Note:

For any cases (with an invalid return) involving AdvCTC payments that do not meet the scenarios described above, prepare and email a Form 4442 using the subject line: "AdvCTC" (or similar) to ITVA HQ. Document all research completed in a CII case note and/or on Form 4442. Attach Form 4442 to your CII case. Suspend the case awaiting a response from ITVA HQ. Upon receipt, the account will be researched. A response on how to address the account will be received within 7 business days.

Refer to the table below for scenarios that do not include an invalid return for TY 2021:

AdvCTC Payments

And

Then

(1) Were issued only to the valid taxpayer

The valid taxpayer has filed a TY 2021 return

If CTCUP was updated by someone other than the valid taxpayer after all AdvCTC payments were issued, the case will be worked as non-tax-related identity theft. Refer to IRM 25.23.3.2.3, Self-Identified - Non-Tax-Related Identity Theft - IDT4, for specific procedures.

If there is no invalid return and CTCUP was not updated after all AdvCTC payments were issued, the taxpayer is not a victim of IDT. Follow procedures in IRM 25.23.4.10.8, No Identity Theft (NOIDT).

Refer to paragraph (11) below for letter requirements.

(2) Were issued in whole or part to the invalid taxpayer

The valid taxpayer has filed a 2021 tax return and a math error was not set

Address lost payments as described in paragraph (4) above.

Reverse AdvCTC for each payment issued to the invalid taxpayer. Include BS 05, SC 0, and HC 4. Post delay the first adjustment by 1 cycle and each adjustment following by an additional cycle (i.e., if reversing 3 lost payments, the first adjustment will have PD 1, the second will have PD 2, and the third will have PD 3).

Input TC 290 .00 with BS 05, SC 0, RC 139, and HC 3. Post delay this adjustment to ensure it posts after all AdvCTC adjustments.

For non-streamline cases, input a TC 971 AC 195 on the invalid taxpayer’s entity using the from account TC 971 AC 199 entity information for the transaction date and MISC filed inputs.

Refer to paragraph (11) below for letter requirements.

(3) Were issued in whole or part to the invalid taxpayer

The valid taxpayer has filed a TY 2021 return and a math error was set

Refer to IRM 25.23.4.21.2.3, ARPA - Advanced Child Tax Credit (AdvCTC) Math Errors, to correct the account.

Refer to paragraph (11) below for letter requirements.

(4) Were issued in whole or part to the invalid taxpayer

The valid taxpayer has not filed a TY 2021 return

Address lost payments as described in paragraph (4) above.

Reverse AdvCTC for each payment issued to the invalid taxpayer. Include BS 05, SC 0, and HC 4. Post delay the first adjustment by 1 cycle and each adjustment by an additional cycle (i.e., if reversing 3 lost payments, the first adjustment will have PD 1, the second will have PD 2, and the third will have PD 3).

For non-streamline cases, input a TC 971 AC 195 on the invalid taxpayer’s entity using the from account TC 971 AC 199 entity information for the transaction date and MISC filed inputs.

Refer to paragraph (11) below for letter requirements.