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| ABATED INTEREST
— The portion of the interest liability on a given module or
account which has been reversed.
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| ACCRUED INTEREST
— The unassessed portion of the total interest liability on
a specified module or account at any given date. It is the difference between
interest assessed and total interest due.
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| ADDITIONS
TO THE TAX — Amounts imposed and added to the tax based on a
specified percentage of the tax. These additions are commonly referred to
as penalties.
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| ADVANCE PAYMENT
— A payment made prior to assessment of a determined, pending,
or proposed liability.
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| ALLOWABLE
INTEREST — Interest (provided by law) which is allowed on an
overpayment. Also known as overpayment or credit interest.
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| ANNUAL INTEREST
NETTING — Method of computing interest which equalizes the rate
difference between credit and debit interest within a single tax module during
periods of mutual indebtedness.
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| ASED — Assessment Statute
Expiration Date. The date established by law by which the Service must assess
any tax due for a given tax period.
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| ASSESSED INTEREST
— The portion of the interest liability on a given module or
account which has been recorded to a given assessment date (23C Date).
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| ASSESSMENT
DATE (23C DATE) — The date that a taxpayer's liability for tax,
penalty, and applicable interest is recorded. It is also the date that the
notice and demand for payment of that amount is issued to the taxpayer.
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| AVAILABILITY
DATE OF CREDIT — The date an amount becomes available to credit
against an outstanding IiabiIity or refund to the taxpayer.
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| CARRYBACK — The application
of a net operating loss, net capital loss, and certain unused non-refundable
tax credits to taxable years preceding the year in which the excess amount
is generated. (See Exhibit 20.2.1-2 Losing
Module and Gaining Module).
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| CARRYBACK
YEAR — The year to which a net operating loss, net capital loss,
or certain other unused non-refundable tax credits is carried.
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| CARRYFORWARD — A carryover
of unused net operating loss, net capital loss, or other unused non-refundable
tax credits to years following the tax year in which the excess amount is
generated.
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| CASH BOND —Payment to stop interest on tax only, but
taxpayer does not agree with a deficiency notice (taxpayer retains appeal
rights). After 10/22/2004, the cash bond terminology is obsolete and IRC section 6603 deposits are used to stop the running
of debit interest on disputed tax liabilities.
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| CLAIM — A request by a
taxpayer to reduce a liability owed through crediting of an overpayment for
refund of an amount paid, for interest netting, or to request an abatement.
A claim may be formal or informal.
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| COMPOUND INTEREST
— Interest computed on interest already assessed or accrued.
Compound interest applies to interest accruing after December 31, 1982.
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| CREDIT INTEREST
— Interest on an overpayment allowed under
IRC section 6611. Also known as overpayment or allowable interest.
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| CREDIT INTEREST
RULES — The rules that define how credit interest is computed
on overpayments.
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| CSED — Collection Statute
Expiration Date. The date established by law by which the Service must collect
any amount due from a taxpayer for a given tax period. Interest can be assessed
to the CSED date.
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| CYCLE — One week's processing
at a Campus, Martinsburg, or Tennessee Computing Center. There are 52 cycles
in a year.
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| DEBIT INTEREST
— Interest charged when the taxpayer owes a liability to the
government. Also known as deficiency or underpayment interest.
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| DEBIT INTEREST
RULES — The rules that define how debit interest is computed
on underpayments under IRC section 6601.
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| DEFICIENCY — The amount
by which the tax imposed by Subtitle A or B, or chapter 41, 42, 43, or 44
exceeds the excess of the sum of the amount shown as the tax on a return filed
by a taxpayer, plus any amounts previously assessed (or collected without
assessment) as a deficiency over the amount of rebates made.
(See Exhibit 20.2.1-2 Rebate).
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| DESIGNATED
PAYMENT — A payment designated by a taxpayer to be applied to
a particular tax, penalty, or interest liability. These payments are identified
by TC 640, 680, or 690.
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| DESIGNATED
PAYMENT CODES (DPC) — A two digit code which identifies a payment
designated by a taxpayer for a type of tax. See
Document 6209, IRS Processing Codes and Information, for a listing
of specific Designated Payment Codes.
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| DIFFERENTIAL
INTEREST RATES — The rate difference between debit and credit
interest rates. Differential interest rates began on January 1, 1987 and ended only for individual taxpayers on December 31, 1999.
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| DUE DATE —
The date a liability is due.
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| EFFECTIVE
DATE — Generally, the date a transaction (either debit or credit)
posts to a taxpayer's module. The effective date for beginning a computation
of debit or credit interest may be different than the posted transaction date.
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| ERRONEOUS
REFUND — A refund to which a taxpayer is not entitled under IRC section 6532(b), 6602 and 7405.
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EXTENDED RETURN
DUE DATE — The date for which an extension of time to file a
return has been granted. The extended return due date affects the date interest
begins on certain penalties.
Note:
May also refer to a return
due date extended by certain provisions such as for combat zone participants
or taxpayers affected by a disaster declaration.
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| FREEZE — An instruction
applied to a Master File tax account or module that restricts normal computer
actions.
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| GAINING MODULE
— The module to which a credit is applied
(See Exhibit 20.2.1-2. Losing Module).
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| GATT (General Agreement on Tariffs and Trade)— Interest
rate legislation effective after December 31, 1994 for large corporate overpayments
exceeding $10,000. The GATT rate is one and a half points below the corporate
credit interest rate. See IRM 20.2.4.9.
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| INSTALLMENT
PRIVILEGE — The right, as provided in the Internal Revenue Code
(IRC), to pay a liability in installments.
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| INTEREST — Generally,
the amount computed on an underpayment or overpayment of tax for the time
a taxpayer has use of the government's money or for the time the government
has use of a taxpayer's money. It is known as underpayment (debit) interest
when a taxpayer owes the government and overpayment (credit) interest when
the government owes a taxpayer. IRC section 6601 and
6611 provide the rules for computing interest on underpayments
and overpayments.
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| INTEREST ABATEMENT
— The reduction of all or part of previously assessed interest.
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| INTEREST DUE
— Total interest due on a module, which includes all assessed
and accrued interest less interest paid.
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| INTEREST-FREE
PERIOD ON OVERPAYMENTS — Period of time during which credit interest
is not allowed (payable).
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| INTEREST-FREE
PERIOD ON UNDERPAYMENTS — Period of time during which debit interest
is not computed (charged).
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| IRC SECTION 6603 DEPOSIT—Similar to a cash bond in
that it is used to stop the running of interest on an underpayment. However,
a taxpayer must specify the "disputable tax"
and pay the
tax amount shown on a 30-Day Letter. If overpaid, a taxpayer can receive credit
interest at a reduced rate (short term rate).
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| IRS COMPUTED
FORM — A partially completed form submitted by the taxpayer,
asking the IRS to figure the tax.
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| LIABILITY — The amount
owed on a tax module or tax account.
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| LOSS YEAR—As it pertains to carrybacks, is the taxable
year in which the loss arises per IRC 6611(f)(4)(B)(ii).
(See Exhibit 20.2.1-2 Carryback).
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| LOSING MODULE
— The module from which a credit originates before being moved
to a liability module (See Exhibit 20.2.1-2
Gaining Module).
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| MANAGERIAL
ACT — An administrative act that occurs during the processing
of a taxpayer's audit examination involving the temporary or permanent loss
of records or the exercise of judgment or discretion relating to management
of personnel. A decision concerning the proper application of federal tax
law (or other federal or state law) is not a managerial act. Further, interest
attributable to a general administrative decision, such as the IRS's decision
on how to organize the processing of tax returns or its delay in implementing
an improved computer system, cannot be abated.
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| MINISTERIAL
ACT — A procedural or mechanical act that does not involve the
exercise of judgement or discretion, that occurs during the processing of
a taxpayer's audit examination after all prerequisites to the act, such as
conferences and review by supervisors have taken place. A decision concerning
the proper application of federal tax law (or other federal or state law)
is not a ministerial act.
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| MODULE — All information
contained on the Master File for a specific type of tax for one tax period
for one taxpayer. A module is a portion of a Master File tax account.
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| NET RATE INTEREST
NETTING — The interest computation method to equalize/eliminate
the interest rate differential between equal amounts of overpayments and underpayments
during overlapping interest computation periods.
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| NON-MASTER
FILE — A manual accounting system which processes documents,
returns, or adjustments that cannot be posted to the Individual or Business
Master File.
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| NORMAL INTEREST
— Debit or credit Interest that is not restricted.
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| NOTICE DATE
— The date a notice (bill) for payment is issued to a taxpayer.
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| OFFER-IN-COMPROMISE
(OIC) — An offer is an agreement between a taxpayer and the
government to settle a tax liability for payment of less than the full amount.
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| OFFSET — The transfer
of an available credit from one type of tax or tax period to an outstanding
liability of another/same type of tax or another tax period.
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| OUTSTANDING
BALANCE — The unpaid amount of overpayment or underpayment existing
in a module. On IDRS or Master File transcripts, a hyphen (-) following the
figure indicates a credit balance while a figure standing alone will indicate
a debit balance.
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| OUTSTANDING
LIABILITY — Total amount of unpaid tax, penalties, and interest
due.
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| OVERPAYMENT — Any payment
in excess of the total liability including tax, penalties, and interest for
a specific type of tax and taxable period.
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| PAYMENT DATE
— The received date of a payment.
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| REBATE — The amount of
an abatement, credit, refund or other payment made on the grounds that the
tax imposed by subtitle A or B, or chapter 41, 42, 43, or 44 was less than
the excess of the amount shown as the tax on a return filed by a taxpayer
plus amounts previously assessed (or collected without assessment) as a deficiency
over the rebates previously made (See Exhibit
20.2.1-2 Deficiency).
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| RECOMPUTATION — The computation
of interest after all transactions with monetary amounts are sorted in effective
date sequence.
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| REFUND — An overpayment,
plus any credit interest, which is issued to the taxpayer.
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| RESTRICTED
INTEREST — Interest computed from other than the normal start
and stop dates. Interest may be restricted because it is prohibited or limited
to specific time periods by law or when conditions exist in which the computer
cannot systemically calculate the interest.
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| RETURN DUE
DATE (RDD) — The required date by law that a return must be filed
(with regard to extensions).
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| RETURN RECEIVED
DATE — The received date of a timely filed return (including
extensions) or the date that a late filed return is received by the Service.
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| RSED — Refund Statute
Expiration Date. The date established by law that a taxpayer must file a claim
for credit or refund for a given tax period.
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| RUNNING MODULE
BALANCE — The balance of tax, penalty and interest, occurring
as monetary amounts are sorted in effective date sequence.
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| SCHEDULE DATE
— The date on which an overpayment is certified for refund.
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| SIMPLE INTEREST
— Interest computed on a principal amount only. The Service
computed simple interest prior to January 1, 1983.
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| SUBSEQUENT
PAYMENT — A payment (TC 670) made after a return is filed or
in response to a subsequent liability.
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| SUBSTITUTE
FOR RETURN (SFR) — A return prepared by the Service under the
authority of IRC section 6020(b), using information
from third party sources because the taxpayer did not file a return.
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| TAXPAYER DELINQUENT
ACCOUNT (TDA) — A computer generated print out stating that a
taxpayer's balance due account or module has reached delinquent status. They
are received systemically via the Integrated Collection System (ICS) in a
revenue officer's inventory.
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| WAIVER — A document (usually
a Form 870) signed by a taxpayer certifying proposed overassessments as correct
or consents to the assessment and collection of a proposed deficiency.
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| WAIVER DATE
— The date a waiver is effective. This is also referred to as
the "870 date"
or "agreement date"
.
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