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Understanding The Transaction Section

Understanding The Transaction Section. Learning Is a Process. Information is gathered or provided. You can gain Knowledge from this information. You must develop Understanding from the knowledge Competency or Wisdom is developed from the understanding.

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Understanding The Transaction Section

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  1. Understanding The TransactionSection

  2. Learning Is a Process • Information is gathered or provided. • You can gain Knowledge from this information. • You must develop Understanding from the knowledge • Competency or Wisdom is developed from the understanding. • Information + Knowledge + Understanding = Wisdom

  3. Sections to IMF • Entity Section • Module Section • Transaction Section

  4. Transaction Code • Transaction Codes are a three digit code that the IRS places into your IMF records which have a specific meaning. • With only three digits the IRS can only have 999 definations to go with those codes. • Well the IRS never have enough money or codes so they took one of these Transaction Codes 971 and used it as a way to get another 999 codes • When a TC 971 is used they also include a CD Code or “Action Code” which has a specific meaning.

  5. Module Section

  6. Transaction Module 460 = Extension of Time for Filing 04152002 = Transaction Date of 04-15-2002 20022008 = Cycle Post Date Year 2002 Week 22 08 07217-124-50005-2 DLN EXT DATE 08152002 08-15-2002

  7. Typical Decoding 460 This has two TC 460 Entries…. Find what a TC 460 means in the 6209 Manual Did you find it? Section 8-19 Page 129 of 613 in the 6209 Manual Notice this has two of these 640 entries.

  8. TC 460Extension For Filing • Page 119 of 613, you will find TC 460 Transaction • Notice it is for (Individual MF or Business MF) • Notice it creates a Status Code 04 or STAT 04

  9. Typical Decoding 140 140 = IRP Delinquency Inquiry Generated Transaction Establishes Entity and/or Tax Module and Status Code 02 (Delinquency Inquiry) within the affected tax module. Section 8-8 Page 118 of PDF 06182003 Transaction Date = 06-18-2003 20032608 CYCLE POSTED — The processing week the return or transaction posted to the master file. A six digit number – the first four digits are the year, the second two are the week number. Year 2003 Week 26

  10. Find the TC 140 • Page 118 of 613 you will find TC 140 Transaction • Notice it is for I (Individual MF not Business MF) • Notice it Established Entity and or Tax Module • Notice it creates a Status Code 02 or STAT 02

  11. Typical Decoding 425 • Did you find the TC 425 in the 6209 Manual? • Section 8-18 Page 128 of 613 in 6209 Manual • What does it say? • The purpose of this Transaction Code 425 is to overwrite and delete from the record the TC 424, which allows for a second examination while appearing to document one examination. Another sequence of erroneous postings to my IMF is the TC 424 and TC 425 entries.

  12. What is a 424? • It is a Examination Request Indicator. • It Deletes Records in the DIF file. • It can be generated for IMF when IRP Under-Reported case is referred to exam

  13. How a SFR is Created • An SFR is created by issuing an AM424 with Push Code 036 to establish the skeletal substitute for return in the IMF. • The AIMS system then queries IMF for matching data and if found, sends other details back to AIMS to create a complete AIMS record. The AM424 updates the IMF with TC424 and the complete AIMS record returned, updates the IMF with TC420and TC 150. • Proof that a TC424 was issued is the presence of the TC425, which in the IMF, is caused by the issuance of an AM424D. • The AM424D will then delete the TC424 from the IMF leaving the trace TC425 in the IMF. Thus, the TC 150 is created, TC420 is recorded, and a TC425 is proof of the AM424 issuance being deleted. This matches completely with my IMF, which has the following entries:

  14. What is a TC 570? • Additional Liability Pending and/or Credit Hold • Page 134 of 613 you will find TC 570 Transaction • Notice it is for Individual MF or Business MF • Indicates additional liability pending. Freezes (—R freeze) module from refunding or offsetting credit

  15. What is a TC 420? • Examination Indicator • Page 128 of 613 you will find TC 420 Transaction • Notice it is for Individual MF or Business MF • Can be input on Form 3177. Indicates that return has been referred to the Examination or Appeals Division.

  16. What is a TC 421 • Reverse Examination Indicator • Page 128 of 613 you will find TC 421 Transaction • Notice it is for Individual MF or Business MF • Generated at MCC when TC 300 posts with a Disposal Code of 1-5, 8-10, 12, or 34 to module and an unreversed TC 420, or 424 is present. Can be input directly with Doc. 47 or on Form 3177. Reverses TC 420 or 424.

  17. What is a TC 590? • Satisfying Trans. • Page 136 of 613 you will find TC 590 Transaction • Notice it is for Individual MF or Business MF • Not liable this tax period. Satisfies this module only. Requires a two digit closing code for IDRS input. See Section 11 for appropriate closing codes. • See Page 432 COLCLOS – 052 No return secured this period. Little or no tax due.

  18. What is a TC 370 • Fraud Penalty • Page 126 of 613 you will find TC 370 Transaction • Notice it is for Individual MF or Business MF • Assesses Fraud Penalty. BMF/IMF: Restricts FTP Penalty on Fraud Penalties assessed under IRC 6653(b) for returns due before 1/1/1989.

  19. What is a TC 971 • Miscellaneous Transaction • Page 151 of 613 you will find TC 971 Transaction • Notice it is for Individual MF or Business MF • Performs different actions based on the Action Code which are listed separately. • Action Codes found at page 256 of 613 in section 8-146

  20. Action Codes • 018 Congressional/PRP indicator. • 045 Causes IMF generation of TC 400. • 066 Return receipt signed – also for TC 972 (reversal) Note: If the Due Process was delivered in person, ACs 69 and 66 are input the same date. If the Due Process Notice was left at the Taxpayer’s home or business instead of being mailed, ACs 69 & 67 are input the same date. • 611 Third Party Contact notification made by Collection – also for TC 972 (reversal).

  21. MF and IDRS Collection Status Codes • Below are the MF STAT that were recorded.

  22. What do they mean? • 04 I/B EXT FILING Extension of time for filing granted. (Date of status is extension application filing date.) Installment basis, when applicable, to Forms 1041, 990C, 990T and 1120. • 02** I/B/E DEL STATUS Return not posted; letter of inquiry mailed. • 03** I/B/E TDI STATUS IDRS in delinquency status. **NOTE: 02 and 03 Status Code are modified and further explained by Status Indicators following the Status Codes. (See Sec. 11 for a definition of these indicators) • 06 I/B/E NO DEL RET Delinquent return not filed. Collection activity suspended while examination or criminal investigation review, or until another tax period posts to the Master File.

  23. Easy Way to Decode • Do a FOIA Request for the following document; • IMF MCC TRANSCRIPT-IMF LITERAL

  24. MF MCC Transcript Literal

  25. Questions & Answers

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