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20.2.3.5
(11-18-2008)
Interest Computation Explanations
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The requester must analyze the account and the notice to determine if it can be mailed to the taxpayer or if further action
is necessary.
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When a requested penalty or interest transaction is restricted from Master File computation, the balance shown on the PINEX
notice will always differ from Master File. In this situation, the balance must be manually computed.
Note:
Beginning May 1, 2003 inquiries received by AM toll-free telephone staffers that require a manual computation of interest
must prepare e-Form 4442, Electronic Inquiry Referral and route the form to the Campus AM Account Paper function within the
phone staff Directorate.
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Manually recompute the balance, prepare the explanation for that type of penalty and interest, and insert the figures onto
the notice (several blank lines appear on the notice following the general explanation. Use these lines to insert the manual
computation).
Note:
A print from CC COMPAD or the Automated Computational Tool (ACT) InterestNet 490 report developed by Decision Modeling Inc.
(DMI), may be sent to the taxpayer in lieu of PINEX.
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See IRM 20.2.8.3, Manual Computations, for instructions regarding manual interest computations and adjustments to interest
transactions.
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Request the return or other adjustment document, if necessary, in order to correctly compute and explain restricted interest
and penalties.
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The PINEX notice provides the taxpayer with the dates and transactions of all computations, including accruals.
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Manually review any discrepancy with a Master File computation in order to determine whether the PINEX computation is correct.
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On balance due modules, there will generally be a discrepancy between the posted Master File amount of interest and the PINEX
computation. This is due to interest continuing to accrue until the balance due is fully paid.
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Pending transactions, if present, are used in the PINEX computations to provide the most current account information available.
Since pending transactions are not used by Master File or IDRS, a discrepancy attributable to a pending transaction will not
require an adjustment to the module.
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When the PINEX result differs from the Master File result by one dollar or more:
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Manually compute to determine if the Master File posting is valid.
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If so, prepare a manual computation to send to the taxpayer.
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If the PINEX amount is incorrect, do not mail the notice.
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If the requester action sheet contains bankruptcy, abusive tax shelter or intelligence freeze codes, contact Collection, Examination
or Criminal Investigation, as appropriate, to determine if the case should be referred to them before the notice is mailed.
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A credit balance may signify:
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a discrepancy between the PINEX and Master File computations, or
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other conditions requiring adjustment action.
Caution:
Verify the module balance before mailing the notice to the taxpayer.
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If the credit balance is an accurate reflection of the taxpayer's module status, mail the notice without further action.
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Determine which additional action to take:
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mail the notice, as is,
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manually perfect, then mail the notice, or
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destroy (do not mail) the notice. Prepare a manual computation instead.
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Reminder:
Report procedural or systems problems, identified through PINEX, to the IDRS Control Staff or to management.
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