Note:

On Category D Erroneous Refunds, the Submission Processing Accounting/Erroneous Refund Unit (A/ER), inputs a TC 700 to remove the erroneous refund amount on Master File and the account is reestablished in Accounting. This action is taken to prevent administrative collection action (liens or levies) from occurring on the erroneous refund liability. Do not release the TC 700 credit.

Statute Barred Refunds.

Taxpayer receives erroneous Health Care Tax Credit (HCTC).

Erroneous refund procedures are not necessary in the following situations:

A signature is missing.

Credit elect requested by the taxpayer has refunded.

In a situation where an error found in Notice Review increases the original tax (TC 150) and there was not a previous tax decrease, treat the tax increase as a regular turnaround case instead of an erroneous refund. Make the adjustment using Blocking Series 00 (non-income tax returns) or 77 (income tax returns) with Hold Code 0. Apply Label 16 to the current cycle notice and allow the next adjustment notice to generate.

Route returns that need to be reprocessed that also have an erroneous refund to Accounts Management and follow the procedures listed below:

Order the return if it is not already with the case.

Complete Form 5101, Examination Referral Slip, explaining the erroneous refund and the reason for the adjustment.

Void the notice.

Recharge and route the case to Accounts Management.

Once an Erroneous Refund has been identified, it must be categorized to decide what further actions will be taken. The most common categories worked in Notice Review are A1, A2 , B, C, and D.