The following topics provide an overview of overpayment processing functionality.
Each overpayment process has an associated overpayment process type. The overpayment process type defines the configuration information that is common to overpayment processes of a given type. The tax type governs the overpayment process types that are valid. When creating an overpayment process, the overpayment process type to use must be valid for the obligation’s tax type. Refer to The Big Picture of Overpayments for a description of the business rules that you control when you set up your overpayment process types.
An overpayment process occurs when the obligation has a credit balance as a result of the payment amount exceeding the liability from the assessment. Another common reason for overpayment is the recalculation of tax, penalty, interest or fee that results in a reduced liability.
An overpayment process can be created in various ways:
As a result of posting a return. This is the most common scenario. The tax form is processed and results in a creation of an assessment. The calculated tax due is evaluated against the total payments made to determine if there is an overpayment.
As a result of the balance of the obligation being reviewed by the account monitor.
Implementations may find other system events that should automatically cause an overpayment to be created.
It is also possible to manually create an overpayment process. For example, if an overpayment occurs and the tax authority chooses to keep the amount for applying to future debt, the taxpayer may ask for it to be returned.
Regardless of how the overpayment is created, the overpayment process is always associated with a specific obligation.
After an overpayment is created, an algorithm may detect a condition that causes it to transition the record to On Hold. An example of this is that an algorithm may detect that an active Suppression exists.
In this situation, the overpayment may be left in this state. A monitor algorithm should be periodically checking to see if the situation causing the record to go into On Hold has been resolved. When this occurs, the overpayment will be reinstated. Note that overpayment process may also be canceled when in this state, if appropriate.
The base overpayment functionality works with the refund control object as part of its lifecycle. A refund control is an object that groups together a list of overpayments that are ready for refunds to be issued. Refund control is mentioned throughout this section. More details about refund control are found in Refund Control Overview.
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