Example:

Form 14039 is received on May 2, 2019. Tax year 2008 is the impacted year. A determination of one return IDT was made. Through research you find the valid taxpayer’s 2015 return was filed by April 18, 2016 and the refund offset to the balance owed for tax year 2008. The CSED for tax year 2008 is April 15, 2019, and the offset was applied to the balance in cycle 201617 (April 22 - April 28, 2016). Because the offset was applied to the balance before the CSED expired, it would not be returned to the tax year 2015 module. Credit availability will be determined following normal statute procedures for payments (i.e., 2 year rule).

If

And

Then

(1) The credit is available for refund or offset,

The RSED is open,

Transfer the credit back to the original module. On the credit side, include TC 570 followed by TC 572 with the appropriate post delay to prevent an offset back to the expired CSED module. Allow the system to refund the credit or offset it to another liability.

(2) The credit is available for refund or offset,

The RSED is expired,

Transfer the credit back to the original module. On the credit side, include TC 570 to prevent offset to the expired CSED module. Issue a manual refund following procedures in IRM 21.4.4.5, Preparation of Manual Refund Forms.

(3) The credit is not available for refund or offset,

Transfer the credit back to the original module. On the credit side, include TC 570 to prevent offset back to the expired CSED module. Apply the credit to the Excess Collection File following procedures in IRM 25.6.1.7.3.1, Transferring Credit to XSF.

When the balance due module is a Married Filing Joint account and the tax offset applied to the balance is from a module that does not reflect both spouses’ names, follow procedures in the table below:

If

And

Then

(1) The credit is available for refund or offset,

The RSED is open,

Transfer the credit back to the original module. On the credit side, include TC 570 followed by TC 572 with PDC 2 to prevent offset back to the expired balance due module, if necessary. Allow the system to refund the credit or offset it to another liability, when possible.

(2) The credit is available for refund or offset,

The RSED is expired,

Transfer the credit back to the original module. Include TC 570 to prevent offset back to the balance due module. Issue a manual refund following procedures in IRM 21.4.4.5, Preparation of Manual Refund Forms.

(3) The credit is not available for refund or offset,

Transfer the credit back to the original module. Include TC 570 to prevent offset back to the balance due module. Apply the credit to the Excess Collection File following procedures in IRM 25.6.1.7.3.1, Transferring Credit to XSF.

TAS hardship requests for returning an offset to the originating module must be considered. The CSR/TE assigned the case is responsible for verifying offset reversal criteria is met. When an Operations Assistance Request (OAR) is received requesting reversal of a tax offset, return the offset to the originating module if the offset is the result of a TAS or IRS clerical error. A clerical error is an error resulting from a minor mistake or inadvertence, in writing or copying something on the record. A clerical error is not an error based on substance or judgment. Clerical errors include:

Typing an incorrect number

Transcribing a word incorrectly

Misdirecting a form

Sending a form to a nonworking fax machine