IRS/FMS Code

[geekgirldany]

Filed a client's tax return efile. The first time they have ever done efile. It came back with a code of IRS/FMS. From what I found the FMS stands for Financial Management Services. Well I had the customer call the IRS about this to see what debt it was going to pay. The client said that they had filed Chapter 13 several years ago and they paid the trustee last year. Trustee said to tell their lawyer to close it down they don't owe anything. Well the IRS/FMS has taken the refund because it shows they still owe on bankruptcy.

I've had several customers file bankruptcy and this has never happened. The IRS says it will send the refund to the lawyer. Client said they called and told him to close the bankruptcy but he obviously didn't. They are trying to get up with him again but they talk like he is hard to contact.

Who is the FMS? Is it a part of the IRS? Is this something new that has started?


EDIT: I guess it isn't new info I found went back to 2002. But I've just never had this happen.

[Black Bart]

dany,

Who is the FMS? Is it a part of the IRS? Is this something new that has started?

.

I don't think it's a part of IRS, but, like them, I believe they're part of the Department of the Treasury. I think they've always handled the money collected for IRS, disbursed Social Security checks, and payments/collections for other government bodies.

It's not a new department, but actually I don't recall hearing much about them until the last few years or so when they began offsetting e-file refunds and stating that it was a debt owed to FMS.

[geekgirldany]

Thanks Bart. This was the first time I had seen this FMS thing. I had saw IRS before showing that they owed them. I guess their lawyer just goofed up and didn't close things. According to IRS rep he will have to call them saying they can release the refund to my customer. He will also probably have to provide some sort of documentation... I would hope.

I won't start a new thread but will just put this little bit of news here.

A client's amended return finally went through after 2 years thanks to the Taxpayers Advocate office. It took the advocate 2 months! Got some very happy customers and it helps that IRS added interest of $800 to the original $5000 refund. Just wanted to share but not make a new post about it

[RLymanC]

Fms

Most all of the e-file ack's I have receive that have the FMS indicator seem to be for a public debt of some sort.

1- Back child support. DA's office files a lien
2- Deliquent student loans
3- General releif payments made by counties to individuals,,County files a lien

In most cases when you call 1-800-304-3107 the information on the debt will be available, and they will refer the taxpayer to the proper agency that filed the lien.

If the taxpayer owe the IRS back taxes there will be IRS in the debt indicator column.