Often, the spouse is aware that an offset will take place and wants to know how to get his/her share of the refund. Rul. However, ignore the "No" answer to question 5b and process the Form 8379 the same as opposite-sex couples if the tax year listed on Form 8379 meets the following: On all Forms 8379, issue the Injured Spouse's portion of the refund in "one name only" unless the revised Form 8379 (Rev. Most common reasons for an unresolved condition are listed below: TC 766 was input with a HC that is holding credit on the module (K Freeze). Allow the credit to refund if there are no other open issues. You do not need to complete the Injured Spouse Allocation Worksheet when one of the shortcut methods apply. When processing an injured spouse form against a Treasury Offset Program offset, all EITC must be allocated on Form 8379 Injured Spouse Allocation Worksheet prior to applying each state's applicable laws to the remaining overpayment. Refer taxpayer to TOP Call Center at 800-304-3107, TDD 8008778339, for agency address and phone number. 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 U.S. Use a TC 570 on the credit portion of the transfer. If the injured spouse is the secondary taxpayer and Part II, line 11, is not checked on Form 8379 (Rev. 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. Working through OCSE, the offset payment is then sent to the state child support agency to pay toward the past-due support. In general, IRS may honor a hardship refund request if the taxpayer has no debt or owes only Federal taxes. If the undelivered or canceled refund, TC 740/TC 841, is less than the TC 840/TC 846, and credit interest, TC 770/TC 776, was included, then Master File (MF) prorates the amount of interest reversed. A manual refund is required when Box 12 on Form 8379, Injured Spouse Allocation, is checked and the address on ENMOD is different than the address on the Form 8379. All manual refunds issued on Form 5792, Request for IDRS Generated Refund (IGR), are subject to offset through TOP unless a specific BPI is assigned either systemically or through manual input. Effective January 2016, the Department of the Treasury, Bureau of the Fiscal Service (BFS), amended its regulation governing the offset of tax refund payments to collect certain past-due child support obligations. Taxpayers with a prenuptial agreement can opt out of state community property laws and elect to have income treated as if they were domiciled in a non-community property state, see IRM 25.15.5.3, Treatment of Community Income in General, IRM 25.15.5.5, Community and Separate Property, and IRM 25.18.1, Community Property, Basic Principles of Community Property Law for additional information. When working an injured spouse case after offset of the original overpayment and the stimulus payment, you will input two adjustments. A3. Advise the taxpayer it may be necessary to obtain Form 8379 and file it with original return. A request for an OBR must be worked immediately upon receipt. The TC 766 Reject Listing must be worked upon receipt to avoid erroneous refund conditions and correct the taxpayer's account. See IRM 21.4.6.4.2.1, TOP Offset Bypass Indicator (BPI), for more information. No other payments or credits are made to the 2011 MFJ account. See IRM 21.4.6.5.11.1(11) below for conditions that will allow an OBR. Inform the taxpayer of the actual amount offset from his/her refund and still outstanding. There are instances in which one of the above is valid, however if the (I) indicator is not set, see IRM 21.4.6.4, Refund Offset Research, paragraph (2). 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. ), Criminal Investigation (CI) (Z or Z freeze, TC 914/TC 916/TC 918). A community property state is entered and the address on ENMOD is a non-community property state. If the injured spouse is the primary taxpayer and Part II, line 11, is not checked on Form 8379 (Rev. If case meets no move criteria disregard any instructions to place the account in debit balance, and only submit the manual reversal request to the TOP Liaison. However, in some instances the recovery did not work. For TOP offsets, UPC 189, RC 06, occurs when a TC 766 with OTN is greater than the net TOP offset amount. Refer to IRM 21.4.4.5, Preparation of Manual Refund Form. Once their identity is verified and their return has been processed they can re-send their Form 8379. We cannot properly calculate their entitlement to injured spouse allocations (for federal tax purposes) without knowing whether the state community property laws apply. Injured spouses MFS tax Both spouses' MFS tax. A subsequent transaction with CRNs 808/809 is not needed to issue the refund in both names. If you don't get a notice, you'll need to call: Bureau of Fiscal Services at 800-304-3107. Input a TC 570 to stop any erroneous refund from occurring prior to the posting of the adjustments. Individual Income Tax Return. 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. Please allow up to 180 days for the manual reversal to post. 8) You have an Injured Spouse and the case is suspended to CAT-A for the First-Time Homebuyer Credit (FTHBC), Earned Income Tax Credit (EITC) and/or Adoption Credit, Work the case up to the amount of the FTHBC, EITC and/or Adoption Credit. If you do not have the stamped received date use the TRDBV date. If CC INOLET does not display a debt indicator, then the IAT Results IS screen displays the "N" . Include taxpayer contact information and any details that the taxpayer gives which may help resolve the case. This prevents a TOP offset to any debts owed by the primary filer. As a result, there can be one or two TC 898(s) for each refund issued. Box 183050 Columbus, OH 43218-3050 Telephone: 1-800-282-1780 Fax: 1-206-339-4207 TTY/TDD: 1-800-750-0750 tax.ohio.gov TAXPAYER NAME ADDRESS LINE 1 ADDRESS LINE 2 Notice ID: 0023 Date: March 03, 2019 Social Security Number(s): XXX-XX-1234, XXX-XX-5678 If the taxpayer attached Form 8901, Information on Qualifying Children Who Are Not Dependents, to the tax return, allocate the child tax credit as the taxpayer determines. Cases approved for TOP offset reversal may be referred to Accounts Management (AM) by Insolvency. See RC statements below: RC 086 - "an injured spouse claim was filed requesting a refund of the non-obligated spouses share of the amount applied against the non-tax debt. Inform the taxpayer that a note has been added to their account and to allow 30 days to process. Attach a copy of the evidence provided by the taxpayer substantiating the overpayment. Policy Owner: The Director of Accounts Management. 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. The OTN is an "offset trace number" used by IRS and Bureau of the Fiscal Service to "connect" offsets with related reversals and the refund from which they came. When the address on a Form 8379, Injured Spouse Allocation, is different than on CC ENMOD, issue the refund to the address on the Form 8379, and send a Letter 104C, Address Change Acknowledged, asking the taxpayer if the address of record needs to be changed. Send the OBR to TAS if the taxpayer requests TAS assistance or if the request meets TAS criteria 1-4 and you cannot resolve the request (or steps taken to resolve) within 24 hours. $586.00 dated 03/06/2012 (TC 846 $1,586.00 TC 898 $1,000.00), $550.00 to the injured spouse dated 04/19/2012, $450.00 from the agency that received the offset. Taxpayers will not report SRP on returns for tax years 2019 and subsequent. 6) Taxpayer says Form 8379 was filed with his/her original return and no refund was received. See IRM 21.4.6.5.23, TOP Unpostable Conditions, and IRM 21.5.5.4.2, Resolving Unpostables. See IRM 21.4.6.5.9, Community Property Allocation. 13) Taxpayer says Form 8379 was filed after offset and no refund was received. Eligibility for the payment is based on the CTC shown on the tax year 2020 return (2019 if a 2020 return has not posted). If an offset has occurred to a separate tax liability for which the injured spouse is not responsible, compare the injured spouse's allocation to the amount of offset. A BPI is needed on these refunds, but is limited to BPI 0 and 3. A TC 899 Type 1 may not appear on the account. See IRM 21.4.6.5.5, Hardship Refund Request. See IRM 21.4.6.5.8.7(2), Incomplete Form 8379 Signed or Filed with Original Return. See paragraphs (9) and (10) below for additional details. We are recalculating the EIP and, if applicable, refunding the recalculated EIP. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. 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. Because of the outstanding tax assessment, the $500.00 and $300.00 credits are transferred in April 2013 to the MFJ tax liability for 2011. The amount of any refund that will be issued which may be subject to offset for TOP debts he/she owes. For example, you cannot allocate an exemption by giving each spouse 1/2 of the exemption. The debt indicators are: The (I) indicator is not always set for all Federal tax debts. After preparing this form, per the instructions on the form, return it to the liaison and the procedures will be initiated. Close you case using Document Type-Internal Transcript, IDRS Cat Code IRRQ, Program Code 40000. RNs 808/809 will generate the refund in both names. A letter is not needed for NCP SC-1, NCP SC-3 or Community Property allocations. When issuing a hardship refund under any circumstance, inform the taxpayer that if he/she owes a child support or Federal agency debt submitted for tax refund offset, Bureau of the Fiscal Service may apply his/her refund to the debt through TOP. Non-IDRS manual refunds issued on Form 3753 are now subject to TOP offset. A TC 898 with document code 45, TOP offset of manual refund, re-sequences for 10 cycles, if TC 840 with the same DLN is not posted. If you work at a remote call site and you don't have access to CIS to view the Form 8379 Allocation Worksheet or do not work injured spouse allocations, transfer the call to Application 35 using ACD = 92035 or IUP = 1035 DO NOT transfer the call if the taxpayer is simply asking about the status of their claim. Notate this information on your case history along with the name of the Bureau of the Fiscal Service CSR who provided it. The non-debtor spouse uses the form to provide additional information to the IRS regarding his or her share of the overpayment shown on a jointly filed original tax return (Form 1040, U.S. If there was an Agency Refund for the full amount do not reverse the TC 898. See IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals. An account may have both a tax offset and a TOP offset. If you don't receive a notice, contact the BFS's TOP call center at 800-304-3107 (or TTY/TDD 800-877-8339 ), Monday through Friday 7:30 a.m. to 5 p.m. CST. If both spouses have income (see Note below), If one spouse has income (see Note below), The earned income is $12,903.00 or more (phased out with a MAGI of $150,000). In some instances, the TC 898 was deleted erroneously. See IRM 21.4.6.5.8.9, Form 8379, No Consideration Procedures. 21) The taxpayer calls in response to letter 3179C, The taxpayer can provide the missing information. Only the agency to which the debt is owed can honor a hardship request for a TOP offset. Indicate that the back-up information is Letter 3064C for your action. When the CP 36D, Injured Spouse Claims Notice, is received in the AM Function, use Command Code (CC) RTVUE, (CC) TRDBV or Return Request Display (RRD) to view the return on-line and work the Form 8379. When CC RFUND is input on a Master File Tax (MFT) Code not eligible for offset, the indicator is set to "3" . When this amount is then added to the portion of the joint overpayment belonging to the injured spouse, it results in a TC 766 amount of $4,220.99 ($4,200 + $20.99). Take the following action: Input TC 767 with invalid OTN, use HC4, SC 087 and PC 8. After contacting Bureau of the Fiscal Service, select the option "If you are calling from a federal or state government agency please press 3 then press 6 for IRS employee processing a Form 8379.". It may be necessary to coordinate the release of freeze conditions and subsequent adjustments with another IRS function. If the funds are transferred back to the individual income tax account(s), a refund will be generated if there are not any outstanding taxes or State or Federal debts owed by the taxpayer. The transaction date is the received date of the Form 8379. If the freeze release occurs without a releasing transaction (e.g., due to the passage of time from the imposition of the freeze), treat the posting date of offset credit transfers as the posting date of the freeze release. The IRS refund file transmitted to Bureau of the Fiscal Service contains both the primary and secondary Social Security Number (TIN) on a Filing Status 2 (FS2) joint refund. BPI (4), (5), or (6) are valid, given the above conditions, even when the (C) combat zone freeze is not on the module. The TO date will be the 23C Date (assessment date) of the adjustment releasing the overpayment minus 18 calendar days. Subsequent payment/credit made dated on or after the due date (determined without regard to any extension of time for filing). 2) Processing any case other than injured spouse, The posted offset(s) is to Agency Code 02 and is more than 5 months old, 3) Processing any case other than injured spouse, The posted offset(s) is to Agency Code 02 and is 5 months old or less, Reverse the offset(s). The 2020 RRC can be reduced to pay TOP debts owed to other Federal government agencies as well as to state agencies. Do not send a letter to the taxpayer. See IRM 21.5.1.5.3 CIS Source Documentation, for Blocking series (BS) and NSD adjustment examples. UPC 168, RC 0, is an IMF unpostable code that occurs when TC 766 with OTN fails to find a previously posted TC 898 with the same OTN. Guam and Puerto Rico community property jurisdictions recognized same-sex marriages starting in mid 2015. Input TC 971, AC 071, to show that a Form 8379 was received. All Forms 1040 series indicating "Injured Spouse" in the upper left corner are blocked in BS 920929. Follow instructions in IRM 21.6.3.4.2.1, Outstanding Balance Considerations Prior to Refund or Credit Elect, when reversing offsets and issuing a manual refund from an account where the taxpayer previously made a credit election. 7) Taxpayer is aware of offset made, but claims the remainder of the refund not received. The Recovery Rebate Credit is authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, and the COVID-related Tax Relief Act, signed into law on December 27, 2020. See IRM 21.4.6.5.12.3, TC 766 Reject Listing. Bureau of the Fiscal Service cannot regenerate another TC 898 or TC 899 transaction when it has been erroneously deleted. Because these economic impact payments are treated as a tax refund offset, and not an administrative offset, the Act does not provide states the option to suspend federal tax refund offset in cases meeting the eligibility criteria under section 464 of the Social Security Act and 45 CFR 303.72. Advise the taxpayer to allow 17 weeks processing time, unless there is an open control base; if there is an open control base advise them to allow 8 weeks from the control date. You may see a TC 971 AC 599 with Type 1, 2, 3 or 4 which represents the manual input of an erroneous deleted TC 899. BPI (1) (2), (8) and (9) are not valid when the BPI was set to (4). See IRM 21.4.6.4.2.9, TC 766 With OTN TOP Offset Reversal, and IRM 21.4.6.5.12.1, Input of TOP Offset Reversals Reference Number (RN) 766 with OTN, for more information. You will work the injured spouse case and issue a refund to the injured spouse for his/her share of the overpayment. Use the following explanations for tax or TOP offset when not considering Form 8379 due to the time limitations per IRM 21.4.6.5.8.10: If the timeframe for submitting Form 8379 is not met for a tax offset or TOP Offset, advise the taxpayer We are sorry, we cannot process your Form 8379, Injured Spouse Allocation. If a TOP debt exists, the IRS has no authority to issue an OBR. The net of all TC 76X with the same OTN cannot be greater than zero. A TC 766 reversing a TC 898 with an OTN starting with 2 (indicates secondary taxpayer debt) results in the generation of a TC 846 with BPI 2. The TC 846 will generate the appropriate bypass indicator based upon the previously unreleased RN 808/809/810/811 that is posted. If the case does not meet TAS criteria or the criteria above, prepare Form 4442/e4442, Inquiry Referral, and refer to the appropriate AM function where there is an open control. See IRM 21.4.6.5.12.2, Manual Reversal of TOP Offset. When issuing a hardship refund for any reason, you must inform the taxpayer that if he/she owes a past-due child support or other TOP debt, his/her refund may be reduced in whole or in part by Bureau of the Fiscal Service and applied to the agency debt through Treasury Offset Program. Additionally, the Department is required to offset a taxpayer's refund as partial payment of any debt (s) reported by the following agencies: Ohio Department of Job and Family Services If the taxpayer can provide a copy of Form 8379 via fax, attach a copy of the faxed Form 8379 to the Form 4442/e4442. Input a TC 767 with the OTN for the full amount of the TC 766 and re-input the TC 766 with the correct information. RC 4 results from an attempt to post a TC 899 when it does not find a TC 898 with the same OTN. See IRM 21.4.6.5.5, Hardship Refund Request, and IRM 21.4.6.5.11.1, Offset Bypass Refund (OBR). Research any cross-reference TINs along with CC IMFOL, CC BMFOL, CC TXMOD, MFT 29 and MFT 31, etc. Certain BPIs also identify one of the spouses on a joint refund as eligible for offset. TC 150 is blocked 92, a TOP offset has or has not occurred, and Form 8379 was not worked and the case is closed. For Form 8379, Injured Spouse Allocation, input RN 808/RN 810 or RN 809/RN 811 with a PDC for 2 cycles or issue a manual refund if applicable. Once the "valid" TC 898 has posted input TC 766 with the correct OTN for the rejected amount, use HC 4, SC 087, PC 8, PD 3. Once the tax is assessed (23C date), the overpayment is created and the offset occurs. Manual refunds will be input using the normal manual refund credit interest rules. There are always exceptions to the situations described above. Send one letter to the Injured Spouse to the address on the Form 8379 and a copy to both spouses to the address of record. These shortcuts are applicable to all Community Property States for TOP debt only, and: The only debt involved is a TOP debt owed by the other spouse or no debt is owed. If the amount of the taxpayer's overpayment exceeds the total of the Federal tax liability and the TOP debt, a manual refund may be issued with a BPI (3) for the amount by which the refund exceeds both debts. Bureau of the Fiscal Service Once the unpostable conditions are corrected, the formula to Net the TOP Offset amount is: The OTN must be the same for all these transactions when computing the net TOP offset amount. The husband does not file an income tax return for 2012 that claims an overpayment. Input adjustment to the joint module, using the appropriate hold code 1, 2 or 4 as appropriate to ensure the overpayment does not offset. If the jointly filed claim on Form 1040, U.S. A TC 766 reversing a TC 898 with an OTN starting with 1 (indicates primary taxpayer debt) results in the generation of a TC 846 with BPI 1.

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