IRS Unpostable Process

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Unpostable Overview

Below are specific procedures how the IRS processes unpostable tax return transactions. It is directly from the IRS manual and is only for reference because it is complex. The easiest way to understand unpostables is to read more about How to Resolve Unpostable Tax Return, Resolution Time, Responding to Taxpayer Inquiries to see what happens in the IRS system when something is unpostable.

If you are experiencing financial difficulty because of an unpostable delay, you can contact the Taxpayer Advocate Service (TAS). A taxpayer advocate can intervene to help resolve some cases they work directly with the IRS.

Read more: What is unpostable?

Processing Unpostables

Refer to the following IRMs for complete procedures for resolving unpostables:
IRM 3.12.279, BMF/CAWR/PMF Unpostable Resolution
IRM 3.13.122, IMF Entity Control Unpostables
IRM 3.13.222, BMF Entity Unpostable Correction Procedures

This section provides specific procedures from the IRS manual for processing unpostables. (12-10-2003)
Preventing Unpostables

  1. Most unpostable conditions can be prevented by thoroughly reviewing IDRS before making an adjustment. Consider the following:

A. Freeze codes

B. The effect of any transactions pending on the account

C. Cycling transaction information, follow procedures in IRM, Cycling Transactions

2. Implementing strategies which prevent unpostables will help you complete adjustments accurately and efficiently. For instance, make sure dates and money amounts on credit transfers match those of the credits being moved before you make the adjustment.

3. Contact other Service employees with an open control base on IDRS to coordinate actions and prevent duplicate adjustments.

4. Do not reduce the following line reference numbers below zero:

878 – Primary Self Employment (SE) Income
879 – Secondary SE Income
885 – Advanced Earned Income Tax Credit (EITC)
886 – Taxable Income
887 – Number of Exemptions
889 – SE Tax
891 – Primary Tip Income
892 – Secondary Tip Income
895 – Primary Medicare Income
896 – Secondary Medicare Income
897 – Spousal Claim on Debtor Master File (DMF) (IMF only)
898 – Primary Medicare Tip Income
899 – Secondary Medicare Tip Income

Note: This list is not all inclusive. Only the most common reference numbers are listed. (01-17-2012)
Resolving Unpostables

  1. Review the unpostable condition and the specific Unpostable Reason Code (URC) to determine the cause of the unpostable. The most common IMF unpostable conditions are 158-1, 160-0, 180-2, and 189-0. Most common for BMF unpostable conditions are 305-2, 316-1, and 325-1.

2. Input Unpostable Resolution Codes (URCs) to resolve/close unpostable cases. Refer to Document 6209, Section 8B.6, Unpostable Resolution Codes, for a complete list.

3. When an unpostable is closed with a URC of 1, 2, or 8, a nullification code is entered by the Unpostables Function to identify the receiving area of the closed unpostable. Refer to IRM, Unpostable Nullified Distribution Listing (GUF 55-47) for more information.

4. If the case is still open, check the transaction information to determine what you must correct. Follow the table below to determine the appropriate action:

You find an error Use CC UPDIS and CC UPCASZ to enter a history item on IDRS. Follow procedures in IRM, Unpostable IDRS Command Codes, above.
The transaction should post based on the corrected information Treat the transaction as “pending” and advise the taxpayer accordingly. Follow procedures in IRM, Unpostable IDRS Command Codes.
All transaction information is correct Input a history item using CC UPDIS and CC UPCASZ indicating the Unpostables Function should post the transaction without change. The transaction may have been unpostable when it first reached MF, but will post under current conditions.
An unpostable credit does not belong on your taxpayer’s module Input history item using CC UPDIS and CC UPCASZ. Follow procedures in IRM, Unpostable IDRS Command Codes, or prepare a referral to the Unpostable Unit per IRM 21.3.5, Taxpayer Inquiry Referrals Form 4442 as appropriate.
You cannot determine where credit belongs or how to resolve the unpostable condition Prepare a referral to the Unpostable Unit. Follow procedures in IRM 21.3.5, Taxpayer Inquiry Referrals Form 4442.

Note: When unpostables are closed, status code “C” shows on CC UPTIN the next day. The information remains on CC UPTIN for 90 days. Determine if the unpostable is closed the same day by checking CC UPDIS. Follow procedures in IRM, Unpostable IDRS Command Codes above.

5. If the account has a lien against it and correction of the unpostable will full pay the account, a manual lien release will be needed. Follow procedures in IRM, Liability is Satisfied, regarding manual lien releases. Submit a completed Form 13794, Request for Release or Partial Release of Notice of Federal Tax Lien, to the Centralized Lien Unit, lien release contact. Fax numbers are found on the Who/Where page on SERP under Lien Payoff/Release Contact Numbers. (10-01-2006)
Cycling Transactions

  1. Each week of processing is considered a cycle. All transactions (returns and adjustments) post to the MF according to the cycle they are input. Transactions pending on the accounts must also be considered.

2. Certain transactions require a related transaction to post first. Input the transaction(s) to the system in the desired order of posting. For instance, most transactions require the establishment of an account or tax module before subsequent transactions can post.

Note: The posting sequence for MF is generally from the lowest numbered transaction code to the highest. TC 400 (transfer of account) posts last on all MFs with the exception of BMF. In BMF, when a TC 400 and TC 150 (return) are attempting to post in the same cycle, the TC 150 will post last.

3. Cycle transactions by using a posting delay code. Determine the necessary number of cycles (weeks) to delay the posting of a TC, and input that number in the appropriate field of the IDRS input screen.

4. If the prerequisite TC with a higher number has to post prior to the posting of another TC, use an appropriate cycle delay indicator.

5. Use an appropriate cycle delay indicator when a prerequisite TC is needed to change filing requirement, balance, freeze condition, or indicator.

Note: Calculate the number of cycles required by using the current cycle plus the number of cycles the adjustment action will take to post to the MF.

6. Do not cycle transactions if:

A. The posting sequence is irrelevant; or

B. The prerequisite transaction will post first.

Caution: When you enter the number of cycles to delay a transaction, consider the day of the week in relation to the day the Service Center (SC) updates to MF. If you input the transaction close to the end of the weekly posting cycle, you may need an additional cycle to allow the transaction to post.

When you transfer credits using CC FRM34 the credit side re-sequences for one cycle after the debit side posts in two cycles. The CC DRT24 and CC DRT48 transfers post in two cycles.

If you use CC FRM34 and CC DRT48 simultaneously, take care to force both transactions to post in the same cycle.

A. Use a one-cycle posting delay on the credit election transfer (CC DRT48) if you move the multiple payments with CC FRM34 to avoid generating erroneous notices, offsets, and refunds.

Note: Refer to Document 6209, Section 8B.8, Resequence Codes (IMF Only), for a list of IMF resequence codes.

B. For additional information regarding credit transfers, refer to IRM 21.5.8, Credit Transfers. (10-01-2012)
Unpostables Created by Your Own Adjustments

  1. Generalized Unpostable Framework (GUF) automatically sends select unpostables back to the originator if the employee caused the condition or has information to close the case.

2. List unpostable codes on CC ADJ54 that can be corrected (forced to post) i.e., UPC 180. If PC 8 was omitted in error, input UPCASZ and request the adjustment to be force-posted. Have Accounts Management Examiners work the unpostable listings for these codes to avoid reworking them. You must resolve unpostables created by your own adjustments, credit transfers, etc., which are referred from the Unpostables Function with URC 2.

3. A control base is opened (Category Code NLUN) to the employee who input the transaction originally, and the transaction is included on the Nullified Distribution Listing (GUF 55-47). The Unpostables Function will route the case and the Nullified Distribution Listing to the area responsible for working the case.

If Then

You receive the nullified document Research CC UPDIS and CC UPRES for the reason(s) the adjustment was nullified. Follow procedures in IRM, Unpostable IDRS Command Codes.
A correction to the adjustment is needed
1. Re-input the transaction(s) using the corrected information and notate the NU DLN on the subsequent adjustment package. If using Correspondence Imaging System (CIS), notate the NU DLN in your CIS history remarks.

2. Close the control base.

The Unpostables Function cannot locate and forward the original input document(s) with the case
1. Try to associate the case with any non-source documents kept in the Accounts Management Campus or Call Site.

2. Analyze the transaction(s) originally input.

3. Re-input the transaction(s) using the corrected information and notate the NU DLN on the subsequent adjustment package. If using CIS, notate the NU DLN in your CIS history remarks.

4. Close the control base.

Note: Refer to IRM, Resolving Unpostables for additional information.