Secret to Our Success

Transcription

1 UNDERSTANDING THEIRS TRANSCRIPT Patti Logan, EA Secret to Our Success The law Procedures (IRM) Client s own info Info IRS has on our client History Various transcripts 1

2 IRC 6103 Provides circumstances when information may be disclosed Return information includes: tax return information & the files and information collected, recorded by, prepared by, furnished to the Secretary with respect to a return or determination of the existence of a return Includes background information associated directly with a particular taxpayer IRC 6103 IRC 6103(e) allows that information may be disclosed d to the taxpayer if the request is made in writing. Including: Name, address and identifying number of the taxpayer, A description of the information requested, including the type of tax and taxable period, and Sufficient evidence to establish that the requester is entitled to receive the requested information. 2

3 IRC 6103 If the request is verbal IRS must ask sufficient questions and receive sufficient responses to make sure the requestor is the taxpayer. IRM suggests: Taxpayer's name as it appears on the tax return, Taxpayer's address as it appears on the tax return or as modified on IRS records, Taxpayer's SSN or EIN, In the case of refund inquiry, the type of tax, the approximate amount of expected refund d( (unless computed by IRS); and the place of filing, For a matter involving 1040return, the date of birth and/or filing status, and/or Other unique identifier issued by the IRS. Delegation Order 11 2 DO 11 2 authorizes IRS employees to disclose information to taxpayers and their representatives to the extent necessary to perform their official duties. In conjunction with a case assigned to them, employee has the authority to disclose information Once case is closed, information must be requested through FOIA 3

4 WHAT KINDS OF INFORMATION ARE AVAILABLE? Copies of employee s histories and documentation. Electronic records Account records How do you get a copy? Practitioner Priority Service Employee assigned the case ACS (???????) Speak to a manger All else fails, contact the DO disclosure officer COMPUTER DEFINITIONS Masterfile System is the main IRS system to store data IMF Individual master file BMF Business master file CADE2 Customer Account Data Engine. Will ultimately replace the Masterfile for IMF IDRS Integrated t ddt Data Rti Retrieval lsystem flows into the Master file ALS Automated lien system Page 2 4

5 Definitions Non Masterfile (NMF) certain transactions do not fit with the masterfile: Formerly on ledger cards now automated Literal transcript (taxpayer friendly) is available Toll free for NMF Letter N following ID number. Refer to the entire number when talking to IRS Non Masterfile (NMF) Basic conditions requiring NMF Large $ accounts $1 billion and over Overflow accounts excessive amount of transactions New Legislation that need immediate tax law implementation where extensive modifications to the masterfile are needed Immediate legal assessments (assessment required within 24 hours) Reversal of erroneous abatements when ASED would expire Child Support cases that have fallen into arrears 5

6 Definitions Page 4 ACS Automated Collection System (Automated t CllSit Call Site) First level of collection action after notices Split screen between ACS and IDRS Can levy with push of a button History annotated with in house abbreviations Major actions go onto IDRS Definitions ICS (Integrated Collection System) computerized dthe field revenue officer. Exam System includes Q & A for interviewing the taxpayer Transaction codes are three digit numbers that indicate actions and history ofthe taxpayer and the specific types of tax. Often needs additional explanation codes 6

7 Definitions Closing Codes and Action Codes supplemental lcodes that t work in conjunction with transaction codes. Designated Payment Codes identify types of payments Disposal Codes indicates how an examination was closed Definitions Transcripts of Accounts MFTRX or literal l version of masterfile CP Notices IDRS generated letter. Example CP 2000 Command Codes: (CC) are computer words that tell the computer what information to pull up. MFTRA which hwe use for ordering the IRS history of an account is actually a command code. 7

8 Definitions Unpostable Transactions that can not be applied to the account. A technician i must manually review the unpostables to identify the problem Pending Transactions A transaction is input to IDRS, the next week it goes to the master file. Until it is posted to masterfile, the transaction stays pending on IDRS Definitions Penalty Codes One transaction code indicates a civil iilpenalty but requires a penalty code to describe which penalty (Desk Guide pg 24) Reference numbers Some transactions require a reference number. The penalty code is an example (Desk Guide pg 24) 8

9 Definitions TIN Taxpayer Identification Number Cycle IRS uses cycle numbers to date when transactions are posted. Cycle number YYYYCC Example CADE adds day of week of 08 EX: means cycle 19 of Generally 19 th week of 2011 Cycle calendars are available Chapter 16 of ADP book on page 61 of Quick Desk Guide. Definitions DLN Document Locator Number is assigned to every return or document tinput tthrough h ADP system (including electronic docs). DLN controls, identifies and locates documents Doc Code Document Code identifies the specific type of return or document filed or processed 9

10 Definitions File Source One digit code following the TIN. Examples: Blank: Valid SSN or EIN *: Invalid SSN on IMF V: Valid SSN on BMF W: Invalid SSN on BMF D: Temporary TIN P: Valid EPMF EIN N: Non master file Definitions File Source Continued: Second type of file source indicates on which h masterfile account the information is housed. B: BMF (Business master file) I: IMF (Individual master file) N: NMF (Non master file) E: EPMF (Employee plan master file) 10

11 Definitions Financial Management Service a bureau of the Treasury Department Provides central payment services to Federal Program Agencies Government collections & deposits Provides government wide accounting and reporting Collects delinquent dli db debt owed to the government FMS 13 is the Authorization for Release of Information ( Command Codes IRM Part 2 has list of command codes. MFTRA Complete transcript of account. Written in code and numbers. Must use the ADP Book, Document 6209 Types of MFTRA: MFTRAX Literal transcript with limited information MFTRAE Entity information MFTRAC Complete information on all accounts under one TIN 11

12 MFTRA continued: Command Codes MFTRAY All BMF Tax Modules for one year. MFTRAU Numident transcript contains SSA info MFTRAJ Form 4340 Certificate of Assessments TxMOD Transcript shows what is on the service center IDRS computer. Differs form MFTRA because has SC history. Page 8 Command Codes Pinex Explains penalty and interest calculations to the taxpayer INTST Calculates penalties and interest to a specific date (Internal use) INTSTD Gives a detailed computation of penalties and interest. Can be given to taxpayer COMPA Causes IRS to compute interest for specified amount for a specified period of time 12

13 Command Codes RTVUE and BRTVU Provides online access to recently filed returns. Much hlike 1040PC. Shows return as filed Provides Line items transcribed Edited or verified fields Accompanying schedules for current year and two prior Command Codes Page 9 RTFTP provides sanitizes taxpayer version of RTVUE that includes no IRS edited data IRP (Information Reporting Program) contains all 1099, 1098 and W 2info by. The IRP info can take as much as 6 weeks to request. Very similar to Wage and Income Transcript from E services SUPOL Accesses national database of potentially delinquent inquiry (non filers). Contains IRP documents. Additional info added in May of each year. Total of 6 year will be available when database is completed. 13

14 Command Codes URINQ (Unidentified Remittance Inquiry) info is input tto the file when IRS cannot identify where a payment should be posted. SUMRY Shows every account under a TIN that is on IDRS and the status. Shows: Collection status codes, and Unpaid balance of assessment per period Filing requirements Command Codes STAUP This allows IRS to put a hold on an account for a certain ti number of cycles or move the account to another notice or status. ENMOD This gives entity information by TIN. Gives history of addresses and cycle address change is input. TXMOD shows the cycle a notice is sent out. Applying ENMOD will tell the address in IDRS for that cycle. 14

15 Command Codes LEVYS indicates levy sources on the computer. Automated Collection System (ACS) Integrated Collection System Revenue Officer s collection system Automated Lien System Handles lien inventory, generates new liens, releases liens. IDRS Based in service centers input terminals at district, area and centers. Automated Exam System (AIMS) Controls Exam inventory giving location & status Masterfile System Located in Martinsburg WV, houses all returns filed. Usually maintained for 6 years then sent to retention register which means they must be called back to be reviewed. Page 11 15

16 Transaction Codes (Partial) TC: Explanation TC Explanation 150 Return assessed 270 Failure to pay penalty (MANUAL) 166 Delinquent return penalty 290 Additional tax assessed 170 ES tax penalty 300 Examination tax assessment 171 Abate ES tax penalty 301 Abate prior tax assessment 180 Deposit (FTD) penalty 480 OIC pending 181 Abate FTD penalty 481 OIC Rejected 196 Generated Assessed Interest 482 OIC Withdraws Pages 12 & 13 TC 971 (Partial) AC: Explanation 13 Delinquent return after SFR 43 TP proposed installment agreement 63 Installment agreement approved 69 CDP notice was issued to the taxpayer 69 & 66 CDP notice was handed to the taxpayer, not mailed 71 Innocent spouse claim 72 Return was inspected as part of a package audit and accepted as filed. 163 Defaulted installment agreement 16

17 Fixing America s Surface Transportation Act (FAST) Gives IRS the mandate to notify the State Dept when: A taxpayer is seriously delinquent (owes $50K or more). IRS first step is to put a TC 971 AC 640 which shows that a levy has been issued or A lien has been filed and No installment agreement or OIC approved & Not in a CDP for a proposed levy or Innocent Spouse election made under IRC 6015 (b), (c) or (f) Page 14 Fixing America s Surface Transportation Act (FAST) Once these criteria are met: IRS notifies State Department AND taxpayer (nothing says POA) State will revoke passport, MAY deny an application If passport p is revoked while out of country State will issue a temporary passport May take the issue to Court 17

18 Fixing America s Surface Transportation Act (FAST) TC971 AC 640 shows on the literal transcript as Initial Levy issued Means only that a levy has previously been issued on this particular account Will show up even if the account is less than $50, Document Locator Number (DLN) 1 & & 5 6, 7 & 8 9, 10 & & & 2 File Locator Numbers indicating where generated 3 Tax class (See Quick Guide) Identifies type of tax 4 & 5 Doc code Differentdoc codes for different actions 6,7,8 Julian Date 9, 10, 11 Block Series Indicates where file is locate 12 & 13 Serial number up to 100 in each block 14 List year 18

19 Service Center/District Office Codes 04 New England 28 Philadelphia SC 54 Virginia/W. VA 77 Central CA 06 Connecticut/RI 29 Ogden SC 56 North/S Carolina 84 Rocky Mountain 07 Atlanta SC 31 Ohia 58 Georgia 86 Southwest 08 Andover SC 33 Southern Calif 59 Florida 89 Fresno SC 09 Kansas City SC 35 Indiana 62 Kentucky/Tennessee 90 Detroit Computing Ctr 11 Brooklyn 36 Illinois 65 South Florida 91 Pacific Northwest 13 Manhattan NY 38 Michigan 66 Puerto Rico 94 Northern CA 16 Upstate NY 39 Midwest 72 Gulf Coast 95 Los Angeles 18 Austin SC 41 North Central 73 Ark./Oklahoma 98 A/C International 19 Brookhaven SC 43 Kansas/MO 74 South Texas 22 New Jersey 49 Memphis SC 75 North Texas 23 Pennsylvania 52 Delaware/MD 76 Houston Electronic Filing Codes 14 BMF Form 1065 Andover SC 16 IM F and BMF Doc codes 19 & 35 Andover SC 41 BMF (1986, 1987 and 1988 only) Andover SC 65 IMF Atlanta SC 76 & 75 IMF Austin SC 22 IMF Brookhaven SC 38 & 35 IMF Cincinnati SC 99 IMF Fresno SC 43 IMF Kansas City SC 72 & 64 IMF Memphis SC 93 IMF Ogden SC IMF & BMF Philadelpha SC 19

20 IMF Electronically Filed Returns # in parentheses is used when maximum daily processed is reached with first number 16 (44) Andover SC 76(75) Austin SC 55(35) Cincinnati SC 72(64) Memphis SC 93(92) Odgen SC 98 (Intl) Returns filed with F2555 (Foreign earned income) Example: DLN SS 4 indicates an electronic return filed in Cincinnati SC Page 20 MFTRX Literal Transcript Page 19 20

21 MFTRX Continued TXMOD Sections Entity Section includes #1 Current assignment CAF indicators Lien indicator ASED CSED Refund statute date Current control information 21

22 TXMOD Entity Section Transaction information Posted return information Return transactions Posted Transactions Notice Section Type of Notice Amount of notice Cycle Number Suppression codes Case Control Status History TXMOD Sections 22

23 TXMOD Top of Page 21 Return Info TC AC TXMOD Control Section History Status Bottom Page 23 23

24 TXMOD Section Case Control & History Section Who controlled the case Action dates Assignment Minimal case history Status History SC Collection status history MF Collection status history TXMOD SC Status Continued Case control Masterfile history Top Page 24 24

25 TXMOD Service Center Status Service Center History Bottom of page 24 TXMOD Heading Section 25

26 TXMOD Header Key From ADP PG 25 TXMOD Header Key From ADP PG 25 26

27 TXMOD Header Key From ADP PG 26 TXMOD Header Key From ADP 27

28 TXMOD Header Key From ADP PG 29 TXMOD Header Key From ADP PG 29 28

29 TXMOD Transactions Page 30 TXMOD Transaction Key Pg 30 29

30 TXMOD Transaction Key Pg 31 TXMOD Transaction Key Pg 31 30

31 Enmod Provides entity information Addresses Filing requirements Any change in overall entity information SUPOL Provides information on taxpayer s dli delinquency status tt Includes CTR (Currency Transaction Report) document SUPOL will NOT: Provide income information prior to FY 90 Be updated once IRP data is online Aid in resolving CP

32 SUPOL Corporate Files On line (CFOL) CFOL allows other offices to view service center info, nationwide Like Masterfile, pending and unpostable transactions do not show but is available on IDRS BMFOL: Provide information like MFTRA Displays additional assessment transactions and abatements Allows research of Txmods that are in retention 32

33 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 DDBOL Dependent Database On line Allows IDRS users to access the dependent database. Retrieves EITC and dependent issues generated from 1040 return 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. 33

34 More CFOL DUPOL Duplicate TIN Database Used to research fraudulent use of SSN s in both paper and electronically filed returns IMFOL Individual Masterfile on line provides read only access to IMF when IDRS shows no data. National access provides: Entity info Posted returns General tax data Status hisotry Adjustment and audit history for specific SSNs Page 41 More CFOL INOLE displays entity data for all masterfiles, SSA and cross ref data for any specified TIN Masterfile data obtained from IMF BMF Business return transaction file Information Return Masterfile Payer Masterfile Employee plans Masterfile Debtor Masterfile 34

35 It provides: INOLE Continued Filing status SSA information IMF prior namelines Date of birth and date of death Primary taxpayer nameline Cross referenced tax ID numbers when primary TIN is known More CFOL PMFOL provides information from Payer Mastefile. Shows: All sources of income and amounts Withholdings The number of documents filed by the payer as shown on 1096 Civil penalties associated with each of these document types 35

36 More CFOL RTVUE provides line items transcribed from 1040 (BRTVEfor BMF). Used in lieu of ordering paper return. Available for current year plus three prior years RPVUE Easy access to the Preparer Listing information extracted from BMF and IMF returns. Identifies suspect return preparers. p Summary screen shows Preparer info Number & percentage of refunds and EITC More CFOL SPARQ designed to research a more current address for a former spouse. Cross reference info from National Account Profile 36

37 More CFOL Third Party Contact System (TPCIN & TPCOL) designed to maintain a database of all third party contacts that were made regarding a taxpayer during the determination or collection of a tax liability. Contains all data related to: IMF BMF Non masterfile Retirement accounts Exempt accounts Review Quick Desk Guide 37

38 Using the Internal Transcripts Calculating statutes to check IRS date Audit reconsiderations Court Cases Missing payments Determining the closing code when an account is reported as currently uncollectible Return Codes MFT Masterfile Transaction indicates the type of return MFT 30 Form 1040 MFT 01 Form 941 MFT MFT MFT 55 Civil il Penalty Period: YYYYMM So a 1040 filed for 2016 is If you saw MFT what would that be? 38

39 Transaction Codes TC Code: File Description 000 I/B/E Establish an account 001 I/B/E Resequence an account 002 E Resequence EPMF merge fail 003 B Duplicate tax modules are not resequenced 004 B BMF partial merge 005 I/B Resequenced account for merge 006 I/B/E Account resequenced to master file location Guide pg 1 18 For More Info See: 007 I/B Carrier transaction 008 I/B IMF/BMF Complete Merge Section 14.7 Problem page 36 TC Posted Trans Amt Cyc DLN WH TX Cr Posted w/rtn See page 4 of QRG: What can you tell from the above? What do the TCs tell you? What does the DLN tell you? 39

40 Answers to Questions What can you tell from the above? The return was assessed 6/6/2004 What do the TCs tell you? TCs tell you that the withholding was not as much as the tax due ($3,950) What does the DLN tell you? The return was filed with the Austin SC (pg 17 of handout What does this tell you TC Posted Trans Amt Cyc DLN Regular Lien What actions were taken on this account? What does the DLN on the TC 582 tell us? 40

41 What does this tell you What actions were taken on this account? Penalties and interest twas assessed (TC 276 & 196) A Notice of Federal Tax Lien was filed. What does the DLN on the TC 582 tell us? A Notice of Federal Tax Lien was filed by Dallas office (DLN starts with 18 See page 17 of handout) Txmoda Shows: TC Posted Trans Amt Cyc DLN CD> CD> MF CAF CD>252 Overall what due these codes tell us? Hint Pg of QRG 41

42 TC Posted Trans Amt Cyc DLN CD> CD> MF CAF CD>252 TC 971 AC 063 Taxpayer entered an installment agreement TC 971 AC 262 Maximum failure to pay assessed TC 960 POA filed on account TC 971 AC 252 Lien CDP Notice was sent to taxpayer What does the following tell us? CD> CD> CD> CD DPC>99 TC 971 AC 253 CDP notice of filing a lien was undelivered. TC 971 AC 611 Third party contact was made by the IRS TC 971 AC 061 Module was blocked/released from Federal Payment Levy Program TC 971 AC 163 Out of installment agreement status TC 670 Payment was made 42

43 What does the following tell us? CD> CD> CD> CD DPC>99 Other important Codes: Before we see a TC 670 with a DPC (Designated payment code Pg 59 QRG) of 05 What must we see to know the IRS did their job? TC 971 AC 069 TC 971 AC 104 TC 971 AC

44 Other important Codes: Before we see a TC 670 with a DPC (Designated payment code) d) of 05 What must we see to know the IRS did their job? TC 670 DPC 05 Levy Served TC 971 AC 069 Due process was issued TC 971 AC 104 Innocent spouse case TC 971 AC 120 Amended return/claim Client says the never received an adjustment notice for TXMOD indicates: TC Posted Trans-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? 44

45 Client says the never received an adjustment notice for TXMOD indicates: TC Posted Trans-Amt , , , , AC> , DISP CD>061 What does the TC 971 AC>139 tell you? AUR soft notice issued How about the TC 290 DISP 10? TP didn t appeal to USTC or sign agreement. What action could you then take? Amended return or request audit reconsideration TC 59X Closing Codes Guide pg TC 590 Not liable this tax period. Satisfies this module only TC 591 No Longer Liable for tax. Satisfies this module and all subsequent modules for same MFT if not already delinquent TC 593 Unable to locate taxpayer Satisfies this module and all subsequent modules for same MFT. 45

46 TC 59X Closing Codes TC 594 Return previously filed. Satisfies this module only. TC 595 Referred to Exam TC 596 Referred to CI TC 597 Surveyed by National Office direction only TC 598 Shelved by National Office direction only TC 599 Return secured. Satisfied this Module only TC 59X Closing Codes CSCO=Compliance Service Collections Operations AM= Accounts Maintenance FA=Field Assistance ACS= Automated Collection System CFf=Collection Field function AIQ=Advisory Closing Code Description TC 590 Not Liable Used By: 01 Not liable for annual return (short period return posted) CSCO/AM 20 Not liable for this period FA 21 Not liable for this period as income below filing requirement FA 27 No return secured this period. Little or no tax due ACS 28 No return secured this period as TP due a refund ACS 54 Not liable this period CFf/AIQ 63 Not liable this period after 6020(b) or SFR CFf/AIQ 46

47 Closing Code: Transaction Code 530 Closing Codes Condition Guide pg Unable to locate 12 Unable to contact 24 Unable to pay, follow up if TPI of subsequent return is $20,000 or more 25 Unable to pay, follow up if TPI of subsequent return is $28,000 or more 26 Unable to pay, follow up if TPI of subsequent return is $36,000 or more 27 Unable to pay, follow up if TPI of subsequent return is $44,000 or more 28 Unable to pay, follow up if TPI of subsequent return is $52,000 or more 29 Unable to pay, follow up if TPI of subsequent return is $60,000 or more 30 Unable to pay, follow up if TPI of subsequent return is $68,000 or more 31 Unable to pay, follow up if TPI of subsequent return is $76,000 or more 32 Unable to pay, follow up if TPI of subsequent return is $84,000 or more IRC PENALTY REFERENCE NUMBERS MISCELLANEOUS CIVIL PENALTIES PRN TYPE OF PENALTY & RATE INFORMATION 6652(d)(1) 165 Failure to file Annual Registration and other pension plan Missing or incorrect TIN penalty 503 Improper Format penalty 6694(b) 650 Preparer s Willful or Reckless Conduct Trust Fund Recovery Penalty adjustment to balance due by a Related Trust Fund Recover Penalty Taxpayer payment or reversal of payment Guide pg

48 TC 520 CLOSING CODE CHART Closing Code IDRS Status Definition CSED Suspended Bankruptcy Yes Litigation No 71 No change Refund litigation No CDP Lien Yes CDP Levy Yes Guide pg 31 Action Code TC 971 Action CODE CHART Definition Guide pg TC 150 posted to incorrect TIN/tax period 012 Amended return/claim forwarded to Collection 013 Amended return/claim forwarded to Examination 043 Pending Installment Agreement 063 Identify module as containing an installment agreement 067 Delivery of Due Process Notice was refused or unclaimed 068 Due Process Notice was returned undeliverable 107 Indicates one spouse has requested an installment agreement 252 Lien CDP Notice sent to taxpayer 253 Lien CDP Notice Undelivered 48

49 Form No. CP 2000 Tax Returns and Forms B BMF E EPMF I IMF N NMF Title File Source Tax Class MFT Code Doc. Code Proposed Changes to Income or Withholding Tax I Employer s Quarterly Federal Tax Return B/N 1,*6 01,* U.S. Individual Income Tax Return I/N 2,*6 30,*20 11,12, 21, 22 1,2,3, 3244 Payment Posting Voucher 4,5,6, 7,8,0 17,18 Guide pg Examination Disposal Codes Code Definition 01 No change with adjustments (considered agreed) 02 No change 03 Agreed prior to issuance of 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 Default (considered agreed) when taxpayer fails to appeal to USTC or 10 sign agreement after 90 day ltr Guide pg 59 49

50 Designated Payment Codes DPC DEFINITION 00 Designated payment indicator is not present on posting voucher 01 Payment is to be applied first to the non trust portion of the tax 02 Payment is to be applied first to the trust fund portion of the tax 03 Bankruptcy, undesignated payment 04 Levy on state income tax refund (prior to 7/22/1998) 05 Notice of levy 06 Seizure and sale 07 Federal tax lien 99 Miscellaneous payment other than above Guide pg Code Frequently Used Collection Status Codes Explanation Delinquent return not filed. Collection suspended while examination or criminal investigation review, or until another tax period posts to the 06 Master File. 12 Full Paid-generated in response and/or account is less than tolerance. 21 Return filed and assessed, first notice issued 22 Return filed and assessed; TDA issued ACS, Queue, ICS or paper Return filed and assessed; TDA issued awaiting paper or ICS 24 assignment, queue 53 Currently uncollectible 58 CP 504 Notice issued 64 Defaulted Installment Agreements. 72 Litigation/Suspend TDA Guide pg 61 50

51 Cycle Calendar From ADP Book Quick Guide Pg 62 51