1

UNDERSTANDING THE IRS TRANSCRIPT

It’s not as boring as your might think!

2

Disclosure Laws

IRC § 6103 provides circumstances when IRS may disclose information

Tax return info may be disclosed to the taxpayer or their representative.

3

IRC §6103 – Disclosure Law

Tax return info includes

◼ Information off a tax return

◼ Files and info collected, recorded by, prepared, furnished to the Secretary in respect to a return or determination as long as associated with a particular taxpayer

Pg 1

4

IRC §6103 – Disclosure Law

Tax return info must be disclosed to the taxpayer as long as the request is made in writing including:

◼ Name address & ID #

◼ Description of the info requested

◼ Evidence that requestor is entitled to the info.

Pg 1

5

IRC §6103 – Disclosure Law

If verbal request, IRS must verify:

◼ Name as appears on return

◼ Address as appears on return

◼ SSN or Tax ID #

◼ For refund inquiry: type of tax, approx amount and place of filing.

◼ For individual: DOB and/or filing status

◼ Other unique identifier issued by IRS

Pg 2

6

Delegation Order 11-2

Authorizes IRS employees to disclose info to taxpayers to the extent necessary to perform their official duties.

If case is assigned to an employee, they have authority to disclose info without need to going to the Disclosure officer

Pg 2

7

Freedom of Information Act (FOIA)

IRS no longer provides transcripts via FOIA.

FOIA

Pg 3

8

HOW TO GET A TRANSCRIPT?

E-SERVICES

PRACTITIONER PRIORITY SERVICE –866-860-4259

ACCOUNT ASSIGNED TO

◼ ACS

◼ REVENUE OFFICER

◼ “NO” – Ask to speak to a manager

Pg 2

9

COMPUTER DEFINITIONS

ADP Book – www.irs.gov/privacy-disclosure/2018-document-6209-adp-and-idrs-information

Document 6209 (redacted)◼ Codes

◼ Closing codes

◼ Locator numbers

◼ Calendars

IRM Part 2, Information Technology –Describes command codes

Pg 2

10

COMPUTER DEFINITIONS

MASTERFILE – Main computer system◼ All types of returns

◼ Official address of taxpayer

◼ Specific return information

Wages

AGI

Withholding

Payments

Offsets

All transactions

“Secret codes”

Pg 3

11

COMPUTER DEFINITIONS

CADE2

NON-MASTERFILE (NMF)

◼ Approximately 10,000 open NMF accounts nationwide

◼ Taxpayer friendly transcript available

◼ “N” follows ID number

◼ Large # accounts

◼ Overflow accounts

◼ New Legislation

Pg 3

12

COMPUTER DEFINITIONS

NON-MASTERFILE (Continued)

◼ Immediate Legal Assessments

◼ Reversal of Erroneous Abatements

◼ Child Support Cases

Pg 4

13

COMPUTER DEFINITIONS

IMF – Individual Masterfile

◼ 1040

BMF – Business Masterfile

◼ 1120

◼ 941

◼ 941

◼ Etc.Pg 4

14

COMPUTER DEFINITIONS

IDRS – Active files

ALS – Automated Lien System

ACS – Automated Collection System

ICS – Integrated Collection System

Pg 4

15

COMPUTER DEFINITIONS

Exam System

Transaction Codes (TC)

Closing Codes & Action Codes◼ Example TC 520 = litigation

◼ With closing code 88=BK & generates a computer freeze

◼ Quick Desk Guide – Pg 4

Pg 5

16

COMPUTER DEFINITIONS

Designated payment codes – 2 digits defining a “subsequent payment”

Disposal code

Transcript of Account◼ MFTRX

◼ Txmoda

◼ MFTRA

Pg 5

17

Definitions

CP Notices

Command Codes

Unpostable

Penalty Codes

Pending Transactions

Reference Numbers

TIN

Cycle

Pg 5 & 6

18

Definitions

DLN

Doc Code

File Source – 123-45-6789*◼ Blank – Valid SSN or EIN

◼ * = Invalid SSN on IMF

◼ V – Valid SSN on BMF

◼ W – Invalid SSN on BMF

Pg 6 & 7

19

Definitions

File Source – 123-45-6789*◼ D – Temporary TIN

◼ P – Valid EPMF EIN

◼ N – Non masterfile

Other Type of File Source◼ B – BMF

◼ I – IMF

◼ N – NMF

◼ E - EPMF

Pg 6 & 7

20

Definitions

Financial Management Service◼ Provides Central Payment Services

◼ Operates Government Collections & Deposits

◼ Provides Government-wide Accounting & Reporting

◼ Manages the collection of delinquent debt owed to US

◼ POA – FMS 13, Authorization for Release of Info

◼ www.fms.treas.gov/debt/dmconsent.pdf

Pg 7

21

Command Codes

MFTRA◼ MFTRX – Codes are explained

◼ MFTRE – Entity information off Masterfile

◼ MFTRC - Complete for the TIN

◼ MFTRAY – All BMF for one year

◼ MFTRAU – Numident trasncript – SSA info

◼ MFTRAJ – Form 4340 – Certificate of Assessments, Payments, Other Matters

Pg 7 & 8

22

Command Codes

TXMOD – Service Center active accounts◼ Shows account info

◼ Encoded history

◼ Status codes (where has it been in the system)

PINEX – Penalty & Interest

INTST – Interest & Penalty calculations

INTSTD – Detailed P & I calculations

COMPA – IDRS computes interest

RTVUE & BRTVU – Line Items from returns

RTFTP

Pg 8 & 9

23

Command Codes

RTVUE & BRTVU – Line Items from returns◼ No adjustments

◼ RTVUE – IMF

◼ Edited & verified files

◼ Accompanying schedule and forms

◼ Current year + 2 back years

◼ BRTVU – Business returns

RTFTP – Sanitized version of RTVUE/BRTVU

Pg 8 & 9

24

Command Codes

IRP – Payer information

SUPOL – IRP info (New: IRPTR)

URINQ – Unidentified Remittance

SUMRY – Summary of assessments

STAUP – Holds on accounts

ENMOD – Entity info including addresses

LEVYS – Levy sources

Pg 9 & 10

25

COMPUTER SYSTEM

ICS

EXAM CAF

LIENS

ACS

IDRSMASTEFILE

Pg 11

26

E-SERVICES

RECENT CHANGES

◼ Attempt to keep taxpayer info secure:

December 2017 – Secure Access

◼ Strengthen Authentication

◼ Two-factor authentication

September 2018

◼ Redact taxpayer Info

◼ Last 4 digits of Acct # & telephone number

◼ First 4 digits of last name

◼ First four characters of business name

◼ Wage & Income transcript shows all money amts

Pg 12

Tax Return Transcript

27

Pg 13

28

Pg 14

Tax Return Transcript (Actual)

29

Pg 15

30Page 16

Note: First 2 letter of a 3 character first name are shown rather than last name.

31

New Tax Transcript: FAQs

New transcripts are “masked” covering personal info

Provided to taxpayer or their representatives

“Unmasked” transcripts may be mailed to taxpayer’s only to address of acct.

Masked transcripts will cause more work

Effective January 2019, transcripts will no longer be faxed to taxpayers or reps

Pg 17

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New Tax Transcript: FAQs

Beginning May 2019, IRS will stop mailing transcripts to those listed on Live 5 e of Form 4506-T or T-EZ. All such requests will be mailed to taxpayer’s address of record

Pg 17

New Tax Transcript: FAQs

33

New Tax Transcript: IRC 7521

IRC 7521 – Right to Representation

In order to bypass a POA, a manager must sign off

Is sending the transcript to the taxpayer instead of us, a bypass?

Pg 17

New Tax Transcript:

34

Pg. 18

35

36

More Frequently Used Transaction Codes:

Pg. 20

37

Supplemental Codes

Action codes

Closing Codes

Disposal Codes

Designated Payment Codes

Penalty codes

Unpostable codes

Many others

Pg 14

38

TC 971

Without additional code – Used to post

identifying XREF TIN/Tax period data

whenever a TC 150 return has been posted

to an incorrect TIN/Tax Period, or an

amended return has been received.

Pg 21

39

TC 971 with AC

13 – Delinquent return after SFR

43 – Taxpayer proposed an installment agreement

63 – Installment Agreement was approved

163 – Installment Agreement was defaulted

Page 21

40

TC 971 with AC

13 – Delinquent return after SFR

43 – Taxpayer proposed an installment agreement

63 – Installment Agreement was approved

163 – Installment Agreement was defaulted

Pg 21

41

More TC 971

AC 69 – CDP Notice issued

AC 69 & 66 – CDP Notice handed to TP

AC 69 & 67 – CDP left at last known address

AC 61 – CDP attempted settling issue before going to Appeals

AC 275 – CDP not yet assigned to Appeals

Pg 21

42

Passport Law

IRS has begun using TC 971 AC 640 to show that a levy has previously been issued on a TXMOD

IRC 7345 authorizes IRS to notify State Dept. of a “seriously delinquent” taxpayer

Owe More than $50,000 ($51,000 in 2018)

With a few exceptions passports may be revoked or denied by State Dept.

Pg. 22

43

TC 972 Reverses

AC 43 – Reverses identification of pending installment agreement

AC 063 – Reverses indication that an IA was approved if TC 971 AC 063 was input in error

AC 061 – CDP withdrawn

44

Document Locator Number

28-210105600254

28 – File Location

2 – Tax class

10 – Document codes

Pg 22

45

Document Locator Number

28-210105600254105 – Julian Date

600 – Block number

25– Serial number in block

4 – Last digit of year DLN assigned

Pg 23

46

Service Center/District Codes

04 New England

06 Connecticut-Rhode Island

07 Atlanta Service Center

08 Andover Service Center

09 Kansas City Service Center

11 Brooklyn, NY

13 Manhattan, NYSee Page 24 for complete list

SC Codes for Electronic Filing

47

Service Center Code Number

Not ElectronicallyFiled:

Andover 14/16 08

Austin 76/75 18

Cincinnati 55/35 17

Memphis 72/64 49

Ogden 93/92 29

Return Filed with F2555 98 (Intl)

For Complete list see page 24 - 26

Old SC Codes for Electronic Filing

48

Service Center

Code Number

Description:

Andover 14 (BMF) Eff. 1991 Form 1065

16 Eff 1989, IMF & BMF Doc code 19 & 35

41 Eff. 1996, 1997, 1988 only - BMF

ATSC 56 IMF

AUSC 76 & 75 IMF

For Complete list see page 25

49

MFTRX

MFTRA – Actual record including complete history of actions in code only. Requires FOIA. A "Specific" MFTRA transcript is a record of a specific type of tax return (i.e., Form 1120) for a specified tax period

MFTRX provides an interpreted transcript from the Masterfile for taxpayer’s use. Not all information is included on the transcript

Pg 26

50

MFTRX

MFTRA – Actual record including complete history of actions in code only. Requires FOIA. A "Specific" MFTRA transcript is a record of a specific type of tax return (i.e., Form 1120) for a specified tax period

MFTRX provides an interpreted transcript from the Masterfile for taxpayer’s use. Not all information is included on the transcript

Pg 26

51

Types of Transcripts

MFTRX – Literal Transcript as seen on E-Services

MFTRA – Masterfile transcript showing codes only – no definition

TXMOD – A lot like a MFTRA but has service center history

◼ Can be ordered from PPS/ACS/RO or anyone assigned a case.

Page 26

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Pg 26

TXMODA – ENTITY PORTION

53

Pg 27

TransactionCodes

ActionCodes

54

Pg 27

Notices

SC History Section

55

Pg 28

Collection Status Codes

56

TXMOD

Has more detailed information than any other single command code. Therefore, the examples and identification of the elements will be broken into five sections:

1.Heading

2. Transaction Section

3. Notice Section

4. Case control and

history

5. Status history

Pg 29

57

TXMOD vs MFTRX

Complete

Very complicated

CC’s and AC’s tell whole story

Hard to get (FOIA)

Shows information necessary to protect TP’s rights

Limited information

Easy to read

IRS interprets story for you

Easy to get – soon electronic access

Most really valuable info is omitted

58

TXMOD

See pages 30-35 for ADP “key” to Txmod

ADP book available at www.irs.gov

Search “ADP” or “6209”

ADP book changes annually

Note: This comes and goes. I suggest you download and save to hard drive.

59

Other Useful Command Codes:

ENMOD – Entity Information

IRPTR◼ Info for all taxpayer not just delinquency

status

◼ Useful for delinquent returns

◼ Provides info by payee or payor

◼ Provides income prior to TY 2008 thru 2017

◼ First day updated for year 2018 –1/23/2019

◼ Aids in resolving CP 2000

Pg 36

60

Corporate Files On-Line (CFOL)

Nationwide access of SC info

Prior to CFOL employees only had access to the SC that processed their area

Does not show all info on IDRS

◼ Pending

◼ Unpostable

◼ History

Pg 36

61

BMFOL

Provides information on the masterfile (same as MFTRA)

Displays additional assessment transactions and abatements

Allows research of Txmods that have been moved to retention

Pg 36

62

BRTVU

Provides a display of the transcribed line items on all business tax returns and their accompanying schedules or forms as the returns are processed at the Campus.

It is used by IRS in lieu of ordering the paper return

Current processing year plus 3 prior years are available.

Displays delinquent and amended returns

63

DDBOL – Dependent Database

Provides the SSN for the EITC child

Provides SSN for the dependent child used for an exemption

Provides the SSN for the child used for child tax credit

Provides the SSN for the child used for the child care credit

Also shows the SSN for the custodial parent for each dependent

Shows the citizenship code.

Pg 37

64

Other Useful Command Codes:

IMFOL (Individual Masterfile On-line)

◼ Nationwide info on IMF read-only used when IDRS shows “no data”

◼ Shows years available

Page 37

65

IMFOL:

IMFOL – Shows an index of tax modules for years available. Contains nationwide information including

◼ Entity

◼ Posted returns

◼ General tax data

◼ Status history

◼ Adjustments and audit history

◼ NOT pending and unpostable items on SC computer

66

Other Useful Command Codes:

IMFOL – does not show information recently input by service center.

INOLE – Accesses National Account Profile containing entity info (limited) Including SSA cross reference data

Page 37

67

INOLE:

Displays entity data for all

◼ Masterfiles

IMF

BMF

Individual Return Masterfile

Information Return Masterfile

Payer Masterfile

Employee Plans Masterfile

Debtor Masterfile

◼ SSA

Page 37

68

INOLE Continued

Cross-Referenced data for any specified TIN which resides in the National Account Profile

It provides

◼ Filing Status

◼ SSA Info

◼ IMF for prior names

◼ DOB & DOD

◼ Primary taxpayer nameline

◼ Cross-referenced Tax ID numbers

Page 37

69

Other CFOL Command Codes

PMFOL – Payer master file informaton showing a summary screen of:

◼ All sources of income and amounts

◼ Withholdings

◼ Number of documents filed by the payer as shown on Form 1096

◼ Civil penalties associated with documents

Page 38

70

Other CFOL Command Codes

RTVUE – displays line items transcribed from Forms 1040 seriesand accompanying schedules.

RPVUE – Provides easy access to Preparer Listing Information taken from business & individual returns◼ Shows preparer entity information

◼ Number & percentage for refund and EIC returns prepared.

71

Other Useful Command Codes:

SPARQ – Researches current address for former spouse

Page 38

72

SUPOL

Provides income info on delinquent taxpayers

SUPOL will not:

◼ Provide info prior to tax year 1990

◼ Update once posted online

◼ Aid in resolving CP 2000 issues

Pg 30

73

Other Useful Command Codes:

Third Party Contact System (TPCIN & TPCOL) – Maintains database of all third party contacts made regarding taxpayers during the determination or collection of a tax liability

Page 38

74

Other Useful Command Codes:

TRDB (Tax Return Database) –

◼ Stores original tax return information within 24 hours of receipt within IRS

◼ Stores electronically filed codes and edit data

◼ Stores corrections made to tax return data

Page 38

75

Reading The Transcript:

Situations when reading the masterfile transcript or TXMOD benefits the case–

◼ Calculating collection statute of limitations (Note: TXMOD provides CSED as calculated by the IRS computer

◼ Audit reconsiderations

◼ Court cases

◼ Missing payments

◼ Determining closing codes used when an account is reported as currently uncollectible

Page 39

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Return Codes:

MFT (Master file transaction) Frequently used codes:

◼ 30 – Form 1040

◼ 01 – Form 941

◼ 02 – 1120

◼ 10 – FUTA Form 940

◼ 55 – Civil Penalty

Page 39

77

Return Codes:

Period – The IRS has a method for designating tax periods

Last Day of Period = YYYYMM

Example: 12-31-2017 = 201712

FY 9-30-2018 = 201809

Quarter ending 6-30-2018 = 201806

Prior to Y2K period was YYMM (9912 = 12/31/1999)

Page 39

78

Question:

You are calling RO for your client, Mr. Smith. RO says she cannot speak to you because you don’t have POA for all years. When asked what period is missing, she says “01 201209.” What period is she addressing?

Page 39

79

Answer:

941 for quarter ending 9-30-12

Question: What if she had said 55 200703?

Page 39

80

Answer:

55 200703 = Civil Penalty for period ending 3-31-2007

Page 39

81

Transaction Codes:

Frequently used term.

Code tells you a transaction took place on the account (Page 3 of Quick Guide)

TC = Transaction code

TC 150 = Date return was assessed

Beside the TC is the date and then a cycle number

Date may be actual date of input or effective date

Page 40

82

Transaction Codes Continued:

Example: Form 1040 is filed in February

TC 150 shows 4/15 of that year

Cycle number is 201310

Cycle indicates assessment was actually made 10th cycle of 2013 or week of March 1st through 7, 2013

ADP Book shows past years cycles

Page 40

83

Reading The Codes

Designated Payment Codes Quick Guide Pg 60

◼ Used on all posting vouchers

◼ Examples:

00 DPC not present on voucher

01 Non-Trust Fund

02 Trust Fund

03 Undesignated bankruptcy payment

04 Levy on state income tax refund

05 Notice of Levy

06 Seizure and sale

07 Federal Tax Lien

84

08 Suit

09 Offer In Compromise

10 Manually monitored installment agreement

11 Bankruptcy-designated to trust fund

12 Cash bond credit (TC 640 only)

14 TP authorized to apply to expired statute

99 Miscellaneous payment other than 01-11 above

Designated Payment Codes Continued

85

Reading The Codes

TC 670 – Subsequent payment with

◼ DPC 02

◼ DPC 09

◼ DPC 11

◼ DPC 99

86

Reading The Codes

TC 670 – Subsequent payment with

◼ DPC 02 – Trust fund

◼ DPC 09 - OIC

◼ DPC 11 – BK designated to trust fund

◼ DPC 99 – No designation on voucher

87

Reading the Codes

Exam Disposal Codes (Quick Guide Pg 59)

This code is applied with an TC 30001 No Change with adjustments

02 No change

03 Agreed prior to 30 day letter

04 Agreed after issuance of 30 day letter

07 Appealed before issuance of 90 day letter

09 Agreed after issuance of 90 day letter

10 Default – TP fails to appeal or agree after 90 day letter issued

11 Petitioned after issuance of 90 day letter

88

Reading the Codes

Exam Disposal Codes (Appendix A-4)

This code is applied with an TC 290

89

Transaction Codes:

What could you read from the above?

What do the TC codes tell you?

What does the DLN tell you?

Page 39

TC Posted Tran-AMT Cyc DLN

150 06062015 4984.00 201521 18221-114-90828-5

806 04152015 3950.00- 201521 WH TX Cr Posted w/Rtn

90

Example Continued

What actions were taken on this account?

What does the DLN tell you on TC 582? (See Page 24 of this handout.)

Page 40

TC Posted Tran-AMT Cyc DLN

276 06062015 10.34 201521 18221-114-90828-5

196 06062015 10.36 201521 18221-114-90828-5

582 08122015 0.00 201534 75277-628-03400-4

Regular Lien

91

Example Continued

What do the following tell us?

TC 971 Code 063

TC 971 Code 262

TC 960

TC 971 code 252

Page 40

TC Posted Tran-AMT

Cyc DLN

971 01012010 0.00 2010001 75277-001-99999-0 CD>063

971 02052011 0.00 201104 75277-999-99999-1 CD>262

960 0.00 201140 18277-664-00382-1 MF-CAF

971 0.00 201140 18277-664-00382-1 CD>252

92

Example Continued

What do the following tell us? (Hint Page 32 Quick Guide)

TC 971 Code 063 – Entered into Installment Agreement

TC 971 Code 262 – Maximum Failure to Pay assessed

TC 960 (Pg 17 of Quick Guide) – Updated CAF Indicator

TC 971 code 252 – Lien CDP Letter sent

Page 41

TC Posted Tran-AMT

Cyc DLN

971 01012010 0.00 2010001 75277-001-99999-0 CD>063

971 02052011 0.00 201104 75277-999-99999-1 CD>262

960 0.00 201140 18277-664-00382-1 MF-CAF

971 0.00 201140 18277-664-00382-1 CD>252

93

Example Continued

What do the following tell us? (Hint Page 32 Quick Guide)

TC 971 Code 253

TC 971 Code 611

TC 971 Code 061

TC 971 code 163

TC 670 code 99

Page 41

TC Posted Tran-AMT Cyc DLN

971 10152011 0.00 201143 18277-675-0382-1 CD>253

971 02232012 0.00 201210 76277-456-04013-2 CD>611

971 06242012 0.00 201224 18277-999-99999-2 CD>061

971 06102013 0.00 201224 75277-001-99999-0 CD>163

670 07252013 132.00 201332 75219-209-00217-3 DPC>99

94

Example Continued

What do the following tell us? (Hint Page 32 Quick Guide)

TC 971 Code 253 – CDP Lien Notice Undeliverable

TC 971 Code 611 – Third party contact made by collection

TC 971 Code 061 – Module blocked/released Fed. Pmt Levy Program

TC 971 code 163 – Out of Installment Status

TC 670 code 99 (Pg 13 & 60) – Subsequent payment not designated

Page 41

TC Posted Tran-AMT Cyc DLN

971 10152011 0.00 201143 18277-675-0382-1 CD>253

971 02232012 0.00 201210 76277-456-04013-2 CD>611

971 06242012 0.00 201224 18277-999-99999-2 CD>061

971 06102013 0.00 201224 75277-001-99999-0 CD>163

670 07252013 132.00 201332 75219-209-00217-3 DPC>99

95

Example Continued

Before we see a TC 670 with a DPC>05, what must we see to see if IRS did their job correctly?

A.TC 971 AC 069

B.TC 971 AC 104

C.TC 971 AC 120

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96

Example Continued

Before we see a TC 670 with a DPC>05, what must we see to see if IRS did their job correctly?

A.TC 971 AC 069 – CDP Issued

B.TC 971 AC 104 – Innocent Spouse

C.TC 971 AC 120 – Amended return

ANSWER: AC 069 because DPC code shows a levy payment was received

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97

A client says he never received notice of an adjustment to his 2011 tax return. We pull a TXMOD and it indicates:

What does the TC 971 AC>139 tell you?

How about the TC 290 Disp 10

What action could you then take?

Page 41

TC Posted Tran-AMT

150 03112013 3,086.00

806 04152013 4,687.00

826 04152013 1,601.00

420 11152013 0.00

971 12152013 1,000.00 AC>139

290 12152013 1,000.00 Disp 10

421 01032204 0.00 CD>061

98

A client says he never received notice of an adjustment to his 2011 tax return. We pull a TXMOD and it indicates:

What does the TC 971 AC>139 tell you? Notice Issued AUR

How about the TC 290 Disp 10? 90 day letter defaulted

What action could you then take? Find out where the 90 day letter was sent? Possible Audit Reconsideration

Page 42

TC Posted Tran-AMT Pg

150 03112013 3,086.00

806 04152013 4,687.00

826 04152013 1,601.00

420 11152013 0.00

971 12152013 1,000.00 AC>139 35

290 12152013 1,000.00 Disp 10 59

421 01032204 0.00 CD>061

99

Collection Status Codes (Quick Guide 61):

Page 42

SC-ST Date Status Amount Cycle Definition

21 06062014 1,054.70 201421

48 06132014 201422

26 06202014 201423

60 10022015 1,054.70 201538

64 01272017 1,054.70 201703

22 06102018 1,054.70 201822

100

Collection Status Codes (Quick Guide 61)

Page 42

SC-ST Date Status Amount Cycle Definition

21 06062014 1,054.70 201421 Rtn assessed; 1st Notice

48 06132014 201422 STAUP – Suppresses

notices for 15 cycles

26 06202014 201423 Taxpayer Delinquent

Account Issued (Field)

60 10022015 1,054.70 201538 Installment Agreement

Generated

64 01272017 1,054.70 201703 Defaulted Installment

Agreement

22 06102018 1,054.70 201822 Taxpayer Delinquent

Account issued (ACS)

101