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Part 21. Customer Account Services

Chapter 2. Systems and Research Programs

Section 5. Miscellaneous Forms and Processing

21.2.5  Miscellaneous Forms and Processing

21.2.5.1  (11-18-2003)
Miscellaneous Forms and Processing Overview

  1. This section provides guidelines for processing loose forms or special taxpayer correspondence worked in various functions in the campuses.

21.2.5.2  (10-01-2002)
What are Miscellaneous Forms and Processing?

  1. Miscellaneous forms include:

    • Special forms requiring exception handling and perpetual maintenance.

    • Loose forms or schedules that should have been attached to a tax return when it was submitted, but are detached due to incorrect processing or being sent in separately by the taxpayer.

    • Computer Paragraph (CP) Notices are generated by the IRS to notify employees or taxpayers of a special circumstance on an account requiring action.

21.2.5.3  (10-01-2002)
Miscellaneous Forms Research

  1. Use all tools available including, but not limited to, IDRS or Master File research. Research the Internal Revenue Code and Regulations as necessary. Use all applicable IRMs and procedures including IRM 11.3, Disclosure of Official Information. Specific references are listed as applicable.

21.2.5.4  (10-01-2002)
Miscellaneous Forms Procedures

  1. Procedures are provided for:

    • Special forms requiring exception handling

    • Special processing of exception accounts requiring "technical" assistance

    • Processing requests for disclosure of taxpayer information

21.2.5.4.1  (10-01-2002)
Loose Forms or Computer Paragraph Notices

  1. Use the following procedures to process various loose forms or computer paragraph notices.

21.2.5.4.1.1  (10-01-2003)
Loose Wage Information Statements

  1. If you receive a loose Form W-2, Wage and Tax Statement, Form 1099R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA, Insurance Contracts, Form 4852, Substitute for Form W-2 or Form 1099–R, Employer's Undelivered Withholding Statements, or Form W-4, Employee's Withholding Allowance Certificate, review the forms, determine the reason IRS has received them, and take the necessary action. Necessary action for Individual Master File (IMF) forms are given below. Business Master File (BMF) forms (having to do with employment tax returns) should be sent to Receipt and Control per IRM 3.11.13.12, Entity Perfection-General.

21.2.5.4.1.1.1  (10-01-2007)
Loose IMF W–2/1099R — Return Filed/Income Reported

  1. Take the following actions when IMF loose Forms W-2/1099R are received, a tax return is filed, and income reported:

    If ... Then ...
    Loose form is Copy A to be filed with Social Security Administration (SSA)

    1. Send TY 06 Forms W-2 received prior to September 2007 to SSA.

    2. Route all others to Reconciliation function.

    3. Dispose of all other forms received without correspondence as outlined in IRM 1.15.29, Records Control Schedule for Submission Processing Campus Records.

    Loose form is Copy B (to be filed with Federal return)

    1. Associate with paper filed return.

    2. If return was filed electronically and is a 2006 tax year or subsequent, destroy W-2.

    3. Research for controlling Document Locator Number (DLN) using Command Code IMFOL. If return found, attach loose form to return. (If secondary filer, research INOLE for primary taxpayer's TIN; then proceed with research for controlling DLN).

    4. Hold form for disposition in accordance with IRM 1.15.29, Records Control Schedule for Submission Processing Campus Records..
    Other copies Hold for disposition in accordance with IRM 1.15.29 , Records Control Schedule for Submission Processing Campus Records.

    Note:

    If loose W-2 Forms are received and the return is filed, however, you cannot determine if the income was reported because the return has not posted to Masterfile yet, input TC930 Push Code. See IRM 21.5.1.4.4.1, TC 930 Push Codes, for TC930 input procedures.

21.2.5.4.1.1.2  (10-01-2005)
Loose IMF W–2/1099R - No Return Filed/Income Not Reported

  1. Take the following actions when IMF loose Forms W-2/1099R are received, no return has been filed, and the income has not been reported.

    If And ... Then
    Loose Copy A received income is not reported or no return is filed.

    1. Send TY 06 Forms W-2received prior to September 2007 to SSA.

    2. Send tax year form prior to 1996 to SSA.

    3. Route all other forms to Reconciliation function.
    Loose Copy D or 1 received  

    1. Return to the payer.

    2. Advise payer to furnish Copy 1 to the appropriate state or local tax authorities if they have not done so.
    Loose Copy B, C, or 2 received there is no record of a return being filed Return copies to payee with Letter 282C (Return Not Received: Copy Requested/Received)or Letter 301C (Individual Return Cannot be Prepared with Information Furnished W-2; 4852 Returned to TP: Form 1040), as appropriate, using all applicable paragraphs and enclosing applicable tax forms.
    Loose Copy B, C, or 2 received there is no indication that income was reported on a filed return

    1. Return copies to payee.

    2. Advise taxpayer to file an amended return including W-2/1099R income or provide a signed copy of return if one was filed.

21.2.5.4.1.1.3  (10-01-2002)
Undelivered Withholding Statements

  1. If the taxpayer’s employer forwards the "federal copy" or "employee copy" of withholding statements to IRS because he/she is unable to deliver them to the employee, return them to the employer to be held in accordance with 26 C.S.R. § 31.6051-1(a)(3).

21.2.5.4.1.1.4  (10-01-2007)
CP Notice 175 and 875

  1. See IRM 21.7.2.4.18.6.4.7, CP 175/875,Unexplained Adjustment to Withholding, Tips, or FICA.

21.2.5.4.1.1.5  (10-01-2007)
CP Notice 177

  1. See IRM 21.7.2.4.24.5.6, Unexplained Adjustment on Form CT-1( CP 177), Employer's Annual Railroad Retirement Tax Return.

21.2.5.4.1.1.6  (10-01-2002)
CP Notice 194

  1. CP 194, Data for Computation of Possible FTD Penalty on Forms 941, 941SS, 720, 940, 943, 943E, 945, informs SC Accounting that an account does not comply with Federal Tax Deposit (FTD) requirements or a FTD transaction was dishonored after return posted.

  2. Process cases using procedures outlined in IRM 20.1.4, Failure to Deposit Penalty.

21.2.5.4.1.1.7  (10-01-2002)
Non-Negotiable Remittances (Form 1040X)

  1. See IRM 21.5.3.4.16.15, Non-Negotiable Remittances.

21.2.5.4.1.1.8  (10-01-2002)
Claims Processing (Form 1040X)

  1. See IRM 21.5.3.4, General Claims Procedures.

21.2.5.4.1.1.9  (10-01-2002)
Certification Forms Received From Withholding Agents

  1. Re-file duplicate copies of certification forms received from withholding agents.

21.2.5.4.1.1.10  (10-01-2003)
Foreign Information Documents Received as Attachments to Returns

  1. Detach Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, 1042S, Foreign Person's U.S. Source Income Subject to Withholding, or other foreign information documents received as attachments or schedules with IMF, BMF or other returns, and send to Philadelphia Campus (PC) for processing. Also:

    If ... Then ...
    Form 1042 or other foreign document is received with Form SS-4, Application for Employer Identification Number, attached for Employer Identification Number (EIN) Forward to PC. Note: If Form SS-4 only is received, receiving campus assigns EIN.
    It is necessary to keep Form 1042 or Form 1042S data attached for processing, audit, etc. Photocopy documents and send originalreturns to PC.

  2. For more information, see IRM 3.15.128, IMF/NMF International DP Adjustments and IRM 3.15.129, BMF/NMF International DP Adjustments.

21.2.5.4.1.1.11  (10-01-2002)
Passive Foreign Investment Company (PFIC) Elections

  1. U.S. shareholders of a PFIC can elect to defer tax on undistributed earnings and capital gains. Process these requests as follows:

    If ... Then ...
    Election is received at other than PC Forward to PC for processing.
    Elections received from PFIC for a Qualified Electing fund which do not indicate an EIN Forward to BMF Entity for EIN assignment.
    Elections received from PFIC for a Qualified Electing fund which indicate an EIN Forward for processing according to IRM 3.21.25, Miscellaneous Tax Returns.

21.2.5.4.2  (11-26-2002)
Corporate Dissolution — Liquidation

  1. Form 966, Corporate Dissolution or Liquidation, must be filed within 30 calendar days after adoption by corporation of a resolution or plan to dissolve or liquidate any of its capital stock.

21.2.5.4.2.1  (10-01-2002)
Form 966 Procedures

  1. Code top of each Form 966 received with name, control, and tax period. Tax period is tax year of final return, indicated in Item 7a of form. Then process as follows:

    If ... Then ...
    Item 7b indicates that final return was filed with a parent corporation Code information from parent company on the document.
    Form 966 indicates a return was never filed A tax period cannot be coded on the return.

  2. After coding, send Form 966 to Returns Files function.

    Note:

    Examination function requests these documents from Files if needed for classification purposes.

  3. CP 198, Push Code Condition, caused by TC 930s being input prior to above processing changes, create no match situations. When this happens, these are returned to the function from Files area. Process these items as indicated above.

21.2.5.4.3  (10-01-2002)
IRC 6905

  1. IRC Section 6905 authorizes Field Directors to grant executors releases from personal liability for decedents' income and gift taxes. Form 5495, Request for Discharge from Personal Liability Under IRC Section 6905, is generally used to request discharge.

21.2.5.4.3.1  (10-01-2007)
Form 5495 Procedures

  1. Process Form 5495 as follows:

    If ... Then ...
    Examination function has return Forward request to Centralized Estate and Gift in Cincinnati.
    Return is not charged out to Examination function Request return, associate return with request, and forward package to Centralized Estate and Gift in Cincinnati.

  2. Prepare Letter 738C, Decedent Income/Gift Tax Return; Personal Liability Discharge Request, to inform taxpayer request is being processed.

21.2.5.4.4  (10-01-2002)
Postal Service Mail Loss/Rifling Report — PS Form 1510

  1. PS Form 1510, Mail Loss/Rifling Report (formerly U.S. Postal Service Mail Non-Delivery Report), is prepared by the Postal Service when an inquiry is received about delivery of a return or return information.

21.2.5.4.4.1  (10-01-2002)
PS Form 1510 Procedures

  1. IRC Section 6103 prohibits IRS from disclosing this return or return information without appropriate taxpayer authorization. Take the following actions:

    1. Research to verify receipt of item in question.

    2. Prepare a letter in duplicate and respond directly to taxpayer informing him/her of your research findings.

    3. Complete PS Form 1510 and prepare Letter 135C, Power of Attorney Needed to Furnish Information, to send to taxpayer. Advise taxpayer we are prohibited from providing information about their return to third parties without written authorization; therefore, we are returning PS Form 1510 to them.

21.2.5.4.5  (10-01-2002)
Application for Change in Accounting Method — Form 3115

  1. See IRM 21.7.4.4.15, Form 3115, Application for Change in Accounting Method.

21.2.5.4.6  (10-01-2007)
Exempt Organization or Employee Plan Photocopy/Public Inspection Requests

  1. See IRM 21.7.7.3.6, Public Inspection.

21.2.5.4.7  (10-01-2002)
Technical Unit

  1. See IRM 21.7.1.4.10, Technical Unit.

21.2.5.4.8  (11-24-2004)
SSA Correspondence

  1. See IRM 4.19.6.2, SSA Correspondence.

21.2.5.4.9  (11-24-2004)
Minister Waivers - Form 4361

  1. See IRM 4.19.6.3, Minister Waivers - Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders.

21.2.5.4.10  (11-24-2004)
Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits/Form 4029

  1. See IRM 4.19.6.4, Application for Exemption from Social Security and Medicare Taxes and Waiver of Benefits/ Form 4029.

21.2.5.4.11  (10-01-2003)
Extensions of Time to File and Pay Individual Tax Returns

  1. Extensions of Time to File, "Dummy" Extension Applications, and Reconsideration of a Denied Request for Extension of Time to File are covered in IRM 3.11.212, Applications for Extension of Time to File.

21.2.5.4.11.1  (10-01-2007)
Letter Requests for Extension of Time to Pay or File and Pay

  1. Process requests for extension of time to pay or file and pay as follows:

    If ... Then ...
    Taxpayer requests extension of time to pay tax due because he/she cannot pay, refuses to pay, will pay later, or wishes to pay in installments Forward letter directly to campus Collection Operations for appropriate action.
    Taxpayer is requesting an extension of time to file and pay

    1. If the letter request was submitted before the due date of the return and shows the full amount properly estimated as tax, then process the letter requests for extension of time to file. See IRM 3.11.212.1.7 to determine if the request was timely.

    2. Send a letter to the taxpayer with the "dummy" application indicating that the extension of time to file is approved but that the extension of time to pay is denied. Use the following statement as a guide:
      "We have approved your request for an automatic six month extension of time to file your income tax return. However, no extension of time to pay your tax is allowed. Although an extension of time to file your return does not require a payment being made, the extension of time to file doesnot extend the time for payment of tax. You may file your return and pay your tax any time before the extension of time to file expires. However, you will owe interest on any tax not paid by the regular due date of your return. The interest runs until you pay the tax." "You may also be subject to a late payment penalty. The penalty is usually 1/2 of 1% of any tax not paid by the regular due date. It is charged for each month or part of a month the tax is unpaid. The maximum penalty is 25%. The late payment penalty will not be charged if you can show reasonable cause for not paying on time. Attach a statement to your return fully explaining the reason. You are considered to have reasonable cause for the period covered by this automatic extension if at least 90% of your actual tax liability is paid before the regular due date of your return through withholding, estimated tax, or with your request for an extension of time to file."

    3. If the letter was not timely received or the request cannot be processed, then follow the procedures in IRM 3.11.212, as appropriate.

    Taxpayer is requesting an additional extension of time to file beyond six months due to taxpayer living and working abroad or serving in the military abroad See IRM 3.11.212.1.3 for approval criteria and processing instructions. No notification is sent to taxpayer unless request is denied.

21.2.5.4.11.2  (10-01-2007)
Extensions of Time and Waivers for Information Returns

  1. IRM 2.7.7.14.2 through IRM 2.7.7.14.6 describes MCC procedures for processing requests for:

    • Extension of time to file paper or magnetic media for Forms 1098, 1099 series, 1042-S. 5498, 8027, W–2G, W–2, and W–3.

    • Waiver from magnetic media reporting requirements for Forms 1098, 1099 series, 1042-S, 5498, 8027, W–2G, W–2, and W–3.

  2. Requests are made on Form 8809, Request for Extension of Time to File Information Returns, or in a letter.

  3. Forward requests received in another IRS office within 3 work days, to the following address:

    Internal Revenue Service
    Martinsburg Computing Center
    Information Reporting Program
    Attention: Extension of Time Coordinator
    240 Murall Drive
    Kearneysville, WV 25430

21.2.5.4.11.3  (10-01-2002)
Form 5713 — International Boycott Report

  1. The time to file a Form 5713, International Boycott Report, is only extended (automatically) if the taxpayer has received an extension of time to file his/her income tax return. Otherwise, no extension is allowed.

21.2.5.4.11.4  (10-01-2002)
Extensions of Time to File Involving Research Credit Suspension Periods

  1. Extensions of time to file will be granted for taxpayers affected by research credit suspension periods. Taxpayers requesting an extension should note at the top of the request "Research Credit Suspension Period" . On Form 4868,Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, they should also include the amount of the suspended research credit on the line for total payments.

  2. Since the taxpayer cannot take the suspended credit on an original return, the possibility exists of failure to file, failure to pay, and/or estimated tax penalties generating when the original return posts. See IRM 21.7.4.4.8.3.4, Credit for Increasing Research Activities, Form 6765, for adjustment procedures.

21.2.5.4.12  (10-01-2004)
Deferment of Payment of Taxes

  1. For deferment of payment for military personnel, refer to procedures in IRM 5.19.1.7.9, Military Deferment and IRM 5.19.1.7.10, Combat Zone Accounts.

21.2.5.4.12.1  (01-13-2005)
Processing Requests for Deferment of Federal Taxes

  1. Forward requests for deferment of payment of federal taxes to appropriate Field Office, Attention Chief, Insolvency Office (formerly Special Procedures function).

  2. Process Form 1127, Application for Extension of Time for Payment of Tax, as follows:

    If ... Then ...
    An unprocessed Form 1127 is received in field office Forward to appropriate Technical Services Office, Attention: Group Manager, Advisory (formerly Special Procedures function).
    A copy of an approved Form 1127 is received in field office Process it in field office to delay enforced collection action.
    Form 1127 refers to a MF tax form Immediately input a TC479 as instructed on Form 4844, Request for Terminal Action.
    Form 1127 refers to a non-MF tax form Process as outlined in IRM 3.21.25, Miscellaneous Tax Returns.


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