part4-35
- 4.4.8.1
Introduction - 4.4.8.2
IDRS Guidelines for Credit Transfers - 4.4.8.3
Form 2424 - 4.4.8.4
Form 3809 - 4.4.8.5
Preparation of Forms
-
In many situations, credit transfers and/or miscellaneous
adjustments are required and must be manually performed before or in conjunction
with the examination adjustments. This section provides guidelines and instructions
on the use and preparation of the various forms required.
-
Before inputting any credit transfer, research IDRS to view any recent
account activity that may have taken place at another campus. Consider the
effects of pending transactions, previous actions, freeze codes, module balances,
and posted penalty and interest adjustments. Also, consider the effects of
the transaction being input. -
Contact any controlling examiner to coordinate actions on modules and
to prevent erroneous or duplicate adjustments. -
Do not move payments until they post. EXCEPTION: Pending payments showing
AP, CU, PN, RS, or TP can be moved if a posting delay code is used.Note:
Generally, payments should not be removed from an account in debit status,
or in zero balance, or if the transfer results in a debit balance. -
Each credit transfer affects two modules unless the transfer is for
the purpose of changing the payment date only. The credit side of the transaction
will post one cycle after the debit side. -
Each credit transfer has two sides:
-
Debit Side – Where the credit is moved from.
-
Credit Side – Where the credit is moved to.
Note:
The generated IDRS format for a credit transfer will always
show the debit side as the upper portion and the credit side as the lower
portion. -
-
All actions need to be input in the same cycle to prevent the issuance
of erroneous notices. Use posting delay codes when inputting multiple actions
such as:-
A credit transfer and tax adjustment. If both an adjustment and a transfer
of credit into the module is needed, input a posting delay code of one cycle
on the adjustment. In three weeks, the taxpayer receives a notice of adjustment
with the correct module balance. -
In and out credit transfer.
Note:
The Posting Delay Code extends the IDRS ”
PN”
status. It does not post with the transaction or appear with the
IDRS pending transaction. -
-
Input a bypass indicator “1″
or TC 570 when transferring
payments to an account in zero or credit balance. -
In order to successfully do a transfer, transaction codes must be compatible.
See Document 6209, ADP and IDRS information, for a list of transaction codes
and document codes. Also reference IRM 21.5.8, Credit Transfers Exhibit 21.5.8-1,
for information on transactions codes and reversals.
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Form 2424
Form 2424 is used to effect the credit/debit transfer from MF to MF and
MF to NMF. It consists of a credit copy (pink) and debit copy (blue). The
form is prepared in duplicate with the credit copy as the original. See Exhibit
4.4.8–1. -
Transfer credits that are made available due to
decreases of previously assessed tax using transaction codes 820 (debit) and
700 (credit). If allowable interest is available for transfer, use transaction
codes 850 (debit) and 730 (credit). -
When an entire account is being deleted, such
as, the secondary taxpayer when a “separate-to-joint”
case
is worked, or when a return posted to an erroneous period or TIN, then use
reversal codes to transfer the credits. -
Input a TC 570, Bypass Indicator 1 as a secondary
code on the debit side, credit side or both, and/or a Posting Delay Code,
when necessary to:-
Suppress notices
-
Hold credits
-
Avoid unpostable conditions
Note:
TC 570 creates a freeze
condition (Freeze Code R) which prevents credits from refunding or offsetting
until they can be transferred, absorbed or released. TC 570 is not required
on the credit portion when applying credits to an outstanding balance but
must be used when making a concurrent assessment to freeze the credits until
the assessment posts. TC 570 is required on the debit portion in all cases
where two or more Forms 2424 are used, and no money is to be refunded.Note:
The bypass indicator field is always required. If “1″
is
not applicable, input bypass indicator of “0″
. -
-
Form 3809
Form 3809 is used:-
to transfer non-revenue receipt amounts, such as
overpayments applied from another period, -
to transfer credit from MF to a numbered NMF account,
(such as the Excess Collections File), -
when using transaction codes not compatible with
Form 2424, (such as TC 830 and TC 710).
-
-
Form 3809 is a two-part form consisting of a credit
copy (yellow) and a debit copy (green). It is always prepared in duplicate
with the credit copy as the original. -
Annotate “use Doc. Code 58″
at
the top of Form 3809. If a transaction code other than 700 or 730 is to be
used, be sure it is compatible with Document Code 58.
-
When preparing the forms, refer to the following
information in addition to Document 6209 and IRM 21.5.8, Exhibit 21.5.8-1:-
Name and address: Only the first name is required
on the MF portions. For NMF portions, enter the taxpayer’s name and
address. If both boxes apply to the same taxpayer, enter the name control
only in the lower box. -
Taxpayer’s identification number, ”
TIN”
: MF portions will always have the SSN or EIN, but NMF portions
will contain the NMF DLN or the schedule number. -
MFT Code: The appropriate MFT code must always be
entered on master file portions of both forms. On NMF portions, enter the
applicable type of return. -
“Document Locator Number”
: This is the DLN of the
form 2424/3809. The DLN is not entered by the preparer. -
Tax period: Enter the six digit tax period in YYYYMM
format. -
Transaction date: Enter the date in eight digit
MMDDYYYY format. This should be the date of the original transaction now being
reversed, transferred, adjusted or corrected. When using reversal codes, the
transaction dates must be the same. Generally, this date may not be earlier
than the beginning of the related tax period, nor later than the date of input. -
First (primary) transaction code, ”
1st T.C.”
: All debits and credits to master file accounts must have
an entry, but this block on debits and/or credits to non-master file accounts
should be left blank. TC 850 (debit) and TC 730 (credit) may be used only
if they represent the primary transaction. -
Primary “Amount”
: This is the
debit/credit amount of the first transaction code. Both the credit and debit
entries must be for the same amount. -
Second transaction code, “2nd T.C.
”
: This is normally used on the credit block to affect a freeze of the
credit (TC 570) until the related adjustment is made to the account. TC 570
should only be entered in the debit portion if more than one transfer document
is prepared to debit the same tax module. This is to prevent the issuance
of a refund until all transfer documents have posted. If a portion of the
overassessment is to refund, a Form 3177 (Notice of Action for Entry on Master
File) with a TC 571 must be prepared and processed after all debit copies
of Form 2424 have posted to the overassessment tax module. -
Secondary “Amount”
: This is
the amount relating to the 2nd T.C. When the second TC is 570, enter “0 (zero)”
in the secondary amount box. -
Third transaction code, “3rd TC”
:
This allows two transaction entries on a single document. Both debit and credit
blocks must have an entry when this item is used. TC 850 (debit) and TC 730
(credit) may be used in these blocks to transfer allowable interest if such
amounts carry the same transaction dates as the primary transactions. -
Third “Amount”
: This is the
amount relating to the third transaction code. Debit and credit entries must
be equal. -
“Form 813 Amount on Form 2424″
: This amount is the
total of the debit amounts (1st and 3rd T.C. debit amounts). These debit amounts
must equal the credit amounts. -
Explanation: The importance of this field cannot
be overemphasized. Remarks and explanatory comments entered here must be such
that in any subsequent review of the case the action taken can be readily
understood. Include the DLN of the original credit. -
Date prepared: This item must contain the month,
day and year on which the document is prepared. -
Prepared by: This item must identify, by name or
employee IDRS number, the individual preparing the document as well as Area
Office or Campus Location.
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