Note:

All employees with access to IAT must use the IAT ERRF Tool to process erroneous refunds. This tool is programmed for use with all ERRF categories. For more information, see IAT Job Aids.

Do not input the adjustment.

Mark the disposition in OLNR as L. Add the appropriate erroneous refund label to the notice. See the Erroneous Refund Labels chart below.

If

Then

The entire refund is erroneous

Use Label 15. You were issued an erroneous refund due to a processing error. Please return the uncashed check or a substitute payment.

A part of the refund is erroneous

Use Label 16. We sent you a refund in error. The correct amount of the adjustment is $____. You will receive a separate notice explaining the correction. We apologize for any inconvenience this may have caused you.

If any offsets have occurred due to the erroneous credits, reverse the offsets and make sure they remain frozen.

Input history item CATA1/XXXM or IDRS. (XXX=CP#)

Recharge the paper return to Exam using CC ESTABDT.

Input a TC 971 action code AC 663. See IRM Exhibit 21.4.5-1 , TC 971 AC 663 - Identifying Erroneous Refunds, for more information.

Prepare Form 5101, Examination Referral Slip, showing the adjustment action to be taken. Staple the Form 5101 to the front of the return (or to a print of CC BRTVU for Electronic File (Electronic File (ELF) returns)below the Entity. See Figure 3.14.2-9, Form 5101.

Staple a copy of TXMOD to the front of the return (or to the back of the BRTVU print for Electronic File (ELF) returns).

Route the Erroneous Refund package to Exam.

Figure 3.14.2-9

Please click here for the text description of the image.

Category B : Non-rebate Erroneous Refunds for income tax returns.