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Memo Adds Standard Explanation for Recovery Rebate Credit

DEC. 8, 2020

SBSE-04-1220-0087

DATED DEC. 8, 2020
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Citations: SBSE-04-1220-0087

Expiration: December 8, 2022
Impacted: IRM 4.10.10

December 8, 2020

MEMORANDUM FOR
DIRECTOR, FIELD EXAMINATION
DIRECTOR, CAMPUS EXAMINATION
DIRECTOR, REFUNDABLE CREDITS EXAM OPERATIONS

FROM:
Maha H. Williams
Director, SB/SE Examination-Field and Campus Policy

SUBJECT:
Interim Guidance Revising and Adding Standard Paragraph Explanations

This memorandum issues guidance on standard explanations until IRM 4.10.10 is published. Please ensure this information is distributed to all affected employees within your organization.

Purpose: This interim guidance revises two standard explanations and adds one new standard explanation as shown in Attachment 1.

Background: These standard explanations will be incorporated into the Report Generation Software (RGS). Prior to the RGS update, examiners can insert these paragraphs using the custom paragraph feature in RGS.

Procedural Change: See Attachment 1 for impacted standard explanations.

Effect on Other Documents and Effective Date: This guidance will be incorporated into IRM 4.10.10, Standard Paragraphs and Explanation of Adjustments, within two years of issuance. The standard explanations can be used immediately.

Contact: Cathy Demetra, Program Manager, Examination Field and Campus Policy, Field Exam General Processes.

Distribution: irs.gov


Attachment 1

SBSE-04-1220-0087

Revised Standard Explanations:

1706 — Unreported Pension Income — You did not report all the pension income reported to you on Form(s) 1099-R. Your income has been adjusted to include the amount(s) shown on Form 1099-R that were omitted from your original return.

8115 — Failure to File — 5% month/prev. penalty considered/minimum or tax due — Since you did not file your return within the time prescribed by law, and you did not show that such failure was due to reasonable cause, a penalty of 5 percent is added to the tax for each month or part of a month (but not to exceed a total of 25 percent) for which your return was late. If your return was more than 60 days late, the minimum penalty is the lesser of:

$100 (for tax returns due on or before 12/31/2008) or the tax due, or

$135 (for tax returns due between 1/1/2009 and 12/31/2015) or the tax due, or

$205 (for tax returns due between 1/1/2016 and 12/31/2017) or the tax due, or

$210 (for tax returns due between 1/1/2018 and 12/31/2019) or the tax due, or

$435 (for tax returns due on or after 1/1/2020) or the tax due.

The penalty shown has taken into consideration any previously assessed penalty. See IRC 6651(a)(1).

New Standard Explanation:

6314 — Recovery Rebate Credit — Since one or more of the qualifying children claimed on your tax return have been disallowed, the amount of Recovery Rebate Credit (RRC) claimed on your tax return has been adjusted as shown.

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