1.13.8  Statistical Editing of Corporation Tax Returns

1.13.8.1  01-01-2006
Introduction

  1. This section provides instructions for editing and perfecting data from selected corporation income tax returns for use in the Corporation Statistics of Income (SOI) program. Special instructions are provided when line references differ between the current and prior year.

  2. The statistical editing process takes place in an on-line computer environment. Data is entered by the editors directly into the corporation database via terminals connected to a minicomputer in the Ogden Service Center. The term ‘editing’ refers to the combined interactive processes of editing, consistency testing and test resolution.

  3. Numerous processes in the on-line system are triggered by special function keys on the keyboard. They are addressed in detail throughout this section and the keys are listed with their associated functions in Exhibit 1.13.8-17. In addition, a special screen lists all function keys available (see Section 8.5.5). Whenever possible, the system displays a message stating which function keys are of use on particular fields. This eliminates the need to remember many of the keys.

1.13.8.1.1  (01-01-2006)
Background

  1. Each cycle, corporation returns are selected off the Martinsburg Computing center (MCC) Returns Transaction File (RTF) for inclusion in the Corporation SOI program. Ogden Service Center receives the files directly from MCC for pre-edit processing. All the Business Master File (BMF) data items are stored in the database for use in editing.

  2. Statistical editors in two service centers access the database through terminals connected to OSC via the Consolidated Data Network (CDN) telecommunications lines. Each selected and reformatted record contains some pre-loaded items from the RTF as well as some prior year SOI data. The editors then complete the editing. They correct any tests which may fire during the edit process.

1.13.8.2  (01-01-2006)
General Procedures

  1. The following general procedures will be used while editing corporation returns.

1.13.8.2.1  (01-01-2006)
Editors

  1. Editor ID — Each editor has assigned a unique editor number which allows access to the system and provides anonymity.

  2. Lead Editors — Each service center designates one or more lead editors identified as such through their editor ID. These lead editors have special system privileges and responsibilities that are described in detail in Section 8.7. The quality reviewers are also designated as lead editors.

1.13.8.2.2  (01-01-2006)
Entering Data

  1. All entries are keyed through the terminals.

  2. Entries are right justified after pressing [ENTER]. In addition, commas appear in money amount fields once [ENTER] is pressed.

  3. Do not enter leading zeros except when instructed.

  4. Key negative amounts with a negative sign preceding the number. For example, a taxpayer entry of (742) would be keyed as -742.

    1. Each negative entry on a tax return must be evaluated to determine whether it should be edited as a positive or a negative. For example, if all entries on the deduction side of the income statement are shown in parentheses, do not edit them as negative numbers because the taxpayer is just indicating that they are all subtracted. If only one amount is shown as a negative, however, edit it as a negative.

    2. Some fields may be designated on the system as positive only. If a negative is entered, the message "Must be Positive" will appear. If the taxpayer has reported the item as a negative check the edit manual in the appropriate section. If still unresolved, contact the National Office.

  5. Enter all money amounts in whole dollars, dropping any cents shown. The following are examples:

    1. 473.06 is keyed as 473

    2. -731.74 is keyed as -731

    3. .03 is left blank

    4. -.85 is left blank

1.13.8.2.3  (01-01-2006)
Navigation

  1. Edit Order - The forms and schedules selected display for editing are in a specific order. Generally, the editing order follows the order in which the taxpayer filled out the forms - attachments edited first. In many cases the bottom line of a form displays in the screen for a later form. For example, the bottom line amount edited from the Form 3800, General Business Credit, displays on Schedule J, Tax Computation, Form 1120, U.S. Corporation Income Tax Return.

  2. Restrictions — Users may navigate back and forth as needed. All tests are fired as you [ENTER] forward through a screen, regardless of the number of passes taken.

    1. If [F12] is pressed on line 1 of a form, it will go to the last line of the previous form/schedule.

    2. Occasionally, the editor may find it necessary to go back further than usual. In these cases, the navigation restrictions on a particular record may be released so the editor may go back as far as needed. However, the system will take the editor through all screens from the point of return and all tests must be re-fired regardless of having passed previously. See Section 8.8 for release procedures. The editor must cursor through all released form/schedules. The fast forward key can be used to move the cursor forward to the last field on the screen unless it hits a null field or a failed test. See Section 8.5.6 for further information.

1.13.8.2.4  (01-01-2006)
Screens

  1. Screen Design — To the extent possible, screens look like the pages of the tax return. Where only a few items are edited off of a form, the items not edited are generally not on the screen. For these forms, you must be extremely careful to edit the amount from the correct line.

  2. Symbols — The following symbols or letters may be present to the right of a screen field:

    SYMBOL MEANING
    * This item is available from the RTF.
    C This is the field from which you may access the Calcscreens associated with the related schedule. (See Section 8.5.2).
    D This item is DISPLAY ONLY on this screen. The cursor will not land here.
    B This item is display only on this screen, but may be changed by backing up to a previously edited screen. (See Section 8.2.4:(4) for instructions).
    Q There is a query (lookup) table available for this field. (See Section 8.2.4:(5) for instructions).
    W There is a workscreen available for this field. (See Section 8.5.1 for instructions.)
    E This is a double entry field.
    G This item is computer generated. (See Section 8.2.4:(3) for Instructions).
    ME This is a must enter entry field.
    P This field allows for a decimal.
    When the fast forward (down arrow) key is pressed on an Unedited form or schedule, the cursor will zero-fill all numeric Fields up to but not including this field. (See Section 8.5.6 for Instructions.
    S When the fast forward (down arrow) key is pressed on an unedited form or schedule, the cursor will zero-fill all numeric fields up to but not including this field. (See Section 8.5.6 for instructions.)

  3. Generated Items — Some items are not edited, but are system computed. They appear on the screen, but the cursor bypasses them. They are display only, and cannot be changed. However, the components that created them may be changed. These items are designated by a ‘G’ margin entry on the editing screen.

  4. The Back Navigate Process — If an item is displayed which was originally edited from another form or schedule, it may not be changed on the display screen. You must navigate back to the originating form to make any changes. A ‘B’ in the right margin identifies these items.

    1. With the cursor on the correct item, press [PAGE UP]. The system will take you back to the originating form and the cursor will be on the first field of that form.

    2. Proceed through the form using the [ENTER] key when you do not want to make changes and the [BACKSPACE] key or [CTRL+U] keys when you want to clear a field to make a change. All tests will fire as you pass through the form.

    3. When all tests have been passed or accepted and you press [ENTER] on the last field, then you must fast forward through the forms/schedules until you arrive back at the screen from which you exited. The new amount displays.

  5. Query (Lookup) Tables — Three edit fields, prior year corp name, industry codes, and country codes have query (lookup) tables. In addition, thirteen additional lookup tables are available: prior-year/bmf, tests fired, test numbers, Form 8825 codes, cost of goods codes, income codes, deduction codes, asset codes, liability codes, Moody's NAICS lookup, Indy Research, State Lookup, and TRR Calc. Browse.

    1. Access the lookup tables by left clicking the mouse on the lookup menu or pressing [ALT+L] during editing and selecting the desired table or pressing [F9] when the cursor is on the industry code or country code fields. The latter option results in the lookup table appearing automatically.

      Prior year / BMF prior-year data for the schedule currently being edited or browsed. Available for all schedules on the main form. See Section 8.5.10 for more specific instructions
      Prior Year Corp Name displays corp name for the twp priopr years
      Industry Codes all possible industry codes in numeric order and a description of the industry
      Tests Fired test number and the error status. The UP ARROW [↑], DOWN ARROW [↓], [PAGE UP], and [PAGE DOWN] keys are used while in the test lookup table
      Country Codes all possible country codes in alphabetic order and their alpha codes used in the corporation study. A complete list of possible values for that field is found in Exhibit 1.13.8-23
      Test Numbers page number reference for each test number in the editing manual. See Section 8.5.12 for more specific instructions
      Form 8825 Codes Form 1120S returns only
      Cost of Goods Lookup a list of valid Cost of Goods codes
      Income Codes on-line dictionary for the income statement. See Section 8.5.11 for more specific instructions.
      Deduction Code on-line dictionary fo rthe deduction statement. See Section 8.5.11 for more specific instructions.
      Asset Codes on-line dictionary for the asset items on the balance sheet. See Section 8.5.11 for more specific instructions
      Liability Codes on-line dictionary for the liability items on the balance sheet. See Section 8.5.11 for more specific instructions
      Moody's NAICS Lookup displays screen to search for Moody's NAICS code by corporation name
      Indy Research browse Indy Research screen results from anywhere within the return
      State Lookup Form 1120S returns only
      TRR Calc. Browse browse Total Receipts Calculator results from anywhere within the return

    2. The lookup tables use the following general keys:

      [ALT+L] accesses lookup
      [↓] scroll down one line
      [↑] scroll up one line
      [PAGE DOWN] scroll down a screen
      [PAGE UP] scroll up a screen
      [F9] accesses help screen (only for IC/CC)
      Mouse positions cursor at: FIND
      [F10] during editing-exits and enters code (only for IC/CC)
      [F10] during browse-exits without entering code (IC/CC)
      [ESC] cancels, exits and returns to edit screen
      [F6] accesses pop-up comments window (prior-year)

    3. SOI industry code or country code lookup tables have a string search capability which allows you to search by entering part of a word or term, (for example "electri" ) or numerically by allowing you to enter part of an industry code (for example entering "561" would retrieve 17 codes 561110 - 561900). It is advisable to search for at least 4 digits. When the cursor is in the FIND position. Enter the full name of the item or a string of selected characters/numbers . The [PAGE UP] and [PAGE DOWN] key search for other industries where the string of characters are present.

    4. To choose a code, position the cursor on that value and enter it in the field by pressing the [F10] key. The originating screen displays and the field (industry code or country code) now contains the value you selected. Press [ENTER] to fire tests and continue editing.

    5. If you are in the query table and do not wish to select a value, press [ESC]. The originating screen displays and the value of the field (SOI industry code or country code) remains unchanged.

  6. Query (Help) Tables - There are four help tables available for the editors, View Comments, View Moody's US, View Moody's Intl.and Keys, and five for the leads and managers, View Control (ON1- Check SCPL- Return ID Information), Display Error, Debug, .About, and Globals. The last four are used to help resolve programming problems.

    1. Access the help tables by left clicking the mouse on the help menu.

    2. Viewing all comments (including industry code comments are accessed by pressing [F6] while editing a form or schedule.

1.13.8.2.5  (01-01-2006)
Editing Pre-loaded Data

  1. When a screen is displayed, any RTF amounts present for that return appear. If that field was not abstracted during revenue processing, it appears blank on the screen.

  2. All pre-loaded RTF amounts must be reviewed for acceptability. Compare the RTF amount on the screen with the taxpayer entry on the return. If there is a difference, try to determine why revenue processing made the change. If a legitimate reason for the change cannot be determined, clear the pre-loaded entry by pressing the [BACKSPACE] key or [CTRL+U] and enter the original taxpayer amount. If you accept the pre-loaded data, make sure the return balances to the bottom line in order to avoid a must test.

  3. Following are some revenue processing procedures which may help you to explain differences:

    1. A red bracket "( )" around an entry means the item should be negative. Remember that a negative in revenue processing may not be a negative for SOI.

    2. A red "X" to the left of the entry means that revenue processing ignored the entry and that a red-penciled entry to the left or above was transcribed.

    3. A red circle around an entry means that the entry should not be transcribed. Generally, "X" is used on tax data and a circle is used on non-tax data.

    4. An arrow may be used to designate the correct line for a misplaced entry.

  4. The following is a list of the most common errors detected during the error correction process that generate a taxpayer notice code (TPNC), which can be found on the return in the upper left of the entity section. Notices applicable for Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts and Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies only, are not included in this listing. Use this list to help you explain differences between taxpayer entries and the pre-loaded data:

    TPNC REASON FOR CHANGE
    01 Mistake in computing total income
    02 Mistake in computing total deductions
    04 Mistake in computing taxable income
    05 Mistake in computing total income tax
    06 Recomputed total income tax to taxpayer’s advantage using alternative tax computation
    08 Credit claimed exceeds maximum allowable
    10 Incorrect balance due/overpayment amount
    11 Foreign tax credit exceeds maximum allowable
    12 Mistake in computing investment credit
    13 Mistake in Work Incentive (WIN) credit
    14 Mistake in computing alternative tax
    15 Mistake in computing Schedule D, Capital Gains and Losses
    16 Mistake in computing Form 4797, Sales of Business Property
    18 Incorrect amount of surtax exemption shown on Schedule J or Form 1120-FY, Corporation Income Tax Return, Fiscal Year
    22 Deduction for additional first year depreciation was more than can be allowed
    23 Mistake was made when alternative minimum tax figured
    25 Mistake in computing alcohol fuel credit
    26 Mistake in computing research credit
    31 Mistake in computing the general business credit on Form 3800
    40 Tax was adjusted, no reply to request for additional information
    90 Blank notice (used for whatever statement is needed)

  5. Retrieving RTF Data — At any point you can retrieve an RTF entry that you changed, by placing the cursor on the field you want to retrieve and pressing the [F8] key. (Remember this will only work on a field with an asterisk next to it). A message appears indicating the BMF value for the field and whether the user wants to restore the original BMF amount. If you wish to move in the BMF value, press the [YES] key, if not press the [NO] key.

1.13.8.2.6  (01-01-2006)
Consistency Test

  1. Validation Checks — Consistency tests run as data is entered. Most fields have simple validation checks run on them when [ENTER] is pressed, and messages display at the top of the screen describing the error(s). In addition to consistency tests, system messages appear at the bottom of the screen for invalid entries, such as negative characters, invalid codes, etc.

  2. Tests are performed when the last field involved in the test is keyed in and [ENTER] is pressed. A single field may have a number of tests run on it. Tests are run in a specific sequence and each failed test must be resolved before the next test is performed.

  3. When a test fails, the process stops and a message appears giving the test number reference page for the edit manual, and a brief description of the condition. Wherever it may be helpful, computed amounts, out-of-balance amounts and other useful items are displayed in the message area. For selected areas, a message displays indicating on-line help screens available. These screens give further instructions how to resolve the test.

  4. Test Types — There are five types of tests which appear in the error message:

    1. Must Correct Tests — These are numbered with an "M" prefix. The system does not allow you past that field until the error is resolved. However, the return may be exited at this point. (See Section 8.2.7:(5))

    2. Error Tests — These are numbered with an "E" prefix. An error of some kind may exist on the return. All resolution instructions should be followed before accepting the test. (See Section 8.2.7:(4) for test acceptance instructions.)

    3. Validation Tests — These are numbered with a "V" prefix. Unusual conditions, which are not as likely to be in error, exist and need to be double checked. They may be accepted according to instructions for the particular test. (See Section 8.2.7:(4) for test acceptance instructions.)

    4. Longitudinal Tests — These are numbered with an "L" prefix. These tests check increases in specified items on the record versus prior year data. " L" tests, if corrected, reduce further review at the National Office. These tests may be accepted according to instructions for the particular test. (See Section 8.2.7:(4) for test acceptance instructions.)

    5. Automatic Tests — These are numbered with an "A" prefix and change amounts based on certain criteria. A message displays stating "AXXX has been fired. Money amounts may change." For an explanation of the various auto adjusts see Exhibit 1.13.8-19.

    6. Warning Tests— These are numbered with a "W" prefix. These test fire only on Calc. Screens and are identical to M Tests that fire on the consolidated form, except they may be accepted. For correction instructions, see the corresponding M test (same test # with an M prefix).

1.13.8.2.7  (01-01-2006)
Test Resolution

  1. Failed tests must be resolved as they fail. On each error or validation test type, you must use the editing instructions to decide whether to correct or accept the test.

  2. Use the following steps to Correct a Test:

    1. Use [F1] if on-line help is specified for a test.

    2. Press the [ENTER] key to correct the test. Use the backspace [F12] and the [ENTER] keys to position the cursor on the field you want to change.

    3. Key in the correct amount. This will automatically clear the field.

    4. Use [ENTER] to move forward through the form.

  3. Moving in the Computed Amount — Sometimes, the proper correction involves moving the computed amount shown on the message line to the field in error. Use the [TAB] key or mouse to choose to [USE COMPUTED] amounts to correct the test. The computed amount replaces whatever was in the field. Press [ENTER] to fire tests and continue editing.

  4. Accepting Tests — When you have decided an "E" , "V" or "L" test should be accepted, you may TEST RELEASE it using the [TAB] key or mouse to select [ACCEPT].

  5. Must Tests — Must tests may not be accepted. However, if a must test has failed, there may be times when you need to exit the system. Use the following procedures:

    1. Exiting a Record With a Failed Must Test — If a must test has failed and you need to exit the system to research the problem. Press [ESC] to exit the return. Continue the EXIT process as described in Section 8.6:(3)(a). The record is marked as an incomplete record with a must test on it and appears on reports generated for the lead editors. To access the record later, choose EDIT from the 1120 Main Menu, enter the SCPL, select the EDIT 1 2, and continue. You will go to the Return-ID screen where you can choose to edit where you left off. Either resolve the error or mark it for lead editor review (See Section 8:2:7:(5)(b))

    2. Marking a Failed Test Record for Lead Editor Review — If you cannot resolve a failed test and would like assistance from a lead editor, use the following procedures. (This will most often be done for unresolvable must tests). Press [ALT] and use the right arrow key to access the " EXIT" menu in the banner at the top of the screen. Use the down arrow key to access the drop down list and place the cursor on "MARK FOR LEAD EDITOR" and press [ENTER]. (You may also just use the mouse to select the menu and menu options). Continue the EXIT process as described in Section 8.6. The record is then marked as needing lead editor review. The return will appear on reports generated for the lead editor used to identify and resolve these tests. Follow your service center's procedures for submitting the return document tothe lead editor. After the must test is resolved, the lead editor returns the record to the original editor for completion.

    3. Exiting a Record to Re-Open — To resolve a test it may be necessary to re-edit a portion of the return. It is possible to re-open a return by using the following procedure: Press [ALT] and use the right arrow key to access the "EXIT" menu in the banner at the top of the screen. Use the down arrow key to access the drop down list and place cursor on "RE-OPEN THIS RETURN" and press [ENTER]. (You may also just use the mouse to select the menu and menu options). The Release Screen then displays. Follow the instructions in Section 8.8 for the release procedures.

1.13.8.3  (01-01-2006)
Getting Started

  1. This section provides general editing instructions for all return types.

1.13.8.3.1  (01-01-2006)
SOI Processing Main Menu

  1. There are three user tabs available to lead editors from the main 2003 Corporation Processing screen (Returns Processing, Utilities, and reports), and two user tabs available to all tax examiners (Returns Processing and Utilities). See Exhibit 1.13.8–31 for an example of the 2003 Corporation main screen design. Within each of these tabs, additional options are available based on the user type. For example, under the tab heading Returns Processing, the following user options are available:

    1. L,E Edit — Select this option when accessing a record on the database for editing, this includes non-selected critical case returns and non-selected possessions returns. You may also, re-enter a return through this option whenever the editing of a record is interrupted. You will be asked to enter ‘C’ to continue.

    2. L, E Quality Review — Select this option to run the quality review system.

    3. L Reconcile — Select this option to identify discrepancies in edited amounts between first and second edits.

    4. L,E Browse Returns — Editors and leads select this option to review either a selected schedule or the entire return. Details are provided in Section 8.9.

    5. L,E Re-Open Returns — Editors and leads select this option to release returns and make editing corrections. Details are provided in Section 8.8.

    6. L Drop — Select this option to edit non-selected records, multiple-form-type insurance returns, extract and short edit records.

    Note: Similar differences in user options will also be seen when either the Utilities or Reports tabs are accessed.

1.13.8.3.2  (01-01-2006)
Return Identification Screen

  1. From the 1120 Main Menu, after selecting EDIT, enter SCPL picking an edit-1-2, and hitting [CONTINUE], the Return Identification Screen displays. A new option that has been programmed for the 2003 program is the Work group entry field. To use this feature, enter a six-digit STARTS assigned Work Group, press the [RETURN] key, and the system will place the cursor on the SCPL entry box. The mouse (or the down arrow) may then be used to access the SCPL drop-down box, which contains a listing of all available scpl's (and the corresponding edit status) within the entered work group. When entering the EDIT mode for the first time:

    1. SCPL — If the return is missing, the system displays the message "THIS RETURN HAS BEEN MARKED AS MISSING BY STARTS" . The Return ID screen clears and the cursor prompts for a new SCPL. Contact National Office to change the status of this return if it is not missing. When the return is later found, re-enter the record through INITIAL EDIT MODE. A new feature that has been programmed for the 2003 study is the automatic display of National office comments (when available). For example: any N.O. comments that are entered during the 2002 National Office Review period, will automatically be displayed for an editor working the 2003 return. This shopuld greatly assits editors in addressing unique reporting issues seen on some tax returns. To exit National Office comments, press the [ESC] key.

    2. RETURN-TYPE — Use the mouse to access the drop down list of return types. Select the return type that matches the return document.

    • A consolidated return is a single income tax return containing combined financial data for a parent corporation and one or more subsidiary or affiliated corporations. The parent corporation files the return and its name, which appears on the return, may include the words "and subsidiaries " or "and affiliated companies" or the like. Form 851, Affiliations Schedule, shows the name and address of each corporation included in the consolidation.

    • Supporting schedules show the following items in detail for each corporation included in the consolidation: income, deductions, and computations of taxable income; reconciliation of earned surplus; and assets and liabilities at the beginning and end of the taxable year. Each of these schedules is usually prepared in column showing the breakdown of reported items. The following format is one commonly used by corporations in preparing their schedules:

    Consolidated
    Total
    Elimination’s &
    Adjustments
    Combined
    Total XY
    X corp.
    (Parent)
    Y corp
    (Subsidiary)

    • Most non-life insurance companies file on Form 1120-PC. However, certain small Other Insurance Companies (most often title insurance companies) file on Form 1120, 1120-A or 1120S. These returns should be edited at their regular edit location (they do not need to be specially sent to Ogden). The editor should select the appropriate return type and assign industry code 524210 or 524290.

    • If you change the return type to an 1120-L or 1120-PC and are other than an Ogden Service Center (OSC) editor, press [ESC] to exit the return. Refer the return to the lead editor as it will need to be shipped to OSC. The return may need to be dropped and transferred to Ogden. See Section 8.7:(4) for further instructions.

    • Once you have left the Return ID Screen, the Return Type can only be changed by the lead editor. You will need to exit the return by pressing [ESC]. The return type can not be changed on the Return ID screen. When the return type is changed, all edited work is deleted. Therefore, it is necessary to be very sure of the return type edited.

    • If the return was consolidated last year and is coded as non-consolidated this year (or vice versa), a system message appears alerting you to verify the return type.

    (c) REVISION YEAR — You should examine the return to make sure all forms are the same revision year. If the return contains all forms and schedules for one year, then select that year by using the mouse. If the return contains a combination of years' forms, and if any of the following forms have a revision year of 2003, edit as revision year 2003:

    Form 4626, Alternative Minimum Tax Credit

    Note:

    Otherwise, code according to the Form 1120 type year (for all 1120 Return types.) Call N.O. Team Leaders with any questions.

    (d) TOTAL ASSETS — The cursor prompts for total assets. Enter total assets from page 1 of the return when it matches end of year total assets from Schedule L, line 15d. If assets from page 1 and Schedule L do not match, enter from Schedule L. If the Taxpayer did not file Schedule L, enter the Page 1 amount. Always pick up end of year total assets. For Form 1120-F, always enter total assets from page 6, Schedule L, end of year. This is a double entry field. If you enter an incorrect amount, you can re-access this field by exiting and restarting this return. This field determines whether any longitudinal tests will be performed. Longitudinal tests fire if total assets are greater than $250,000,000 (unless otherwise stated). Edit Total Assets as negative if reported by the taxpayer as a negative.

    (e) REJECT CODE SELECTION — Select the [REJECT] option using the mouse and refer to Section 8.4 for instructions.

    (f) While on the Return ID Screen, if you need to go back to the previous field to make a change, use the mouse. If the [ESC] key is used on the Return ID Screen, all previously entered fields will have to be re-entered the next time you enter the same SCPL.

    (g) If the return is a possessions corporation and you are not a Cincinnati editor, the system will display a message indicating that the return must be shipped to Cincinnati for editing.

  2. Re-entering EDIT mode to continue — After the SCPL, if you were not the initial editor of the return, the system will ask you if you wish to edit the return. Use [TAB] key (or mouse) to move between the [YES] / [NO] boxes and press [ENTER] to continue. You will be placed in the screen where you left off with the cursor at the first field on the screen.

1.13.8.3.3  (01-01-2006)
Form/Schedule Selection Screens

  1. Original Selection of Forms/Schedules — A form/schedule selection screen unique to each return type displays. Carefully search through the return and use the mouse to select any form or schedule listed for which there are data to edit. Sometimes the corporation only provides information for a particular form on an attachment and does not file the form itself. Therefore, you must search attachments as well. Watch out for returns with Form 4626, Alternative Minimum Tax-Corporations that also include any of forms 1118, 4562, and/or 4797 stating "for alternative minimum tax purposes." Do not edit the Forms (1118, 4562, 4797) stating "for alternative minimum tax purposes" .

    1. Certain screens display for all returns and are not included as options on the selection screen. These include the entity information, other information, income/deduction, taxes/payments screens, and balance sheet.

    2. Special Instructions for Form 3800 - When any of the following general business credit component forms are selected, the Form 3800 will automatically be selected as well. The component forms are as follows:
      Form 3468, Investment Credit
      Form 5884, Work Opportunity Credit
      Form 8861, Welfare to Work Credit
      Form 6478, Credit for Alcohol Used as Fuel
      Form 6765, Credit for Increasing Research Activities
      Form 8586, Low-Income Housing Credit
      Form 8830, Enhanced Oil Recovery Credit
      Form 8826, Disabled Access Credit
      Form 8835, Renewable Electricity Production Credit
      Form 8845, Indian Employment Credit
      Form 8846, Credit for Employer Social Security Taxes Paid on Certain Employee Cash Tips
      Form 8820, Orphan Drug Credit
      Form 8864, Biodiesel Fuels Credit
      Form 8896, Low Sulfur Diesel Fuel Production Credit
      Form 8874, New Markets Credit
      Form 8881, Credit for Small Employer Pension Plan Startup Costs
      Form 8882, Credit for Employer-Provided Child Care Facilities and Services
      Form 8847, Credit for Contributions to Certain Community Development Corporations
      Form 8844, Empowerment Zone Employment Credit
      Form 8884, New York Liberty Zone Business Employee Credit

    3. Special instructions for selecting the Schedule P - select the Schedule P if all of the following conditions are met:
      Part II of the Schedule P's (Form 5735) has amounts present Line 8 of those Schedule P's is reported Other Income, Line 10, on Form 1120, is reported.

    4. After selecting all forms and schedules needed, press the [DO] key to go to the next screen.

    5. If you have not selected a form for which RTF data already exists, the system selects it for you. A message appears stating that the form must be selected.

  2. Corrections to Form/Schedule Selections — The form/schedule selection screen may be accessed at any point in the edit process to correct selections made on the first pass. Additional screens may be selected or previously selected screens may be de-selected. Press [ALT] and the right arrow key (or the mouse) to access the "EXIT" menu in the banner at the top of the screen. Use the down arrow key to access the drop down list and place cursor on "Exit to form selection screen. " Any form already completed is marked with a 'D'. Move the cursor to the point of correction and either clear the ✓ by using the mouse, or use the mouse to enter a ✓ depending on whether you are de-selecting or selecting a form, and press either the [F10] or [DO] key to conform your selection. Make as many changes as necessary. Note: You can only de-select a form/schedule that is not completed yet (i.e. marked with a ✓). If you want to de-select a form that has been completed, you must release the return at or before the appropriate schedule. In following this procedure, you may select a form that would normally have been edited before forms or schedules you have already completed. Since forms need to be edited in a specific order, the system places you where you indicate, but takes you through all subsequent (selected) forms even if they have already been edited. You will need to press [ENTER] through these forms to re-fire all tests. Use the Fast Forward [ ↓ ] key to get to bottom of the screen faster.

1.13.8.3.4  (01-01-2006)
Return Completion Screen

  1. The system will display a screen with the buttons [FINISH], [EDIT],and [EXIT]. Use the mouse to select one of these options. If [FINISH] is selected, a checklist of several processes that will then execute is displayed on the right side of the screen. If the return needs to be scanned, the following message will display: "Please flag this return for scanning. Press [ENTER] to continue."

    1. If the return needs to be photocopied for the Form 5471, Form 1118, or Form 5735 studies, a message displays. See Exhibit 1.13.8-63 for specific editing instructions for these forms.

    2. Computed amounts are generated at return completion. If any computed amount becomes negative, a message instructs you to contact National Office. Acknowledge the message by pressing [ENTER] and you will automatically be taken to the Return ID screen. The edit status of the return will be set to 'I' (Incomplete) until National Office can resolve the problem. In the past, National Office had to resolve these problems without the use of the return. Through this procedure, the service centers will provide a vital role in the resolution process since the return is still in the unit.

    3. Returns meeting selected item sample criteria will be identified at return completion. Editors will receive the following message: "This returns has been selected for the Selected Item Sample:" (See QUASR IRM (26)12.3 or Exhibit 1.13.8-72).

1.13.8.4  (01-01-2006)
Rejecting Records (See Exhibit 1.13.8-10)

  1. Rejecting from the Return ID Screen — See Exhibit 1.13.8-18 for a list of reasons a return may need to be rejected from the sample. Do not just use the reasons as listed on the reject code screen as they are too abbreviated to use alone. If you are on your initial pass through the RETURN ID SCREEN for a record and you can determine that the return needs to be rejected, select the [REJECT] button at the bottom of the Return-Id screen.

    1. The REJECT CODE SELECTION SCREEN displays containing a drop-down listing of valid reasons why a return may need to be rejected. Enter the number corresponding to the appropriate reason and press [ENTER].

    2. A screen with DATA ELEMENTS TO VERIFY ON REJECT CODED RETURNS displays. Edit corporation name, EIN, ending accounting period, date incorporated, prior year EIN, PBA code and SOI Industry code according to instructions for the entity and other information screens for the appropriate form type.

    3. When you have completed entering all necessary data, the return comment field automatically displays for you to document why the return was rejected. After entering any comments, click on the [DONE] button . A blank RETURN ID SCREEN displays for beginning your next return.

  2. Rejecting While in the Return — If you have begun editing the return and realize that it should have been rejected, press [ALT] and use the right arrow key to access the "EXIT" menu in the banner at the top of the screen. Use the down arrow key to access the drop down list.

    1. Select the option, EXIT TO REJECT SCREEN.

    2. The REJECT CODE SELECTION SCREEN displays. Follow steps 1(b) through (c) above to reject code the record.

  3. If you reject a return in error, the lead editor must drop the return. See Section 8.7 for resetting tables for a SCPL (deleting records).

1.13.8.5  (01-01-2006)
Workscreens and Enhancements

  1. Several on-line editor aids simplify some of the more cumbersome and time-consuming editing processes. These include workscreens for industry coding, consolidating non-consolidated income statements and balance sheets and allocating amounts out of catch-all fields on the income statement and balance sheet. Some of the enhancements are the lookup screens, on-line general calculator, on-line comments field, fast forward/backward keys, on-line help screens and return information screen.

1.13.8.5.1  (01-01-2006)
Industry Code Workscreen

  1. The industry code workscreen was designed for two reasons — to provide you with a screen of data items that may aid you in selecting an industry code and — to record the results of your research in the database for future use.

  2. This section only gives instructions related to accessing and using the INDUSTRY CODE RESEARCH SCREEN. Refer to IRM 1.13.7 for complete industry coding instructions.

    1. Position the cursor on the Industry Code field in the Entity or Other Information screen. Press the [ALT+F8] key.

    2. The INDUSTRY CODE RESEARCH SCREEN displays:


      Current SOI Industry Code
      PBA Code
      Total Assets (Stored)
      BMF Gross Receipts
      BMF (Total Dividends + Interest)
      Industry code from 2 prior year files
      PBA Code from 2 prior year files
      Total Assets from 2 prior year files
      Gross Receipts from 2 prior year files
      Prior Year Sources Used
      Moody's US and International
      Total Receipts Calculator
       

    3. The cursor will be positioned at a reference source field on the screen. Enter as many of the following codes as apply and press [ENTER]:

       
      Moody's (Listed)
      Moody's (Not Listed).
      Dun & Bradstreet
      Polk’s
      Best's
      Internet

    4. The cursor moves to the industry code comment field. Enter information about the results of your research according to the instructions in IRM 1.13.7. Use the [F6] key to display current year comments. The [VIEW ALL COMMENTS] button allows the user to access all comments, including industry code comments from prior years (when available). Use the [ESC] key to return to the research screen.

    5. The cursor moves to the SOI industry code field for you to enter the industry code you have selected or press [F9] key to access the Industry Code Lookup Screen. After pressing [F10], you will be placed back in the screen you exited to access this process and the new industry code will be displayed.

  3. You may use the industry code lookup table on the industry code field in the INDUSTRY CODE RESEARCH SCREEN . (See Section 8.2.4:(5) for instructions.)

  4. Changes to the SOI industry code must be made through the industry code research screen. Any time you research the industry code, whether you change the industry code or not, you must record your research on the industry code research screen. The system will automatically force any changes to be made on the research screen.

1.13.8.5.2  (01-01-2006)
Calcscreens

  1. The Corporation SOI study requires consolidated data. On occasion, the taxpayer files returns for the individual corporations within the group without providing a consolidated return. In these cases, the editor adds amounts across all returns or attachments and edit the sums. Calcscreens aid in this process.

  2. Calcscreens are provided for the income statement, balance sheet, Schedule D, Schedule A, Schedule M-1, Form 1118, Foreign Tax Credit - Corporations and Forms 4562, and 4797. All return types will have calcscreens for their associated Forms 1118, 4562, and 4797. The 1120-A, 1120-RIC, and 1120-REIT will not have the calcscreens available for the income and balance sheet, Schedule A, or Schedule M-1, but do have the on-line general calculator available.

  3. To access the calcscreens:

    1. The field from which you may access the calcscreen for a particular schedule is identified with a ‘C’ to its right. Position the cursor on this field and press the [F4] key to access calcscreens.

    2. A calcscreen displays a list of all items that may be edited for that screen. The calcscreen covers the existing numerical fields on the screen so it appears that the original screen is being edited. An indicator shows the subsidiary number at the top. Edit these fields for the first return or attachment using the appropriate editing instructions in this manual. The calcscreens enforce positive only, numeric, etc. element constraints, i.e., the same constraints as the regular edit screens.

    3. You must enter an amount or press [ENTER] on each field of the calcscreen. A test will fire within each calculation screen of deductions, assets, and liabilities to ensure the sub items add to the bottom line. If the totals do not add up, a warning message "Out of balance by: [difference]" , will display. The [ENTER] key can be pressed to continue. If the [ESC] key is pressed on any item on the calculation screen the question "Do you want to exit the calculation process?" displays to confirm the exit.

    4. Items that came from previously edited schedules are not included on the calcscreens. By definition, they have already been edited. Income is an example of having items (Total Dividends) that were previously edited and therefore the totals for subs could not be tested. However, you may use the back navigate process described in Section 8.2.4:(4) if you need to return to them after the calcscreen process is complete.

    5. When you press [ENTER] on the last field of the first calcscreen, a blank calcscreen displays for entering the next subsidiary's information. The calcscreens for each subsidiary are numbered so you can keep track of them.

    6. Blank calcscreens continue to display until all subsidiaries’ information is edited. [PAGE UP] and [PAGE DOWN] keys can be used to go backward and forward between each SUB (calculation screen). A message displays when you are at the first or last sub group. When you have finished entering all data, press [F10]. Every field will be summed across all subsidiaries. The cursor will be positioned at the first field on the screen from which you exited and you must [ENTER] through the screen to fire all tests as in the regular edit process.

    7. To erase a whole subsidiary, press [F5] at any time within the calcscreen.

    8. To retrieve the calcscreens, press [F4]. Changes can be made and when you press [F10], all amounts will be re-calculated and displayed. You may retrieve the calcscreens and make changes as often as needed until you have exited the last screen associated with the schedule.

  4. If it is necessary to make changes to a field after all calculations have been totaled, you do not need to re-enter the calcscreens. Any changes can be made directly on the screen.

  5. On-line general calculator — When [F11] is pressed, a "mini" on-line general calculator in the form of a pop-up window displays on the edit screen. This calculator can be used on all money fields on any return, schedule, or attachment. The display shows the total amount entered. The general calculator operates like a standard adding machine.
    To move the calculator, use the mouse to click on the dark blue banner at the top of the calculator. Click and hold the left mouse button and drag the calculator to the desired location on the screen.
    After each amount, press [ENTER] to add or [-] to subtract. Pressing [F7] clears the last number displayed, [F8] clears the entire calculation, [F6] reverses the sign of the current entry and [F5] clears the current entry.

    1. When [F10] is pressed, the total amount from the calculator is entered on the screen for the line item entry from which the calculator was accessed, if it is a numeric field.

    2. To exit the calculator without bringing an amount forward, press [ESC].

    3. When [F9] is pressed, the entire contents of the general calculator tape are printed, even the entries and calculated values that are not currently displayed.

    4. Press [PAGE DOWN]or [PAGE UP] to scroll thru the history tape list. The Backspace key removes the last character from the display. [F3] will increase or decrease respectively the number of digits where the decimal point display is positioned. The default is set at zero.

1.13.8.5.3  (01-01-2006)
Allocation Screens

  1. There are three fields on the income statement, two fields on Schedule A, Cost of Goods, and five fields on the Balance Sheet for which allocation screens may be used. They are Other Income, Other Deductions, Farm Income; Other Costs, Section 263A Costs; Other Current Assets, Other Investments, Other Assets, Other Current Liabilities and Other Liabilities. You can allocate from income to deductions, from deductions to income, from assets to liabilities, and from liabilities to assets with some restrictions.

  2. Use Exhibits 1.13.8-56 and 1.13.8-59 editing instructions for further information on moving amounts out of the "other schedule" attachments. The on-line dictionaries will help to determine the amounts that should be moved from each schedule and where they should go.

  3. After the income statement or balance sheet is in balance, the cursor moves to the ALLOCATION field. If you do not need to allocate any amounts out of any schedules, enter ‘C’ to bypass the allocation process and continue editing.

  4. If you need to allocate amounts from any "other" field, press [F3].

    1. If you are on the income statement, the ALLOCATION SCREENS for Other Costs, Section 263A Costs, Other Income and Other Deductions are available to you. Use the [PAGE DOWN] and [PAGE UP] keys to move back and forth between the four allocation screens. If the Schedule A has not been selected, the allocation screens for Other Costs and Section 263A Costs do not display.

    2. If you are on the balance sheet, the ALLOCATION SCREENS for Other Current Assets, Other Investments, Other Assets, Other Current Liabilities and Other Liabilities are available. Use the [PAGE DOWN] and [PAGE UP] keys to move back and forth between the five allocation screens.

  5. Each allocation screen "pops up" over the existing screen and has a list of fields on the left where amounts may be moved. Each field has a unique two letter code assigned to it. On the right side of the screen are blank money amount and code fields. Both positive and negative amounts may be allocated for the income statement and the balance sheet. See Exhibits 1.13.8-56 for income statement restrictions and 1.13.8-59 for balance sheet restrictions.

  6. Go through the appropriate taxpayer attachments and determine money amounts that need to be moved. Enter the code and money amount associated with the field where you want the money amount moved. For example, if 10,000 should be moved from Other Costs to Rents, on the Other Costs ALLOCATION SCREEN, enter "RT [ENTER] 10000 [ENTER]" . A highlight bar indicates where the cursor is positioned for allocation entries. At this point [ALT+L] can be used to access prior year info, and using the mouse to click on [ALLOCATION] will access prior year allocations.

  7. An amount in the income statement can be allocated from a field (source field) which is larger than the field itself (which would make the source field zero or less). A total box displays at the top of the allocation screen. When amounts are designated for movement, a running total displays how much is left for allocation in that source field. The ‘to field’ is referred to as the destination field.

  8. Enter as many items as you find to move. They may be entered in whatever order the taxpayer provides them, within each allocation screen. When you [ENTER] on the last field, more blank fields display. To change or correct an entry:

    1. The Backspace key or [CTRL+U] clears an individual field (either the money amount or code field).

    2. The [F5] key clears an entire line (both the money amount and code fields on the line)

  9. After you complete entering amounts for the first "other " field, press [PAGE DOWN] to display the next one. If the [ESC] key is pressed, on any items on the allocation screen the question "Do you want exit the allocation process? " , YES/NO displays to confirm the exit. You must answer either Yes or No. All allocations are deleted when ‘Yes’ is entered. When you enter all money amounts and codes for all of the allocation screens on that schedule, press [F10] to initiate the allocation calculations:

    1. All amounts for each code are summed. For example, all amounts associated with the GR (gross receipts) code are added together.

    2. All summed amounts are added to the appropriate field and subtracted from the related "other" field. For example, the summed gross receipts amount are added to Gross Receipts and subtracted from Other Income. However, for Intangible Drilling Cost allocation and Amortization the amounts are not subtracted out of Other Deductions. The amounts are only displayed in these fields to show how much of Intangible Drilling Costs and/or Amortization is included in Other Deductions.

    3. Next, the originating screen displays the cursor on Allocation field. All necessary tests run behind the scenes and failed tests must be test released or corrected.

    4. When the cursor is at the Allocation field, you can press [F12]. A message "Allocation may have changed money amounts. Re-editing amounts" , appears along with an "OK" . Press [ENTER]; the cursor automatically moves to the last field before the Allocation field and changes can be made directly to the screen for re-editing.

    5. Another alternative would be to press [ALT] and use the right arrow key to access the "EXIT" menu in the banner at the top of the screen. Use the down arrow key to access the drop down list and place the cursor on "Browse This Return," and press [ENTER] in order to browse the forms and schedules that you wish. To exit out of Browse mode, select [EXIT] using the mouse.

    6. If further items need to be allocated, then press [F3] to re-enter the Allocation screens.

  10. Movement from other categories should always be made in allocation. The screens can be accessed as many times as you need. Changes must be made by re-accessing the ALLOCATION SCREENS using the [F3] key. For this reason, be very careful about perfecting the schedule before any allocation processes are run.

  11. When you are satisfied with the allocation results, position the cursor at the Allocation field and enter ‘C’. At this point, the change field amounts for any income statement allocation are stored in the database for use in the future development of an automated imputation system.

  12. After you have pressed ‘C’ for the Income Statement allocation process, there are several options for re-entry.

    1. If a return is released or re-edited at cost of goods, income statement, deduction statement or balance sheet, a message appears at the bottom of the screen stating "Allocation may have changed money amounts. Re-editing amounts." Stored allocation amounts may be re-accessed or browsed. See (10) and (11) above for procedures.

    2. If [F3] is pressed, the allocation screens re-displays and any changes can be made. The allocation screens can also be viewed while in BROWSE mode by pressing [F3].

  13. Certain tests only fire after allocation has been completed. See specific editing instructions for the associated tests.

1.13.8.5.4  (01-01-2006)
On-Line Comments

  1. Note any peculiar taxpayer entries or confusing situations in comment windows accessed from any point in the return by pressing [F6]. Access the prior year’s comments by pressing [F6]. Using the mouse to select the [VIEW ALL COMMENTS] button allows the user to access on-line comments from prior years when available.

  2. The comment screen is 780 characters long and can be accessed at any time. After entering all comments, press [F10] to save them. [ESC] exits the screen without saving comments. Use the Backspace key or [CTRL+U] to erase all comments.

  3. This screen displays automatically before the completion of a return. The comment screens can also be viewed in the browse mode.

1.13.8.5.5  (01-01-2006)
Key Definitions

  1. At any time a list of function keys can be displayed by clicking the mouse on HELP and clicking on KEYS. A list of keys and their associated functions will be displayed. See Exhibit 1.13.8-17 for the main function keys.

1.13.8.5.6  (01-01-2006)
Fast Forward Key

  1. When the fast forward (down arrow) key [] is pressed on an unedited form or schedule, the program will zero-fill all numeric fields up to but not including the next stop point, defined on the screen as a red stop sign engraved with an ‘S’ in the right margin. The down arrow process will stop when a character field is encountered or a test reads out. At this point the editor must make the necessary change to [CORRECT], [ACCEPT], or [USE COMPUTED AMOUNT] by using the mouse or pressing the [TAB] key to select a choice and then pressing [ENTER]. Use this option with caution as it could cause tests to read out if you zero-fill too far. On some schedules, notably the Form 4797, Schedule D, Income/Deduction, Schedule J, and Balance Sheet, the down-arrow will not zero-fill when editing.

  2. When a form or schedule has already been edited, this key moves the cursor forward to the last field on the screen unless it hits a null field or a failed test.

  3. The [ENTER] key must be hit before the [] key can be used again. The [ENTER] key must be pressed at the end of the screen to make the cursor continue to the next screen.

1.13.8.5.7  (01-01-2006)
Fast Backward Key

  1. The fast backward key [] moves the cursor back to the top of a form allowing you to move back through portions of a return previously edited. Once at the top of a form, use the [F12] key to move the cursor back to the bottom line of the previous form. The key works on regular editing screens only.

  2. To move back several screens, it is faster to release the return at the designated schedule and re-edit from there.

1.13.8.5.8  (01-01-2006)
On-Line Help Screens

  1. On-line help screens are available for industry codes; country codes; class/method and convention on Form 4562; general calculator; and on releasing a return by pressing the [F1] key.

1.13.8.5.9  (01-01-2006)
Return Information Screen

  1. During editing, some return information might be helpful. When HELP, then View Control is selected by the mouse during the editing process, the return information will be displayed on top of the editing screen. Click on the [EXIT ICON] to return to the regular editing screen. Pressing the [PAGE DOWN] key displays a pop-up box allowing the user to query for a different scpl / edit_1_2. This information is available to lead editors and N.O. analysts only.

1.13.8.5.10  (01-01-2006)
Prior Year Lookup/BMF

  1. The Prior Year Lookup/BMF function displays current year BMF data for all fields as well as data on any 1120 schedule from the two prior years.

  2. In order to access the prior year lookup, press [ALT+L] on any schedule and then select "Prior Year Lookup/BMF" and the [ENTER] key. The prior year data as well as any edited current year data displays. The prior year data for a specific schedule can only be accessed when the cursor is on that schedule. For example, the prior year data for the Schedule A can only be accessed from the Schedule A screen. For any schedules with allocation screens, the prior year allocations can be accessed by pressing the [ALLOCATION] button.

  3. While in the Prior Year Lookup, press the [VIEW BMF] button at the bottom of the screen to access the BMF information for the current year.

  4. Also, while in the Prior Year Lookup for the balance sheet, income and deductions and Schedule A by pressing the [Allocation] button at the bottom of the screen, you may access the lookups for the allocation screens.

  5. Some of the function keys operate differently than they do for the other lookup schedules. [ENTER] and [F12] scroll up/down one screen at a time; [], [] scroll up/down one line at a time.

1.13.8.5.11  (01-01-2006)
Asset, Liability, Income, Deduction and Other Costs Code Lookups

  1. The asset and liability code lookups display all dictionary items for their respective sides of the balance sheet. The columns are arranged in the order of current asset/liab, non-current asset/liab, and running schedule. The income and deduction code lookups display all dictionary items for their respective sides of the income statement. The other costs code lookup display all dictionary items that may be allocated within Schedule A. The two letter code shows where to move the specific term.

  2. The [F12] places you in the FIND mode to enter a specific term. After entering a specific term, press [F10].

  3. If the lookups were entered from the allocation screens, pressing [F10] next to a term enters the code into the code field. For the balance sheet, pressing [ENTER] toggles between current/non-current/ and running schedule codes.

1.13.8.5.12  (01-01-2006)
Test Number Lookup

  1. The test number lookup is an on-line page reference for all tests in the editing manual. When you press [ALT+L] and select "Test Number Lookup" and the [ENTER] key, all test numbers will display in alpha-numerical order. You may search for a specific test number reference by pressing [F12], entering the test number and then pressing the [F10] key.

  2. If more than one page number is listed for a specific test, it means that there are form types which have separate editing instructions for that test. The page numbers are listed in numeric order and correspond to the order the form types are listed in the manual.

1.13.8.5.13  (01-01-2006)
Test Fired, Industry Code, Country Code, Cost of Goods Code, Form 8825 Code

  1. When in the Lookup menu and "Tests Fired Lookup" is selected followed by the [ENTER] key, you will see the test number and the error code for any test that have fired at that point when in editing and you will see all test that have fired when the return has been completed.

  2. Also, when in the Lookup menu and "Industry Code Lookup " is selected followed by the [ENTER] key, you will get all possible industry codes. See Section 8.2.4(5) for more detailed information.

  3. If "Country Code Lookup" is selected followed by the [ENTER] key, you will get all possible country codes. See Section 8.2.4(5) for more detailed information.

  4. If "Cost of Goods Code Lookup" is selected followed by the [ENTER] key, you will get all possible Schedule A allocation codes. See Exhibit 1.13.8-53(5) for more detailed information.

  5. If "Form 8825 Code Lookup" is selected followed by the [ENTER] key, you will get all possible codes. See the S corporation editing instructions for more detailed information.

1.13.8.5.14  (01-01-2006)
Help Keys Lookup

  1. Press [ALT+H, then K] or click on Help and then Keys, and a listing of all available keys and their functions will be displayed. Listed below are some examples of the more common functions / keys used during editing.

    Function Key
       
    Clear Field / Item Ctrl+U
    Delete F5
    Delete Backwards Backspace
    Enter Comments F6
    Exit Esc or Ctrl+Q
    Pop-Up-Calculator F11
    Previous Record (Backnavigate) Page Up

1.13.8.6  (01-01-2006)
Exiting the Return (See Exhibit 1.13.8-9)

  1. After completing all mandatory and selected forms and schedules for any return type, a return exit screen displays. On this screen, you see [FINISH], [EDIT], and [EXIT] buttons.

    1. If you need to get back into the return, click on the [EDIT] button with the mouse. From here the editor can follow the usual procedures for re-accessing an already completed form or schedule. (See Section 8.8:(2)).

    2. If the return is complete, click on the [FINISH] button as instructed. It is at this point that the record is marked on the system with an edit status code of 'C' for complete. When finished editing, mark the top of the return with a red "E" .

  2. Pressing [ALT] and using the right arrow key accesses the " EXIT" menu in the banner at the top of the screens.
    (You may also use the mouse to select the menu and menu options.)

    Note:

    There are some screens from which you are denied the ability to exit. For example, you may not [EXIT] out of the Forms Selection Screen. In these cases, a message displays preventing your exit.

  3. The EXIT MENU SCREEN allows you options for exiting the return. To choose an option, use the down arrow key to access the drop-down list and place cursor on your choice and press [ENTER]. (You may also use the mouse to select the menu and menu options).

    1. EXIT THIS RETURN — This is the option you will most often choose. If you are in the middle of a return and you exit through this option, the editing status code is set to ‘I’ for incomplete. You will use the EDIT MODE to continue editing this record. The MAIN MENU displays. Follow your service center's procedures for logging out.

    2. MARK FOR LEAD EDITOR — This is to mark a problem return for lead editor review. One case would be the presence of an unresolvable Must Test. The MAIN MENU displays. Follow your service center’s procedures for logging out.

    3. EXIT TO FORM SELECTION SCREEN — See Section 8.3.3:(2) for instructions for making changes to the form selection while in the edit process.

    4. EXIT TO REJECT SCREEN — See Section 8.4:(2) for instructions for rejecting a return after starting it.

    5. RE-OPEN THE RETURN — If you wish to re-edit a portion of the return, the re-open option is available without exiting to the main menu. See Section 8.8:(2) for release instructions.

    6. BROWSE THE RETURN — If you wish to browse the return, this option is available without exiting to the main menu.

    7. If you do not want to exit the return, press [ESC] to return to the point of the return from which you last were.

1.13.8.7  (01-01-2006)
Lead Editor Options (See Exhibit 1.13.8-12)

  1. The lead editors have special system privileges and responsibilities on the system. Each service center defines program responsibilities for its senior editors which involves monitoring editing progress, answering editor questions, contacting National Office analysts when needed, etc. The utilities available under the "Utilities Menu" and include:

    • Reviewing records marked for leads

    • Resetting Busy code

    • Viewing prior year data

    • Using the Communication log


    The Communication and Suggestion logs are available under the "Utilities, Pick a Utility" Menu.

  2. Review Records Marked for Leads (" Utilities" Menu) — When an editor has trouble resolving an error on a record, she has the option to exit the return and designate it as needing lead editor review. The record is given an edit status of " L" — needing lead editor review. Each service center sets up a system for handling lead editor review records. This includes saving and filing returns until they have been reviewed, assigning priority to returns, and assuring the completion of the review.

    1. Choosing REVIEW RETURNS MARKED FOR LEADS displays a pop-up screen with SCPLs coded for review.

    2. Use Up and Down arrow keys to choose SCPL/EDIT-1-2, use the scroll bar on the right of the screen or [PAGE DOWN] / [PAGE UP] keys to scroll down or up a full screen, and use [F10] to select a SCPL or [ESC] to exit to LEAD EDITOR screen. Options to EDIT or BROWSE are located at the bottom of the screen and may be accessed using the mouse.

    3. If the return has been marked for lead editor review because of a Schedule P problem, [F5] may be used to delete all Schedule P data when the cursor is on the Schedule P. Please have editors check the Schedule A, income deduction items carefully as these cannot be restored to their original amounts.

    4. After a record is selected, the lead editor sees the form/schedule, which was last accessed by the editor and the return is edited like a regular edit.

    5. When the lead editor exits the return, the next screen is the screen of L coded returns so the remaining records can be queried.

  3. Reset Busy Code ("Utilities" Menu) — The busy code locks a return so only one person accesses it at a time. Occasionally an event occurs which causes the code to not change. Choosing RESET BUSY CODE takes you to a screen which prompts you for an SCPL and an edit-1-2. When finished entering the information, choose [RESET BUSY] to reset for the one particular return. There is no option to reset the busy code for multiplerecords; you must do each one individually.

  4. Reset Tables for an SCPL (Deleting Records) ("Utilities" Menu) — Lead editors have the responsibility of deleting any records which were edited erroneously. To reset tables for a given SCPL, select "DROP" from the Main Menu - Returns Processing. Enter an SCPL, edit-1-2 and press [CONTINUE], and the system will then prompt you for an EIN. The following are reasons for resetting tables for an SCPL.
    Presence of Insurance companies when not expected. When an editor begins a return and then realizes it has insurance subsidiaries and should be sent to Ogden, reset the record by choosing "DELETE 1504c OR 594 RECORDS" This deletes the record from the database and changes the return type. A report of these records keeps Ogden informed of the returns they should receive.
    Changing Return Type. Once the record is deleted from the database, the editor may re-access the return through EDIT mode and change the return type on the return ID screen. This option does not delete a record from the file. If a record needs deletion from the file, contact the National Office.

  5. Prior Year/BMF Lookup ("Utilities Menu" — The lead editor may access prior year and BMF information for all schedules on the 1120. This option shows all of the schedules in the order that they are edited while the prior year lookup option within a return shows only the information for the specific schedule being edited/browsed. Choosing PRIOR YEAR LOOKUP/BMF displays a screen prompting for an SCPL and EDIT-1-2. The SCPL must be entered. If there is not a match, "NO MATCHING RECORD ON THE DATABASE " is displayed. If there is a match, the EIN and Corporation name display on the appropriate lines. Use the mouse to select the form / schedule that you would like to see prior year information for. Use the [ENTER] and [F12] keys to scroll down and up respectively within the screens.

  6. Communication Log ("Utilities Menu " ) — To facilitate better communication between the processing service centers and the National Office, a two-way on-line communication log is available. Choosing COMMUNICATIONS LOG allows the lead editor to report a problem and review broadcast messages from the N.O. Please provide a solution when sending all commlogs to N.O. In addition, only send commlogs for QUASR mis-matches on returns with Total Assets greater than $50 million.
    Report problems and view messages from National Office with the top screen. Respond to problems reported with the bottom screen. An asterisk in the " in review" area means that the question or problem is currently being reviewed. Users can query problems based on different criteria.
    Communication log key chart:

    [F6] — Initiate or respond to problem
    [F10] — Commit problem or response
    [][] Navigate up and down log entries
    [PAGE DOWN]  
    [PAGE UP] — Navigate between report and response
    [ESC] — Exit
    [F7] — Enters query mode
    [F12] — Backspace
    [CTRL+F3] — Save temporary answer


    Use the following codes to identify the problem type:

    0 broadcast message
    1 taxpayer reporting problem
    2 test problem
    3 system problem
    4 edit manual problem
    9 other problem

  7. Suggestion Log ("Utilities Menu " ) —To facilitate better communication between the processing service centers and the National Office, a two-way on-line suggestion log is available. A system generated e-mail message will be sent to the project lead and co-leads. Choosing the SUGGESTION LOG allows the editor to make a suggestion while editing the return. A suggestion can be viewed only by the editor who reported it and by any lead. Report a suggestion by pressing the [Create Log] button at the main screen. Next, enter a "Topic " and "Test Number" (if appropriate) then place the curser in the suggestion field and type in the suggestion. After typing the suggestion an scpl may be entered prior to pressing [Send[ to submit the suggestion. Suggestions and responses can be reviewed by pressing the [Review Log] button after highlighting the log. All suggestions can be sorted by pressing the appropriate button located at the top or bottom of the column you wish to sort by, while on the main screen. The following is a list of valid status codes: W – waiting (waiting to be reviewed), C – completed (review completed), F – forwarded (accepted, but will be implemented in the following program year).

    1. Suggestion log key chart:

      [F6] Report a suggestion
      [F10] Commit suggestion or response
      [F8] Query a reported suggestion
      [][] Navigate up and down log entries
      [PAGE DOWN]  
      [PAGE UP] Navigate between report and responses
      [ESC] Exit / cancel
      [ENTER] To respond to a suggestion
      [CTRL+F3] Save temporary answer
      [F9] Pop-up lookup window
      [F5] Place return in browse mode
      [F7] Enters query mode

1.13.8.8  (01-01-2006)
Releasing the Return (See Exhibits 1.13.8-13 and 1.13.8-14)

  1. When balancing is achieved on schedules users are restricted from routinely re-accessing and changing amounts. For example, the bottom line of Form 3800 is used in the Schedule J. When both the Form 3800 and the Schedule J are in balance, the system prevents the editor from changing amounts on Form 3800. In this way, navigation restrictions move forward through the return.

  2. The editor may release the schedules for re-edit two ways:

    1. To release a return that you are currently editing, press [ALT] and use the right arrow key to access the "EXIT" menu in the banner at the top of the screen. Use the down arrow to access the drop down list and place cursor on your choice and press [ENTER]. (You may also use the mouse to select the menu and menu options.)

    2. Choose "Re-open" in the 1120 Main menu under "Pick a Function" . Enter an SCPL and select an edit-1-2 and click on [CONTINUE] to release a return already completed. The release screen displays. A return which has been closed out (Release date has been set) cannot be released for re-edit. The release screen shows all forms and schedules in navigation order, and their respective edit status; "D" for done or "X" for not yet complete. Move the mouse to the earliest point on the return that re-access is needed and click on the box for release. The system responds with the question "Do you want to release from ....?" to verify that the correct schedule was released. If incorrect, use the mouse to click on the [CANCEL] box. If correct, use the mouse to select "OK."

    3. The designated schedule and all subsequent schedules are now coded "X" . The original editor may re-access the record through Edit Mode and will be placed on the newly released schedule. If the release process was entered from within the return (on the Exit Menu Screen) the system automatically navigates to the released form. It is not necessary to exit the return. All previously edited amounts appear on the screens and changes may be made as necessary. The editor must cursor through all previously edited screens so that tests will be re-fired. The fast forward key speeds up the process. Press [F1] to access the help screen for the release procedure.

  3. Controlling Re-access to Allocation — When navigating to a form from which allocation has been performed a message appears at the bottom of the screen indicating allocation has been completed. Allocation can be browsed or re-accessed. See Section 8.5.3:(10), for further instructions. Any new allocation entries made at this point will be changed in addition to what was previously done. The editor must be very careful not to duplicate previously entered data. If data was originally edited through allocation, it should be deleted through allocation mode as well.

1.13.8.9  (01-01-2006)
Browse Mode (See Exhibits 1.13.8-13 and 1.13.8-15)

  1. Users may browse returns until they are released — two weeks after the return is completed or quality reviewed. Choosing BROWSE RETURN displays a screen prompting for an SCPL.
    After entering the SCPL, the user is prompted to choose first or second edit. The Return ID screen with the SCPL of the return you wish to review then displays. Press [ENTER]. A Browse Form Selection Screen then displays all form and schedules in navigation order.

    1. Forms which have not been selected (edited) cannot be browsed.

    2. If you wish to begin browse from a particular form schedule, position the cursor and press [ENTER]. The schedule then displays with the cursor in the upper left-hand corner. After the screen has been browsed, the remaining forms or schedules for this return follow.

    3. [ENTER] scrolls forward and [F12] scrolls backward. All workscreens can be accessed during Browse mode. (See (2) below.)

    4. To exit browse at any time, press [ESC]. This automatically returns you to the Browse Form Selection Screen.

  2. While in browse, the allocation and calculation screens can be accessed via the Allo / Calc buttons (will display only when allocation or calculation has been performed). To access any of the lookup screens(including Indy Research), press the [ALT + L] buttons. See (7) for some available keys.

  3. When browsing, it may be necessary to see any automatic processing that may have taken place on the record when it was initially edited. See Exhibit 1.13.8-19 for a list of automatic tests.

  4. After browsing is complete, [ESC] back to the main menu.

  5. Remember, no updating is allowed while in Browse Mode! If changes need to be made, exit browse mode with the [ESC] key and enter Release mode to release the return at the point where corrections need to be made. When you or the original editor re-accesses the record, any field you encounter can be changed, so be certain that only the appropriate fields are updated.

  6. Lead editors can browse any return for their service center. Lead editors may designate the editors as being able to browse only their own returns or any returns for their service center. The leads may change the browse code setting by accessing the "Automated Selection Information" menu under the Reports, QUASAR function. Then they must access the " Change Editor Review Status" in order to change the browse code.

  7. Operational keys in browse include:

    KEY FUNCTION
    [CTRL+F3] On farm schedule: allocation screen displays.
    [F4] Calcscreens display on income statement, balance sheet, 1118, 4562 and 4797.
    [F3] On income statement or balance sheet: allocation screens display.
    [PAGE UP] The previous screen displays.
    [ESC] In allocation or calcscreens: exits the workscreens and returns tot he form. Anywhere else: displays the browse exit screen.
    [F10] Start Browse at a selected form.
    [] Scroll down. Valid only for the multi-year browse schedules.
    [F6] Displays pop-up comments window
    [] Scroll up. Valid only for the multi-year browse schedules.
    [PAGE DOWN] The next screen displays.
    [F7] Display pop-up window containing unique Forms L and/or PC subgroup amounts.
    [ALT + L] When pressed from anywhere within browse, the listing of lookup options will be displayed.

Exhibit 1.13.8-1  (01-01-2006)
SOI Corporations Processing Menu

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-2  (01-01-2006)
2000 Corporations Return Identification

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-3  (01-01-2006)
Return-Types

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-4  (01-01-2006)
1120 Form/Schedule Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-5  (01-01-2006)
1120-A Form/Schedule Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-6  (01-01-2006)
1120-F Form/Schedule Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-7  (01-01-2006)
1120-REIT Form/Schedule Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-8  (01-01-2006)
1120-RIC Form/Schedule Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-9  (01-01-2006)
Exit Menu

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Exhibit 1.13.8-10  (01-01-2006)
Reject Code Selection

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Exhibit 1.13.8-11  (01-01-2006)
Data Elements to Verify on Reject Coded Returns

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-12  (01-01-2006)
Utilities Menu

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-13  (01-01-2006)
Browse/Re-Open Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-14  (01-01-2006)
Re-Open Return-- Form/Schedule Release Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.
** The release screen only shows forms edited or selected to be edited

Exhibit 1.13.8-15  (01-01-2006)
Browse Form Selection

This image is too large to be displayed in the current screen. Please click the link to view the image.
** Edit status appears at the bottom of the screen.

Exhibit 1.13.8-16  (01-01-2006)
Communication Log

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.13.8-17  (01-01-2006)
Special Function Key List

KEY LOCATION FUNCTION
     
[Alt + 3] Farm Income
Allocation screen
Accesses allocation screen for farm
  Allocation screens Accesses prior year and BMF lookup
[F4] Calculation screens Accesses calcscreens associated with the screen on which [F4] is pressed
[F3] Allocation screens Accesses allocation screens associated with the screen on which [F3] is pressed
[Ctrl+P] All screens Print the screen
[F12] All screens Go to the previous field
  Industry Code,
Country Code,
Test Number Lookup
Screens
Goes to Find Field
[F9] Country and Industry
Code Fields
Accesses Country and Industry Code lookup screens
  Allocation Screens Accesses balance sheet, income statement lookups
  Prior year/BMF Lookup Accesses prior year allocation (if available)
  Field with failed
"E" , "V" , or "L" test
Test Release Key: accepts the test condition and stores the test number to the database
[ALT+F8] Industry Code field Access Industry Code Research screen
[Help/View Control on the Menu Bbar] Editing screens Return ID information screen
[F5] Allocation, Calcscreens, General Calculator and Forms 8594, 8824 and 8869 Remove a record
  Indyustry Code Research Access Total Receipts Calculator
[F6] All screens Enter comments screen
[F7] Industry Code Research Access Moody's US
[F8] Fields with "*" attribute Displays original BMF value
  Industry Code Research Access Moody's Int'l
[CTRL+U] Editing screens Clears the current field
[Help/Keys on the menu bar] All fields Displays function key screen
[F11] All fields except those associated with calcscreens Displays on-line general calculator
[F12] Editing screens Returns cursor to previous field
[ESC] All fields except in screens listed below Displays exit menu screen
  First page of Reject Screen Cancels selection and returns to previous screen
  Return ID screen, Lead editor menu, Displays previous menu
  Query Tables Returns to the field without entering a value
  Asset/Liability Code, Income/Deduction Code From the Find Field, moves cursor to main body of the dictionaries. From the main body of the dictionaries, returns to previous screen.
[F10] Allocation screens Runs allocation calculations
  Calcscreens Runs calcscreen calculations
  Exit Menu Screen Selects exit option
  Query Tables Selects code from query table and brings value to appropriate screen
  On-line General Calculator Enters the total amount, from calculator, onto edit screen
[USE COMPUTED] Field with failed test Moves the computed amount from the message line into the field

Exhibit 1.13.8-18  (01-01-2006)
Reject Codes

Use this exhibit to select the appropriate codes as listed on the Reject Code Screen:

Reason
Code
Description
   
01 Inactive returns with no items of income or deductions, including tax-exempt interest. If IR Code 501c or Code 115(1) (with tax-exempt interest on Sch.M-1) is referenced and no tax is reported, then indy code as 525990 and reject the return using code 1. Tax-exempt returns which are not RICs or REITs should be edited as 525990. Exceptions to no items of income or deductions, or tax exempt interest:: (1) 1120S returns when there are Schedule K items of income, deduction, or tax exempt interest present; (2) 1120F returns with any items on Section III, Branch Profits Tax, and (3) 1120RIC with an amount for Schedule B, Line 5, Exempt-interest dividends.
02 Returns previously processed for SOI.
03 Unsigned returns. Typically, these are tax returns that were originally filed as part of a consolidated return and have become separated.
04 Returns on other than Forms 1120, 1120-A, 1120-F, 1120-L, 1120-PC, 1120-REIT, 1120-RIC and 1120S
05 Fraudulent Returns
06 Amended returns not attached to the original returns or to a complete duplicate
07 Tentative returns that are not attached to the final return
08 Information return of certain joint undertakings. These corporations may file an "information" return stating that the data shown on the return is also included in the return of the owners. The taxpayer may refer to themselves as a "Cost Corporation " or may cite Revenue Ruling 52-542.
09 Returns of corporations exempt under Section 934 of the IR Code. These are companies incorporated in the U.S. that conducted all of their business in the U.S. Virgin Islands and received no income from within the U.S.
10 Returns filed by political organizations that should have filed an 1120-POL return. Also include in this code educational, charitable and similar non-profit corporations.
11 Returns filed by General Stock Ownership Corporations that should have filed an 1120-GSOC return.
12 Returns filed by homeowners' associations that should have filed an 1120-H. Section 528 should be referenced.
13 Returns of foreign corporations exempt under Section 883 of the IR Code. These are companies incorporated in a foreign country whose earnings include aircraft, ships or communication satellite systems as specified in Section 883. The company must cite Section 883 or write that its earning are tax-exempt. Just indicating that earnings are from aircraft, ships, etc. is not enough.
14 Information returns reporting no tax due to treaty or convention. These are companies incorporated in a foreign country where no tax is due the US according to Section 894 of the lR Code. Use this code if the 1120-F return reports a F.8833 or makes reference to a treaty-based return position under section 6114 or 7701(b).
15 Information returns of foreign investment companies. These companies are incorporated in a foreign country and are exempt under Section 1247 of the IR Code.
16 Corporations incorporated in the U.S. which conducted all of their business in Puerto Rico, Guam, American Samoa or the Northern Mariana Islands and received no income from within the U.S. These corporations are tax exempt under Section 931 of the IR Code.
17 Use this code for rejected 1120-F returns if code 13 (10) or 14 (11) do not apply. Returns of (nonresident) foreign corporations having no income effectively connected with a trade or business within the U.S. These are incorporated in a foreign country (including Puerto Rico and the Virgin Islands) and show no effectively connected income on pages 3 through 6 of Form 1120-F.
18 Delinquent returns whose accounting period endings are before 07/2003, and who are non-giant returns (assets of less than $250,000,000). Call National Office to see if delinquent Giant returns should be edited. If you have two full year returns of the same ein that are exactly one year apart from each other, you may reject the earlier return. For example if you have a 12/2004 and a 12/2003, you would reject the 12/2003.
  Returns having an invalid accounting period (see page 21-4), and taxpayer indicates the return is merging or final.
  Returns having invalid accounting periods often will arrive in the same workgroup as a return with a valid accounting period. After identifying that the EIN is the same, the older return may be rejected.
19 Other — Consult National Office.
20 Return (should be) edited in another year.
If the reason code is other than those given , then call National Office. Also, enter the specific reason in the comments field for reason code 19 - Other.
When rejecting 2003 returns from the 2004 file during the time when the 2003 file is still open, please verify that the return has been edited for the 2003 file. If it has not been edited and it has Total Assets over $100,000,000, please contact National Office to determine if it should be edited for 2003.

Exhibit 1.13.8-19  (01-01-2006)
Automatic Tests

MOVEMENT OF NEGATIVE AMOUNTS
 
Most negative amounts in the income statement and balance sheet are removed and the schedules are rebalanced through processes run automatically. All negative automatic tests are run at the completion of a return, and all negative balance sheet automatics, A160 through A295, are run after allocation of the balance sheet items. The following table shows what happens in automatic processing when the item in the field column is negative. The items are listed in the order in which they appear on the Form 1120.
TEST NO FIELD RESULT
     
A055 Gross receipts If Cost of Goods > 0,
Gross receipts = 0,
Amount added to Cost of Goods
Amount added to Other Costs on
Schedule A.
Amount added to Total on Sch A.
Amount minus Cost of Good added
 to Generated Gross Profits
If Cost of Good < 0,
Gross Receipts = 0,
Amount added to Income Adjustment
Amount minus Cost of Goods
 added to Generated Gross Profits.
A065 Interest Interest = 0,
Amount added to interest paid,
total income and total deductions.
A070 Gross rents Gross rents = 0,
Amount added to income adjustment
A075 Gross royalties Gross royalties = 0,
Amount added to income adjustment
A080 Other Income Other Income = 0,
Amount added to income adjustment
A085 Compensation of Officers Compensation of officers = 0,
Amount added to deduction adjustment
A090 Salaries and Wages Salaries and Wages = 0,
Amount added to deduction adjustment
A095 Repairs Repairs = 0,
Amount added to deduction adjustment
A100 Bad Debt Deduction Bad Debt Deduction = 0,
Amount added to deduction adjustment
A105 Rents Paid Rents Paid = 0,
Amount added to deduction adjustment
A110 Taxes Paid Taxes Paid = 0,
Amount added to deduction adjustment
A115 Interest Paid Interest Paid = 0,
Amount added to interest,
total income and total deductions
A120 Contributions Contributions = 0,
Amount added to deduction adjustment
A125 Net Depreciation Net Depreciation = 0,
Amount added to deduction adjustment
A130 Depletion Depletion = 0,
Amount added to deduction adjustment
A135 Advertising Advertising = 0,
Amount added to deduction adjustment
A140 Pension, Profit
Sharing Plans
Pension, profit sharing plans = 0,
Amount added to deduction adjustment
A145 Employee Benefit
Program
Employee benefit program = 0,
Amount added to deduction adjustment
A150 Other Deductions Other deductions = 0,
Amount added to deduction adjustment
A160 Cash Cash = 0, Amount added to asset adjustment
A165 Trade Notes and
Accts Receivable
Trade notes and accts receivable = 0
Allowable for bad debts = 0,
Trade notes minus bad debts
added to asset adjustment
A170 Beginning Inventories
(and Ending Inventories GT 0)
The absolute value of beginning inventories is kept in field.
A175 Beginning Inventories
(and Ending Inventories LE 0)
Beginning Inventories = 0
A180 Ending Inventories Ending Inventories = 0,
Amount added to asset adjustment
A185 Government Obligations Government Obligations = 0,
Amount added to asset adjustment
A190 Tax Exempt
Securities
Tax exempt securities = 0,
Amount added to asset adjustment
A195 Other Current
Assets
Other current assets = 0,
Amount added to asset adjustment
A200 Loans to
Stockholders
Loans to stockholders = 0,
Amount added to asset adjustment
A205 Mortgage and
Real Estate Loans
Mortgage and real estate loans = 0,
Amount added to asset adjustment
A210 Other Investments Other investments = 0,
Amount added to asset adjustment
A215 Depreciable Assets Depreciable assets = 0,
Accumulated depreciation = 0,
Depreciable assets minus accumulated
depreciation added to asset adjustment
A220 Depletable Assets Depletable assets = 0,
Accumulated depletion = 0,
Depletable assets minus accumulated depletion
added to asset adjustment
A225 Land Land = 0,
Amount added to asset adjustment
A230 Intangible
Assets
Intangible assets = 0,
Accumulated amortization = 0,
Intangible assets minus accumulated amortization
added to asset adjustment
A235 Other Assets Other assets = 0,
Amount added to asset adjustment
A245 Accounts
Payable
Accounts payable = 0,
Amount added to liability adjustment
A250 Mortgages Less
Than One Year
Mortgages less = 0,
Amount added to liability adjustment
A255 Other Current
Liabilities
Other current liabilities = 0,
Amount added to liability adjustment
A260 Loans From
Stockholders
Loans from stockholders = 0,
Amount added to liability adjustment
A265 Mortgages One
Year or More
Mortgages More = 0,
Amount added to liability adjustment
A270 Other
Liabilities
Other liabilities = 0,
Amount added to liability adjustment
A275 Capital Stock Capital Stock = 0
Preferred Stock = 0
Common Stock = 0,
Amount of capital stock added to
paid-in capital surplus
A295 Ending Retained
Earnings Appropriated
Retained earnings appropriated = 0
Amount added to retained earnings unappropriated
     
OTHER AUTOMATIC CHANGES
     
Listed below are other changes that are made automatically throughout the return. If the condition in the second column exits, the changes described in the third column will automatically occur.
 
Tests A005-A020: NOLD is Net Operating Loss Deduction. The original value of NOLD is stored on the database. "Special Deductions" means "Special deductions " for Forms 1120, 1120-A, and 1120-F, and the sum of " Deduction for dividends paid" and "Section 857(b)(2)(E) deduction" for the Form 1120-REIT.
     
TEST NO CONDITION RESULT
     
A005 Net Income is negative or zero and NOLD is present NOLD = 0
A010/T Net Income is positive but "Special Deductions " are 0 and NOLD is greater than Net Income NOLD is reduced to Net Income.
A015/T Net Income is positive and "Special Deductions " are greater than or equal to Net Income and NOLD is present NOLD = 0
A020/T Net Income is positive and "Special Deductions " are positive but less than Net Income and NOLD is greater than (Net Income minus "Special Deductions" ) Net Income minus "Special Deductions" is moved into NOLD
A022 When SOI Industry Code 522110, 551111 and the return is not consolidated and Cost of Goods Sold is greater than 0 If COGS is less than Gross Receipts (GR), the net amount is moved to GR. If greater, add GR minus COGS to income adjustment and GR is set to 0. Schedule A is nulled.
A025 LIFO Inventory amount is Between 0 and 100 LIFO Inventory percent is set equal to
LIFO Inventory amount.
LIFO Inventory amount is set to 0.
A028 Form 4562, Line 5 is not the correct amount based on Line 2 entry. Line 5 should equal Line 1 minus Line 4 Line 5 is automatically updated to the correct amount, per taxpayer instructions.
A030/A Ending or Beginning inventories greater than 0 for industry codes 523110 - 523900 If return type = ’01', or Total Assets LE 500,000,000. Return is not consolidated. Beginning and Ending Inventories and all cost of goods fields = 0. Ending inventories added to other investments.

COGS is subtracted from GR, if greater than 0, the net amount is moved to gross receipts. If less, the net amount is added to income adjustment and GR is set to 0. Sch. A is nulled.
A035 Ending or Beginning Inventories greater than 0 for industry codes 522110, 522120, 522130, 522210, 522220, 522291, 522293, 522298, 524159, 524210, 524290, 531190, 531210, 531310, 531320,531390 551111. If return type = ’01,' or Total Assets LE 500,000,000. Return is not consolidated. Beginning and Ending inventories and all cost of goods fields = 0. Ending inventories added to other current assets. COGS is subtracted from GR. If greater than 0, the net amount is moved to gross receipts. If less, the net amount is added to income adjustment and GR is set to 0.
Sch.A is nulled.
A036 Ending or Beginning Inventories greater than 0 for industry codes 522292,522294 522300. if return type = ’01’, Total Assets less than or equal to 500,000,000.
Return is not consolidated.
Ending inventories added to mortgage and real estate loans and beginning and ending inventories = 0
COGS is subtracted from GR,
or if greater than 0, the net amount is moved to GR.
If less than zero, the net amount is added to income adjustment and GR is made 0.
Sch.A is nulled.
A040 Ending or Beginning Inventories greater than 0 for industry codes 531110, 531120, 531190. Total Assets LE 500,000,000, and return is not consolidated. Ending inventories added to other current assets and Beginning and Ending inventories = 0.
A050 Net income per books on M-1 and Net income from the front page equal each other, but one is positive and the other is negative. Net income per books is made to equal Net income.
A315 Total Amortization is greater than Other Deductions and Other Deductions = 0 Total Amortization = 0.
A320 Total Amortization is greater than Other Deductions and Other Deductions is greater than 0 Total Amortization = Other Deductions.
A335 Total Assets less than 250,000 and total receipts less than 250,000 and distributions are edited on Schedule M-2 Cash and Property distributions on Schedule K = 0.
A345 Return Type = ‘08’,’10’,‘14’,’20’and total assets GE 250,000 Cash and Property distributions on Schedule K = 0

Exhibit 1.13.8-20  (01-01-2006)
Rebalancing Process and Return Status Codes

Rebalancing Process
The balance sheet will go through rebalancing automatics at the end of the editing process to handle any minor discrepancies. These automatic tests will add or subtract the discrepancy to or from an 'other' field on the schedule. The Income Statement rebalances at the total income/total deduction and net income fields. In addition, the Income Statement rebalances at the Return Completion Screen when the automatic adds or subtracts the discrepancy to or from the income or deduction adjustment field. If Amortization is greater than other deductions, then it will be reduced during the rebalancing process by either one of two tests.
Editing Status Code
 The editing status will be system assigned to flag the record as to its status in the edit process. The code will be set to the following values:
Value Description
U Unedited — The record exists on the database because it was selected and transmitted from the Detroit Data Center/Martinsburg Communication Center, but it has never been accessed for editing.
2 Missing return — The return was selected and a record exists in the database, but the selection files unit has designated the actual hardcopy return as missing.
I Incomplete — The record has been accessed for editing, but the editor exited the return before completing it.
L Lead Editor Review — The record has been designated as needing lead editor review for an unresolvable error condition. The record will be considered incomplete when the editing status code is "L" .
C Completed Record — The last screen selected either by the editor or the system has been committed and there are no must tests existing on the record. The record is now available for quality review.
R Rejected Record — The editor has rejected the record according to the reject process described in Section 8.4.
Or the system has rejected the record because it was a duplicate.
D Done (Service Center Complete) — All service center processing of the record is complete, including editing and review. The record is now available for National Office processing.

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