Example:

The next module is missing the first two Estimated Tax deposits. The overpayment on the Q- Freeze is one-half of the notice module's tax liability. Transfer the payment per taxpayer intent to combine both payments.

If a misapplied payment is transferred from a notice module with an estimated tax penalty, and the overpayment per the taxpayer is reduced by the penalty, retype the notice to a CP 173 (if no other discrepancy exists).

Review module for the incorrect posting of TC 806 (Credit for Withheld Taxes) or TC 766 (Refundable Credits). Check for payment(s) posting to the module that match the TC 806 or TC 766 amount. If the credit is incorrect, reverse the TC 806 with TC 807 (credit reference code) and the TC 766 with TC 767(credit reference code) using CC REQ54.

If transferring a timely misapplied payment from a notice module for Form 940, 941, 943, 944, or 945, check CC FTDPN or PIFTD for FTD penalty computation and refer to the Transferring a Timely Payment Decision table below:

If

Then

An FTD penalty (TC 186) has not posted on the notice module, but CC FTDPN indicates a penalty amount over tolerance

The FTD penalty will assess when the credit transfer posts. Refer to Q- Freeze Retype Condition Chart to decide if notice must be retyped to the applicable notice or voided and allow CP 210 to generate.

An FTD penalty (TC 186) has posted on notice module and CC FTDPN or PIFTD indicates the penalty will recompute

The penalty will recompute when the credit transfer posts. Use LCF to void the next adjustment notice or stop an adjustment notice from being issued using CC REQ54, 290 .00, Hold Code 3. (See Q- Freeze Retype Condition Chart for notice disposition.) If LCF is being updated, see IRM 3.14.2.5.4.1 , NRP97 Input Information.