Purpose: This IRM covers Spousal Payment Transcript processing.

Audience: These procedures apply to Submission Processing (SP) 1040-X employees such as supervisory tax examining technicians, lead tax examining technicians, and tax examining technicians, who are responsible for processing the spousal payment transcripts.

Policy Owner: Director, Submission Processing

Program Owner: Submission Processing, Post Processing Section, Specialty Programs Branch

Primary Stakeholders: SP 1040-X employees, Accounts Management (AM), Small Business/Self-Employed (SBSE), Large Business and International (LB&I), Return Integrity Compliance Systems (RICS), Chief Financial Officer (CFO), Taxpayer Advocate Service (TAS), Chief Counsel, Information Technology programmers, Compliance, Submission Processing (SP)

Program Goals: This IRM provides the fundamental knowledge and procedural guidance for employees who work spousal transcripts. By following the processes and procedures provided in this IRM, employees will adjust tax accounts using an internally generated transcript in a manner that follows IRS policy and procedures while promoting the best interests of the Government.

Spousal Payment Transcripts (SPT) must be processed in first in/first out (FIFO) order by the oldest received date.

Payments from the same taxpayer on the same transcript are batched together.

Process the Spousal Payment Transcript within 3 calendar days from the date the site receives the case. For additional information on processing timeframes, see IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates.

Submit IRM deviations in writing following instructions from IRM 1.11.2.2.3, When Procedures Deviate from the IRM, and elevate through proper channels for executive approval.

IRS employees can be identified from the IRS-EMP-CD on CC TXMOD and on CC IMFOLT. There are special procedures that you must follow to protect the taxpayer employee, as well as to protect yourself.

If you access an account of an IRS employee that you don't know, work the case and see (4) below.

If you access an account of an IRS employee that you do know, or if you access an account of someone that falls under a covered relationship such as family members, friends, or neighbors, refer the case to your lead or manager and see (4) below.

Completing Form 11377-E, Taxpayer Data Access, is voluntary but highly recommended. The purpose is to document the reason(s) that the tax return and/or information on IDRS was accessed when the case wasn't assigned directly to you.

While working Spousal Payment Transcript (SPT) cases, employees may encounter modules that are blocked on IDRS. These modules are identified by an IDRS security violation message, "Unauthorized to Access This Account" . Reassign the case to your manager. Managers must notify the local Planning & Analysis staff who must send the case as encrypted information to the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ mailbox requesting access to the account. Managers must retain the original case in their inventory, awaiting access that can take up to five business days. Once notified that access has been granted, the case can be transferred back to the tax examiner to work following applicable procedures.

SPT OFP codes are used for reporting work closed by individual Tax Examiners working the SPT program.

SPT OFP codes are used in conjunction with the weekly Work Planning and Control (WP&C) reporting system.

The OFP code used for reporting the work performed under the SPT program is 710-37711.

For additional information regarding OFP codes, refer to IRM 3.30.20, Work Planning and Control - Organization, Function, and Program (OFP) Codes.

A Spousal Payment Transcript (SPT) is a weekly report that’s received by Submission Processing (SP) 1040-X teams. The tax examiners on these teams research the accounts on the report and take the necessary action to correct the accounts. The SPT report is required to be processed before any other SP 1040-X workflow.

An SPT is created when payments have been systemically transferred to the PTA from the STA and there’s no systemic means to move the payment back from the PTA to the STA when a financial institution (FI) returns the payment for one of the following reasons:

Submission Processing (SP) 1040-X procedures don’t apply to Spousal Payment Transcript (SPT) processing.

Use of Integrated Automation Technologies (IAT) tools including the IAT ERRF tool or the IAT Credit Transfer tool is required when processing an SPT.

When the TC 666 payment is still present on the account and hasn’t been refunded, a credit transfer to move the money from the PTA to the STA is required to resolve the SPT case.
Caution: If any part of the payment has been credited to another tax year or used as a credit elect, reverse the credit prior to transferring the SPT payment. See Paragraph 3 below.

Transfer the credit using the IAT Credit Transfer tool. During "Dead Cycles" the IAT Credit Transfer tool is unavailable. To process the credit transfer:

When two credit transfers are needed to resolve a case, add a Posting Delay Code (PDC) to the 2nd transfer.

When the TC 666 payment has already been refunded or is pending, Category D erroneous refund procedures are required to resolve the SPT case.

If there is a -V Freeze present on the module, do not request repayment or issue a Letter 510C, Refund in Error; Return Check. The erroneous refund issue must be addressed by Field Insolvency or Centralized Insolvency Operation (CIO). Refer the case to CIO in Philadelphia. CIO will determine the appropriate action. Refer to IRM 21.5.6.4.44, -V Freeze, for more information.

See IRM 21.4.5.6, Category D Erroneous Refund Procedures, for general CAT-D erroneous refund (ERRF) information.

See IRM 21.4.5.15.1.1, Statutes of Limitations Category D Erroneous Refunds IRC 6532(b) ERSED, when determining the ERSED.

See IRM 21.4.5.6.1, Account Actions For Category D Erroneous Refunds, to determine the appropriate account action(s) to take on a CAT-D ERRF.

When preparing Form 12356, Erroneous Refund Worksheet, refer to IRM 21.4.5.6.2, Preparing Form 12356, Erroneous Refund Worksheet.

When preparing an erroneous refund package, refer to IRM 21.4.5.6.1, Account Actions For Category D Erroneous Refunds.

Effective October 1, 2020, all CAT-D ERRFs must be emailed to the organizational mailbox established for each Accounting/Erroneous Refund (A/ER) function. Refer to IRM 21.4.5.15.1, Collection Statute Expiration Date for Category D Erroneous Refunds, before sending the package to the A/ER function.

When sending the package to the A/ER function, refer to IRM 21.4.5.6.3, Routing Category D Erroneous Refund Packages.

When an account has been identified incorrectly with the Erroneous Refund TC 844, and the Letter 510C was sent, a Letter 544C must be sent to the taxpayer.

If the TC 844 can’t be reversed, prepare Form 12356, Erroneous Refund Worksheet, and email to your servicing A/ER Unit, explaining the error and request the input of a TC 845.

See IRM 21.4.5.9, Reversal of TC 844.