7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

## Handbook 9.8 Criminal Investigation at the Service Center Chapter 4 Restitution
### Contents [9.8] 4.1 OVERVIEW [9.8] 4.2 BACKGROUND [9.8] 4.3 LIMITATIONS [9.8] 4.4 AUTHORITY [9.8] 4.5 TRACKING [9.8] 4.6 PROCESSING INSTRUCTIONS [9.8] 4.6.1 One defendant using his or her own SSN [9.8] 4.6.2 One defendant using a valid taxpayer's SSN [9.8] 4.6.3 One Defendant Filing Multiple Fraudulent Returns Using Valid SSN [9.8] 4.6.4 Cumulative Refund Amount Is Greater Than Tax Liability Of Defendant [9.8] 4.6.5 Case Assembly [9.8] 4.7 INTEREST CONSIDERATIONS [9.8] 4.8 PROCESSING PAYMENTS [9.8] 4.9 CASE MONITORING [9.8] 4.10 CASE COMPLETION AND CLOSING Exhibit [9.8] 4-1 Restitution Letter for Perpetrator Exhibit [9.8] 4-2 Form 3809, Miscellaneous Adjustment Voucher (Debit Actions) Exhibit [9.8] 4-3 Form 3809, Miscellaneous Adjustment Voucher (TC 841) Exhibit [9.8] 4-4 Form 4287, Record of Discovered Remittances Exhibit [9.8] 4-5 Form 3244, Payment Posting Voucher Exhibit [9.8] 4-6 Restitution Cover Sheet Exhibit [9.8] 4-7 Restitution Letter of Non-Compliance Exhibit [9.8] 4-8 Restitution Letter of Completion
### [9.8] 4.1 (04-14-1998) OVERVIEW
This chapter gives an overview of procedures for court-ordered restitution. Topics include: Background Limitations Authority Tracking Processing instructions Interest considerations Processing payments Case monitoring Case completion and closing
### [9.8] 4.2 (04-14-1998) BACKGROUND
Courts, as a condition of probation, impose an order requiring the defendant to pay restitution. The restitution can be paid within a specific period of time, by installments within 5 years from the end of the defendant's term of imprisonment, or within 5 years of sentencing.
### [9.8] 4.3 (04-14-1998) LIMITATIONS
There is no statute of limitations for collection of restitution. Subsequent refund returns filed by a defendant can be offset to an amount owing from restitution by means of common law offset. There is no need to file suit upon non-payment of restitution. Should a defendant fail to meet his or her obligation, refer the case back to the special agent in the district. Service center personnel can contact probation officers regarding restitution. This contact may also be made by the special agent. Fines are to be handled through the Department of Justice (DOJ) for deposit into the Crime Victims Fund. Payments received for fines should be directed to the US Attorney's office having jurisdiction.
### [9.8] 4.4 (04-14-1998) AUTHORITY
The service has no authority to make an assessment against a defendant specifically for restitution. Therefore, restitution cases will be processed as erroneous refunds. A judgment and commitment order from the court contains the amount of restitution ordered and how it should be paid.
### [9.8] 4.5 (04-14-1998) TRACKING
Within 30 days of sentencing, the special agent will send to CIB a copy of the judgment and commitment order and/or a closing memorandum for case disposition. CIB will maintain a suspense file to monitor each case for payment of restitution. Prior to submitting a case for processing, the QRDT tax examiner will: Make all necessary adjustments to tax accounts involved, except the account of the perpetrator. Input TC 130 to the perpetrator's account using REQ 77. Reverse TC 916 on the year the restitution was ordered. Input TC 916 on perpetrator's the SSN, with history item restitution. Control the account on TXMOD in status A.
### [9.8] 4.6 (04-14-1998) PROCESSING INSTRUCTIONS
Processing instructions for restitution cases will depend on the following circumstances: One defendant using his or her own SSN. One defendant using a valid taxpayer's SSN. One defendant filing multiple fraudulent returns using valid SSNs.
### [9.8] 4.6.1 (04-14-1998) One defendant using his or her own SSN
When one defendant uses his or her own SSN and the refund amount is equal to or less than the tax liability of the defendant, use the following processing instructions: Reverse erroneous credit(s) via Command Code REQ54 using same date of erroneous credit. Accounting will input TC 844 within 5 days of receipt of restitution case from CIB. Send letter to defendant. (See Exhibit 8-1). When one defendant uses his or her own SSN and the refund amount is greater than tax liability of defendant, use the following processing instructions: Reverse erroneous credit(s) up to the amount of tax liability via Command Code REQ54. Accounting will input TC 844 within 5 days of receipt of restitution case. Prepare Form 3809 (Credit Copy) to debit 1510 account for the amount that exceeds the tax liability. (See Exhibit 8-2.) Send letter to defendant. (See Exhibit 8-1.)
### [9.8] 4.6.2 (04-14-1998) One defendant using a valid taxpayer's SSN
When one defendant is using a valid taxpayer's SSN, use the following processing instructions: Zero out any tax, withholding credits, or refundable credits on the fraudulent return via command code REQ54. Contact entity to obtain a temporary SSN and create a dummy account for the fraudulent return. Prepare part one of Form 3809 (Credit Copy) with TC 841 to reverse the refund from the valid SSN. (See Exhibit 8-3.) Prepare part one of Form 3753 to post refund to invalid SSN with TC 840. (See Exhibit 8-3.) Assess correct tax from the valid SSN. Correct entity for the true taxpayer's account. Prepare the manual refund for the correct SSN. Debit the 1510 account for the amount of erroneous refund with 3809 (Credit Copy); move credit to the invalid SSN with TC 700. Send letter to the defendant. (See Exhibit 8-1.) Hand carry entire case to Accounting Branch. Within 5 workdays, Accounting will input TC 844.
### [9.8] 4.6.3 (04-14-1998) One Defendant Filing Multiple Fraudulent Returns Using Valid SSN
When one defendant files multiple fraudulent returns using a valid SSN and the refund amount is equal to or less than the tax liability of the taxpayer, reverse the credit by following these instructions: Input TC 971 on erroneous refund. Accounting Branch will input TC 844 within 5 workdays of receipt of the case. Send letter to the defendant. (See Exhibit 8-1.) NOTE: The TC 971 will cross-reference to the preparer's account.
### [9.8] 4.6.4 (04-14-1998) Cumulative Refund Amount Is Greater Than Tax Liability Of Defendant
When one defendant files multiple fraudulent returns using a valid SSN and the cumulative refund amount is greater than the tax liability of the defendant, use the following processing instructions: Reverse erroneous credit(s) up to the amount of the tax liability. Accounting Branch will input TC 844 within 5 workdays of receipt of the case. Input TC 840 to move credit(s) to the defendant's account. Input TC 700 and prepare Form 3809 (Credit Copy) to debit 1510 account for the amount of refunds that exceed tax liability. (See Exhibit 8-2.) Send letter to the defendant. (See Exhibit 8-1.)
### [9.8] 4.6.5 (04-14-1998) Case Assembly
Only cases debited to the 1510 account will be sent to the Accounting Branch. Do not send original documents unless an adjustment is involved. Input TC 470 to the account. NOTE: Any numbered documents sent to Accounting must be recharged. The CI history sheet must have detailed narratives. Attach the CIB Restitution Case cover sheet. (See Exhibit 8-6.)
### [9.8] 4.7 (04-14-1998) INTEREST CONSIDERATIONS
Interest will not be computed if the judgment and commitment order exclude it. If ordered, interest will be computed from the date of the erroneous refund.
### [9.8] 4.8 (04-14-1998) PROCESSING PAYMENTS
Follow these procedures when processing payments: Prepare Form 4287. (See Exhibit 8-4.) Post with TC 720 to the extent of the refund amount with Form 3244. (See Exhibit 8-5.) Hand carry payment and voucher to the Receipt and Control Branch. Hand carry copies to the Accounting Branch. Maintain a copy of each check and Form 3244 in the case file. Payments received not clearly identified will be applied to restitution. When the defendant indicates that payment was made through the Justice Department Lock Box Program, contact the Atlanta Service Center, Accounting Branch, at (770) 455-2316 and verify receipt of payment.
### [9.8] 4.9 (04-14-1998) CASE MONITORING
CIB will review case files, at a minimum, on a quarterly basis. Accounting Branch will review each file quarterly to determine if the defendant is making required monthly installments. They will notify CIB if the defendant is in non-compliance. When the terms of court-ordered restitution are not being met, refer the case back to the special agent through the Chief, CI. (See Exhibit 8-7.) Review IDRS for any collection activity for prior and subsequent periods (i.e., open TDA or TDI) and notate the completion of this review in a letter to the special agent.
### [9.8] 4.10 (04-14-1998) CASE COMPLETION AND CLOSING
When a defendant has satisfied the terms of the court-ordered restitution, use the following instructions: Notify the special agent that conditions have been satisfied. (See Exhibit 8-8.) Reverse TC 130 on account. Retire the case file, per Records Control Schedule 206. NOTE: Refer to the Criminal Investigation Branch Desk Procedures for the Restitution Program for detailed procedures and examples.
Exhibit [9.8] 4-1 (04/14/98)
Restitution Letter for Perpetrator

>
Internal Revenue Service | Department of the Treasury
DirectorSouthwest Region | P.O. Box 9941, Ogden, Utah 84409
Internal Revenue
Service Center
| February 20, 1992
Dear ______ :
On May 31, 1991, you were ordered by the court to repay the Internal Revenue Service $ ______ plus any accumulating interest, which was erroneously refunded to you. All payments are to be sent to the following address:
| Internal Revenue Service
| P.O. Box 9957 - Mail Stop 9000
| Ogden, UT 84409
Should you fail to comply with the terms of the court ordered restitution, your case will be referred back to the U.S. Attorney's Office for enforcement action. Additionally, your probation officer will be notified of your non-compliance with the terms of probation.
If there are any questions regarding your restitution payments, please feel free to call 1-801-625-6524 (not a toll-free number).
|  | Internal Revenue Service
Note: Each QRDT should enter their Service Center information, e.g., Name of center, region, address.
Exhibit [9.8] 4-2 (04/14/98) Form 3809, Miscellaneous Adjustment Voucher (Debit Actions) Exhibit [9.8] 4-3 (04/14/98) Form 3809, Miscellaneous Adjustment Voucher (TC 841) Exhibit [9.8] 4-4 (04/14/98) Form 4287, Record of Discovered Remittances Exhibit [9.8] 4-5 (04/14/98) Form 3244, Payment Posting Voucher Exhibit [9.8] 4-6 (04/14/98) Restitution Cover Sheet Exhibit [9.8] 4-7 (04/14/98) Restitution Letter of Non-Compliance
Exhibit [9.8] 4-7 (04/14/98)
Restitution Letter of Non-Compliance

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| *See note below
DATE: | February 20, 1997
TO: | Chief, Criminal Investigation Division
| Settle District
FROM: | Chief, Criminal Investigation Branch C:CI:9000
| Ogden Service Center
SUBJECT: | Non-Compliance of Court Ordered Restitution
| CID Case Number: ________
This it to inform you that ________________ , SSN __________ , CID case number _______ , has failed to comply with the terms of the court ordered restitution issued November 30, 1996.
Restitution was ordered in the amount $ _____ , and a payment has not been received. It is requested that action be taken as outlined in text 9.3.1.8.1(4).
Should there be any questions, please contact ________________ of my staff on (801)620-7136.
*Note: Each QRDT should enter their Service Center information, e.g., Name of center, region, address.
Exhibit [9.8] 4-8 (04/14/98) Restitution Letter of Completion
Exhibit [9.8] 4-8 (04/14/98)
Restitution Letter of Completion

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| *See note below
DATE: | February 20, 1997
TO: | Chief, Criminal Investigation Division
| Denver District
FROM: | Chief, Criminal Investigation Branch C:CI:9000
| Ogden Service Center
SUBJECT: | Completion of Court Ordered Restitution
| CID Case Number: ________
This is to inform you that ________________ , CID case number ________________ , has complied with the terms of the court ordered restitution issued November 30, 1996.
It is requested that action be taken on this case as outlined in text 9.3.1.8.1(4) to notify the U.S. Probation Officer that the terms of the court ordered restitution have been met.
Should there be any questions, I can be reached on (801)620-7136.
*Note: Each QRDT should enter their Service Center information, e.g., Name of center, region, address.
### Internal Revenue Manual | ### Hndbk. 9.8 Chap. 4 Restitution | ### (04-14-1998)

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