Application 35 will not transfer calls to lower level account applications and must address all account issues in addition to the Injured Spouse inquiries listed below. More than 45 days have passed since TC 971, AC 071 was input, and there is no case control. Information indicates taxpayer resided solely in a community property state and taxpayers provided a signed premarital agreement. In general, IRS may honor a hardship refund request if the taxpayer has no debt or owes only Federal taxes. Quality data and guidelines for measurement are referenced in IRM 21.10.1, Quality Assurance - Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, TEGE, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support. After preparing this form, per the instructions on the form, return it to the liaison and the procedures will be initiated. If the Form 8379, Injured Spouse Allocation, is incomplete, attempt to contact the taxpayer or authorized representative by phone and request the missing information such as: Allocation of itemized deductions (Schedule A), Allocation of exemptions other than personal exemptions, Allocation of payments if unable to determine to whom they belong. Application 35, an Injured Spouse Allocation (ISA) telephone application, enables CSRs who are fully trained in Injured Spouse Allocation processing to assist taxpayers. IRS has no say in this matter. 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). If there is no Form 8379 on file, the injured spouse must file Form 8379, to request their share of the EIP which offset. Suggested response: Our records show the Excess Advance Premium Tax Credit Repayment (APTC) was not allocated on Form 8379. Information indicates taxpayer may have resided in both types of states, or in two or more community property states. Use a manual refund to reissue a returned refund check. Each spouse must take their own exemption and is entitled to his/her share of the joint RRC/ESP up to $600.00. The calculation below provides the amount of interest related to the portion of the refund that was canceled. Do not call the agency. A UPC 138, RC 0, will still result if there is a TC 898 TOP offset and the TC 740/TC 841 is less than the related TC 840/TC 846: (TC 899 type 2 or 3) + (TC 899 type 4) (TC 76X), all with the same OTNs as the TC 898. 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. The agency is required to make the refund payable in the name or names that were on the IRS refund file at the time the original refund and TOP offset occurred. Only use BPI 3 if instructed to do so by Insolvency. Therefore, if the taxpayer does not respond by the time frame given in the Letter 3064C, IRS will transfer the funds back to the individual tax account where it was originally offset from and enter the appropriate information in the "Remarks" section of the credit transfer. See IRM 21.4.6.5.12.1, Input of TOP Offset Reversals Reference Number (RN) 766 with OTN. The TC 766 cannot be within $10.00 of any TC 766 amount listed on the account without using a Priority Code (PC) 8. The remaining $400 overpayment offsets to the Federal tax debt. Input the net credit adjustment (TC 29X) using HC 1 or HC 4 and the appropriate blocking series, SC, RC, and PDC for 1 cycle. For either situation (f) or (g) above, advise the taxpayer that the Form 8379 cannot be processed when there is a balance due or no overpayment exists on the account. A HC 2 is not needed when box 11 is checked. If part of the RRC payment was offset and part was refunded to the taxpayers, deduct the refunded amount from the credit amount to determine if the injured spouse is entitled to any additional refund. If the DEBTOR-TIN was present and filed with the secondary spouse's TIN, the offset would have been to the secondary spouse's debt. If BFS rejects the reversal request, you will receive notification from the TOP Liaison Office, for any action needed. See this press release. The timeframe for filing Form 8379 for Federal Tax Debts or TOP Debts is the same as the timeframe for filing the claim for refund (generally 3 years from the date the return was filed or 2 years from the date that the tax was paid, whichever is later, but there are numerous exceptions see IRC 6511 . See IRM 21.4.6.5.11.1(11) below for conditions that will allow an OBR. Therefore, do not disclose this information to the taxpayer. Reverse a TOP offset to the Office of Child Support Enforcement (Agency Code 2), over 5 months old (150 days) from the refund payment date unless for an injured spouse allocation. This credit is reported on Schedule M of the Form 1040/Form 1040A, U.S. Any remaining overpayment will release to the joint outstanding debt. Form 8379 was not filed with the original return. See IRM 21.6.6.2.54.1 Account Adjustments for the UCE. When working an injured spouse form for a tax offset (I) debt, the control base must be changed to something other than DMFC (97140 Paper)/DMFE (97144 Electronic). A TC 898 or TC 971 AC 598, originating from a computer-generated refund, will match the date of the TC 846. For prior revisions of Form 8379, always issue the Injured Spouse's portion of the refund in "one name only" even if the one name only box on line 11 is not checked. Transfer the Injured Spouse's portion of the refund back to the joint account. If the account requires the reversal of four or more TC 898s, and will be issued in both names input all the required TOP offset reversals (TC 766) using HC 3 with the appropriate blocking series, SC 7, RC 086 and PC 8. Allocate the education credit to the spouse who would have shown the item on his or her separate return. Bureau of the Fiscal Service generates this transaction when a partial offset occurs and the remainder is refunded, but later returned. If there are any IRS debts which must be by-passed or the address on ENMOD is different than the address on the Form 8379, issue a manual refund for the injured spouses portion of the overpayment. Determine the amount of offset available for reversal. For all shortcut methods, if the Recovery Rebate Credit (RRC) is claimed and the injured spouse is entitled to half of the RRC. If applicable, refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339 for offset information. TOP offsets will not be made against refunds issued from an MFT not shown above. Continue computing the injured spouse's refund based on TOP offset instructions. If the injured spouse indicates on Form 8379, line 5b, that his or her marriage was recognized under the laws of the community property state(s) listed on line 5a, allocate items based on the instructions provided in the table above. Close you case using Document Type-Internal Transcript, IDRS Cat Code IRRQ, Program Code 40000. When the TC 150 posts, a CP 36D notice generates to the AM Function, The BS sets a TC 570 -R freeze to hold the credit until the Form 8379 is worked, and. Additional Child Tax Credit, Making Work Pay Credit, American Opportunity Credit, etc.) If the Form 8379 is attached to the joint Form 1040 or Form 1040X and the Form 1040 or Form 1040X is timely under IRC 6511, the Form 8379 is timely for any refund requested on Form 1040 or Form 1040X. Bureau of the Fiscal Service will reduce the offset against the oldest certified debt first. If the Form 8379 is not attached to the joint Form 1040 or Form 1040X, but is instead filed separately, the timeframe for filing Form 8379 for Federal Tax Debts or TOP Debts is the same as the timeframe for filing the claim for refund (generally 3 years from the date the return was filed or 2 years from the date that the tax was paid, whichever is later, but there are numerous exceptions see IRC 6511 . If the injured spouse is entitled to the entire overpayment, this computation is not needed. See exception below. Meaning, the TC 706 credits must transfer from one spouse on the originating account either as a single or separate filer or as a joint filer with a new spouse. See IRM 21.5.6.4.4, -B Freeze, IRM 21.5.2.3, Adjustment Guidelines Research, and IRM 21.5.3.4, General Claim Procedures to resolve the -B Freeze. Levy proceeds that result in offsets are not considered misapplied payments. Any remaining overpayment will release to any outstanding debt. Identify the missing information on the original return, if available, and write the taxpayer requesting it or if the issue can be resolved by having the taxpayer fax in missing information, you may attempt to contact the taxpayer/authorized representative by telephone and request the missing information be faxed to you, explain that the injured spouse Form 8379 cannot be processed until the information is received. A reversal of a TOP offset cannot be input to: Solely satisfy an audit or under-reporter deficiency posted after the offset occurs unless the offset resulted from a TC 640/TC 670 payment intended specifically for the tax audit increase. Input a TC 570 to stop any erroneous refund from occurring prior to the posting of the adjustments. A refund was not issued and the taxpayer may or may not be experiencing a financial hardship. If part of the stimulus payment was offset and part was refunded to the taxpayers, deduct the refunded amount from the credit amount to determine if the injured spouse is entitled to any additional refund. If CC INOLET does not display a debt indicator, then the IAT Results IS screen displays the "N" . Form 8379, revision date 11-2021, filed with MeF returns erroneously rejected entries on the Form 8379 for Line 16 Non-refundable credits and Line 17 Refundable credits column (a) (b) and (c) did not populate. See IRM 21.4.6.5.8.9, Form 8379, No Consideration Procedures, for instructions. (1) This transmits revised IRM 21.4.6, Refund Inquiries, Refund Offsets procedures. You should verify the computation is correct, before sending the Form 8379 Injured Spouse Allocation Worksheet to the taxpayer. When the wrong spouse is identified on Form 8379 and you are issuing a manual refund, you must notate in the remarks section "INJ SP Incorrect on F8379" , of Form 5792, Request for IDRS Generated Refund (IGR) or Form 3753, Manual Refund Posting Voucher. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. Follow procedures in (2) below, if appropriate. Individual Retirement Account (additional tax reported on Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts). If there is no PENDMRR or MRRTONHQ in the IDRS case control activity, then the TC 899 Type 3 is a BFS/IRS correction. If the Form 8379 is not attached to the joint Form 1040 or Form 1040X, but is instead filed separately (after offset), and is received after the time allowed, See IRM 21.4.6.5.8.10, Time Period for Submitting Form 8379. A TC 971 AC 598 will appear on TXMOD with the OTN shown as MISC field and the offset amount will be shown as MEMO-MONEY-AMT. This change limits the time during which Treasury may require States to return the offset funds to six months from the date of such collection. For taxpayers inquiring about Other Issues: An injured spouse may contact IRS before or after an offset occurs. After 2018, the SRP is $0.. See IRM 21.4.6.5.27.1, Injured Spouse Allocation/Recovery Rebate Credit (RRC). Advance CTC is not subject to offset. For the State Income Tax Levy Program (SITLP), refer to IRM 21.5.7.4.7.17, State Income Tax Levy Program (SITLP). Notate RRC 50/50 after the appropriate shortcut method used. You will need to do a manual reversal request. If the current date is more than 30 days past the 23C date and review of the case indicates a clerical error did not occur, the employee should inform the customer that the overpayment has been applied to the balance due account and the IRS cannot undo it. Advise the taxpayer of corrective action. Under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, taxpayers may elect to use their 2019 earned income to figure the EITC for 2020 if their 2019 earned income is more than their 2020 earned income. The programming issue was fixed. Her 2013 overpayment offsets with TC 706 to the 2011 account filed as John & Mary Cod, married filing joint.