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20.2.6.3
(06-24-2008)
Assessment of Interest Accruals
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Interest will continue to accrue until the liability (tax, penalties,
additions to tax and/or interest) is fully paid. Interest accruals are not
assessed (recorded) on the transcript (Command Code (CC) TXMOD/IMFOL/BMFOL)
except when one of the following conditions occur;
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input of an adjustment (e.g. TC 29X or TC 30X), or
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posted payment is in excess of tax and/or penalties, or
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input of a TC 290 for zero ($.00) with Priority Code 5.
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The input of TC 290 for a zero amount, Priority Code 5, with the appropriate
hold code on an unrestricted tax module will post any accrual of interest.
If adjusting with Document Code 54, use Hold Code 0, so that notices will
go out.
Caution:
Only use this procedure when necessary, for
example:
if an account is being moved to Non-Master File or MFT 31, or
a
module balance is zero, and interest is accruing on unpaid, accrued interest.
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Unrestricted Failure to Pay (FTP) penalty accruals will also post with
the input of TC 290 for zero, with Priority Code 5.
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If you want to stop accruals because it is below tolerance (see IRM 21.5.2.4.8.3), then input a TC 290, 340, and 270
for zero amounts.
Reminder:
If a module is restricted from
computing interest, Master File will not systemically assess interest accruals.
Refer to Section 8 of Document 6209, IRS Processing
Codes and Information, for an explanation of conditions that restrict
systemic interest computation.
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