BobKamman
Level 15
‎05-27-2020 10:52 PM

There's this thing online called the Internal Revenue Manual

21.4.1.5.6 (10-01-2017)
Credit Elect Problems

  1. A taxpayer may elect to have all or a portion of an overpayment credited to the next year's estimated tax (ES). The "credit elect" can be recognized by TC 836 on the current year's module and TC 716 on the following year's module. Access CC REINF or CC IMFOL if there is no data on CC TXMOD.

    Note:

    The Service will apply the credit elect to the next year’s estimated tax periods in the order necessary to avoid the addition to tax for underpayment of estimated tax. Taxpayers may request to have an overpayment credited to another year/period other than the immediately succeeding tax year or period. See IRM 20.2.4.6.2, Rules for Applying Offsets Under Section 6402, at (2) for guidance.

  2. When a taxpayer inquires about a refund and research shows the overpayment was applied as a credit elect for the following year, the overpayment is only refundable if:

    1. It was applied as a credit elect to the following year due to a processing error.

    2. The taxpayer is not liable for ES, and he/she erred in entering the overpayment as a credit elect.

    3. The taxpayer files a balance due superseding return and requests a credit elect reversal to satisfy the balance due. See IRM 21.4.1.5.6.1, Credit Elect Reversals, for additional information.

    4. For an individual taxpayer, the taxpayer is liable for ES payments but proof of hardship is provided. See IRM 21.4.4.3, Why Would A Manual Refund Be Needed?.

      Reminder:

      Refer to IRM 20.2.4.8.5, Credit Elect, for instructions on payment or nonpayment of credit interest on credit elect reversals.

      Caution:

      If none of the instances in (2) above apply, the election to have the overpayment applied as a credit elect is binding and the credit cannot be reversed.