Most financial institutions have recently received inquiries from their customers about the status of their IRS 

tax return payments. Properly handling these inquiries on behalf of your customer not only facilitates good 

customer service, but also prevents many unnecessary Non-Receipt claims from being filed by the IRS. 

Because it is inevitable that certain customers will approach their financial institution about their IRS payment 

or other Federal benefit payment made by Direct Deposit, it is important that financial institution personnel are 

properly trained in locating payments for their customers, especially payments that are memo posted or posted 

prior to settlement date. Statistics captured by Treasury’s Financial Management Service (FMS) reveal that 

over 60% of all missing payments were posted to the financial institution when the recipient called to inquire 

about their payment. Thorough research of these payments by financial institutions will help to eliminate 

unnecessary Non-Receipt claims that must be processed by IRS and FMS. Financial institution employees 

should be aware of the various techniques and procedures utilized by their institution to post payments in order 

to aptly assist their customer with the status of their Direct Deposit payment. 

Below are the steps a financial institution should take before referring the recipients to the IRS, or another 

authorized Federal agency: 

• Determine if the payment was posted late 

• Determine if the payment was memo posted 

• Determine if the payment was posted early 

• Determine if a third party processor is used. If so, confirm the funds are available and notify the 

customer of the outcome 

• Determine if the payment was an exception item 

The financial institution should be aware that payments could have been posted 

incorrectly, posted manually, or returned to FMS due to incorrect banking 

information being used. In cases where the financial institution did not receive the 

payment for the recipient, the financial institution should ask the recipient the 

following questions: 

• Were there any changes to their banking information, such as account number 

 or type of account? 

• Did they change financial institutions? 

• Did they verify entitlement for their payment with IRS, or the authorizing 

 agency? 

Where’s my Refund? A Financial Institution’s Guide 

to Internal Revenue Service (IRS) Non-Receipts 

Financial Management Service 

Special ACH Edition—2009 Philadelphia Financial Center 

PFC Journal 

Inside this issue: 

IRS Non-Receipts 1-2 

Notification of Change 3-4 

Updating Information 5 

Tips for Handling 6 

Teletrace 7-8 

ACH Returns 9-10 

Get Involved! 10 
Where’s my Refund? (Continued) 

If all efforts to locate the payment have failed, the financial institution should instruct the recipient to file a 

Non-Receipt claim with the IRS, or the appropriate Federal agency. 

Upon notification from the recipient that a payment has not been received, the authorizing agency will notify 

FMS. FMS will research the claim via Follow-Up Trace Request (FMS 150.1) or Initial Trace Request (FMS 

150.2) forms to determine the status of the payment. FMS will initiate contact with the financial institution by 

telephone or by mailing the FMS-150.1 or FMS 150.2 forms to the appropriate financial institution in an 

attempt to locate or resolve the non receipt claim. The FMS 150.2 form is used to trace payments dated the 

current or previous month. Upon receipt of the FMS 150.2, the financial institution should follow these steps: 

• Make all attempts to locate the payment 

• Credit the customers account if they have not done so already 

• Return the payment if for any reason the financial institution cannot credit the customer account 

• Use the customer’s copy of the FMS 150.2 form to notify the recipient of the status of the payment 

The FMS 150.1 form is used to trace payments with an issue date two months or older or as a follow-up notice 

for previous Non-Receipt claims. Upon receipt of the FMS 150.1, the financial institution should follow these 

steps: 

• Make all attempts to locate the payment 

• Credit the customers account if they have not done so 

• Return the payment if for any reason the financial institution cannot 

 credit the customers account 

• Complete the Financial Institution Action section within three (3) 

 business days of the receipt of the FMS 150.1 

• Return the Disbursing Office Copy to the FMS office identified on 

 the form 

• Use the Customer’s Copy to notify the recipient of the status of the 

 payment 

The financial institution must respond to FMS within three (3) days by completing and returning the FMS 

150.1 form to the Regional Financial Center indicated on the form. If no reply is received from the financial 

institution, FMS will call the financial institution and pursue the case until it is resolved. If FMS cannot 

resolve the case by either method, a letter will be sent to the Vice President of the financial institution 

requesting assistance. 

For more information, please refer to Chapter 3 (Non-Receipts) and Chapter 4 (Returns) of the Green Book at: 

http://www.fms.treas.gov/greenbook. For additional information or specific questions, please feel free to 

contact the Education & Marketing Staff at (215) 516-8154 or Philly@fms.treas.gov. 

Page 2 

Special ACH Edition—2009 

IRS Non-Receipt Fact: 

Out of the 23,544 IRS 

Non-Receipts 

processed in Fiscal 

Year 2008, 89% were 

posted on payment 

date. 
Notification of Change (NOC) is a method available to financial institutions to notify a Federal agency to 

correct or change account information in an entry the Federal agency processed through the Automated 

Clearing House (ACH). In certain circumstances, a financial institution may receive a payment file with 

erroneous information on it; however, they are able to identify the payment and post it to the correct account. 

In such cases, the financial institution may issue an NOC to correct the erroneous information. A financial 

institution may also issue a NOC when it merges with another bank and a change in routing number results. 

NOCs are used for Federal government (both civilian and military) 

payments that are made on a recurring basis. Examples are: 

• Social Security Administration 

• Railroad Retirement Board 

• Supplemental Security Income 

• Department of Veteran Affairs 

• Office of Personnel Management 

• Federal salary 

• Treasury Direct 

• Vendor and miscellaneous 

NOCs should not be used to change title/ownership of an account, change interest of the recipient or 

beneficiary in the account, change accounts from one financial institution to the other, or for one time 

payments, such as an IRS tax refund. In these circumstances, a new enrollment form must be processed and/or 

the payee should be directed to contact the agency directly. 

The use of NOCs prevents delays often associated with returned ACH payments. If a financial institution is 

able to correct an error on an ACH payment file, they will often accept and post the entry as an exception item 

instead of returning the entry. The financial institution consequently sends the NOC, with the correct 

information needed for automated processing, back to the originating agency so that its master payment record 

can be updated with the correct bank information prior to the next payment. 

Treasury has become aware that, in certain circumstances, federal agencies do not react timely to NOCs sent 

by financial institutions. According to Chapter 6 of FMS’ Green Book (Guide to Federal ACH Payments and 

Collections), “NOCs will be processed for the next ACH transaction. (Due to operation limitations, it may 

take two payment cycles for some NOCs to be processed).” Despite this guidance, a significant number of 

NOC requests are unaddressed by federal agencies and result in frustration for both the recipient and the 

financial institution. Ultimately, the financial institution is often forced to return payments that could 

otherwise have been posted had the Federal Agency acted timely upon the NOC, thereby causing a significant 

delay in recipients receiving their Federal payment. 

Upon receiving an NOC, agencies should take measures to ensure that the erroneous payment file information 

is corrected before submitting the next payment by ACH. If your agency received an NOC, you should ensure 

that the party responsible for updating your accounts receivable records receives a copy. This is customarily 

staff that works in your agency’s accounting area or payment certification area. NACHA has an approved list 

of NOC change codes that indicate any changes that need to be made to your payment file, prior to the next 

payment cycle. 

Notifications of Change—The Agency’s Perspective 

Special ACH Edition—2009 

NOC Fact: 

In Fiscal Year 2008, 

PFC provided Federal 

Program Agencies 

(non-benefit) with 

192,432 Notifications of 

Change. 
Some of the more common codes are listed below: 

 C01—Incorrect Account Number 

 C02—Incorrect Routing Number (RTN) 

 C03—Incorrect RTN and Account Number 

 C05—Incorrect Transaction Code (Checking/Savings Account) 

 C09—Incorrect Individual Identification Number 

For nearly all federal agencies, the NOC is provided on a paper report detailing a recently posted payment, with all of the 

necessary updates required for the next payment cycle. Below is an example of an NOC, with explanations for each of 

the fields located on the form. 

 

The Philadelphia Financial Center (PFC) has recently undertaken multiple initiatives to facilitate the improvement of the 

NOC process. First, PFC has developed a cover letter that will be included with subsequent mailings of the NOCs. This 

document provides guidance on how to handle the NOC appropriately. Secondly, PFC will be emailing an NOC Survey 

to their customer agencies to confirm several components of the process, namely the correct mailing address and point of 

contact for each agency, and also to provide a venue to offer feedback and suggestions on potential improvements to the 

process. 

Additionally, it is important to note that agencies may have the option to receive these notifications electronically. If 

you are interested in exploring an electronic alternative to paper, or are receiving NOCs and are unsure how to address 

them, please contact Lisa Andre, Accredited ACH Professional (AAP), at (215) 516-8142. For more information on 

NOCs, please refer to the Green Book, Chapter 6, Notifications of Change at http://www.fms.treas.gov/greenbook. 

Specific questions regarding NOCs can be directed to the Education & Marketing Staff at (215) 516-8154 or 

Philly@fms.treas.gov. 

Notifications of Change—The Agency’s Perspective (continued) 

Page 4 

Special ACH Edition—2009 
Updating Your Financial Institution’s Information with the 

FRB – A Quick Guide 

The Financial Organization Master File (FOMF) is a Department of the Treasury master list of financial institutions 

receiving Federal government Automated Clearing House (ACH) payments. It contains the Routing Transit Numbers 

(RTN) and a single financial institution name, mailing address and contact phone number for each RTN. The FOMF is 

derived from the Federal Reserve Bank’s (FRB’s) ACH Customer Directory (ACD), which contains the RTNs and 

related information of all valid ACH participants. The FOMF is updated on a monthly basis using information from the 

most current ACD file. 

The Department of Treasury’s Financial Management Service (FMS) relies on the contact information provided via the 

FOMF to send financial institutions time sensitive correspondence, such as Notices of Reclamations. These documents 

are mailed by FMS to the address listed on the ACD. In the event that a Notice of Reclamation is returned to FMS for an 

insufficient or incorrect address, the financial institution’s liability does not change. If the financial institution fails to 

respond to the Notice of Reclamation correctly and timely, they are liable for the entire amount of the Notice of 

Reclamation. This could result in a substantial debit to your Federal Reserve account that could have been avoided if 

correct information was provided in your ACD profile. The phone number provided in the ACD is used by our Teletrace 

program to research ACH non-receipt claims from Federal payment recipients. It is important for us to be able to contact 

your institution’s ACH Department by phone so that your customer’s non-receipt claim can be resolved in a timely 

fashion. 

Ultimately, financial institutions are responsible for keeping their name, mailing address and phone number for each 

RTN current and accurate with the FRB. Any changes to RTN data should be provided to the FRB as soon as possible so 

that the ACD and FOMF contain current data. If the financial institution fails to notify the FRB, it will be held liable for 

information (e.g., reclamation notices) mailed to obsolete addresses. 

If a financial institution changes RTNs (e.g., due to merger), it must notify its servicing 

FRB’s ACH Department as soon as possible to have the old RTN updated on the ACD. 

Updates to the ACD will automatically update the FOMF. Additionally, financial 

institutions should send a Notification of Change (NOC) to each originating Federal 

agency from which it receives recurring payments to update their RTN in their respective 

payment files. 

The following steps should be taken in updating RTNs: 

• Delete an obsolete RTN only after all activity has been transferred to the 

 surviving RTN 

• Confirm that no activity is being received on the obsolete RTN prior to deletion 

• Allow at least three months after the update to the ACD before deleting an obsolete 

 RTN 

If an institution wants to update the information that appears on the ACD file, they should submit "Attachment E" of the 

FedACH Participation Agreement to their designated FedACH Central site. The FedACH Participation Agreement can 

be accessed on the FRB website: http://www.frbservices.org/StandardForms/index.html. 

Atlanta

Toll Free: (866) 234-5681 

Districts Supported: Boston (1), New York (2), 

Philadelphia (3), Cleveland (4), Richmond (5), Atlanta (6)

Minneapolis

Toll Free: (888) 883-2180 

Districts Supported: St. Louis (8), Minneapolis (9), 

Kansas City (10), Dallas (11), San Francisco (12) 

Page 5 

Special ACH Edition—2009 

You’re Liable...

If you fail to update 

your information 

with the FRB, your 

FI will be held liable 

for information (i.e.., 

reclamation notices) 

mailed to obsolete 

addresses. 
Most likely, your financial institution has received calls from the US Department of Treasury’s Financial Management Service 

(FMS) to research Social Security Direct Deposit payments in order to resolve claims of non-receipt by recipients. FMS’ 

Philadelphia Financial Center (PFC) and Kansas City Financial Center (KFC) receive and process an average of over 6,500 

non-receipt claims a month to support the Tele-TRACE program, which traces “lost” Social Security (SSA), Supplemental 

Security Income (SSI) and Veteran’s Administration (VA) payments for beneficiaries. Statistics have revealed that over 60% 

of payments in which a non-receipt claim has been filed have, in actuality, been posted to the customer’s account on payment 

date, according to the banking information they provided SSA/VA. 

Specifically, FMS representatives support the Tele-TRACE program by contacting financial institutions to determine the 

status of Direct Deposit payments and subsequently informing the beneficiaries of the status. FMS representatives have all 

pertinent account information relating to each non-receipt claim, and therefore call financial institutions solely for the purpose 

of confirming that the payment was appropriately credited to the recipient’s account. Consequently, FMS representatives will 

not request any additional financial/personal data on the recipient. 

PFC representatives will call to confirm the following information: 

• Account number 

• Routing Number 

• Payment Date 

• Payment Amount 

• Recipients name 

In cases where a payment is posted to an incorrect account or the recipient’s name is not on the account, FMS representatives 

will forward your financial institution a letter requesting that the funds be returned with return code R06 (Returned per Originating Depositary Financial Institution’s Request), or that you provide the account-owner’s information to SSA/VA in the 

event the funds are unavailable for return. 

We live in a world where identity theft is prevalent and there are overwhelming concerns about protecting privacy. It is because of these factors that FMS representatives often meet resistance from financial institution representatives, who are looking to protect the best interest of their customers and their own liability. While the Treasury Department recognizes and respects these concerns, there are various legal and regulatory sources which support the release of information for the purpose 

of facilitating the Tele-TRACE program: 

12 USC 3413: Right to Financial Privacy Act of 1978 

There is an exemption to the Right to Financial Privacy Act that allows for the disclosure 

of information about individuals receiving benefit payments from Social Security, Railroad 

Retirement Board, and Veteran’s Administration, if disclosure of this information is necessary to support critical agency functions. Specifically, the Right to Financial Privacy Act 

of 1978 states that: “Nothing in this title shall apply to the disclosure by the financial institution of the name and address of any customer to the Department of the Treasury, the Social Security Administration, or the Railroad Retirement Board, where the disclosure of 

such information is necessary to, and such information is used solely for the purpose of, 

the proper administration of section 1441 of the Internal Revenue Code of 1954, title II of 

the Social Security Act, or the Railroad Retirement Act of 1974.” 

31 CFR Part 210.3(c): Federal Government Participation in the Automated Clearing House (ACH) 

By accepting Federal Government ACH payments, your financial institution agrees to the provisions in 31 CFR Part 210 and 

the procedures in the Green Book. Specifically, 31 CFR Part 210.3(c) states that: “Any person or entity that originates or reCooperation from the Financial Community is Key for 

Tele-TRACE Program 

Page 6 

Special ACH Edition—2009 

Teletrace Tip: 

Not sure it’s actually 

Treasury? Ask the 

representative to fax the 

request to verify their 

identity. 
ceives a Government entry agrees to be bound by this part and to comply with all instructions and procedures issued by the 

Service under this part, including the Treasury Financial Manual and the Green Book.” 

Green Book, Chapter 3, Non-Receipts 

The Green Book Chapter on Non-Receipts describes a financial institution’s responsibility in the resolution of non-receipt 

claims alleged by a customer of their financial institution. Specifically, this Chapter states that: “Receiving Depositary Financial Institution’s (RDFI’s) should be aware of the following situations that often result in unnecessary non-receipt claims. The 

RDFI should make every reasonable attempt to locate a payment prior to redirecting a recipient to the authorizing Federal 

agency. RDFI employees should be educated on the numerous scenarios and various posting techniques utilized to better assist 

customers who are concerned with the status of a direct deposit.” 

It additionally details the Tele-TRACE program: “FMS has partnered with several Federal agencies to research Direct Deposit non-receipt claims. The Kansas City Financial Center (KFC) and/or Philadelphia Financial Center (PFC) will call the 

RDFI directly to resolve claims of non-receipt. FMS has access to all of the payment information and will process claims via 

telephone (Tele-TRACE). Once the reason for non-receipt has been determined, FMS will telephone the recipient to inform 

him/her of the resolution. FMS will mail a letter if unable to reach the recipient by telephone. Keep in mind that RDFI's can be held liable for ACH payments not processed 

timely or correctly. If the Federal government sustains a loss as a result of a financial 

institution’s improper handling of an entry, the financial institution is liable to the Federal government for the loss, up to the amount of the entry.” 

Green Book, Chapter 4, Returns 

The Green Book Chapter on Returns describes a financial institution’s responsibility to 

return Government ACH payments that cannot be posted to an account at their institution. Specifically, this Chapter states that: “Un-postable payments must be returned so 

that they are received by the Government Disbursing Office (ODFI) no later than the 

opening of business on the second banking day following the settlement date of the original entry. Under no circumstances should a financial institution hold payments indefinitely in a suspense account, or by any 

other means, nor should payments otherwise be held if any of the conditions apply on when to return a payment. Holding payments may constitute a breach of the financial institution's warranty for the handling of federal government ACH payments 

under regulations codified in 31 CFR Part 210.” 

ACH Rules, Article One, Section 1.6.1: Records of Entries 

Article One of the ACH Rules provides for a six year retention period for ACH payments. Consequently, financial institutions 

are responsible for providing a printout or reproduction of the information relating to an ACH entry, provided that the individual requesting this information is the customer or a participating depositary financial institution. This requirement applies to 

Tele-TRACE inquiries because FMS is an originating depositary financial institution on behalf of SSA/VA in the ACH network. 

These various rules, regulations, and procedures support the Tele-TRACE program and provide your financial institution with 

the regulatory foundation to confirm or verify information about your account holders receiving SSA/SSI/VA payments. It is 

also important to recognize that the Tele-TRACE program is designed to assist your account holders in locating their payments, and therefore your cooperation with the Tele-TRACE program and FMS representatives enhances customer service for 

your account holders. 

If you have any questions about the Tele-TRACE Non-Receipt process, please feel free to contact the Education & Marketing Staff at (215) 516-8154 or Philly@fms.treas.gov.

Tele-TRACE Program (Continued) 

Teletrace Fact: 

78,272 Teletrace cases 

were processed between 

the Philadelphia and 

Kansas City Financial 

Centers in 2008 . 
Tip Sheet for Financial Institutions: How to Limit Your Liability 

for ACH Treasury Reclamations 

Page 8 

Special ACH Edition—2009 

Reclamation is a procedure used by the Federal government to recover benefit payments made through the Automated 

Clearing House (ACH) to the account of a recipient who died or became legally incapacitated or a beneficiary who died 

before the date of the payment(s). The government's right to reclaim funds is established in Title 31 of the Code of 

Federal Regulations Part 210, Subpart B, Section 210.10(a). By accepting a recurring benefit payment from the 

government, a receiving depository financial institution (RDFI) agrees to the provisions of 31 CFR 210, including the 

reclamation actions and debiting of the RDFI's Federal Reserve Bank account for any reclamation for which it is liable. 

Under 31 CFR Part 210, financial institutions are fully liable for all Federal benefit payments received through the ACH 

after death. Financial institutions can limit their liability for payments subject to reclamation if they had no actual or 

constructive knowledge of death at the time of deposit or withdrawal of post death payments, and adhere to the following 

guidelines outlined below: 

• Immediately return any post death payment(s). 

• The financial institution should immediately determine if the account balance is sufficient to cover the amount 

 of the Notice of Reclamation and return any remaining balance up to the amount of the reclamation. This 

 minimizes the risk of incurring any liability for the withdrawal of any post-death payments. When returning a 

 partial payment, the financial institution must return a check to the Regional Financial Center specified in the 

 notice 

• The financial institution should check for other types of Federal benefit 

 payments received by the deceased and take steps to ensure these post- 

 death payments are returned promptly. If the account remains open and 

 additional payments are credited to the account, these payments become 

 a part of the amount that must be returned in response to the Notice of 

 Reclamation 

• The financial institution must mail the Notice to Account owners copy 

 of the Reclamation form to the last address of the account owners, 

 notifying the owners of any action it plans to take against the account 

 and certify on the form (in certification #1) that the account owners 

 copy was mailed. 

• The financial institution must also provide the name and address of any 

 account owners or persons with access to the account if returning less 

 than the full amount of the Notice of Reclamation for Federal benefit 

 payments received from the Railroad Retirement Board, Social Security 

 Administration, and Veterans Administration. The Right to Financial Privacy Act prohibits financial 

 institutions from releasing account holder information for all other Federal benefit payments subject to reclamation. 

 Financial institutions should enter “Federal Law Prohibits the release of this information – refer to Title 31, CFR 

 Part 210 and the Green Book” for these payments, if attempting to limit their liability. 

• The financial institution must certify (certification # 2) the date it received the reclamation and the date it first 

 learned of the death or incapacity of the recipient. When any of the above information cannot be provided, the 

 financial institution should include a written statement explaining why the information cannot be furnished. 

• Respond to the Notice of Reclamation timely so that it is received by the Regional Financial Center within 60 days 

 from the date of the notice. If the financial institution fails to limit its liability by the 61st day after the original 

 notice, their Federal Reserve account will be debited for the full amount of the reclamation. 

For more information on reclamations policy questions, please contact the Education & Marketing Staff at (215) 516-

8154 or Philly@fms.treas.gov. Questions on specific reclamations should be directed to the San Francisco Financial 

Center at (510) 594-7183 or the Austin Financial Center at (512) 342-7300. 

Reclamation Tip:

Account for mail float and 

processing time when 

mailing a Notice of 

Reclamation. It can take a 

Regional Financial Center 

1-3 days to process a 

response. 
Financial institutions can utilize the Automated Clearing House (ACH) system to return electronic Federal benefit 

payments back to federal agencies. Financial institutions return ACH payments that cannot be posted to a 

recipient’s account for a variety of reasons, for example, if a recipient’s account is closed or the recipient is 

deceased. The ACH system is governed by the National ACH Association (NACHA), who regulates the use of 

ACH transactions and sets guidelines for proper system usage. The Financial Management Service’s (FMS) Green 

Book (Guide to Federal ACH Payments and Collections), Chapter Four, Returns, outlines proper usage of the ACH 

Return function as is relates to Federal payments. 

FMS is committed to educating financial Institutions on the proper use of ACH 

return reason codes. The ACH return reason code assists federal agencies, such as 

the Social Security Administration (SSA) or the Veterans Administration (VA), in 

determining how to update a recipient’s payment information. Utilizing 

acceptable ACH return reason codes plays a critical role in an agency being able 

to reissue a payment in a timely fashion by correcting or updating data in their 

payment file. 

Statistics revealed that in 2007 financial institutions frequently returned Federal 

ACH payments with return codes that are not appropriate for the Federal 

Government. These included both Receiving Depository Financial Institution (RDFI) return reason codes, as well 

as codes reserved only for ACH Operators. Although the FMS system has the capability of accepting all NACHA 

approved return reason codes, financial institutions are encouraged to use only those codes prescribed in the Green 

Book, Chapter 4 (Returns), Section 2, so that agencies can make the appropriate changes to their payment file 

records. Listed below are the codes that are deemed acceptable by the Federal Government: 

• R02 – Account Closed: A previously open account has been closed by the customer or the RDFI. 

• R03 – No Account/Unable to Locate Account: The account structure is valid but does not correspond to the 

individual or company listed on the entry, or the account number indicated is not a valid account 

• R04 – Invalid Account Number: The account number structure is not valid or may contain an incorrect 

number of digits 

• R06 – Returned Per Originating Depositary Financial Institution (ODFI) Request: When the RDFI agrees 

to return the ACH credit at the request of the ODFI, Article Six of the NACHA Operating Rules states that the 

ODFI must indemnify the RDFI by providing a R06 letter 

• R14 – Representative Payee Deceased or Unable to Continue in that Capacity: The representative payee is 

the person or institution authorized to receive payments on behalf of one or more persons. The person they 

represent may be a legally incapacitated adult, or a minor. The representative payee is either deceased, or alive, 

but unable to continue in that capacity. 

• R15 – Beneficiary or Account Holder (Other than a Representative Payee) Deceased: The beneficiary 

who may or may not be an account holder is the person entitled to the benefits and is deceased; or the account 

holder who is a non-representative payee is an owner of the account and is deceased

• R16 – Account Frozen: Access to the account is not allowed because of specific action taken by the RDFI or 

by legal action 

• R17 – File Record Edit Criteria (Specify): Some fields that are not edited by the ACH Operator are edited by 

RDFI. If the RDFI cannot process the entry, the fields that are causing the error must be indicated in the 

What’s in a Code? A Financial Institution’s Guide to Federal 

ACH Returns 

Page 9 

Special ACH Edition—2009 

ACH Returns Fact:

While FMS systems can 

accept any ACH Return 

Code, there is a list of 

acceptable codes for 

Federal Government 

Payments 
Get Involved! Reaching Out to the Financial Community 

The Philadelphia Financial Center Newsletter entitled PFC 

Journal is presented by the Customer Service Branch and 

addresses a variety of topics of interest to individuals in the 

Federal financial community.

The PFC Journal is available exclusively on our website. 

P.O. Box 51317 

Philadelphia, PA 19115 

Phone: 215-516-8000 

Fax: 215-516-8010 

A review of Fiscal Year 2007 statistics revealed the following issues with ACH returns coding: 

• 11,827 out of 743,979 SSA returned ACH payments contained unacceptable return reason codes such as

Customer Advises Not Authorized (R10), Credit Entry Refused by Receiver (R23), Duplicate Entry (R24), and 

Corporate Customer Advises Not Authorized (R29). 

• 5,693 out of 376,887 IRS returned ACH payments contained unacceptable return reason codes such as 

Insufficient Funds (R01), Invalid ACH Routing Number—Reserved for ACH Operator (R13), Non-Transaction 

Account (R20), and Invalid Individual Name/Company Name—Reserved for Federal Government Agency 

(R45). 

• 2,600 out of 133,467 VA returned ACH payments contained unacceptable return reason codes such as 

Uncollected Funds (R09), Account Sold to Another Depositary Financial Institution (R12), and Credit Entry 

Refused by Receiver (R23). 

Financial institutions are encouraged to review the Green Book, Chapter 4 (Returns) for proper codes. FMS will 

continue to review returned ACH payments for improper codes and conduct outreach to educate the financial 

community on the appropriate usage of return reason codes for Federal payments. For additional information, 

please contact the Education & Marketing Staff at (215) 516-8154 or Philly@fms.treas.gov. 

ACH Returns (Continued) 

Page 10 

Special ACH Edition—2009 

Have you ever received a call from the “Treasury Department” on a non-receipt claim, but were not sure if it was 

fraudulent? Are you unsure of what information you should be providing to callers from the Treasury Department 

on non-receipts? If so, we are looking for your participation. The Philadelphia Financial Center (PFC) and the 

Kansas City Financial Center (KFC) are exploring the concept of hosting a Webinar to open the lines of 

communication between the financial community and PFC/KFC with regards to non-receipt claims. This invitation 

is open to all Regional Payment Associations (RPA’s) and Financial Institutions. If you are interested in 

participating in such a Webinar, please contact Lisa Andre, Accredited ACH Professional (AAP) at (215) 516-8142 

or Lisa.Andre@fms.treas.gov.