UNDERSTANDING THE IRS TRANSCRIPT. It s not as boring as your might think!

Transcription

1 UNDERSTANDING THE IRS TRANSCRIPT It s not as boring as your might think! 1

2 Disclosure Laws IRC 6103 provides circumstances when IRS may disclose information Tax return info may be disclosed to the taxpayer or their representative. 2

3 IRC 6103 Disclosure Law Tax return info includes Information off a tax return Files and info collected, recorded by, prepared, furnished to the Secretary in respect to a return or determination as long as associated with a particular taxpayer Pg 1 3

4 IRC 6103 Disclosure Law Tax return info must be disclosed to the taxpayer as long as the request is made in writing including: Name address & ID # Description of the info requested Evidence that requestor is entitled to the info. Pg 1 4

5 IRC 6103 Disclosure Law If verbal request, IRS must verify: Name as appears on return Address as appears on return SSN or Tax ID # For refund inquiry: type of tax, approx amount and place of filing. For individual: DOB and/or filing status Other unique identifier issued by IRS Pg 2 5

6 Delegation Order 11-2 Authorizes IRS employees to disclose info to taxpayers to the extent necessary to perform their official duties. If case is assigned to an employee, they have authority to disclose info without need to going to the Disclosure officer Pg 2 6

7 Freedom of Information Act (FOIA) IRS no longer provides transcripts via FOIA. FOIA Pg 3 7

8 HOW TO GET A TRANSCRIPT? E-SERVICES PRACTITIONER PRIORITY SERVICE ACCOUNT ASSIGNED TO ACS REVENUE OFFICER NO Ask to speak to a manager Pg 2 8

9 COMPUTER DEFINITIONS ADP Book Document 6209 (redacted) Codes Closing codes Locator numbers Calendars IRM Part 2, Information Technology Describes command codes Pg 2 9

10 COMPUTER DEFINITIONS MASTERFILE Main computer system All types of returns Official address of taxpayer Specific return information Wages AGI Withholding Payments Offsets All transactions Secret codes Pg 3 10

11 COMPUTER DEFINITIONS CADE2 NON-MASTERFILE (NMF) Approximately 10,000 open NMF accounts nationwide Taxpayer friendly transcript available N follows ID number Large # accounts Overflow accounts New Legislation Pg 3 11

12 COMPUTER DEFINITIONS NON-MASTERFILE (Continued) Immediate Legal Assessments Reversal of Erroneous Abatements Child Support Cases Pg 4 12

13 COMPUTER DEFINITIONS IMF Individual Masterfile 1040 BMF Business Masterfile Etc. Pg 4 13

14 COMPUTER DEFINITIONS IDRS Active files ALS Automated Lien System ACS Automated Collection System ICS Integrated Collection System Pg 4 14

15 COMPUTER DEFINITIONS Exam System Transaction Codes (TC) Closing Codes & Action Codes Example TC 520 = litigation With closing code 88=BK & generates a computer freeze Quick Desk Guide Pg 4 Pg 5 15

16 COMPUTER DEFINITIONS Designated payment codes 2 digits defining a subsequent payment Disposal code Transcript of Account MFTRX Txmoda MFTRA Pg 5 16

17 Definitions CP Notices Command Codes Unpostable Penalty Codes Pending Transactions Reference Numbers TIN Cycle Pg 5 & 6 17

18 Definitions DLN Doc Code File Source * Blank Valid SSN or EIN * = Invalid SSN on IMF V Valid SSN on BMF W Invalid SSN on BMF Pg 6 & 7 18

19 Definitions File Source * D Temporary TIN P Valid EPMF EIN N Non masterfile Other Type of File Source B BMF I IMF N NMF E - EPMF Pg 6 & 7 19

20 Definitions Financial Management Service Provides Central Payment Services Operates Government Collections & Deposits Provides Government-wide Accounting & Reporting Manages the collection of delinquent debt owed to US POA FMS 13, Authorization for Release of Info Pg 7 20

21 Command Codes MFTRA MFTRX Codes are explained MFTRE Entity information off Masterfile MFTRC - Complete for the TIN MFTRAY All BMF for one year MFTRAU Numident trasncript SSA info MFTRAJ Form 4340 Certificate of Assessments, Payments, Other Matters Pg 7 & 8 21

22 Command Codes TXMOD Service Center active accounts Shows account info Encoded history Status codes (where has it been in the system) PINEX Penalty & Interest INTST Interest & Penalty calculations INTSTD Detailed P & I calculations COMPA IDRS computes interest RTVUE & BRTVU Line Items from returns RTFTP Pg 8 & 9 22

23 Command Codes RTVUE & BRTVU Line Items from returns No adjustments RTVUE IMF Edited & verified files Accompanying schedule and forms Current year + 2 back years BRTVU Business returns RTFTP Sanitized version of RTVUE/BRTVU Pg 8 & 9 23

24 Command Codes IRP Payer information SUPOL IRP info (New: IRPTR) URINQ Unidentified Remittance SUMRY Summary of assessments STAUP Holds on accounts ENMOD Entity info including addresses LEVYS Levy sources Pg 9 & 10 24

25 COMPUTER SYSTEM ACS ICS LIENS IDRS MASTEFILE EXAM CAF Pg 11 25

26 E-SERVICES RECENT CHANGES Attempt to keep taxpayer info secure: December 2017 Secure Access Strengthen Authentication Two-factor authentication September 2018 Redact taxpayer Info Last 4 digits of Acct # & telephone number First 4 digits of last name First four characters of business name Wage & Income transcript shows all money amts Pg 12 26

27 Tax Return Transcript Pg 13 27

28 Pg 14 28

29 Tax Return Transcript (Actual) Pg 15 29

30 Note: First 2 letter of a 3 character first name are shown rather than last name. Page 16 30

31 New Tax Transcript: FAQs New transcripts are masked covering personal info Provided to taxpayer or their representatives Unmasked transcripts may be mailed to taxpayer s only to address of acct. Masked transcripts will cause more work Effective January 2019, transcripts will no longer be faxed to taxpayers or reps Pg 17 31

32 New Tax Transcript: FAQs Beginning May 2019, IRS will stop mailing transcripts to those listed on Live 5 e of Form 4506-T or T-EZ. All such requests will be mailed to taxpayer s address of record Pg 17 32

33 New Tax Transcript: IRC 7521 IRC 7521 Right to Representation In order to bypass a POA, a manager must sign off Is sending the transcript to the taxpayer instead of us, a bypass? Pg 17 33

34 Pg

35 35

36 More Frequently Used Transaction Codes: Pg

37 Supplemental Codes Action codes Closing Codes Disposal Codes Designated Payment Codes Penalty codes Unpostable codes Many others Pg 14 37

38 TC 971 Without additional code Used to post identifying XREF TIN/Tax period data whenever a TC 150 return has been posted to an incorrect TIN/Tax Period, or an amended return has been received. Pg 21 38

39 TC 971 with AC 13 Delinquent return after SFR 43 Taxpayer proposed an installment agreement 63 Installment Agreement was approved 163 Installment Agreement was defaulted Page 21 39

40 TC 971 with AC 13 Delinquent return after SFR 43 Taxpayer proposed an installment agreement 63 Installment Agreement was approved 163 Installment Agreement was defaulted Pg 21 40

41 More TC 971 AC 69 CDP Notice issued AC 69 & 66 CDP Notice handed to TP AC 69 & 67 CDP left at last known address AC 61 CDP attempted settling issue before going to Appeals AC 275 CDP not yet assigned to Appeals Pg 21 41

42 Passport Law IRS has begun using TC 971 AC 640 to show that a levy has previously been issued on a TXMOD IRC 7345 authorizes IRS to notify State Dept. of a seriously delinquent taxpayer Owe More than $50,000 ($51,000 in 2018) With a few exceptions passports may be revoked or denied by State Dept. Pg

43 TC 972 Reverses AC 43 Reverses identification of pending installment agreement AC 063 Reverses indication that an IA was approved if TC 971 AC 063 was input in error AC 061 CDP withdrawn 43

44 Document Locator Number File Location 2 Tax class 10 Document codes Pg 22 44

45 Document Locator Number Julian Date 600 Block number 25 Serial number in block 4 Last digit of year DLN assigned Pg 23 45

46 Service Center/District Codes 04 New England 06 Connecticut-Rhode Island 07 Atlanta Service Center 08 Andover Service Center 09 Kansas City Service Center 11 Brooklyn, NY 13 Manhattan, NY See Page 24 for complete list 46

47 SC Codes for Electronic Filing Service Center Code Number Andover 14/16 08 Austin 76/75 18 Cincinnati 55/35 17 Memphis 72/64 49 Ogden 93/92 29 Return Filed with F (Intl) Not Electronically Filed: For Complete list see page

48 Old SC Codes for Electronic Filing Service Center Code Number Description: Andover 14 (BMF) Eff Form Eff 1989, IMF & BMF Doc code 19 & Eff. 1996, 1997, 1988 only - BMF ATSC 56 IMF AUSC 76 & 75 IMF For Complete list see page 25 48

49 MFTRX MFTRA Actual record including complete history of actions in code only. Requires FOIA. A "Specific" MFTRA transcript is a record of a specific type of tax return (i.e., Form 1120) for a specified tax period MFTRX provides an interpreted transcript from the Masterfile for taxpayer s use. Not all information is included on the transcript Pg 26 49

50 MFTRX MFTRA Actual record including complete history of actions in code only. Requires FOIA. A "Specific" MFTRA transcript is a record of a specific type of tax return (i.e., Form 1120) for a specified tax period MFTRX provides an interpreted transcript from the Masterfile for taxpayer s use. Not all information is included on the transcript Pg 26 50

51 Types of Transcripts MFTRX Literal Transcript as seen on E- Services MFTRA Masterfile transcript showing codes only no definition TXMOD A lot like a MFTRA but has service center history Can be ordered from PPS/ACS/RO or anyone assigned a case. Page 26 51

52 TXMODA ENTITY PORTION Pg 26 52

53 Transaction Codes Action Codes Pg 27 53

54 Notices SC History Section Pg 27 54

55 Collection Status Codes Pg 28 55

56 TXMOD Has more detailed information than any other single command code. Therefore, the examples and identification of the elements will be broken into five sections: 1. Heading 2. Transaction Section 3. Notice Section 4. Case control and history 5. Status history Pg 29 56

57 TXMOD vs MFTRX Complete Very complicated CC s and AC s tell whole story Hard to get (FOIA) Shows information necessary to protect TP s rights Limited information Easy to read IRS interprets story for you Easy to get soon electronic access Most really valuable info is omitted 57

58 TXMOD See pages for ADP key to Txmod ADP book available at Search ADP or 6209 ADP book changes annually Note: This comes and goes. I suggest you download and save to hard drive. 58

59 Other Useful Command Codes: ENMOD Entity Information IRPTR Info for all taxpayer not just delinquency status Useful for delinquent returns Provides info by payee or payor Provides income prior to TY 2008 thru 2017 First day updated for year /23/2019 Aids in resolving CP 2000 Pg 36 59

60 Corporate Files On-Line (CFOL) Nationwide access of SC info Prior to CFOL employees only had access to the SC that processed their area Does not show all info on IDRS Pending Unpostable History Pg 36 60

61 BMFOL Provides information on the masterfile (same as MFTRA) Displays additional assessment transactions and abatements Allows research of Txmods that have been moved to retention Pg 36 61

62 BRTVU Provides a display of the transcribed line items on all business tax returns and their accompanying schedules or forms as the returns are processed at the Campus. It is used by IRS in lieu of ordering the paper return Current processing year plus 3 prior years are available. Displays delinquent and amended returns 62

63 DDBOL Dependent Database Provides the SSN for the EITC child Provides SSN for the dependent child used for an exemption Provides the SSN for the child used for child tax credit Provides the SSN for the child used for the child care credit Also shows the SSN for the custodial parent for each dependent Shows the citizenship code. Pg 37 63

64 Other Useful Command Codes: IMFOL (Individual Masterfile On-line) Nationwide info on IMF read-only used when IDRS shows no data Shows years available Page 37 64

65 IMFOL: IMFOL Shows an index of tax modules for years available. Contains nationwide information including Entity Posted returns General tax data Status history Adjustments and audit history NOT pending and unpostable items on SC computer 65

66 Other Useful Command Codes: IMFOL does not show information recently input by service center. INOLE Accesses National Account Profile containing entity info (limited) Including SSA cross reference data Page 37 66

67 INOLE: Displays entity data for all Masterfiles IMF BMF Individual Return Masterfile Information Return Masterfile Payer Masterfile Employee Plans Masterfile Debtor Masterfile SSA Page 37 67

68 INOLE Continued Cross-Referenced data for any specified TIN which resides in the National Account Profile It provides Filing Status SSA Info IMF for prior names DOB & DOD Primary taxpayer nameline Cross-referenced Tax ID numbers Page 37 68

69 Other CFOL Command Codes PMFOL Payer master file informaton showing a summary screen of: All sources of income and amounts Withholdings Number of documents filed by the payer as shown on Form 1096 Civil penalties associated with documents Page 38 69

70 Other CFOL Command Codes RTVUE displays line items transcribed from Forms 1040 seriesand accompanying schedules. RPVUE Provides easy access to Preparer Listing Information taken from business & individual returns Shows preparer entity information Number & percentage for refund and EIC returns prepared. 70

71 Other Useful Command Codes: SPARQ Researches current address for former spouse Page 38 71

72 SUPOL Provides income info on delinquent taxpayers SUPOL will not: Provide info prior to tax year 1990 Update once posted online Aid in resolving CP 2000 issues Pg 30 72

73 Other Useful Command Codes: Third Party Contact System (TPCIN & TPCOL) Maintains database of all third party contacts made regarding taxpayers during the determination or collection of a tax liability Page 38 73

74 Other Useful Command Codes: TRDB (Tax Return Database) Stores original tax return information within 24 hours of receipt within IRS Stores electronically filed codes and edit data Stores corrections made to tax return data Page 38 74

75 Reading The Transcript: Situations when reading the masterfile transcript or TXMOD benefits the case Calculating collection statute of limitations (Note: TXMOD provides CSED as calculated by the IRS computer Audit reconsiderations Court cases Missing payments Determining closing codes used when an account is reported as currently uncollectible Page 39 75

76 Return Codes: MFT (Master file transaction) Frequently used codes: 30 Form Form FUTA Form Civil Penalty Page 39 76

77 Return Codes: Period The IRS has a method for designating tax periods Last Day of Period = YYYYMM Example: = FY = Quarter ending = Prior to Y2K period was YYMM (9912 = 12/31/1999) Page 39 77

78 Question: You are calling RO for your client, Mr. Smith. RO says she cannot speak to you because you don t have POA for all years. When asked what period is missing, she says What period is she addressing? Page 39 78

79 Answer: 941 for quarter ending Question: What if she had said ? Page 39 79

80 Answer: = Civil Penalty for period ending Page 39 80

81 Transaction Codes: Frequently used term. Code tells you a transaction took place on the account (Page 3 of Quick Guide) TC = Transaction code TC 150 = Date return was assessed Beside the TC is the date and then a cycle number Date may be actual date of input or effective date Page 40 81

82 Transaction Codes Continued: Example: Form 1040 is filed in February TC 150 shows 4/15 of that year Cycle number is Cycle indicates assessment was actually made 10 th cycle of 2013 or week of March 1 st through 7, 2013 ADP Book shows past years cycles Page 40 82

83 Reading The Codes Designated Payment Codes Quick Guide Pg 60 Used on all posting vouchers Examples: 00 DPC not present on voucher 01 Non-Trust Fund 02 Trust Fund 03 Undesignated bankruptcy payment 04 Levy on state income tax refund 05 Notice of Levy 06 Seizure and sale 07 Federal Tax Lien 83

84 Designated Payment Codes Continued 08 Suit 09 Offer In Compromise 10 Manually monitored installment agreement 11 Bankruptcy-designated to trust fund 12 Cash bond credit (TC 640 only) 14 TP authorized to apply to expired statute 99 Miscellaneous payment other than above 84

85 Reading The Codes TC 670 Subsequent payment with DPC 02 DPC 09 DPC 11 DPC 99 85

86 Reading The Codes TC 670 Subsequent payment with DPC 02 Trust fund DPC 09 - OIC DPC 11 BK designated to trust fund DPC 99 No designation on voucher 86

87 Reading the Codes Exam Disposal Codes (Quick Guide Pg 59) This code is applied with an TC No Change with adjustments 02 No change 03 Agreed prior to 30 day letter 04 Agreed after issuance of 30 day letter 07 Appealed before issuance of 90 day letter 09 Agreed after issuance of 90 day letter 10 Default TP fails to appeal or agree after 90 day letter issued 11 Petitioned after issuance of 90 day letter 87

88 Reading the Codes Exam Disposal Codes (Appendix A-4) This code is applied with an TC

89 Transaction Codes: TC Posted Tran-AMT Cyc DLN WH TX Cr Posted w/rtn What could you read from the above? What do the TC codes tell you? What does the DLN tell you? Page 39 89

90 Example Continued TC Posted Tran-AMT Cyc DLN Regular Lien What actions were taken on this account? What does the DLN tell you on TC 582? (See Page 24 of this handout.) Page 40 90

91 Example Continued TC Posted Tran- AMT Cyc DLN CD> CD> MF-CAF CD>252 What do the following tell us? TC 971 Code 063 TC 971 Code 262 TC 960 TC 971 code 252 Page 40 91

92 Example Continued TC Posted Tran- AMT Cyc DLN CD> CD> MF-CAF CD>252 What do the following tell us? (Hint Page 32 Quick Guide) TC 971 Code 063 Entered into Installment Agreement TC 971 Code 262 Maximum Failure to Pay assessed TC 960 (Pg 17 of Quick Guide) Updated CAF Indicator TC 971 code 252 Lien CDP Letter sent Page 41 92

93 Example Continued TC Posted Tran-AMT Cyc DLN CD> CD> CD> CD> DPC>99 What do the following tell us? (Hint Page 32 Quick Guide) TC 971 Code 253 TC 971 Code 611 TC 971 Code 061 TC 971 code 163 TC 670 code 99 Page 41 93

94 Example Continued TC Posted Tran-AMT Cyc DLN CD> CD> CD> CD> DPC>99 What do the following tell us? (Hint Page 32 Quick Guide) TC 971 Code 253 CDP Lien Notice Undeliverable TC 971 Code 611 Third party contact made by collection TC 971 Code 061 Module blocked/released Fed. Pmt Levy Program TC 971 code 163 Out of Installment Status TC 670 code 99 (Pg 13 & 60) Subsequent payment not designated Page 41 94

95 Example Continued Before we see a TC 670 with a DPC>05, what must we see to see if IRS did their job correctly? A.TC 971 AC 069 B.TC 971 AC 104 C.TC 971 AC 120 Page 42 95

96 Example Continued Before we see a TC 670 with a DPC>05, what must we see to see if IRS did their job correctly? A.TC 971 AC 069 CDP Issued B.TC 971 AC 104 Innocent Spouse C.TC 971 AC 120 Amended return ANSWER: AC 069 because DPC code shows a levy payment was received Page 42 96

97 A client says he never received notice of an adjustment to his 2011 tax return. We pull a TXMOD and it indicates: TC Posted Tran-AMT , , , , AC> , Disp CD>061 What does the TC 971 AC>139 tell you? How about the TC 290 Disp 10 What action could you then take? Page 41 97

98 A client says he never received notice of an adjustment to his 2011 tax return. We pull a TXMOD and it indicates: TC Posted Tran-AMT Pg , , , , AC> , Disp CD>061 What does the TC 971 AC>139 tell you? Notice Issued AUR How about the TC 290 Disp 10? 90 day letter defaulted What action could you then take? Find out where the 90 day letter was sent? Possible Audit Reconsideration Page 42 98

99 Collection Status Codes (Quick Guide 61): SC-ST Date Status Amount Cycle Definition , , , , Page 42 99

100 Collection Status Codes (Quick Guide 61) SC-ST Date Status Amount Cycle Definition , Rtn assessed; 1 st Notice STAUP Suppresses notices for 15 cycles Taxpayer Delinquent Account Issued (Field) , Installment Agreement Generated , Defaulted Installment Agreement , Taxpayer Delinquent Account issued (ACS) Page

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