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20.2.8.1
(07-31-2001)
Restricted Interest Overview
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Interest may be limited to specific time periods
or rates, or it may be statutorily prohibited; this gives rise to the term "restricted interest."
Restricted interest is subject to the
same variables (time, rate, amount) as "normal"
interest
calculated by the Service. The primary difference between normal and restricted
interest is that the computer may not be able to identify all conditions involved
in a restricted interest situation.
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Certain freeze codes or certain transaction codes
post to prevent the computer from calculating normal interest. As a result,
interest must be manually computed and updated. Document 6209, "
ADP and IDRS Information"
provides information on the following freeze
codes and transaction codes:
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Freeze codes: –I, I–, –C
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Transaction codes: TC 340, TC 341, TC 500, TC 534,
TC 770, TC 772, TC 780.
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Personnel with the expertise to accurately verify
the interest computation should review all manual debit or credit interest
adjustments in excess of $50,000.
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