21.7.7  Exempt Organizations and Tax Exempt Bonds (Cont. 2)

21.7.7.4 
Exempt Organization Procedures

21.7.7.4.15 
Routing Exempt Organization Correspondence Issues

21.7.7.4.15.3  (05-25-2012)
EO Issues Routed to EO Entity Control (OSPC)

  1. Route the following issues to OSPC's EO Entity Control at MS: 6273:

    • Mismatch of Subsection Code, Foundation Code, type of return filed, or IRC section;

    • EO section not on ENMOD;

    • Name changes (Proof of name change must be provided. This can be in such forms as articles of incorporation or by-law changes, articles of amendment, formal notification to the Secretary of the resident state, or formal minutes of meetings.) This includes organizations without a formal exemption (including subordinates included in a group ruling and government entities/instrumentalities).

      Note:

      If the entity has a formal exemption (either with an individual ruling or as a central organization in a group ruling) or the filer is requesting an affirmation letter, route the documentation to:
      Internal Revenue Service
      TE/GE Correspondence Unit Room 4024
      PO Box 2508
      Cincinnati, OH 45201
      Fax: 513-263-4330

    • Inquiries requesting a change in filing requirement;

    • EO Form 1128, Application to Adopt, Change, or Retain a Tax Year;

    • All correspondence stating the following -
      "We are not required to file"
      "We are not an exempt organization"
      "We are no longer a charter credit union"
      "Out of business"
      "No longer a group (no longer an affiliate of this group)."

    • Inquiries stating the exempt organization is "out of business," "terminated" or "dissolved" ;

    • Organization stating it files as part of a group

      Note:

      Basic research must be completed by EO Accounts before routing.

    • Requests for copies of the SGRI listing or to be added to the SGRI listing.

    Note:

    If the account is in status 97, follow procedures in IRM 21.7.7.3.2.1.3 before routing to Entity.

  2. When MF indicates a different accounting period than the one indicated in correspondence from the organization, inform the organization to elect the change by timely filing the applicable information return (for example, Form 990, Form 990-EZ, Form 990-PF, Form 990-T, Form 990-BL, or Form 1065) for the short period for which the return is required. Indicate on the return that a change in accounting period is being made ( Revenue Procedure 85–58). If the organization has already changed its FYM within the last ten years, it must submit a Form 1128.

    Note:

    These procedures do not apply to farmer's cooperatives exempt from Federal income tax under IRC 521 or to organizations described in IRC 526, IRC 527, or IRC 528. These organizations file their change in accounting period applications on Form 1128 , Application to Adopt, Change, or Retain a Tax Year Period.

21.7.7.4.15.4  (01-01-2015)
EO Informant Letters, Information Items, and Referrals

  1. Route third-party correspondence or any Service prepared document which alleges potential noncompliance with a tax law on the part of an exempt organization (e.g., taxpayer informant letters, information items, referrals) to the address shown below. Form 13909, TE/GE Referral Information Report, may be used for referrals.

    Internal Revenue Service
    1100 Commerce St
    Attn: EO Group 7993 MC 4910 DAL
    Dallas, TX 75242
    Fax - 214-413-5534

  2. Do not establish an AIMS account. If an examination is warranted, EO Classification will establish an AIMS account.

21.7.7.4.16  (01-01-2015)
EO Claim Procedures

  1. All EO claims and amended returns must be forwarded to OAMC , EO Accounts units. On site classification is available for claims/amended 990-T returns with an attached Form 8941 or amount on line 44f.

  2. All claims and/or amended returns for a Form 990-T with an attached Form 8941 or amount on line 44f of the 990-T (even if there is other unrelated business income on the return) will require additional review before approval of the claim.

  3. Payments made after March 1, 2013 for the 45r credit (line 44f) are subject to a reduction of 7.3% due to sequestration.

  4. Prior to completion of the programming, Accounts Management will receive requests to issue manual refunds for those accounts which are in interest jeopardy.

  5. When a request for a manual refund is received, take the following actions:

    • Research to ensure the organization's EIN is correct.

    • Ensure the amount of credit on line 44f is reduced by 7.3%.

    • Prepare Form 5792 (or Form 3753 for 990-T, 45R direct deposit refunds or refunds in excess of $10,000,000 to issue manual refund. Include remarks which state the "refund amount is being reduced by 7.3% due to sequestration."

    • Issue a 3064C letter to the filer using the approved sequestration language.

  6. EO claims meeting CATA criteria must be routed to either EO Classification or directly to the EO Exam Area Offices. For additional information refer to IRM 21.7.7.4.17.3, Routing Procedures for EO CATA Cases.

  7. If the claim or amended return is not assigned to a Revenue Agent, route the case to the appropriate address shown below. An AIMS control must be established prior to routing the case. Refer to Exhibit 21.7.7–1 for Form 5597 preparation. Route the following cases to the EL Monte, CA address,

    • Amended Form 990-T reporting a tax liability decrease greater than tolerance (with the exception of a Form 990-T with a Form 8941 attached or an amount on line 44f) Refer to IRM 21.7.7.4.16.2.

    • Amended Form 990-PF reporting an IRC 4940 (tax on net investment income) tax decrease greater than tolerance. Refer to IRM 21.7.7.4.16.2.

    • Form 4720 requesting abatement of Chapter 42 excise taxes.

    • Form 4720-A requesting abatement of 2nd Tier Chapter 42 (Section 4962 abatement) excise taxes. Form 4720-A requests for abatement of Section 4962 excise tax should be referred to the unit Subject Matter Expert who will refer the request to the field.

    • Requests for penalty reconsiderations which were previously denied by the field.

    • Cases/returns with issues related to prior field examinations.

    • Claims from credit unions regardless of dollar amount.

      Note:

      Claims for credit unions should be sent % Jenny Tran using the address below.

    Internal Revenue Service
    1100 Commerce St M/S 4910 DAL
    Attn: EO Group 7999
    Dallas, TX 75242–1100

  8. If the case shows an open AIMS control in status 09 or above, forward the case directly to the applicable EO Exam Area Office. Cases with status 08 or below are worked in EO Accounts Management. Initial research must be conducted via CC AMDISA in order to determine the Employee Group Code (EGC). The EGC address' can be found on SERP under the "Who/Where" tab, "EXAM Employee Group Code (EGC) Contacts" bullet.

  9. If the EGC is 772X, prepare a Form 3210 and route the case to the Exempt Organization Compliance Unit (EOCU), MS: 1112. Annotate "CLtoEOCU" in the Activity field on TXMODA.

  10. If the group code is other than 772X, continue compiling the claim package as outlined below and forward case directly to the related Employee Group Code (EGC) as outlined above.

  11. Prior to routing a case to the Field, the tax examiners must compile a complete claim package which consists of the following information:

    1. A copy of the original return from OL-SEIN. If the return is not available via OL-SEIN, request the original return from Files (two attempts must be made to secure the original return). If the original return is not available, a complete print of BRTVU must be included.

      Reminder:

      Do Not send the original return to the Field.

    2. Complete print of TXMODA.

    3. If the claim involves a NMF account (Form 4720-A) a NMF transcript must also be included.

    4. Print of AMDISA if the account has an open TC 420/424 on the module.

    5. Complete either Form 3499 or Form 12839 routing slip. In the "Remarks" field (on Form 3499) or the " Note to Exam" field (on Form 12839), provide a detailed explanation as to why the claim is being referred to the Field.

    6. The case must be clearly stamped with the tax examiner's name or IDRS number, telephone number and date.

    7. Completed Form 5597 or 5588 (AIMS card).

  12. Once the claim package is compiled, the tax examiner will:

    1. Update the Activity field to "EO CATA" ,

    2. Send 86c letter to organization ( allow 90 days for response, and

    3. Place the complete claim package in the team tub for review by the unit lead.

    All claims must be reviewed and initialed by the unit lead prior to routing the claim to the Field.

  13. For EP Form 990-T claim procedures, refer to IRM 21.7.7.4.16.9.

  14. Refer to the table below in determining when and where other amended returns or penalty abatement cases should be routed.

    Reminder:

    All EGC 772X are routed to EOCU.

    If And Then
    amended return or
    penalty abatement request is received, (case is other than a 990–T claiming 45R credit)
    no AIMS control (i.e., TC 42X) is present on the module or does not meet CATA criteria, 1. Do not route to the field.
    2. Resolve case issue using established procedures.
    amended return is a 990–T claiming 45R credit or claiming the credit and reporting tax no AIMS control and the following criteria is met:
    • Account has a F941/943 or 944 filing requirement.

    • Medicare wages are greater than zero and not more than $1.5 million.

    • Average number of employees is 25 or less.

    • The credit claimed on the return is not greater than the amount calculated using the 45R worksheet.

    • Credit is not greater than $24,742.

    • Employment code "F" , "G" ," T" or "A" is not present.

    • EO Status Code 01, 02, 07, 10, 11, 21, 24 or 25

    1. Process the return.

    2. Allow the credit.

    3. Credit should be applied to tax, offsets or if requested credit elect without reduction due to sequestration.

    4. If actions result in a refund, ensure the amount is reduced by 7.2% (current sequestration rate.)

    amended return is a 990–T claiming 45R credit or claiming the credit and reporting tax no AIMS control but the criteria listed above is not met
    1. Route the case to the P&A Analyst responsible for EO/EP at M/S 2100.

    2. Do not close the CIS case.

    3. The analyst will discuss with GE Technical advisor.

    4. The analyst will provide specific instructions for closing the case.

    amended return or
    penalty abatement request is received,
    an open TC 420/424 is present on the module, 1. Research AMDISA in order to determine the related Primary Business Code (PBC) and Employee Group Code (EGC).
    2. Make two attempts by phone or email to contact the RA assigned to the AIMS case to see if he/she wants the penalty abatement request or amended return associated with their case. If they determine the case should be forwarded to them, attach the AMDISA print to case file and route the amended return/abatement request to the corresponding address associated with the specific EGC. If unable to contact the RA after two attempts, notate in case notes all contact attempts, attach email or any other documenation and forward the case to the specific EGC. EGC address' can be found on SERP under the " Who/Where" tab, "EXAM Employee Group Code (EGC) Contacts" bullet.

    Note:

    Managerial or Lead approval is required prior to sending to the RA to ensure two attempts were made to contact the RA.


    3. Send CRX letter 86c to taxpayer informing them the case has been referred to the Field for resolution.

    Note:

    Enter the EGC manager's name and telephone number as the contact person in the 86c letter.

    amended return is received, or
    penalty abatement request is received,
    a TC 421 is on the module, 1. Resolve the case issue based on existing guidelines.
    2. Attach the amended return to the original return with a TC 290 .00, in block 18.

21.7.7.4.16.1  (01-01-2015)
Claim for Refund/Reconsideration ≡ ≡ ≡ ≡ ≡ or Less

  1. OAMC EO Accounts unit tax examiners may allow or disallow claim/reconsideration requests ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (excluding EP Form 990-T) with the exception of the following:

    • An open TC 420/424 is present on the module

    • Non-Master File (NMF) accounts (i.e., Form 990-BL , Form 4720-A )

    • EO Protective Claims (see IRM 21.5.3.4.7.3)

    • Former closing agreements

    • Requests for an immediate examination of the claim

    • Resubmitted claims previously disallowed by the EO Accounts unit based on instruction from the EO classifier with no additional information provided

    • Tax decreases if organization did not successfully accomplish a 60-month IRC 507(b)(1)(B) termination

    • Case is assigned to group code 772X (EOCU)

    • Madoff or Ponzi scheme related claims (regardless of dollar amount.

    • Virgin Islands tax abatements

    • Form 990-T with credit claimed on line 44f or a Form 8941 attached.

  2. OAMC EO Account unit leads may contact the EO Exam Classifier via telephone regarding any claim for refund, reconsideration requests or technical issues if they are not sure whether to allow or disallow the issue. The EO Classifier will provide technical guidance as to whether the case should be routed to the Field for further action or resolved in EO Accounts.

21.7.7.4.16.2  (01-01-2015)
Claim for Refund/Reconsideration ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  1. Claims or reconsiderations ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ are forwarded directly to the Field. Prior to routing, a complete claims package must be compiled and reviewed by the unit lead. The claim package must include the following items.

    • A copy of the original return from OL-SEIN. If the return is not available via OL-SEIN, request the original return from Files. (Two attempts to secure original return must be made). If the original return is unavailable, include a complete print of BRTVU.

      Reminder:

      Do Not send the original return to the Field.

    • Complete print of TXMODA.

    • If the claim involves a NMF account a NMF transcript must also be included.

    • Complete Form 5597 or Form 5588 for AIMS establishment. Refer to Exhibits 21.7.7–1 and 21.7.7–2.

    • Update the activity field to "EO CATA" on TXMODA and close the control base.

    • If a balance due is present and no -A freeze on the account, input a STAUP for 6 cycles.

    • Send 86c letter to the organization. Allow 90 days for response.

    • Prepare applicable routing slips.

    • Provide a detailed explanation on Form 3499 or Form 12839 as to why the case is being referred to the Field.

    • Case must be reviewed and initialed by the unit lead prior to routing the claim to the Field.

  2. Refer to the routing procedures outlined above in IRM 21.7.7.4.16.

21.7.7.4.16.3  (01-01-2015)
EO Protective Claims

  1. Claims or amended returns based on expected changes in any of the following areas are considered protective claims:

    • A current IRC or regulation;

    • Pending legislation; or

    • Current litigation.

  2. Refer all protective claims to the Field at the address shown below.

    Internal Revenue Service
    9350 Flair Dr 4th Flr
    TE/GE EO Classification
    EL Monte, CA 91731-2828

  3. If there is an open AIMS control on the account in status 09 or above refer to procedures outlined in 21.7.7.4.16 above.

21.7.7.4.16.4  (01-01-2015)
EO Forms 4136

  1. Form 4136 (or a statement showing the computation of tax) is used by state and local governments or nonprofit educational organizations that are not liable for excise tax on gasoline or special fuels. Form 4136 can be filed with Form 990-T and Form 1120-POL.

  2. Government or tax exempt organizations cannot file a claim for payment or refund if it is known another person is entitled to file a claim for the same fuel.

  3. Verify and compute the amount to be refunded. Follow the table below:

    If Then
    the claim cannot be processed due to lack of information or you are using "no consideration procedures" , 1. Send the taxpayer a 916C letter.
    the claim is disallowed, 1. Input TC 290 .00 in Blocking Series (BS) 98/99.
    2. Send the taxpayer letter 105C.
  4. See IRM 21.5.3 for more information on claims. See IRM 21.6.3.4.2.6 for additional information on fuel tax claims.

21.7.7.4.16.5  (01-01-2015)
EO Windfall Profit Tax

  1. If a claim or amended return is received requesting credit or refund of Windfall Profit Tax, route to Austin Compliance Center. Send letter 86C to taxpayer. Allow 90 days for response.

21.7.7.4.16.6  (01-01-2015)
IRC 4958 and IRC 4962 Abatement Request Procedures

  1. IRC 4958 and IRC 4962 establishes excise taxes as an intermediate sanction where applicable tax-exempt organizations engage in excess benefit transactions with disqualified persons. These excise taxes are imposed on disqualified persons who benefit from excess benefit transactions and on organization managers who participate in these transactions knowing that they are excess benefit transactions.

  2. A disqualified person is any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization at any time during the five year Lookback period.

  3. The "Initial Tax" or "First Tier Tax" is an excise tax equal to 25 percent of the excess benefit from each excess benefit transaction between an applicable tax-exempt organization and a disqualified person. When this occurs, Form 4720, Part I is completed.

  4. When the 25-percent tax is imposed on an excess benefit transaction between an applicable tax-exempt organization and a disqualified person, and the excess benefit transaction is not corrected within the taxable period, an additional excise tax equal to 200 percent of the excess benefit is imposed on the excess benefit transaction. This tax is referred to as the "Additional Tax" or "Second Tier Tax" . In this situation, Part II of Form 4720 is completed. During processing, if Part II information is present, a Form 4720-A is prepared. (Refer to IRM 21.7.7.4.11.3 for more information.)

  5. Delegation Order No. 237 (Rev. 2), dated November 14, 1997, does not authorize Directors, Submission Processing or Accounts Management Campuses to abate qualified First or Second Tier excise tax amounts imposed by Chapter 42 of the Internal Revenue Code. All IRC 4958 and 4962 requests or claims for abatement of First or Second Tier Chapter 42 taxes are sent directly to the Field.

  6. Prior to routing the case to the field, a TC 150 must be posted to Master File and the following items must be attached to the claim or correspondence request.

    • A copy of Form 4720 from OL-SEIN. If return is not available via OL-SEIN, request the original return from Files (two attempts must be made). If unable to secure the original Form 4720 from Files, attach Form 4125 (charge-out document) to the case file. If the initial charge out indicates the original return is in SOI, do not submit a second request.

    • Taxpayer’s letter of explanation.

    • If claim is requesting abatement for Second Tier tax, attach a NMF transcript .

    • Complete prints of TXMODA & BRTVU.

    • Completed Form 5597 (See Exhibit 21.7.7–1 or 21.7.7–-2).

    • Send an 86c letter (allow 90 days for response) to the taxpayer and prepare applicable routing slips.

    • Case must be reviewed and initialed by the unit lead prior to routing the claim to the field.

  7. IRC 4958 and IRC 4962 requests for abatement must be sent directly to the EL Monte Field office for review at the following address.

    Internal Revenue Service
    9350 Flair Dr 4th Flr
    Attn: EO Group 7999
    EL Monte, CA 91731-2828

21.7.7.4.16.7  (01-01-2015)
Form 8941 Claims

  1. The Patient Protection and Affordable Care Act (ACA) created a new tax credit to encourage small employers to provide health care coverage to their employees. Form entities exempt from tax under the provisions of IRC 501(c), the credit is refundable and is only claimable by filing a Form 8941 with a Form 990-T.

  2. Returns filed normally are filtered for compliance purposes prior to processing. In some instances, amended or superseding returns may be filed that will bypass the compliance review process.

  3. Detached Form(s) 8941 or F8941s filed separately to claim the credit, amended returns and claims will be sent to EO Accounts Management for processing.

  4. Use the following table to resolve:

    IF THEN
    A Form 990-T was filed claiming the credit and the credit was previously allowed, input a TC 290 for zero to attach the F8941 to the posted 990-T.
    A Form 990-T was filed but the credit was previously disallowed or the filer is amending to increase the credit,
    1. Apply the criteria in 21.7.7.4.16 (14).

    2. If a previous disallowance is due to an exam, route the case to the P&A Analyst at M/S 2100.

    3. If the claim passes the criteria requirements, and was not previously disallowed by exam, input the adjustment TC 290. Use BS 46 to indicate an adjustment to a sequestered account. If computer condition code "C " is not present on BRTVU, do not use BS 46 because the adjustment will unpost.

    A Form 990–T is filed and the amount on Line 44f is the same amount or less than the amount on the return previously filed, work the case following normal amended return procedures.
    A Form 8941 is filed but a 990-T filing cannot be found, return the F8941 to the filer instructing them to complete a Form 990-T and attach.
    A filer files a Form 843 to claim the credit, return the F843 to the filer and instruct them they must complete F990-T and 8941 to claim the credit.
    A filer indicates they are not entitled to the credit and returns the refund Input a TC 290 with reference number 291 (-) to remove the credit.
    A -L freeze is present on the account Send to GECU M/S 7700.
    The claim is for a tax period prior to 2010 Deny the claim. Input a TC 290 with blocking series 98. Send 105C letter.
  5. When classification is complete, take the following actions based on the information provided by the EOCA Technical Advisor and AM P&A Analyst.

    Note:

    An email will be sent by the EOCA documenting the appropriate actions. The email should be attached to the case when it is returned to the TE.

    If Then
    The increase in credit is approved Input a TC 290 CRN 291 using BS 46 to allow the credit.

    Note:

    If CCC C is not present on BRTVU do not use BS 46 because the adjustment will unpost.

    If the 45 day interest is in jeopardy, consideration should be given to issuing a manual refund when the overpayment to be refunded is $5,000 or more. Refer to manual refund guidelines found in IRM 21.4.4, Manual Refunds. When issuing any refund, the refund portion related to the 45R credit must be reduces (sequestered) by 7.3%.
    Selected for audit Establish the account on AIMS and route the entire case to GECU M/S 7700. The following information should be included on the Form 5597:
    • Source Code - 79

    • Primary Bus. Code - 414

    • Secondary Bus. Code - 00000

    • Status Code - 10

    • Project code - 1073

    • Emp. Grp. Cd - 7203

    • Activity Code - 394

    • All other information should be completed as outlined in 21.7.7 - 2.

    Correspondence is received in EO Account providing requested incomplete or missing information, forward the case to the AM P&A Analyst responsible for EO/EP.

    Input the adjustment via TC 290 with credit reference number 291 with BS 46.

  6. Ensure a TC 971/356 is input with the amount of credit allowed.

21.7.7.4.16.8  (01-01-2015)
Sequestered 990-T Returns With 45R Credit, Offsets, Credit Elect and Tax

  1. Current programming sequesters 7.3% of all 45R refundable credits. If a 990-T with 45R credit owes tax the 45R credit should not be reduced. The filer must be allowed the full credit when offsetting tax, other outstanding IRS obligations or credit elect to a future tax obligation. Only the 45R refundable amount should be subject to the 7.3% reduction. Because this cannot be accomplished with the current programming, the accounts will be posted to Master File as a TC 150 for zero and will require adjustment manually in Accounts Management.

  2. EO Accounts will receive lists from SPP of EINs of Form 990-T with 45R credit and tax.

  3. When the list is received from SPP take the following actions:

    1. Obtain a copy of the 990-T return from SEIN.

    2. Follow the criteria in 21.7.7.4.16 table.

  4. If the account passes the criteria found in 21.7.7.4.16 table, take the following actions:

    1. Assess any tax due on the account.

    2. Input a TC 290 CRN 291 for any credit due. Credit should be allowed in full if offset by tax. For example, if tax is $1,000 and credit is for $500, the total credit should be allowed, However if tax is $500 and credit is $1,000; $500 of the credit should be applied to tax and $500 should be reduced by 7.3% and the reduced amount input on the TC 290 CRN 291.

    3. If there is any other outstanding balances, the credit should not be reduced if the entire credit will be applied to another obligation.

    4. If the filer is electing to apply the credit to a future tax period, the credit should not be reduced.

    5. If a refund is due, reduce the 45R portion of the refund by 7.3% and prepare a manual refund.

  5. If the credit should not be allowed, refer to IRM 21.7.7.4.16.7 (5) table for resolution.

    Note:

    If credit is not approved, EO Accounts will still be required to assess the tax or other credits to the account.

21.7.7.4.16.9  (01-01-2015)
American Recovery and Reinvestment Act of 2009

  1. The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law on February 17, 2009. Section 1211 provides an extended carryback period for "eligible small businesses" sustaining a net operating loss in tax year 2008. The provision allows taxpayers that are eligible small businesses to elect a 3, 4, or 5-year carryback period for a 2008 Net Operating Loss (NOL).

  2. The provision applies to net operating losses arising in taxable years ending after December 31, 2007. The new provision, enacted as part of ARRA, enables small businesses with a net operating loss (NOL) in 2008 to elect to offset this loss against income earned in up to five prior years. Typically, an NOL can be carried back for only two years.

  3. Revenue Procedure 2009-26, published on April 24, 2009, (supersedes Revenue Procedure 2009-19) provides modified guidance to taxpayers on how to make the election.

  4. Refer to IRM 21.5.9 for detailed procedures in regards to processing carrybacks.

21.7.7.4.16.10  (01-01-2015)
Form 990-T Employee Plan (EP) Claim Procedures

  1. An Employee Plans Trust is a trust opened to hold the money from a retirement plan. The money in the trust is put into various accounts such as Savings Accounts, Certificate of Deposits, Stocks or Limited Partnerships. The money is invested in hopes of receiving interest, dividends or a return of the partnership's income. When a trust invests in a partnership that generates income from a trade or business that is not substantially related to the exempt organization's purpose, it is considered Unrelated Business Income (UBI). The Unrelated Business Income and related tax is reported and paid on Form 990-T.

  2. Schedule(s) K-1 substantiates the amount reported on Line 30 of Form 990-T and should be attached to the return. However, if Schedule(s) K-1 is not attached to the original return during initial processing, the Form 990-T will still post to MF. No correspondence is issued requesting the missing K-1.

  3. Form 990-T EP accounts can be identified by researching the entity portion of the module. EP Form 990-T filers are required to apply and enter an EIN assigned to the 401(a) Trust. EP Form 990-T has a filing requirement code 02 and no EO subsection. Form 990-T is required to be filed by the 15th day of the fourth month following the end of the tax period.

  4. The local tolerance level for Form 990-T EP claims was increased to ≡ ≡ ≡ ≡ ≡ ≡ . This tolerance amount allows the Ogden Accounts Management Campus (EO Accounts) to resolve all Form 990-T EP claims/reconsiderations, NOLs, RINTs, TENTs and amended returns of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . EP Form 990-T claims/reconsideration, NOLs, RINTs and amended returns, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , are routed directly to the field for resolution. Refer to IRM 21.7.7.4.16.9.3 for procedures relating to resolution of Form 990-T EP TENT claims.

21.7.7.4.16.10.1  (01-01-2015)
EP Form 990-T Claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  1. OAMC EO Accounts unit tax examiners may allow or disallow Form 990-T EP claim/reconsideration requests ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ with the exception of the following:

    • TC 42X is present on the module

    • Former closing agreements

    • Requests for an immediate examination of the claim

    • Resubmitted claims previously disallowed by the EO Accounts unit based on instruction from the EP classifier with no additional information provided

  2. OAMC EO tax examiners may forward any claim for refund or reconsideration requests, regardless of amount, to the EP Classifier in EL Monte if they are not sure whether to allow or disallow the issue. All instructions for routing to the Field should be followed including AIMS establishment.

  3. There are primarily three different type of claims that may be received:

    • Amended returns

    • Carryovers

    • Carrybacks (worked by designated tax examiners)

  4. Supporting documentation (i.e., Sch. K-1) is not required for adjustments resulting in a tax decrease of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

21.7.7.4.16.10.2  (01-01-2015)
EP Form 990-T Claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  1. When a Form 990-T has been identified as an EP claim ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the tax examiner must secure and attach the following items to the case prior to routing it to the field:

    1. Complete prints of TXMODA and BRTVU (for Carrybacks, RINTs & TENTs, also include complete print on the year(s) generating the loss). The original return is not required for EP claim processing.

    2. Complete Form 5597 for AIMS establishment (refer to Exhibit 21.7.7-1).

      Note:

      The PBC is 410 and the EGC is 7693 for EP 990-T claims.

    3. Print of AMDISA (if the account has a TC 42X on the module).

    4. Send 86c letter to the taxpayer (allow 90 days response time) and close control base.

    5. Prepare applicable routing slips.

    6. Place case in unit routing tub..

    Note:

    For RINTs, TENTs, and Carrybacks, establish an AIMS control on the year(s) the loss is being carried back to.

  2. The EO Accounts clerks will:

    1. Pull all EP claims from the tub in the clerical unit.

    2. Input AIMS control on IDRS utilizing CC AM424.

    3. Attach both Form 5597 and AM424 print to the case file.

    4. Prepare Form 3210 and route to the following address:

    Internal Revenue Service
    Attn: EP Classification Coordinator
    9350 Flair Dr., 2nd Floor
    El Monte, CA 91731-2885

21.7.7.4.16.10.2.1  (01-01-2015)
EP Form 990-T Amended Return Procedures

  1. A Form 990-T is secured during the examination of a Form 5500 return when it is discovered that the trust assets have produced income that is taxable under IRC section 511 as Unrelated Business Income (UBI).

  2. Delinquent, dummy or SFR returns may be submitted by either an EP agent or the taxpayer. Occasionally, an amended return may also be received subsequent to the filing of the original return.

  3. When an amended return is received subsequent to the filing of a delinquent, SFR or dummy return by either the taxpayer or an EP agent, adjust the account based on the information provided on the amended return. Since the tax module will already contain a TC 42X, the adjustment must be entered with the applicable TC 29X amount, Hold Code and Priority Code 01.

  4. If there are any questions or concerns regarding the amended return adjustment, contact the EP group manager at 410-962-9536.

21.7.7.4.16.10.3  (01-01-2015)
Form 1139 Carryback Applications for Employee Plans

  1. Refer to the following procedures for resolution of Form 1139Carryback Applications.

    If And Then
    the loss year return has posted, the claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input adjustment.
    2. Post verification is not necessary.
    the claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input adjustment.
    2. Route case to EP Exam Classification Site at the address shown above for post verification.
    3. Annotate on the routing slip that a refund has been issued and post verification is required.
    4. Send 86c letter to taxpayer. Allow 90 days for response.
    the loss year return has not posted, the claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input TC 930 (Push Code) on the loss year return using the tax examiner’s IDRS number.
    2. Follow normal procedures of attaching OSC Form 460 (TC 930 push code form) to Form 1139.
    the claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Route directly to EP Classification Site.
    return is filed when TC 930 push comes back,   1. Process Form 1139 following tolerances in this chart.
    return is not filed,   1. Refer to IRM 21.5.9.5.34, Reassessing Carryback Form 1045 and Form 1139.

21.7.7.4.17  (01-01-2015)
Exempt Organization Carrybacks
Overview

  1. Exempt organizations may claim a Net Operating Loss (NOL) deduction. A NOL is used to lower taxes in an earlier year, allowing a refund for taxes that have already been paid.

  2. Exempt organizations may file a carryback claim for refund of tax. These Restricted Interest claims for refunds are referred to as "RINTs" . They must be filed before the statute expires on the loss year return.

  3. Exempt organizations may claim a NOL carryback by filing an amended Form 990-T, Exempt Organization Business Income Tax Return.

  4. Refer all RINTs filed by exempt organizations ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ to the Field.

  5. Secure all research and returns (if necessary) prior to referral.

  6. If a claim/reconsideration was generated from a NOL carryback, then include both the original and amended return(s) of the loss year. Provide an explanation for any missing return(s).

21.7.7.4.17.1  (01-01-2015)
Restricted Interest Claims (RINTs)

  1. If TC 150 is processed at the OSPC, request a copy of the loss year return (or any other year the tax examiner deems necessary) from OL-SEIN to verify the adjustment. If the return is not available on OL-SEIN, request the original return from Files (two attempts must be made).

  2. If the original loss year return is unavailable, attach a complete TXMODA and BRTVU prints, along with Form 4251 (charge out document) if the original return is unavailable.

  3. Apply claims dollar threshold criteria:

    • RINTs ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ are worked by the tax examiners.

    • RINTs ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ are forwarded directly to the Field.

  4. Prior to routing amended gain year returns or claims over the ≡ ≡ ≡ dollar threshold, the following action must be taken:

    1. Secure a copy of the original gain year return from OL-SEIN. If return is not available from OL-SEIN, request the original return from Files (two attempts must be made).

    2. If the original gain year return is unavailable, attach complete TXMODA and BRTVU prints, along with Form 4251 (charge out document(s)) if original return is unavailable.

    3. Send the amended gain year return, original gain year return or TXMODA/BRTVU prints and charge out documents (if necessary) and the loss year return or TXMODA/BRTVU prints and charge outs to the appropriate EO classification site.

  5. Refer to IRM 21.5.9 for detailed information regarding the processing of BMF Restricted Interest Claims.

21.7.7.4.17.2  (01-01-2015)
Tentative Carryback Refunds (TENTs)

  1. Exempt organizations may file for a Tentative Refund of Tax. These requests for refund, called "TENTs" , must be filed within 1 year from the end of the loss year and are filed on Form 1139, Corporate Application for Tentative Refund.

  2. Form 1139 has a 90-day processing requirement, so input the adjustment within the later of:

    • 70 days of the TENT received date; or

    • 70 days of the last day of the month that includes the due date (or extended due date) for filing the loss year return.

  3. TENTs have a 45-day interest free period (see IRM 21.5.9.5.32).

  4. Unique processing codes identify a TENT:

    • Transaction Codes:
      TC 295 — Tentative Carryback Adjustment
      TC 294 — Reverses Tentative Carryback Adjustment

    • Blocking Series:
      91 — Without the original gain year return.
      92 — With original gain year return or an account brought back from retention.
      95 — Reassessment on a statute imminent or expired year.

  5. TENT adjustments require input of an interest start date (INT-COMPTN-DT) and carryback received date (TCB-DT). The INT-COMPTN-DT determines the date that credit interest begins on the overpayment. The TCB-DT determines the expiration date of the 45-day interest free period (see IRM 21.5.9.5.32).

  6. Refer to the following procedures for resolving Form 990-T (EO) TENTs.

    If And Then
    the loss year return has posted, claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input adjustment.
    2. Follow IRM 21.5.9.4.7(2), Carryback Tolerances.
    3. Post verification is not necessary.
    claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input adjustment.
    2. Route case to EO Exam Classification (refer to IRM 21.7.7.4.16 for address).
    3. Send 86c letter. Allow 90 days for response.
    4. Post verification is done by the EO Exam Classification Site.
    the loss year return has not posted, claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Input a TC 930 (Push Code) on the loss year return. Enter the tax examiner's IDRS employee number.
    2. Follow normal procedures of attaching OSC Form 460 (TC 930 push code form) to Form 1139.
    claim is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 1. Route directly to EO Exam Classification Site.
    the loss year return has posted when TC 930 push comes back,   1. Forward the case to the EO Exam Classification for post verification.
    2. After the case has been post verified and returned to the tax examiner, refile the document by inputting a TC 290 .00.
    the loss year return has not posted when TC 930 push comes back,   1. Refer to IRM 21.5.9.5.34,Reassessing Carrybacks.
  7. When referring TENTs to the Field that are ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ follow the procedures outlined below.

    1. Secure a copy of the loss year return from OL-SEIN. If return is not available on OL-SEIN, request the return from Files (two attempts must be made).

    2. If the original loss year return is unavailable, attach Form 5546, Examination Return Charge-Out and complete prints of TXMODA and BRTVU.

    3. Route Form 1139, copy of the loss year return or complete TXMODA and BRTVU prints and Form 5546 to the appropriate EO Examination Classification site.

      Note:

      Form 5546 and computer printed labels are generated by individual examination requests for a specific return. The Form 5546 is used to pull the return. The requester will receive Form 5546 and requested return, Form 5546 annotated to indicate Not-in-File (return's DLN space is empty), or Form 5546 annotated with explanation why the return is not in the file per the return's DLN space placeholder document.

  8. Refer to IRM 21.7.7.4.16.9.3 for Form 990-T EP TENT procedures.

  9. Additional information regarding Carryback procedures are provided in IRM 21.5.9.

21.7.7.4.17.3  (01-01-2015)
Routing Procedures for EO CATA Cases

  1. On-site EO classification is no longer available in OAMC, EO Accounts units. All related issues that were formerly routed to the on-site classifier must now be sent to either EO Classification or directly to the EO Exam Area Offices (refer to 21.7.7.4.16). This includes but is not limited to the following:

    • Tax decreases ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ;

    • Statements referencing "Assets were merged with another organization" or "Organization has assumed (purchased, acquired, etc.) the assets of this (or another) organization" ;

    • Technical questions or assistance requests on open AIMS accounts only.

  2. Upon determination by the tax examiner that the case meets EO CATA criteria, the tax examiner will compile a complete claim package which includes:

    1. A copy of the original return from OL-SEIN. If the return is not available via OL-SEIN, request the original return from Files (two attempts must be made to secure the original return). If the original return is not available, a complete print of BRTVU must be included.

      Reminder:

      DO NOT send the original return to the Field.

    2. Complete print of TXMODA.

    3. Attach a print of AMDISA if the account has a TC 42X present on the module.

    4. Prepare Form 5597 or Form 5588 for AIMS establishment. (Refer to Exhibit 21.7.7-1 and Exhibit 21.7.7-4 for additional information.)

    5. Provide a detailed explanation as to why the case is being referred to the Field.

    6. The case must be clearly stamped with the tax examiner's name or IDRS number, telephone number and date.

    7. Update the activity field to "EO CATA. "

    8. If a balance is due on the account and no -A freeze is present, input a STAUP for 6 cycles.

    9. Send 86c letter to organization. Allow 90 days for response.

    10. Case must be reviewed and initialed by the lead prior to routing to the Field.

  3. If an AIMS control is not present on the module, complete Form 5597 or Form 5588 in order to establish an AIMS control and forward claim(s) to the appropriate address . If there is an open AIMS control on the module (TC 420/424) in status 09 or higher, forward the case directly to the EO Exam Area Office. Refer to 21.7.7.4.16 for routing instructions.

  4. The following cases should be sent to the address in the table below:

    • Amended Form 990-T reporting a tax liability decrease greater than tolerance. Refer to IRM 21.7.7.4.16.2 for tolerance amounts.

    • Amended Form 990-PF reporting an IRC 4940 (tax on net investment income) tax decrease greater than tolerance. Refer to IRM 21.7.7.4.16.2 for tolerance amounts

    • Form 4720 requesting abatement of Chapter 42 excise taxes.

    • Form 4720-A requesting abatement of 2nd Tier Chapter 42 (Section 4962) excise taxes. Form 4720-A requests for abatement of Section 4962 excise tax should be referred to the unit Subject Matter Expert who will refer the request to the field.

    • Any EO forms or returns reporting a tax liability increase that should be referred to a field group.

    • Requests for penalty reconsiderations which were previously denied by the field.

    • Cases/returns with issues related to prior field examinations.

    EO Exam Classification Site Address
    All claims will be established with Employee Group Code – 7999 .
    Phone: 627-927-1362
    Signature Code: AG
    TE/GE EO Classification
    9350 Flair Dr 4th Flr
    Attn: EO Group 7999
    EL Monte, CA 91731-2828

21.7.7.4.18  (01-01-2015)
EO Credits

  1. As with income tax returns, EO credits can either be refundable or non-refundable. A non-refundable credit is a statutory credit claimed to reduce tax liability. These credits, subtracted from the tax amount, are limited to the amount of tax liability. Any excess is non-refundable, but generally, still available if the tax liability increases at a later date or can be applied against tax liabilities in other periods (carryback/carryforward –- see IRM 21.5.9 for more information on carrybacks). Also, see information on the specific credit to determine if it is available for carryback/carryforward. The following non-refundable credits are applicable to Form 990-T (unless otherwise annotated):

    • Form 1116 (trusts) or Form 1118 (corporations) — Foreign Tax Credit

    • Form 3468 — Investment Credit

    • Form 3800 — General Business Credit

    • Form 4255 — Recapture of Investment Credit

    • Form 5735 — American Samoa Economic Development Credit

    • Form 6478 — Credit for Alcohol Used as Fuel

    • Form 6765 — Credit for Increasing Research Activities

    • Form 8820 — Orphan Drug Credit

    • Form 8586 — Low-Income Housing Credit

    • Form 8611 — Recapture of Low-Income Housing Credit

    • Form 8801 (trusts) or Form 8827 (corporations) — Credit for Prior Year Minimum Tax

    • Form 8826 — Disabled Access Credit

    • Form 8834 — Qualified Electric Vehicle Credit

    • Form 8835 — Renewable Electricity, Refined Coal, and Indian Coal Production Credit

    • Form 8847 — Credit for Contributions to Selected Community Development Corporations

    • Trans-Alaska Pipeline Liability Fund Credit (no form)

    • Section 29 computation sheet - Credit for Producing Fuel From a Nonconventional Source

    • Form 8864 — Biodiesel and Renewable Diesel Fuels Credit

    • Form 8874 — New Markets Credit

    • Form 8881 — Credit for Small Employer Pension Plan Start Up Costs

    • Form 8882 — Credit for Employer Provided Child Care Facilities and Services

    • Form 8896 — Low Sulfur Diesel Fuel Production Credit

    • Form 8900 — Qualified Railroad Track Maintenance Credit

    • Form 8906 — Distilled Spirits Credit

    • Form 8907 — Nonconventional Source Fuel Credit

    • Form 8908 — Energy Efficient Home Credit

    • Form 8910 — Alternative Motor Vehicle Credit

    • Form 8911 — Alternative Fuel Vehicle Refueling Property Credit

  2. Refer to IRM 21.7.4.4.8.3, for additional information on specific non-refundable credits.

21.7.7.4.18.1  (01-01-2015)
EO Refundable Credits

  1. A refundable credit is a credit to reduce a tax liability. If the tax is reduced to zero (or reported as zero) and the credit remains, it is refundable.

  2. Refundable credits can be claimed on Form 990-T or certain Form 1120 series returns. The taxpayer is required to submit various forms or schedules to substantiate credits applicable to the return. Refer to Document 6209 for the appropriate CRNs to adjust refundable credits.

  3. The following refundable credits are applicable to Form 990-T (unless otherwise annotated):

    • Form 2439 - Credit For Regulated Investment Companies (Form 990-T only)

    • Form 4136 - Credit for Federal Tax Paid on Fuels (see IRM 21.6.3.4.2.6 and IRM 21.7.4.4.9.1.)

    • Credit for Ozone Depleting Chemicals (Form 990-T only)

    • Tax paid or withheld at source (Form 990-T and Form 990-PF only)

    • Estimated tax payments

    • Tax paid with Form 7004 ( Form 1120 series only)

    • Tax paid with Form 8868 ( Form 990-T and 990-PF only)

    • BUWH (see IRM 21.7.4.4.10, for more information on BUWH)

    • Tax credit for health care (45R) credit claimed on Form 8941 for certain exempt organizations.

  4. HR 4520, the American Jobs Creation Act of 2004, created five new excise credits that can be claimed on Form 4136, effective for tax years ending after December 31, 2004. Fiscal year taxpayers may claim these credits for tax periods ending January 31, 2005 (200501). The new credit reference numbers and description is shown below. Refer to IRM 21.7.4.4.9, for additional information on refundable credits.

    CRN Description
    388 Qualified Bio-diesel Mixture
    390 Qualified Biodiesel
    393 Alcohol Mixture Containing Ethanol
    394 Alcohol Mixture Containing Alcohol other than Ethanol
    395 Other Non-Taxable Use

21.7.7.4.19  (01-01-2015)
EO Duplicate Filing Conditions

  1. In addition to specific procedures outlined below for TE/GE returns, tax examiners will also need to refer to IRM 21.7.9, BMF Duplicate Filing Conditions, when resolving EO amended/duplicate returns.

  2. A duplicate filing condition occurs when a return (TC 976) posts to a module already containing a return (TC 150). IDRS generates an -A freeze. This prevents any refund or offset from the module until an adjustment (TC 29X) is made. IDRS also generates a CP 193 or CP 293 (when there is an open (unreversed) TC 420) which is associated with return and forwarded to EO Accounts.

  3. Since CP 190s, 193s, and 293s are generated at the site which processes the TC 976 return, the vast majority of EO DUPF cases are generated in Ogden. EO DUPF returns received in other campuses should be routed to OSPC for processing.

  4. If an EO amended return is received, and no TC 150 has posted to MF, suspense the amended return pending the posting of the original return. Allow six weeks suspense time from the return due date or extended due date. If no TC 150 posts to MF by the end of the suspense period, edit the amended return and process as an original.

  5. If an amended return is received, any missing information must be addressed and should not be considered a true dup if the information was also missing on the original. Refer to IRM 21.7.7.4.23.1.3.

  6. All duplicate filing conditions age in 45 days and are not considered to be correspondence. If correspondence is attached to the duplicate return, the case must be re-controlled as "EXOR" . The case then needs to be acknowledged. In this instance, the received date of the case must be changed to the original received date on the return. If additional correspondence is received after the date of the duplicate return, do not change the received date. However, the Category Code must be changed to EXOR.

21.7.7.4.19.1  (01-01-2015)
Duplicate Filing Conditions Research

  1. Use CFOL, EUP, OL-SEIN or secure the original return (when absolutely necessary) from Files.

  2. Determine correct entity on original and duplicate returns.

  3. Examine both returns for following similarities and differences:

    • Tax amounts

    • Tax periods

    • Received dates

    • Julian dates

    • Signature dates

    • Signatures and titles

    • Dates of deposits

    • GEN

  4. When a return is filed marked "amended " , "corrected" , "supplemental" , or "superseding" (an amended return filed on or before return due date is a superseding return), etc., Code and Edit (C&E) inputs CCC "G" . IDRS does not record any information except the amount paid with return. It does not math verify "G" coded returns. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  5. When working CP 193s involving income tax, particularly Form 990-T, Form 990-PF and Form 1120-POL, be sure to check for possible credit adjustments. Even though no tax change may be indicated, the amended return could be filed to claim a refundIf an adjustment is required, refer to IRM 21.6.3.4.2.6. and IRM 21.7.4.4.9.1.

  6. All duplicate filing cases must be controlled on IDRS and not closed until action has been taken to resolve the -A freeze or the case has been referred to another appropriate area.

  7. If a letter of explanation stating why the amended return is being filed is not included, additional research will be necessary in order to determine what is being amended. This can be accomplished by accessing CC BRTVU and viewing a copy of the original return via OL-SEIN. If the original return is not available on OL-SEIN, it may be necessary to secure the original return from Files.

21.7.7.4.19.2  (01-01-2015)
Duplicate Filing Conditions Procedures

  1. Exempt organization returns marked "amended " or "corrected" are sorted by Receipt and Control (R&C) and forwarded to the Imaging unit to be imaged. After the return has been imaged, it is routed to Code & Edit where the return is "G" coded and continues through processing.

  2. EO returns must be controlled on IDRS with category code "EDUP" .

  3. Follow table below to make adjustments.

    If Then
    an increase in tax, 1. Input TC 290 in the appropriate BS and money amount.
    2. Send letter of explanation if necessary.
    return indicates a tax decrease, 1. Refer to Claim procedures in IRM 21.7.7.4.16.
    return is a true duplicate, 1. Input TC 290 .00 in the appropriate BS.
    2. If there is a credit on the account not indicated on the returns, perform research or contact taxpayer to ascertain the appropriate disposition of credit before releasing the "-A" freeze.
    one of the returns belongs on another period/TIN,
    1. Reprocess the return to the correct TIN or tax period. (Refer to IRM 21.7.9.4.9)

    2. If Form 5800 or Form 5800-A (edit sheet) is attached, make the necessary changes before reprocessing return.

    3. Adjust or assess any penalty if necessary.

      Note:

      If return belongs on another tax period, penalties should be increased or decreased. Check due date of tax period and compare to received date of the return. Make any adjustments to the penalties necessary.

21.7.7.4.19.3  (01-01-2015)
Adjusting Total Gross Receipts and
End of Year (EOY) Assets

  1. Amended Form 990 or Form 990-EZ returns requesting an adjustment to the "Total Gross Receipts" or "End of Year Assets" fields can be corrected by entering the corresponding Reference Code for each item. The applicable Reference Codes are:

    • 888 — Total Gross Receipts

    • 889 — End of Year (EOY) Assets

  2. In order to compute the total gross receipts on Form 990 or Form 990-EZ refer to the guidelines below.

    TY 2007 and prior
    Form 990, Part I - Total of lines 1e, 2, 3, 4, 5, 6a, 7, 8a (both columns) 9a, 10a, and 11 of Part I.
    Form 990-EZ, Part I - Total of lines 1, 2, 3, 4, 5a, 6a, 7a, and 8.
    TY 2008 and 2009
    Form 990, Part VIII, Column A — Total of lines 6b (both columns), 7b (both columns), 8b, 9b, 10b, and 12.
    Form 990-EZ, Part I — Total of lines 5b, 6b, 7b, and 9.
    TY 2010 and subsequent
    Form 990, Part VIII, Column A — Total of lines 6b (both columns), 7b (both columns), 8b, 9b, 10b, and 12.
    Form 990–EZ, Part I - Total of lines 5b, 6c, 7b and 9.
  3. Reference Code 889 is used to adjust the " End Of Year Assets" field. Refer to the table below for the specific line number of the EOY assets and where it is located on the return.

    TY 2007 and prior
    Form 990 - Part IV, line 59 (B) Form 990-EZ - Part II, line 25 (B)
    TY 2008 and subsequent
    Form 990 - Part I, line 20 (B) Form 990-EZ - Part II, line 25 (B)
  4. Input a TC 290 .00, with the applicable Reference Code to adjust the account based on the information provided on the amended return. Either one or both Reference Codes may be input.

  5. It may be necessary to manually re-compute or adjust the DDP if the penalty was calculated on the original gross receipts amount.

21.7.7.4.19.4  (01-01-2015)
CP 193 Received Without Duplicate Return

  1. When a CP 193 is received without the duplicate return, attempt to determine if it is a true duplicate using CC BRTVU.

    If Then
    the return proves to be a true duplicate, 1. Input TC 290 .00 in BS 10/15.
    2. Annotate in the remarks portion of the adjustment document "NSD - True DUPF per BRTVU" (unless original return is attached).
    TC 976 proves to be a true duplicate for another period, and there are no open TDI's for this MFT, 1. Input a TC 290 .00 in BS 10/15 and follow procedures outlined in IRM 21.7.9.4.1.2.
    2. Secure a copy of the duplicate return from OL-SEIN or use a print of BRTVU if return is not on OL-SEIN.
    3. If the return was filed electronically, obtain a copy of the return from the EUP.
  2. When unable to secure a return from OL-SEIN or Files (after two attempts or within 40 days):

    1. Send a 418C letter to the organization requesting a copy of the return. You may also contact the organization by phone to obtain a copy in order to expedite case closure.

    2. Suspend case for 40 days.

  3. If there is no reply and:

    If Then
    a payment was received with duplicate return, 1. Assess tax equal to payment amount.
    2. If module credit balance is in excess of payment submitted with return, determine reason for additional excess credit.
    3. Resolve any misapplied payments or other module freeze conditions before making assessment.
    information is not available to determine adjustment needed and no payment was received with duplicate return, 1. Input TC 290 .00 to release the "-A" freeze.
  4. If a reply is received (fax or mail) and the document must be processed to another account, edit the DLN of the TC 976 on the form, and follow local reprocessing procedures.

21.7.7.4.19.5  (01-01-2015)
Multiple Employer Identification Numbers (EIN)

  1. On cases involving multiple EINs, determine if any account needs to be deleted.

  2. If necessary, contact the organization and/or Entity Control for purpose of deleting accounts, filing requirements, and/or input of appropriate TC 59X.

21.7.7.4.19.6  (01-01-2015)
Amended Statute Period EO Returns

  1. In May 2007, the Ogden Submission Processing and Account Management teams agreed to the following process in order to by-pass the Unpostable 350 condition associated with EO statute period amended returns. The new process allows all amended statute period EO returns to be identified, statute cleared, imaged and routed to EO Accounts for resolution in the least amount of time.

    Note:

    Statute period EO amended returns are the only returns that are sent directly to EO Accounts and are not "G" coded during initial processing.

  2. The following is a list of EO returns that are imaged.

    • Form 990

    • Form 990-EZ

    • Form 990-PF

    • Form 990-T

    • Form 4720

    • Form 5227

    • Form 8871

    • Form 8872

  3. R&C will route all statute period amended returns to the Statute unit (MS: 6741) to be cleared. After the document has been cleared, Statutes will input a TC 971–010 on the applicable module(s) in order to generate a TC 976. If Statute fails to input a TC 971-010 Accounts Management will need to input the TC 971-010. This action is necessary in order to provide an audit trail for the Field. After the return(s) have been cleared, Statutes will also attach Form 12547-A and route the cases to the Imaging unit (MS: 6058) to be scanned. Form 12547-A must included the following information:

    • EIN

    • Tax Period

    • MFT

    • Name Control

  4. After the Imaging unit has scanned the documents, they will route them (via Form 12547-A) to EO Accounts (MS: 6552) for resolution.

  5. EO Accounts will resolve the amended return condition based on existing amended/duplicate return procedures.

21.7.7.4.19.7  (01-01-2015)
CP 193s Involving Reprocessing Returns

  1. When a return must be reprocessed (via Form 13596 ), refer to IRM 21.5.2.4.23, for procedures.

  2. When a dummy return is reprocessed in place of original or duplicate return, use the same received date as original or duplicate, respectively.

  3. If the module is in MF Status 02/03, input a TC 599 CC 18 via CC FRM49 on the module to which the return is being processed.

  4. Input TC 971 with the appropriate action code on the incorrect module (to identify a cross reference TIN/tax period data) whenever an original or amended/duplicate return posts to an incorrect TIN/tax period and is being reprocessed to the correct module. Input TC 971 AC 017 on the module to which you are reprocessing the return to regardless of MF status. When inputting TC 971 use the correct TRANS-DT on REQ 77:

    • 971-001 indicates reprocessing TC 150. Use the return received date on TXMOD for the TRANS-DT.

    • 971-002 indicates reprocessing TC 976. Use the posted TC 976 date on TXMOD for the TRANS-DT.

    • 971-017 indicates a reprocessed return is being reprocessed to this period. Date depends on whether return was original TC 150 being reprocessed or TC 976. Follow instructions as shown above for TRANS-DT. However, if the return posted to an earlier tax period with an incorrect date or before the due date of the tax period, use the actual received date of the return as the transaction date of the TC 971 AC 017.

    Exception:

    A TC 971 AC 17 cannot be entered on a period with a fiscal year month that differs from the one shown on ENMOD.

  5. If a TC 971 with one of the action codes listed in paragraph (4) above is incorrectly input on an account, reverse it with a TC 972 using the same action code.

  6. Do not input TC 290 .00 to release an -A freeze if other unresolved freeze conditions would be incorrectly released simultaneously. (See IRM 21.7.1.4.6.2 for conditions under which an excess credit ("Q-" freeze) is released. A TC 290 .00 only does not release the "Q-" freeze).

21.7.7.4.19.8  (01-01-2015)
Resolving CP 193s

  1. Determine and resolve duplicate filing conditions by examining and comparing information on the CP 193. Use CP 193, duplicate return, CFOL command codes, and OL-SEIN (or secure original return if absolutely necessary) to resolve case. Compare the items listed below:

    • Difference in entities (names, addresses, TINs, etc.)

    • Tax periods

    • DLNs

    • Correct form used

    • Received dates

    • Signature, title, and signature date

    • TCs

    • Deposits (compare dates and amounts)

    • Payment received with return(s)

    • Module balance

  2. Check CCs ENMOD, NAMEE, EOGEN, and INOLE when the EIN is circled out and a new EIN is written in.

  3. Some of the most common reasons for filing duplicate or amended returns include:

    • Organization received a delinquency notice due to a delay in processing return;

    • Organization sent a duplicate return and indicated it was a final return;

    • Organization filed a second return to correct erroneous information on first return;

    • Organization filed a paper return after filing electronically;

    • Organization filed a second return attaching missing information requested by the IRS;

    • Organization received a penalty notice and a second return was filed to provide missing information;

    • Organization filed an original return but underpaid the tax liability and the second return included a payment of the remaining tax liability;

21.7.7.4.19.8.1  (01-01-2015)
True Duplicate

  1. A true duplicate condition occurs when an organization files two returns for the same tax period with the same information on both returns and no tax change is required.

  2. Do the following:

    1. Analyze account data and both returns (if original was needed to resolve case) to verify they are true duplicates.

    2. Input TC 290 .00 in BS 10/15 (unless original return is attached) to release -A freeze. Use duplicate return for source document.

      Caution:

      If module balance is in credit status, use appropriate HC to prevent an adjustment notice from generating.

    3. Staple CP 193 to duplicate return.

    Note:

    If original return was secured, staple duplicate return behind original and use blocking series 00.

21.7.7.4.19.8.2  (01-01-2015)
Amended/Supplemental Return–Increase or Decrease

  1. Refer to the procedures outlined in IRM 21.7.9.4.1 for resolution of amended/supplemental returns involving a tax increase or decrease.

  2. Use the applicable Blocking Series associated with the specific EO returns.

21.7.7.4.19.8.3  (01-01-2015)
Various TC 976 Conditions

  1. If any of the following conditions applies to the TC 976 account, refer to the procedures in IRM 21.7.9.4.

    • Two returns posted to same account. Correct return posted first. TC 976 belongs on different period or EIN;

    • Reprocessing TC 976 return to module with no TC 150;

    • Reprocessing TC 976 return to module with TC 150;

    • Two returns posted to same account. Incorrect return posted first. TC 976 return is correct return;

    • Reprocessing TC 150 return to module with no TC 150;

    • Reprocessing TC 150 return to module with TC 150;

21.7.7.4.19.8.4  (01-01-2015)
Form 8872 Subsequent/Duplicate Return Resolution

  1. The organization may opt to file its reports on either a quarterly or monthly basis, but it must file on the same basis for the entire calendar year. Due dates for Form 8872 vary depending on whether the form is due for a reporting period that occurs during:

    • A calendar year in which a regularly scheduled election is held (quarterly or monthly basis) or

    • Any other calendar year (semiannually or monthly basis).

  2. Form 8872 may be filed either electronically or by mail. If the organization has reason to expect that contributions or expenditures will exceed $50,000 in the calendar year, they must file electronically. An electronically filed return can be identified by the Location Code (first two digits) of the DLN. Location codes "93" (primary) or"92" (overflow) indicate the return was filed electronically. These returns can be viewed by accessing the Intranet website, http://forms.irs.gov/politicalOrgsSearch . Go to "Search Political Organization Disclosures" and query by EIN.

    Reminder:

    Do not attempt to order an electronically filed return from Files.

  3. The majority of subsequent or duplicate filed Forms 8872 is the result of the filer submitting additional returns based on their filing requirement. For example:

    • Filing both a year end and a December monthly return or

    • Filing both pre-election return and a monthly return.

  4. Refer to the procedures outlined below to resolve the duplicate filed condition.

  5. If there is an EIN discrepancy, release the "-A" freeze and route the case to EO Entity for resolution.

    If And Then
    the TC 976 document is a true duplicate, there is no discrepancy with the tax period, 1. Release the "-A" freeze by entering a TC 290 .00, block 15 (unless original return is attached).
    2. Use the duplicate return as the source document.
    3. Staple the CP 193 to the duplicate return.
    the duplicate filed return is for a different tax period,   1. Edit the return and reprocess it to the correct tax period following existing procedures in IRM 21.5.2.4.23 and IRM 21.7.9.4.1.1.

21.7.7.4.19.8.5  (01-01-2015)
Form 4720 Adjustments

  1. If there is a tax on an individual, there is usually also a tax on the organization. Schedule G relates to Form 990 or Form 990-EZ Schedule A.

  2. IRNs must be used to adjust tax on Form 4720. Net amount for TC 29X transactions must equal sum of IRNs.

  3. Below are applicable IRNs:

    • 150 — Self Dealing (Form 4720-A only)

    • 151 — Failure to Distribute Income

    • 152 — Excess Business Holdings

    • 153 — Investments Which Jeopardize Charitable Purposes

    • 154 — Taxable Expenditures

    • 182 — Excess Grass Roots

    • 183 — Excess Lobbying

    • 213 — Tax on Political Expenditures

    • 214 — Tax on Disqualifying Lobby Expenditure

    • 234 — Split Dollar Insurance

    • 237 — Prohibited Tax Shelter Transaction

    • 238 — Tax on Taxable Distributions

    • 239 — Tax on Prohibited Benefits

21.7.7.4.19.8.5.1  (01-01-2015)
Form 4720 Duplicate Filing Procedures

  1. In order to resolve a duplicate filing condition on a Form 4720 module, one of the following steps should be taken:

    • True DUPF - Input a 290 .00.

    • Amended return (increase) - Input TC 290 with the applicable money amount and reference number. "Pend to post" the adjustment to ensure it posts.

    • Amended return (decrease) or request for abatement of First or Second Tier Tax (IRC 4958 or 4962). Refer to IRM 21.7.7.4.16.6 for procedures.

  2. A TC 29X or 30X will unpost as UPC 390 RC 9 on Form 4720 if the following apply:

    • IRN is 18X and the organization code on the tax module is not "2" .

    • IRN is 15X and the organization code on the tax module is not "1" .

  3. If any of the conditions apply as shown above in (2), it may be necessary to transfer the account to Non-Master File for correction. To transfer the account to NMF take the following actions:

    • If additional tax should be assessed, complete Form 2859. Enter the following:

    • Check the box at the top for "Quick" assessment.

    • Part A
      TIN (with an "N" behind it)
      Name Control
      Name
      Address
      23C date - Usually "Next Available" unless the statute requires a specific date

    • Part B
      Statute Expiration Date
      DLN
      Requester information
      approval signature.

    • Part C
      Form no
      Period ended
      PLN/Rpt no (if applicable)
      3a - Tax - Original Return
      3b - Return Received Date
      4a - Tax - Adjustment

  4. Part D should be completed to adjust an account.

  5. The following lines should be completed if completing Part D:

    • 21a - Abstract number

    • 21b - Amount

  6. Remarks should instruct NMF to post to MFT 50 and not MFT 66.

  7. Fax the completed Form 2859 to 859-669-2959. The Form 2859 must be signed by a manager authorized to sign for NMF.

  8. Monitor the account on NMF to ensure the Quick Assessment posts.

  9. If request is a 4962 abatement request, an AIMS card must be completed and sent to the field after the tax is assessed on NMF.

21.7.7.4.19.9  (01-01-2015)
CP 293 Duplicate Return With TC 42X Present

  1. A CP 293 is generated when a duplicate return posts to an account with open TC 420 present.

  2. Be sure to consider the open TC 42X when adjusting account. Refer to the EO CATA guidelines in IRM 21.7.7.4.16 prior to adjusting accounts.

21.7.7.4.19.10  (01-01-2015)
CP 190 Amended Return–No Original Posted

  1. CP 190 is generated within four cycles after a "G" coded TC 976 return posts to a module which does not contain an original return (TC 150).

  2. CP 190 is associated with TC 976 return and forwarded to EO Accounts for resolution.

  3. "E-" freeze is generated along with CP 193. The "E-" freeze must be released before CP 190 case is closed by either posting:

    • TC 971 action code 002

    • TC 150

  4. Follow procedures outlined in IRM 21.7.9.4.10 for resolution of CP 190 accounts.

21.7.7.4.20  (01-01-2015)
IRN 886 on Form 990-T

  1. IRN 886 is used for unrelated business taxable income on Form 990-T. . It can be ascertained by using CC BRTVU (line 34).

  2. Adjust IRN 886 by computing the difference between the amount on CC BRTVU (plus/minus any other IRN 886 adjustments on the module) and amount reflected on the second return.

21.7.7.4.21  (01-01-2015)
FUTA Tax and Exempt Organizations

  1. Employment Code (EC) "W " is assigned to non-profit organizations of the type described in IRC 501(c)(3), IRC 501(e), IRC 501(f), IRC 501(k), and IRC 501(n). These organizations are operated exclusively for religious, educational, charitable, scientific, literary or humane purposes, or for the purpose of testing for public safety among other purposes.

  2. These organizations are exempt from tax under IRC 501(a) and are not subject to Federal Unemployment (FUTA) tax. They can be identified on the entity module by EC "W" . They also are not subject to FUTA tax during the application period for exempt status.

  3. If an organization submits correspondence or an amended return stating it is exempt from filing Form 940 under IRC 501, verify the following conditions are present on the entity module:

    1. Exempt Organization Status Field (EO-Stat) is 01 or 02 (indicates exemption granted by TE/GE Determinations)

    2. Ruling Date Field (RUL) contains a date which is prior to, or within the tax period, for which taxpayer is claiming exempt status. The Ruling date is the date the organization was granted an exemption.

    3. The SS code field (SUB>) is 03, 50, 60, 70, 71 or 91.

  4. Refer to the procedures outlined below if the organization meets all of the conditions identified above and indicates they either:

    • Filed the Form 940 in error or

    • Submits correspondence requesting a refund of previously paid tax, but did not file a return.

    If And Then
    the organization states they are not liable for Form 940 or requests a refund of previously paid, conditions in (3) above are present, 1. Abate the tax with a TC 291 decrease and applicable HC. (Follow statute guidelines if necessary)
    2. Input EC " W" (if not already present).
    3. Delete the Form 940 filing requirement with TC 591 CC 75.
    4. Resolve any other issues related to taxpayer's inquiry.
    conditions in (3) above are not present, 1. Do not abate tax.
    2. Inform taxpayer that a copy of their determination letter is needed in order to verify their exempt status (faxed copies are acceptable).
    3. If they do not have a copy of the determination letter, instruct them to submit a letter requesting a copy of their determination letter. The request should be sent to:
    Internal Revenue Service
    TE/GE Adjustment Unit
    P.O. Box 2508, Rm: 4010
    Cincinnati, OH 45201
    Additional information can also be provided by calling the TE/GE toll free number 877-829-5500.
    conditions in (3) a. and b. are present, but (3) c. is other than SS code 03, 50, 60, 70, 71 or 91, 1. Do not abate tax or delete Form 940 filing requirements.
    2. Inform the organization they are required to file and pay Form 940 FUTA tax.

    Note:

    Employment Codes C, F, G, I and T also indicate the filer is not required to file Form 940.

  5. Form 940 Employment Code "W" abatement requests are worked at OAMC. For CIS cases, update case data appropriately to a PHZ2 case and reassign to 0430446257. For paper cases route to OAMC, BMF Adjustments, MS: 6552.

21.7.7.4.21.1  (01-01-2015)
FUTA Tax and Churches

  1. A church has a 501(c)(3) status but does not officially have to file an application for exemption. If the name of the organization contains any of the following word(s) in relationship to a religious organization, an EC "W" is assigned.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡

    • ≡ ≡ ≡

  2. A ministry is not necessarily considered a church and must generally apply for exemption. If the name of the organization contains the word "ministry," do not assign EC "W" .

  3. Refer to the procedures outlined below for resolving FUTA tax discrepancies that involve religious organizations when the organization's name contains any of the words shown above (in relationship to a religious organization) and the conditions in IRM 21.7.7.4.21(3) above are not present.

    If And Then
    the organization states they are not liable for Form 940, conditions in IRM 21.7.7.4.21(3) above are not present, but the organization's name contains any of the word(s) in paragraph (1) above, 1. Abate the tax with a TC 291 decrease and applicable HC. (Follow statute guidelines if necessary)
    2. Input EC "W" (if not already present).
    3. Delete the Form 940 filing requirement with TC 591 CC20.
    4. Resolve any other issues related to taxpayer's inquiry.
    conditions in IRM 21.7.7.4.21(3) above are not present and the name of the organization does not contain any of the word(s) in paragraph (1) above, 1. Do not abate tax.
    2. Inform taxpayer that a copy of their determination letter is needed in order to verify their exempt status (faxed copies are acceptable).
    3. If they do not have a copy of the determination letter, instruct them to submit a letter requesting a copy of their determination letter. The request should be sent to:
    Internal Revenue Service
    TE/GE Adjustment Unit
    P.O. Box 2508, Rm: 4010
    Cincinnati, OH 45201
    Additional information can also be provided by calling the TE/GE toll free number 877-829-5500.

21.7.7.4.22  (01-01-2015)
EO Extensions

  1. An organization wanting an extension of time for filing a return must submit either a Form 8868, Application for Extension of Time To File an Exempt Organization Return or Form 7004, Application for Automatic Extension of Time to File Corporation Income Tax Return. The form should be sent to the service center where the return is to be filed.

  2. Form 8868 and Form 7004 may be filed electronically via the Modernized electronic Filing (MeF) System.

    • Electronically filed Forms 8868 can be identified by File Location Code 93 or 92 (first two digits of the DLN).

    • Electronically filed Forms 7004 can be identified by File Location Code 88, 93 or 92 (first two digits of the DLN) , for domestic filers, and 66 or 98 for foreign filers.

    Refer to IRM 3.42.4, IRS e-file for Business Income Tax Returns for viewing forms filed via MeF.

    Note:

    Beginning January 2011, both parts I and II of Form 8868 can be filed electronically via MeF.

  3. Organizations that submit Form 8868 via MeF receive a CP 211-A when the extension is timely filed. An "Acknowledgement of Receipt" is also provided upon initial filing of the Form 8868 through the authorized e-File provider. If the organization is unable to file an extension via MeF, they will receive a "Rejection Notification" . If there is an indication on the extension or an attachment that the taxpayer attempted to file the extension electronically and it was rejected, the paper request must be filed by the later of the due date or 5 calendar days after the date the taxpayer was notified of the last rejection. For more information, refer to Publication 4163, Modernized e-file (MeF) Information for Authorized IRS e-file Providers for Business Returns.

  4. Under normal circumstances, an extension of time to file can legally be granted for no longer than a total of 6 months (including first and second extension requests for Form 8868) from the due date of the return. IRC section 6081(a) and Treas. Reg. section 1.6081–1 (a) state that an extension of time to file generally "shall not be granted for more than 6 months" from the due date of the return required to be filed.

    Exception:

    In some cases, organizations that are abroad may receive more than 6 months. If a foreign corporation files a second or third extension request asking for more than six months, the service will have to perform an analysis of the facts presented to make a determination in a "rational, nonarbitrary and regular fashion" . A foreign corporation is not entitled to an extension of more than six months; it must justify its entitlement based upon the facts.

  5. Occasionally, an organization wanting an extension of time to file a return may submit a letter request to the Submission Processing Campus where the return is to be filed. Normal approval/denial criteria is followed. Correspondence is sent to the organization indicating the status of their request and the correct form to use in the future.

  6. All information required by a form is also required if the request is made via a letter. The letter application may be process in one of two ways. They may:

    1. input the extension information as a TC 460 directly into IDRS or

    2. prepare a "dummy" IRS extension form from the information in the letter and process it as a paper extension.

  7. An organization cannot apply for both the automatic 3-month extension and the additional 3-month extension at the same time.

21.7.7.4.22.1  (01-01-2015)
Form 7004, Application for Automatic Extension of Time to
File Corporation Income Tax Return

  1. Form 7004, Application for Automatic Extension of Time to File Corporation Income Tax Return, is used to request an automatic 6-month extension for Form 1120-POL. The form must be filed on or before the due date of the applicable tax return. The extension posts as a TC 620 and TC 460.

  2. The IRS no longer sends notifications when the extension has been approved. However, the organization is notified when the extension is disallowed.

  3. Penalty abatement requests relating to extension issues may be considered based on the reasonable cause explanation provided by the organization. Refer to IRM 20.1.1 for reasonable cause criteria.

  4. Refer to the table below for return due date and applicable extended due date.

    Original and Extended Due Dates for Form 1120-POL
    Tax
    Period
    Ending
    Due
    Date
    (21/1
    Months)

    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡
    Form 7004
    Automatic
    6 Month
    Extended Due Date
    01 04-15 ≡ ≡ ≡ ≡ ≡ 10-15
    02 05-15 ≡ ≡ ≡ 11-15
    03 06-15 ≡ ≡ ≡ ≡ ≡ 12-15
    04 07-15 ≡ ≡ ≡ ≡ 01-15
    05 08-15 ≡ ≡ ≡ 02-15
    06 09-15 ≡ ≡ ≡ ≡ ≡ 03-15
    07 10-15 ≡ ≡ ≡ ≡ ≡ 04-15
    08 11-15 ≡ ≡ ≡ 05-15
    09 12-15 ≡ ≡ ≡ ≡ ≡ 06-15
    10 01-15 ≡ ≡ ≡ ≡ ≡ ≡ 07-15
    11 02-15 ≡ ≡ ≡ ≡ ≡ 08-15
    12 03-15 ≡ ≡ ≡ ≡ ≡ 09-15

21.7.7.4.22.1.1  (01-01-2015)
Form 8868, Application for Extension of Time To File an Exempt Organization Return
General Information

  1. Form 8868, Application for Extension of Time to File an Exempt Organization Return, is used by exempt organizations to request an automatic 3-month extension of time (6-months for a corporation required to file Form 990-T) to file its return. An additional (not automatic) 3-month extension can also be requested using this form.

  2. Form 8868 is used by exempt organizations to request an extension of time to file the following forms:

    • Form 990

    • Form 990-EZ

    • Form 990-BL

    • Form 990-PF

    • Form 990-T (corporation)

    • Form 990-T (trust)

    • Form 1041-A

    • Form 4720

    • Form 5227

    • Form 6069

    • Form 8870

  3. Form 8868, Part I must be completed to request an initial automatic 3-month extension. The extension will be approved if the Form 8868 is received on or before the return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . During processing, a Notice Code 1 is entered and a CP 211-A generates stating the extension was granted. If the Form 8868 is not timely filed, Notice Code 2 is entered and a CP 211-C is generated stating the request for extension of time to file was denied. Prior to January 1, 2007, organizations did not receive acknowledgment from IRS indicating the automatic 3-month extension was granted.

  4. Form 8868, Part II must be completed to request an additional (not automatic) 3-month extension of time to file (if necessary). If all the criteria below is met, the request for the additional 3-month extension of time to file is approved, Notice Code 3 is entered and a CP 211-A is generated.

    • The received date is on or before the previously granted extended due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • A statement is present on Part II, Line 7, or on an attachment giving an acceptable reason why an extension is needed.

    • The request is signed.

    • A previous extension was filed.

  5. If any of the above criteria is not met, the extension is denied, the applicable Notice Code is entered and a CP 211 B, C, D or E notice is generated informing the organization why the extension was denied. Refer to the table below for Notice Code definitions and related CP 211 notice.

    Example:

    Notice Code 6 will generate a CP 211-C notice explaining that the extension request was denied because it was not timely filed.

    Note:

    Notice Code 1 generates a 3 month extension unless the taxpayer files Form 990-T (501(c)(3) corporation, which will generate a 6-month extension.

  6. Extension Notice Codes are located on BMFOLT.

    Notice Code Definition CP Notice
    1 Approved first extension CP 211-A
    2 Disapproved first extension — Not timely filed CP 211-C
    3 Approved second extension CP 211-A
    4 Denied second extension — Missing signature CP 211-B
    5 Disapproved second extension — No reason for extension or reason not valid. CP 211-D
    6 Disapproved second extension — Not timely filed CP 211-C
    7 Disapproved second extension — Other CP 211-E
  7. For Form 990-T (501(c)(3)) corporations, Notice Code 1 will generate a 6-month extension.

21.7.7.4.22.2  (01-01-2015)
Extension Due Dates

  1. The computer uses the " Type of Org" code shown on BRTVU to determine the return due date. Form 990-T has two possible due dates:

    • An employee plan's trust defined in IRC 401(a), an IRA (including SEP) and (SIMPLE), a Roth IRA, and Education IRA, and an MSA must file Form 990-T by the 15th day of the 4th month after the end of the tax year.

    • All other organizations must file Form 990-T by the 15th day of the 5th month after the end of the tax year.

    Note:

    An Employee Plan Trust under 401(a) must attain and use a separate EIN for Form 990-T. EINs for corporate returns Form 1120, Form 940, Form 941, Form 5500 and Form 990 cannot be used for Trusts defined in IRC 401(a).

  2. Refer to the tables below for the type of form, return due date and applicable extended due dates for EO returns.

    Original and Extended Due Dates for Forms: 990, 990-EZ, 990-PF, 990-BL, 990-T (Org 1, 2, 4 & 5),
    4720 (Org 1 & 2), 8870 and 6069
    Tax
    Period
    Ending
    Due
    Date
    (41/1
    Months)
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    Form 8868
    Automatic
    3-Months
    Extended
    Due Date
    Form 8868
    (Not Automatic)
    6-Months
    Extended Due Date
    01 06-15 ≡ ≡ ≡ 09-15 12-15
    02 07-15 ≡ ≡ ≡ 10-15 01-15
    03 08-15 ≡ ≡ ≡ 11-15 02-15
    04 09-15 ≡ ≡ ≡ 12-15 03-15
    05 10-15 ≡ ≡ ≡ 01-15 04-15
    06 11-15 ≡ ≡ ≡ ≡ 02-15 05-15
    07 12-15 ≡ ≡ ≡ 03-15 06-15
    08 01-15 ≡ ≡ ≡ ≡ 04-15 07-15
    09 02-15 ≡ ≡ ≡ 05-15 08-15
    10 03-15 ≡ ≡ ≡ ≡ 06-15 09-15
    11 04-15 ≡ ≡ ≡ ≡ ≡ 07-15 10-15
    12 05-15 ≡ ≡ 08-15 11-15
    Original and Extended Due Dates for Form 990-T Trust (Org. 3), Form 4720 (Org 3), Form 5227 and Form 1041-A

    Note:

    Form 5227 and 1041-A is due on or before April 15 following the close of the calendar year.

    Tax
    Period
    Ending
    Due
    Date
    (31/1
    Months)
    DELINQUENT
    DATE
    Form 8868
    Automatic
    3-Months
    Extended
    Due Date
    Form 8868
    (Not Automatic)
    6-Months
    Extended Due Date
    01 05-15 ≡ ≡ ≡ 08-15 11-15
    02 06-15 ≡ ≡ ≡ ≡ 09-15 12-15
    03 07-15 ≡ ≡ ≡ ≡ 10-15 01-15
    04 08-15 ≡ ≡ ≡ 11-15 02-15
    05 09-15 ≡ ≡ ≡ 12-15 03-15
    06 10-15 ≡ ≡ ≡ ≡ 01-15 04-15
    07 11-15 ≡ ≡ ≡ 02-15 05-15
    08 12-15 ≡ ≡ 03-15 06-15
    09 01-15 ≡ ≡ ≡ 04-15 07-15
    10 02-15 ≡ ≡ ≡ ≡ 05-15 08-15
    11 03-15 ≡ ≡ ≡ ≡ 06-15 09-15
    12 04-15 ≡ ≡ ≡ 07-15 10-15

21.7.7.4.22.3  (01-01-2015)
Extension Reconsideration Procedures
General Information

  1. Each case must be individually evaluated based on the information provided by the organization. Once a determination has been made as to why the penalty was assessed (Service or TP error), the appropriate action must be taken (e.g., input extension or request reasonable cause statement) in order to resolve the account issue.

  2. If the organization cannot provide a copy of their approved extension (CP 211-A) or proof of timely filing, then a signed reasonable cause statement is required.

  3. When the Service recognizes a failure to timely input a TC 460 either before or after the return posts and before or after the DDP or FTF penalty is assessed, input a TC 460 with the proper extension date. The TC 460 will systemically reverse/recompute the late filing portion of the DDP (TC 238). However, if CC 22, 23 or 24 is present on the module, a manual adjustment will have to be entered. Penalty Reason Code (PRC) 045 should be used for this correction (see IRM 20.1.2.1.3.1, Extension of Time to File).

  4. In reviewing the account, if it is determined that the penalty was assessed as a result of something IRS failed to do (e.g., not processing initial extension), an apology letter must be sent to the organization. Refer to IRM 21.3.3.4.17.1 for additional information.

  5. When inputting a TC 460 on Form 1120-POL (MFT 02) or Form 990-T (MFT 34), a DLN Code must be entered

    • 20 (approved)

    • 25 (disapproved)

    • All other MFTs leave the DLN blank for approval or

    • Enter 000 (3 zeros) in the DLN for denial

    Note:

    When entering two TC 460s within the same cycle, post delay the second TC 460.

  6. Due to current programming restraints relating to Command Code REQ 77 and Form 990-T extension requests, the following work-around procedures were developed. In order to enter the correct extension date, ULC 98 must be entered on the REQ 77 screen. This will allow the correct extended due date to be entered on Form 990-T modules. This is a temporary measure until the REQ 77 program is corrected.

21.7.7.4.22.3.1  (01-01-2015)
Abatement Procedures for Initial 3-Month Extension Requests

  1. Extensions are either granted or denied. If the extension was denied because the TP did not complete the Form 8868 properly or filed late, reasonable cause criteria must be adhered to in order to consider penalty abatement.

  2. If the extension was denied because of something the Service failed to do (e.g., input TC 460, erroneous received date) a TC 460 must be input with the correct extended due date. Penalties will recompute unless the module is restricted due to a previous manual adjustment.

  3. If correspondence is received regarding the denial of the initial 3-month extension period refer to the procedures outlined below.

    Reminder:

    The only criteria for granting the initial (automatic) 3-month extension is a timely filed Form 8868.

    If And Then
    the organization can provide:
    ~ A copy of the CP 211-A, or
    ~ A copy of Form 8868 (if extension request is prior to 01/2007), or
    ~ Proof of timely filing (e.g., certified mail receipts or postmark), or
    a TC 460 is not present or was previously denied, 1) Allow the extension by inputting a TC 460 via REQ 77 to the valid extension due date.
    2) Send the applicable CRX letter informing the organization the extension has been granted, provide the new extended due date and apology for the error.
    the organization can not provide proof of timely filing, 1) Inform the organization a reasonable cause statement must be submitted prior to abating the penalty.
    2) If a penalty has not been assessed, instruct the organization to resubmit their reasonable cause explanation after the penalty notice has been received.
    the organization notifies the Campus that an error was made on the Form 8868 (e.g., incorrect EIN or tax period), a TC 150 has not posted to MF and
    it is not past the RDD, and
    the initial Form 8868 was filed timely,
    1) Allow the extension by inputting a TC 460 via REQ 77 to the valid extension due date.
    2) Send the applicable CRX letter informing the organization the extension has been granted and provide the new extended due date.
    the organization notifies the Campus that an error was made on the Form 8868 (e.g., incorrect EIN or tax period), a TC 150 has posted to MF and a penalty was assessed Request reasonable cause from the filer.
    the organization attempted to file an extension via MeF, the extension was rejected, 1) Research the EUP to determine if the extension was filed by the RDD or request a copy of the rejection notice from the organization.
    2) If the EUP or the rejection notice indicate it was filed by the RDD, input a TC 460.
    3) Send the applicable CRX letter informing the organization the extension has been granted and provide the new extended due date.
    the Form 8868 appears to be the original, a TC 150 has not posted to MF and extension is prior to the RDD, 1) Route Form 8868 to C&E to be processed as the original (MS: 6110).
    a TC 150 has posted to MF or the RDD has passed, 1) Verify the Form 8868 was timely filed based on the IRS stamped received date.
    2) If a determination is made that the extension was timely filed, enter a TC 460 via REQ 77 to the valid extension due date.
    2) Send the applicable CRX letter informing the organization the extension was granted and provide the new extended due date.

21.7.7.4.22.4  (01-01-2015)
Abatement Procedures for Additional 3-Month Extension Requests

  1. As stated above, when an organization requests the additional (not automatic) 3-month extension, specific information in Part II of Form 8868 must be completed (refer to 21.7.7.4.22.1.1 (4)). If this information is not provided, the extension is denied and the applicable CP 211 B-E is generated to the organization.

  2. Although the organization may provide the missing information (e.g., explanation, signature, etc.) at a later day, they must still provide a reasonable cause statement requesting penalty abatement.

  3. When correspondence is received involving the second additional 3-month extension period, refer to the procedures outlined below.

    If And Then
    the organization provides proof that the second extension request was complete & timely filed (e.g., copy of Form 8868 and certified mail receipt or post mark) or a copy of the CP 211A, TC 460 is not present on the module or was previously denied, 1) Input TC 460 with valid extension date via REQ 77.
    2) Send applicable CRX letter informing the organization the extension has been granted & apology for our error.
    the extension was previously denied & the organization provides subsequent information (e.g., signature, reason for extension, or other related information), a late filed penalty was assessed, 1) Instruct the organization to provide a reasonable cause explanation (if one was not included) for late filing.
    2) If an explanation is provided and meets the R/C criteria, abate the penalty.
    a penalty was not assessed (return has not posted to MF), 1) Input a TC 460 to the applicable extension date.
    2) Send a CRX letter to the organization informing them the extension has been granted & the extended due date.
    the extension was previously denied because it was late filed,   1) Instruct the organization that a reasonable cause explanation must be submitted.
    the Form 8868 appears to be the original, a TC 150 has not posted to MF and extension is prior to the first extended RDD, 1) Route Form 8868 to C&E to be processed as the original.
    a TC 150 has posted to MF or the first extended RDD has passed, 1) Verify the Form 8868 is complete (see 21.7.7.4.22.1.1(4) above for Part II approval criteria) and extension was timely filed based on the IRS stamped received date.
    2) If a determination is made that the extension is complete and timely filed, enter a TC 460 via REQ 77 to the valid extension due date.
    2) Send the applicable CRX letter informing the organization the extension was granted and provide the new extended due date.
    3) If the required information is missing on Form 8868 or extension was late filed, inform the organization the request was incomplete and instruct them to submit a reasonable cause explanation in order to abate the late filed penalty.
    the organization attempted to file an extension via MeF, the extension was rejected, 1) Research the EUP to determine if the extension was filed by the RDD or request a copy of the rejection notice from the organization.
    2) If the EUP or the rejection notice indicate it was filed by the RDD, input a TC 460.
    3) Send the applicable CRX letter informing the organization the extension has been granted and provide the new extended due date.

21.7.7.4.22.5  (01-01-2015)
Extension Application Due Dates

  1. Extension requests are due by the return due date (or extended due date for second requests) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the normal return due date falls on a Saturday, Sunday or holiday, the extension is due the first business day following the Saturday, Sunday or holiday. No adjustment will be made to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for occasions when the due date is extended because the 15th falls on a weekend or a holiday. The grace period always ends on the 22nd of the month.

  2. Refer to the table below to determine if the extension was filed timely.

    If Received Date is And Postmark is Then the extension is
    Before Due Date   Timely
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ On or before the due date Timely
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ On or before the due date Timely
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ After due date Not timely
  3. If the postmark is not timely, refer to IRM 20.1.2.1.3 and IRM 21.5.1.4.2.4 for additional information.

21.7.7.4.23  (01-01-2015)
Exempt Organization Penalties

  1. Exempt organizations may be subject to various penalties when they fail to meet the established guidelines set forth by the Internal Revenue Code. These penalties include:

    • Daily Delinquency Penalty

    • Failure to File Penalty

    • Failure to Pay Penalty

    • Estimated Tax Penalty

    • Failure to Deposit Penalty

  2. All EO penalty abatement requests are worked in either the EO Accounts units or by TE/GE telephone account representatives located in the OAMC. Penalty abatements may also be resolved by the Exempt Organization Compliance Area (EOCA) if the case is assigned to them. Cases that are assigned to the EOCA can be identified by IDRS # 4070800000 and must be routed to EOCA, MS: 1112 for resolution.

  3. Additionally, TE/GE telephone account assistors, except as specifically prohibited in IRM 21.3.8, should use all available tools to resolve penalty issues during a call with an authorized caller. This includes, but is not limited to, OL-SEIN, AMS, receipt of faxed POAs and proof of timely filing of returns or extensions.

  4. TE/GE telephone account assistors located at the OAMC may abate the DDP for late filing only if the penalty amount falls within the oral authority threshold of ≡ ≡ ≡ ≡ ≡ . If the DDP was assessed due to missing or incomplete information, the verbal authority abatement does not apply.

  5. Other than stated above, CSRs and tax examiners at other sites or campuses are not authorized to resolve EO penalty abatement cases. Areas that are not authorized to work EO Account penalties and account related issues must follow case referral procedures as outlined in IRM 21.3.5.

  6. EO accounts that are in collection status 22, 24 or 26 are worked in EO Accounts.

  7. When determining penalty abatement due to reasonable cause, the Reasonable Cause Assistant (RCA) is not applicable to exempt organizations. The RCA is not designed to address exempt organizations reasonable cause requests. Refer to the reasonable cause guidelines and criteria as outlined in IRM 20.1.1.3.2.

  8. The following table identifies the various penalties that may be applicable to exempt organizations.

    Applicable EO Penalties
    Form MFT 23X
    DDP
    16X
    FTF
    17X
    ES
    27X
    FTP
    18X
    FTD
    Form 990 or Form 990-EZ 67 YES NO NO NO NO
    Form 990-T 34 NO YES YES YES YES
    Form 990-PF 44 YES YES YES YES YES
    Form 1041-A 36 YES NO NO NO NO
    Form 5227 37 YES NO NO NO NO
    Form 1120-POL 02 NO YES YES YES YES
    Form 4720 50 NO YES NO YES NO
  9. Additional information on penalties and reasonable cause abatement is located in IRM 20.1, Penalty Handbook.


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