Section 1. Filing Status and Exemption/Dependent Adjustments

21.6.1 Filing Status and Exemption/Dependent Adjustments

Manual Transmittal

September 12, 2024

Purpose

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

Material Changes

(1) IRM 21.6.1.1.3 Updated the title of this section.

(2) IRM 21.6.1.1.4 Updated the title of this section.

(3) IRM 21.6.1.1.5 Updated the title of this section.

(4) IRM 21.6.1.1.6 Updated Taxpayer Bill of Rights information.

(5) IRM 21.6.1.5 (IPU 24U0715 issued 06-04-2024) Added CC ENREQ and a link to IRM that explains how to update CC ENMOD.

(6) IRM 21.6.1.5.3.1 (IPU 24U0407 issued 03-14-2024) Added instruction to consider credit elect transfers and not to update DDBCK if the only change is to the filing status.

(7) IRM 21.6.1.5.3.1 Removed shared responsibility payment information as it is obsolete.

(8) IRM 21.6.1.5.5 (IPU 24U0407 issued 03-14-2024) Added extended due date to first sentence.

(9) IRM 21.6.1.5.5 (IPU 24U0715 issued 06-04-2024) Added link to disallowance IRM.

(10) IRM 21.6.1.6 (IPU 23U0990 issued 10-02-2023) Added Note to (1) to include a case note on AMS to assist those without access to CII.

(11) IRM 21.6.1.6.6.2 (IPU 24U0118 issued 01-23-2024) Updated paragraph 4 to clarify when an ITIN is considered active for a current processing year.

(12) IRM 21.6.1.7 (IPU 24U0118 issued 01-23-2024) Removed reference to TCJA.

(13) IRM 21.6.1.7 (IPU 24U0407 issued 03-14-2024) Removed exemptions from section and combined paragraphs 1 & 2.

(14) IRM 21.6.1.7.1 (IPU 24U0118 issued 01-23-2024) Removed reference to TCJA.

(15) IRM 21.6.1.7.1 (IPU 24U0407 issued 03-14-2024) Removed exemptions from section and combined paragraphs 1 & 2.

(16) IRM 21.6.1.7.2 (IPU 24U0118 issued 01-23-2024) Updated the first paragraph to clarify that DDBCK is used for the current processing year and prior 2 years.

(17) IRM 21.6.1.7.2 (IPU 24U0407 issued 03-14-2024) Removed exemptions from section and added row numbers to charts.

(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Tax Returns, Filing Status and Exemption/Dependent Adjustments, dated October 2, 2023 (effective 10-02-2023) is superseded. Interim Procedural Updates (IPU) 23U0990 (issued 10-02-2023), 24U0118 (issued 01-23-2024), IPU 24U0407 (issued 03-14-2024), and IPU 24U0715 (issued 06-04-2024) are included in this IRM.

Audience

Effective Date

LuCinda Comegys
Director, Accounts Management
Taxpayer Services

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, Taxpayer Services (TS).
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 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.

Roles and Responsibilities

1. The Taxpayer Services Chief 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 Management and Review

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.

Terms and 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 Internal Revenue Code (IRC) provides taxpayers specific rights. The Taxpayer Bill of Rights groups these rights into ten fundamental rights. See IRC 7803(a)(3). IRS employees are responsible for being familiar with and following these rights. For additional information about taxpayer rights, see Pub 1 , Your Rights as a Taxpayer or visit irs.gov/taxpayer bill of rights.

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.

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 for refund in any court, 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 25.6.1.10.3.6.2, Joint Returns, for statute information. Include appeal rights in the letter. See IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.
2. Update CC ENMOD, using CC ENREQ, on all filing status changes. Refer to IRM 3.13.5.120.10, Inputting Name Changes for Married Filing Jointly (MFJ) Taxpayers, and IRM 3.13.5.124, Add, Delete or Change Spouses' TIN (generates a TC 017), for additional information.
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.