Section 1. Filing Status and Exemption/Dependent Adjustments

21.6.1 Filing Status and Exemption/Dependent Adjustments

Manual Transmittal

Purpose

(1) This transmits a revised IRM 21.6.1, Individual Tax Returns, Filing Status and Exemption/Dependent Adjustments.

Material Changes

(1) IRM 21.6.1.1 (IPU 23U0574 issued 05-02-2023 ) Corrected the program owner name to Policy and Procedures IMF (PPI).

(2) IRM 21.6.1.1.5 (IPU 22U1042 issued 10-25-2022) Updated Correspondence Imaging System to new name Correspondence Imaging Inventory (CII). Updated throughout the IRM.

(3) IRM 21.6.1.4.1 (IPU 22U1103 issued 11-22-2022) Added Caution regarding assignment date of TIN for Path Act Credits.

(4) IRM 21.6.1.5.3.1 (IPU 22U0979 issued 10-03-2022) Removed RRC refunds from the 2nd Exception in paragraph 1 to clarify processing and added Advanced Child Tax Credit Payments. Also moved Reminder in 2i to 2a.

(5) IRM 21.6.1.5.3.1 (IPU 22U1103 issued 11-22-2022) Moved 1(b) to be included in 1(a).

(6) IRM 21.6.1.5.3.1 (IPU 23U0574) issued 05-02-2023 Corrected paragraph c to b in 1(a).

(7) IRM 21.6.1.5.3.1 Added reminder regarding ASED to paragraph 1.

(8) IRM 21.6.1.5.3.2 (IPU 22U1234 issued 12-20-2022) Clarified exception in paragraph 2c regarding EIP & RRC reported on Joint Returns.

(9) IRM 21.6.1.5.3.2 (IPU 23U0574 issued 05-02-2023) Changed to state do NOT update DDBCK if only change is filing status. This is to agree with change in IRM 21.6.1.7.2.

(10) IRM 21.6.1.5.3.2 Added instruction to determine the correct amount of EIP/RRC.

(11) IRM 21.6.1.5.9 Added that CSRs should use account indicators to properly route bankruptcy cases.

(12) IRM 21.6.1.6.6 (IPU 23U0574 issued 05-02-2023) Added information regarding assistance available for filing Form W-7.

(13) IRM 21.6.1.6.6 (IPU 23U0579 issued 05-03-2023) Added make an appointment to change made in paragraph 5.

(14) IRM 21.6.1.6.6.2 (IPU 22U1234 issued 12-20-2022) Reorganized paragraph for clarification and easier reading.

(15) IRM 21.6.1.7.2 (IPU 22U1103 issued 11-22-2022) Added "Date Earlier Than Return" as a response in paragraph 6d.

(16) IRM 21.6.1.7.2 (IPU 23U0574 issued 05-02-2023) Clarified the note in paragraph 1 also removed primary from the if/then chart in paragraph 5 pertaining to merging ITIN to SSN. Changed CC DDBCK instruction to not update if only change is filing status.

(17) IRM 21.6.1.7.2 Added note regarding RefCr line 15 on CC DDBCK and reference to EITC Claims IRM.

(18) Editorial changes have been made throughout IRM 21.6.1. This includes correcting links, typographical errors, improving plain language, etc.

Effect on Other Documents

IRM 21.6.1, Individual Tax Returns, Filing Status and Exemption/Dependent Adjustments, dated September 01, 2022 (effective 10-03-2022) is superseded. This IRM incorporates the following IRM Procedural Updates(IPU): IPU 22U0979 issued 10-03-2022; IPU 22U1042 issued 10-25-2022; IPU 22U1103 issued 11-22-2022; IPU 22U1234 issued 12-20-2022, IPU 23U0574 issued 05-02-2023; and IPU 23U0579 issued 05-03-2023.

Audience

Effective Date

Joseph Dianto
Director, Accounts Management
Wage and Investment Division

Programs Scope and Objectives

1. Purpose : This IRM covers information on Individual Tax Returns, Filing Status and Exemption/Dependent Adjustments.
2. Audience : The primary users of the IRM are all IRS employees in Business Operating Divisions (BODs) who are in contact with taxpayers by telephone, correspondence, or in person.
3. Policy Owner : The Director of Accounts Management.
4. Program Owner : Policy and Procedures IMF (PPI), Accounts Management, Wage and Investment (WI).
5. Primary Stakeholders : The primary stakeholders are organizations that Accounts Management collaborates with; for example: Return Integrity & Compliance Systems (RICS), Compliance and Submission Processing.
6. Program Goals : Program goals for this type of work are included in the Accounts Management Program Letter as well as IRM 1.4.16, Accounts Management Guide for Managers.

Background

1. Employees in the Accounts Management (AM) organization respond to the taxpayer inquiries and phone calls as well as process claims and other internal requests.

Authority

1. Refer to IRM 1.2.1.13, Policy Statements for Customer Account Services Activities, for information.
2. Per Policy Statement 5-2: We actively assist taxpayers who try to comply with the law, and work to continually improve the quality of our systems and service to meet the needs of our customers. All taxpayers whether delinquent or fully compliant are entitled to prompt and professional service whenever they deal with IRS employees. The public as a whole is our customer, not just delinquent taxpayers. Our customers expect us to promote voluntary compliance by ensuring that all promptly pay their fair share. This information can be found in IRM 1.2.1.6.2, Policy Statement 5-2, Collecting Principles.

Responsibilities

1. The Wage and Investment Commissioner has overall responsibility for the policy related to this IRM which is published on a yearly basis.
2. Additional information is found in IRM 1.1.13.7.3, Accounts Management, and IRM 21.1.1, Accounts Management and Compliance Services Overview.

Program Controls

1. Program Reports : The program reports provided in this IRM are for identification purposes for the Accounts Management Contact Representatives (CR) and Tax Examiners (TEs). For reports concerning quality, inventory, aged listing, refer to IRM 1.4.16, Accounts Management Guide for Managers. Aged listings can also be viewed by accessing Control Data Analysis, Project PCD, are on the Control-D/Web Access server, which has a login program control.
2. Program Effectiveness : Program Effectiveness is determined by Accounts Management’s employees successfully using IRM guidance to perform necessary account actions and duties.
3. Program Controls : Goals, measures and operating guidelines are listed in the yearly Program Letter. Quality data and guidelines for measurement are referenced in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support.

Acronyms

1. The information below is a list of commonly used acronyms used throughout this IRM:

• AMS - Account Management Services
• BMF - Business Master File
• CC - Command Code
• CII - Correspondence Imaging Inventory
• CP - Computer Paragraph
• DLN - Document Locator Number
• IAT - Integrated Automated Technologies
• IDRS - Integrated Data Retrieval System
• IMF - Individual Master File
• MFT - Master File Tax
• TC - Transaction Code

Related Resources

1. Refer to IRM 1.4.16.1.6, Related Resources, for information on related resources that impact internal controls.
2. The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. TBOR lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accordance with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights FAQs.

Filing Status and Exemption/Dependent Adjustments Overview

1. This section provides information on changes made to filing status and exemptions/dependents, usually after a tax return has been filed. It is designed to assist in making the appropriate changes to a taxpayer’s return, evaluate each situation and decide if an adjustment is needed to the taxpayer’s filing status and/or exemptions/dependents. Because of inflation, the amount allotted for each filing status usually increases yearly. Exemption amounts also increased yearly until tax year 2018, when they were suspended due to the Tax Cuts and Jobs Act (TCJA) of 2017. For tax years 2018-2025, dependents may be claimed to meet credit eligibility.
2. For 2017 and prior, there are two types of exemptions:

• Personal
• Dependency

What Are Filing Status Changes?

1. A taxpayer may file an amended return to change the filing status claimed on the original return. Changes may involve the following:

• From Married Filing Separately (MFS), Single, or Head of Household (HOH) to Married Filing Joint (MFJ), refer to IRM 21.6.1.4 , Filing Status Research, and IRM 21.6.1.4.1 , Married Filing Separate, Single, or Head of Household to Married Filing Joint Research
• From MFJ to MFS, Single or HOH, refer to IRM 21.6.1.5.5 , Married Filing Joint to Married Filing Separate, Single, or Head of Household Procedures
• Other changes, such as Qualifying Surviving Spouse (QSS) with dependent child

Filing Status Research

1. The filing status for the original return can be found using Command Codes (CC) TXMOD, RTVUE, TRDBV, and IMFOLE.
2. If the filing status was changed during initial processing due to a Taxpayer Identification Number (TIN) related math error, consider a filing status correction if the taxpayer responds to the TIN issue.

Example:

The filing status was changed from Married Filing Joint to Single, during original processing, because the taxpayer did not provide the correct TIN for the spouse.

Refer to IRM 21.6.1.7 , Command Code DUPED and DDBCK, and IRM 3.13.5, Individual Master File (IMF) Account Numbers, and IRM 21.5.4.5.3, Processing Responses to Math Error Notices, for additional information.

Caution:

Prior to release of any tax information to a taxpayer or the taxpayer’s representative, appropriate disclosure authentication must be made. For additional information, refer to IRM 21.1.3.2, General Disclosure Guidelines.

• Personal exemptions are limited to the taxpayer and the taxpayer’s spouse.
• Dependency exemptions are for anyone else the taxpayer can properly claim as a dependent on a return.
• The amount for one personal exemption and one dependency exemption is the same.

Married Filing Separate, Single, or Head of Household to Married Filing Joint Research

1. Married taxpayers who previously filed as Married Filing Separate (MFS), Single, or Head of Household (HOH) may file a married filing joint return within three years from the due date of the original return without regard to extensions, provided the IRS did not mail either spouse a notice of deficiency for which a petition was filed timely in the U.S. Tax Court, and neither spouse has commenced a suit, or entered into a closing agreement, or offer-in-compromise. If married taxpayers file a MFJ return after petitioning the Tax Court from a notice of deficiency, contact Chief Counsel via your Planning and Analyst contact.

Note:

Refer to IRM 25.6.1.9.4.4, Joint Return after Separate Return, for specific information regarding separate to joint returns and the Assessment Statute Expiration Date (ASED).

Caution:

When claiming the American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC), Earned Income Credit (EIC), and Credit for Other Dependents (ODC), also known as PATH related credits, the TIN must be assigned by the due date, or extended due date, of the original return.

Filing Status Change Procedures

1. Follow these procedures for filing status changes. Disallow filing status change if the spouses are not eligible to switch the filing status from married filing separate to married filing joint status and send the appropriate certified "C" letter (i.e., Letter 105C). Refer to IRM 25.6.1.10.2.10.2, Joint Returns, for statute information. Include appeal rights in the "C" letter. See IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.
2. Update CC ENMOD on all filing status changes. Refer to IRM 3.13.5.120.10, Inputting Name Changes for Married Filing Jointly (MFJ) Taxpayers.
3. In all cases, when an exemption and/or credit requiring Taxpayer Identification Number (TIN) validation is being allowed/removed due to a filing status change, use either Command Code (CC) DUPED or CC DDBCK to update the Duplicate TIN database. Refer to IRM 21.6.1.7 , Command Code DUPED and DDBCK.
4. Filing status changes may impact the Premium Tax Credit (PTC), refer to IRM 21.6.3.4.2.12, Premium Tax Credit. Terms used for PTC:

• Excess Advance Premium Tax Credit Repayment - Amount of additional tax liability the taxpayer must pay with their tax return.
• Premium Tax Credit - Amount of premium tax credit the taxpayer is entitled to receive as a refundable credit on their tax return after reconciling the total premium tax credit with advance premium tax credit.
• Advance Premium Tax Credit (APTC) - Amount of advance premium tax credit paid to the insurer on behalf of covered individuals in the tax household.
• Total Premium Tax Credit - Full amount of premium tax credit the taxpayer is entitled to receive without considering APTC paid.
• Excess Advance Payment Above Limitation - When the additional tax limitation is applied, amount of excess advance payment the taxpayer is not required to repay.