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Part 21. Customer Account Services

Chapter 7. Business Tax Returns and Non-Master File Accounts

Section 9. BMF Duplicate Filing Conditions

21.7.9  BMF Duplicate Filing Conditions

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21.7.9.1  (01-01-2006)
BMF Duplicate Filing Conditions Overview

  1. This section contains information and procedures related to BMF duplicate filing conditions. Topics include:

    • Analysis and resolution of TRNS 193s

    • True duplicate returns

    • Increases and decreases involving TRNS 193s

    • TRNS 193s with IRC 6020(b) involvement

    • Re-input of returns involving TRNS 193s

    • FTD discrepancies

    • Doc code 51 assessments

    • CPs 170, 170A

    • TRNS 293s

    • Section 338 corporate filers

    • TRNS 190s

21.7.9.2  (10-01-2009)
What Are BMF Duplicate Filing Conditions?

  1. A duplicate filing condition occurs when a return (TC 976) posts to a module already containing a return (TC 150). IDRS generates a -A freeze which prevents any refund or offset from the module until an adjustment (TC 29X) is made. IDRS also generates a TRNS 193 or TRNS 293 (when there is an open (unreversed) TC 420) which is associated with the TC 976 return and forwarded to Accounts Management, Excise, or Estate and Gift, based on the category code in (3) below.

  2. Since TRNS 190s, 193s, and 293s are generated at the site which processes the TC 976 return, the vast majority of BMF DUPF cases are generated in Ogden and Cincinnati, beginning with returns processed in 2002.

  3. All duplicate filing conditions are systemically controlled on IDRS as follows:

    CATG TRNS 193's generating on:
    DUPE Estate and Gift Tax Returns (Form 706 and 709 series)
    DUPF BMF returns (except Excise and Estate and Gift)
    DUPX Excise Tax Returns (Form 720,730,2290, etc.)

  4. All duplicate filing conditions age in 45 days and are not considered correspondence. If correspondence is attached to the duplicate return, the case must be re-controlled as "TPRQ" . 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 TPRQ.

    Note:

    Do not forget to resolve the -A freeze before closing the case.

  5. Form 941c, Supporting Statement to Correct Information, which was used to correct information previously reported on Form 941, Form 943, Form 944, Form 945 and/or CT-1 is now obsolete. Beginning with errors discovered on or after January 1, 2009, taxpayers file new Form 941X, Form 943X, Form 944X, Form 945X, or CT-1X in place of Form 941c. See IRM 21.7.2.5.8, Exception Processing - Incorrect Filing, Forms Routed to AM from SP, for more information.

21.7.9.3  (10-01-2009)
Duplicate Filing Conditions Research

  1. When working duplicate filing cases, always refer to the information and procedures for the specific form involved; e.g., Forms 941, 1120, 1065, etc. Use this information for input of appropriate TCs, CRNs, IRNs, etc.

  2. C & E inputs CCC "G" on returns marked "amended" , "corrected" , " supplemental" , or "superseding" (amended returns filed on or before the return due date or extended due date). IDRS does not record any information on G coded returns, except the amount paid with the return. C & E does not math verify "G" coded returns. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. All duplicate filing cases must be controlled on IDRS and not closed until action has been taken to resolve the -A or E- freeze, or the case has been referred to another appropriate area; e.g., Criminal Investigation.

  4. See IRM 21.3.3.4.10.2.1, Amended Return/Claims - Compliance Criteria, for information on working amended returns on accounts in Collection Status 22, 24, 26, or involving other collection criteria/status (status 72). Forward any correspondence received indicating taxpayer wishes to file a delinquent return to Collection after all other adjustment issues have been resolved.

  5. When working Duplicate filed cases, statute must be considered before sending to Submission Processing for input. Original delinquent returns which are 2 years and 9 months old or older (based on the return due date) must be cleared by the Statute function. See IRM 25.6.1.8, Original Delinquent Returns, for more Statute information.

21.7.9.4  (10-01-2009)
Duplicate Filing Conditions Procedures

  1. Apply the following procedures for working BMF duplicate filing conditions and amended returns.

  2. Non-remit Forms 94X series returns (only) marked "amended" or "corrected" are sorted by Code and Edit (C & E) and forwarded directly to Accounts Management (AM). Non-remit Forms 706 are also sorted by C & E and forwarded to the Estate and Gift (E & G) Tax Operation in Cincinnati.

  3. In addition, all Forms 1120X , Amended U.S. Corporation Income Tax Return, are routed directly from Receipt and Control to Accounts Management.

  4. The following items are mandatory on all returns that by-pass Submission Processing and do not create a TRNS 193 package:

    1. Cases must be controlled on IDRS within 14 days from receipt in AM.

    2. AM and E & G control under category code BDUP. (See (5) below for more information.)

    3. TC 971 ac 010 must be input to set the –A or E- freeze and for statistical purposes when case is controlled, even if case is closed on the same day it is controlled. Do not input if there is no TC 150 on the module. (See (5) and (6) directly below.)

  5. Returns marked "amended" or "corrected " for modules which do not contain a TC 150, must be sent to R & C on Form 1725 (or other locally designated form) with instructions to "process as original" . The words "amended" or "corrected" MUST BE CIRCLED OUT. See IRM 21.7.9.4.11, TRNS 190, Amended Return - No Original Posted, for more information when working TRNS 190's.

  6. Also route to R & C returns received (no TC 976), and the account contains a TC 150 that is a 6020(b) return. This is to allow the ASED to be systemically set.

  7. The following category codes are used with Duplicate Filing Conditions and amended returns sent directly to AM:

    CATG Description (OFP 710-10050)
    C190 TRNS 190 on all BMF returns where there is an amended return (TC 976) and no original return (TC 150).
    CT1X Form CT-1X
    DUPE TRNS 193 on Estate and Gift Tax Returns (Form 706 and 709 series) that are systemically processed.
    DUPF TRNS 193 on all BMF returns (except Excise and E & G) that are systemically processed.
    DUPX TRNS 193 on all Excise Tax Returns (Form 720, 730, 2290, etc.) that are systemically processed.
    XRET Forms 1120X filed alone, that have not generated as a TRNS 193.
    DAUD TRNS 293 on all BMF Forms with TC 420 present.
    941X Forms 941-X or 941-X-PR
    943X Forms 943-X or 943-X-PR
    944X Forms 944-X, 944-X-PR or 944-X-SP
    945X Form 945-X
    BDUP All BMF Form 706, 709 and 94X series returns identified as amended, revised, or corrected that by-pass processing. (All other returns should go through SP and be systemically controlled.)

21.7.9.4.1  (10-01-2009)
Resolving TRNS 193s and Amended/Corrected/Supplemental Returns

  1. Determine and resolve duplicate filing conditions by examining and comparing information. Use the TRNS 193, duplicate return, CFOL command codes, and original return (secure only 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, NAMEB, INOLE when the TIN is circled out and a new TIN written in.

  3. Check for indication of "final" on returns and delete filing requirements, if necessary. Input TC 591 closing code 75 using command code FRM49. (See IRM 5.19.2.6.5.4.5 , BMF Response Taxpayer Not Liable, for more information.)

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

    • Taxpayer received a delinquency notice due to a delay in processing return.

    • Taxpayer sent a duplicate return and indicated it was a final return.

    • Taxpayer filed a second return to correct erroneous information on first return.

    • Taxpayer filed an original return but underpaid the tax liability; second return filed with payment of remaining tax liability.

    • Taxpayer received a penalty notice for failure to provide a tax liability breakdown; second return filed to provide missing information (forms where FTD penalty is applicable).

    • Taxpayer filed a second return, with deposits specifically addressed, in response to a balance due notice regarding missing payments and a failure to deposit penalty (forms where FTD penalty is applicable).

    • Taxpayer is responding to a notice requesting additional information such as CP 175, etc.

  5. Per Rev. Proc. 2001–18, if you discover a new address on an amended return/DUPF that is different than what is on ENMOD, update the address. If your case involves a Fiduciary Name Change or an Address Change on Form 1041, see IRM 21.7.1.4.9, Fiduciary Name/Address Change. Also, see IRM 21.3.4.12.2(6), Taxpayer Requests for Address Change, when an account has an address change and a Z freeze or –Z freeze.

21.7.9.4.1.1  (10-01-2009)
TRNS 193s Involving Reprocessing Returns

  1. When a return must be reprocessed via Form 13596, Reprocessing Returns, refer to the following:

    • IRM 21.5.2–2, Preparing Form 13596 – Reprocessing Returns, for instructions on preparing Form 13596.

    • IRM 21.5.2.4.23.7 (3), Coding and Editing Procedures for specific information on editing the tax return.

    • IRM 21.5.2.4.23.1. Reprocessing Electronic Returns for reprocessing electronic returns.

    .

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

  3. Whenever an original or amended/duplicate return posts to an incorrect TIN/tax period and is being reprocessed to the correct module, TC 971 must be input to identify cross reference TIN/tax period data. Input TC 971 with the appropriate action code (001/002) on the module you are moving the return from. Also, Input TC 971 ac 017 on the module you are reprocessing the return to. When inputting TC 971, use the correct TRANS-DT on REQ 77:

    • 971-001 indicates reprocessing TC 150. Use the return received date on cc TXMOD (located in the RET_RCVD_DT field) 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 processed return is being reprocessed to this TIN/tax period. The date to input with the TC 971 ac 017 depends on whether the original TC 150 is being reprocessed or the TC 976. Follow the instructions for the date to input with the TC 971 ac 017 as shown in the two bullets directly above. 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 for the TC 971 ac 017 input.

      Exception:

      A TC 971 ac 017 cannot be input on a period with a fiscal year month that differs from the one on ENMOD.

      Example:

      A fiscal year taxpayer files a short period final income tax return. It posts as a TC 976 on period ended 200812, but needs to be processed to 200903. Do not input a TC 971 ac 017 on 200903. This causes an unpostable condition since the FYM on ENMOD indicates 12. Do not change the FYM on ENMOD.

      Note:

      TC 971 017 is also used by CAWR to cross reference EIN’s for Reconciliation Balancing. See IRM 4.19.4.3.5 (3), Working Replies – Cross Reference (X-Ref) Cases/Filed With Another EIN, for more information.

  4. Input TC 599 closing code (cc) 18 using CC FRM49 when the return is being processed to a module in MF Status of 02/03.

  5. If a TC 971 with one of the action codes listed in paragraph (3) above is incorrectly input on an account, reverse with a TC 972 with the same action code.

21.7.9.4.1.1.1  (10-01-2009)
Two Returns Posted to Same Account, Correct Return Posted First, TC 976 Belongs on Different Period/TIN

  1. If TC 976 return is posted to an incorrect account, use IDRS and CFOL command codes to determine account to which it must be reprocessed.

  2. Once correct account is determined, See IRM 21.7.9.4.1.1.1.1, Reprocessing TC 976 Return to Module With No TC 150, or See IRM 21.7.9.4.1.1.1.2, Reprocessing TC 976 Return to Module With TC 150, for instructions, based on whether module to which return is being moved contains a TC 150.

21.7.9.4.1.1.1.1  (10-01-2009)
Reprocessing TC 976 Return to Module With No TC 150

  1. Use Form 13596, Reprocessing Returns, to reprocess return to correct TIN/tax period. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for reprocessing procedures.

  2. On module which TC 976 return is being reprocessed to:

    • Input TC 971 ac 017 indicating where the return originally posted. See IRM 21.7.9.4.1.1(3), TRNS 193s Involving Reprocessing Returns, for proper input.

    • Input TC 599 cc 18 if this account is in MF status 02 or 03.

  3. On module which TC 976 return is being reprocessed from:

    • Input 290 $.00 (use appropriate HC) to release -A freeze.

    • Transfer any credit which does not belong on this module (use TC 570 if necessary).

    • Input TC 971 ac 002 using REQ 77. ( See IRM 21.7.9.4.1.1(3), TRNS 193s Involving Reprocessing Returns, for proper input.)

21.7.9.4.1.1.1.2  (10-01-2009)
Reprocessing TC 976 Return to Module With TC 150

  1. On module which TC 976 return is being reprocessed to:

    • Input TC 29X to increase or decrease tax using appropriate reference numbers.

    • Input TC 971 ac 017 using REQ 77.

    • Attach TC 976 return to adjustment document.

  2. On module which TC 976 return is being reprocessed from:

    • Input TC 290 $.00 (use appropriate hold code) to release -A freeze.

    • Transfer any credits which do not belong on module. See IRM 21.5.8.4.1, IDRS Guidelines for Credit Transfers. (Input TC 570, if necessary.)

    • Input TC 971 ac 002 using REQ 77 ( See IRM 21.7.9.4.1.1(3), TRNS 193s Involving Reprocessing Returns, for proper input.)

21.7.9.4.1.1.2  (10-01-2009)
Two Returns Posted to Same Account, Incorrect Return Posted First, TC 976 Return is Correct Return

  1. When it is determined TC 150 return is posted to an incorrect account, use IDRS and CFOL command codes to determine account to which it must be reprocessed.

  2. Once correct account is determined, follow instructions in See IRM 21.7.9.4.1.1.2.1, Reprocessing TC 150 Return to Module With No TC 150, and See IRM 21.7.9.4.1.1.2.2, Reprocessing TC 150 Return to Module With TC 150 directly following, based on whether module to which return is being moved contains a TC 150.

21.7.9.4.1.1.2.1  (10-01-2009)
Reprocessing TC 150 Return to Module With No TC 150

  1. Use Form 13596, Reprocessing Returns, to reprocess return to correct TIN/tax period. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for reprocessing procedures.

  2. On module which TC 150 return is being reprocessed to:

    • Input TC 971 ac 017 indicating where return originally posted ( See IRM 21.7.9.4.1.1(3), TRNS 193s Involving Reprocessing Returns, for proper input.)

    • Input TC 599 cc 18 if account is in MF status 02 or 03.

  3. On module which TC 150 is being reprocessed from:

    • Input TC 29X with appropriate reference numbers to adjust tax to the amount reflected on TC 976 return. Use BS 00-09 since the TC 976 is now the original return on the module.

    • Adjust penalties if necessary.

    • Transfer any credits which do not belong on module. (Use appropriate HC with TC 29X in step 1 above, if transferring credits.)

    • Attach TC 976 return to adjustment document if working outside of CIS.

    • Input TC 971 ac 001 using REQ77. ( See IRM 21.7.9.4.1.1(3) for proper input.)

21.7.9.4.1.1.2.2  (10-01-2009)
Reprocessing TC 150 Return to Module With TC 150

  1. On module which TC 150 return is being reprocessed to:

    1. Input TC 29X to increase or decrease tax using appropriate reference numbers.

    2. Circle out incorrect TIN/tax period on TC 150 return being moved and enter correct TIN/tax period. (It is not necessary to enter anything else on return.)

    3. Input TC 971 ac 017 using REQ 77.

    4. Attach TC 150 return you are moving to adjustment document if working outside of CIS.

  2. On module which TC 150 return is being reprocessed from:

    1. Input TC 29X to increase or decrease tax using appropriate reference numbers, (BS 00–09 since the TC 976 is now considered the original return on the module), and HC to adjust tax for difference between the TC 150 and TC 976 returns.

    2. Adjust penalties, if necessary.

    3. Transfer credits, if necessary. See IRM 21.5.8.4.1 , IDRS Guidelines for Credit Transfers. (Input TC 570 if necessary.)

    4. Input TC 971 ac 001. ( See IRM 21.7.9.4.1.1(3) , TRNS 193s Involving Reprocessing Returns, for proper input.)

    5. Attach TC 976 return to adjustment document if working outside of CIS.

21.7.9.4.1.1.3  (10-01-2009)
Reprocessing Returns With FTD Penalty Computation Other Than Current MF Computation

  1. If a return being reprocessed contains an FTD penalty computed differently from that which would be computed under current processing:

    1. Verify correct penalty amount and enter near the top of return.

    2. See IRM 20.1.4, Failure to Deposit Penalty, for more information.

    3. Edit a CCC "J" if taxpayer has provided a valid explanation for non assertion of the FTD penalty based on reasonable cause.

21.7.9.4.1.2  (10-01-2009)
TRNS 193 Received Without Duplicate Return

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

    If Then
    Return proves to be a true duplicate Input TC 290 $.00 in BS 15/17 and in the remarks portion of the adjustment document input "NSD - True DUPF per BRTVU" (unless original return is attached).
    TC 976 proves to be a true duplicate of another period, and there are no open TDI's for this MFT On the TC 976 module, do the following:

    • Input a TC 290 $.00 in BS 15/17 to release the -A freeze.

    • Input TC 971 ac 002 with appropriate cross reference information. See IRM 21.7.9.4.1.1(3), TRNS 193s Involving Reprocessing Returns, for proper input of TC 971.

    On the module to which the return is a true duplicate, input a TC 290 $.00 using a print of BRTVU as documentation. If working cases thru CIS, capture the BRTVU screen as required in IRM 21.5.1.5.1,CIS General Guidelines.

    Example:

    Form 941, TC 976, generates on tax period 200906 and was received on October 31, 2009. The TRNS 193 is received without the TC 976 return attached. BRTVU clearly indicates the return is a true duplicate of the TC 150 posted to tax period 200909. There are no open TDI's on any other Form 941 accounts. In this situation, it is acceptable for you to input a TC 290 $.00 and TC 971 ac 002, on the 200906 period. Also, with a print of BRTVU, input a TC 290 $.00 on the 200909 period.

  2. If Files is unable to secure the return, and you are unable to determine the reason for filing the second return, or if additional information is needed, attempt to contact the taxpayer by telephone for a copy of the return(s). Provide enough information to help the taxpayer determine which return we are asking about.

  3. If unable to contact the taxpayer by telephone, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge,and send correspondence (generally Letter 31C or Letter 418C) to taxpayer to request a copy.

    Note:

    The TRNS 193 is considered the first request for the return.

  4. Suspend case for 40 days.

  5. If there is no reply and:

    If Then
    A payment was received with duplicate return 1. Assess tax equal to payment amount.
    2. If TC 976 carries, for example, wage/withholding/tax information (non "G" coded returns) on TRNS 193, assess additional tax based on this information. If not, follow the instructions in IRM 21.7.2.5.2.2.1, Withholding Tax Adjustment When Unable to Determine Proper Tax Correction, and input TC 29X using IRN 003 or 111, whichever is applicable.
    3. If module credit balance is in excess of payment submitted with return, determine reason for additional excess credit.
    4. 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 Input TC 290 $.00 to release the -A freeze.
    Sufficient information is available to recreate the return and it needs to be reprocessed Follow procedures in IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns.

  6. 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 normal reprocessing procedures.

21.7.9.4.1.2.1  (10-01-2009)
Multiple Returns Posting to a Module, One (1) or More Returns Were Electronically Filed

  1. Multiple returns are posting to some Forms 941 and 940 accounts where one or more of the returns were electronically filed. DUPF's have generated on some accounts where one return was filed via XML format and another return was filed on paper. We also have DUPF's generating when one return is filed in XML format and a second return is filed electronically via the legacy e-file system (EDI/Proprietary formats). There is no interaction between the legacy and XML systems. Because the returns were not submitted using the same system for the first and second return, they were not recognized as duplicates and were allowed to post.

  2. Some of these DUPFs are the result of the taxpayer having difficulties with one system and then converting to another system. They also are generating because the taxpayer has changed payroll companies. One payroll company submits a return for the entire quarter and the other company submits a partial return, with both companies using different formats.

  3. Action required. Follow normal research procedures. Use CC BRTVU to view the second (TC 976) return. See IRM 21.7.9.4.1.5, Amended/Supplemental Return – Increase, and treat as a supplemental return, unless something indicates otherwise. If there is a credit balance on the account and you do not treat as a supplemental return, do not release the refund without contacting the taxpayer first.

21.7.9.4.1.2.2  (10-01-2009)
MeF Filed Amended Returns

  1. Beginning January 2007, IRS began accepting amended MeF filed Forms 1065 and 1120 returns.

  2. These returns are filed and worked at the Ogden AM Campus.

  3. Beginning with TY 2006 returns, both amended and superseding returns are required to be e-filed if the taxpayer is required to file electronically . Corporate taxpayers will file an amended Form 1120 to amend their original return and will attach a pdf file of Form 1120X.

  4. Employees view MeF filed electronic returns though the Employee User Portal (EUP). See IRM 3.42.4.1.1.1, Employee User Portal, for more information. See IRM 21.7.4.4.4.15, Electronic Filing of Corporate Returns, for more information regarding the MeF system.

  5. Route carrybacks to the appropriate carryback unit. Also, route claims to Examination and send Cat-A as required.

  6. A user guide is being developed for IRS employees who need to view and print Modernized e-file (MeF) tax returns, extensions, and/or transmissions. This guide will be shared when it is completed.

21.7.9.4.1.2.3  (10-01-2009)
TRNS 193 Erroneously Generated from Input of TC 971 ac 010

  1. Forms 94XX scanned via CIS, systemically generate TC 971 ac 010. If the TC 150 is not posted, an erroneous TRNS 193 generates. This results in an additional control base on CIS/IDRS. Master File programming will be implemented in January, 2010 to prevent these erroneous notices.

  2. The following identify these DUPF cases:

    • DLN of the TC 971–010 and TC 976 are identical with a doc code of "77" . Do not attempt to order the TC 976 document from Files.

    • No CIS image is available for the TRNS 193 chargeout. Do not work these cases from BRTVU.

    • The TC 150 posting cycle is later than the TC 976 (971–010) posting cycle.

  3. After determining your DUPF case is erroneous:

    1. Ensure correct actions were taken on the 94XX case. If not, see IRM 21.7.2.5, Adjusted Employer's Federal Tax Return or Claim, for additional information.

    2. Update the IDRS control base to category MISC and close your IDRS base. The control category must be updated and closed on IDRS prior to closing the CIS case or it will be systemically changed back to DUPF.

    3. Close the CIS case as "No Action" .

      Note:

      If the -A freeze was not released from the 94XX case action, take appropriate action to release freeze.

21.7.9.4.1.3  (10-01-2009)
True Duplicate

  1. A true duplicate condition occurs when taxpayer files two returns for 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 15/17 (unless original return is attached) to release -A freeze. Use duplicate return for source document if working outside of CIS.

      Caution:

      If the module is in zero balance, input hold code "0" . If the true duplicate return was received with payment, do not treat as a true duplicate. See IRM 21.7.9.4.1.5, Amended/Supplemental Return-Increase, and treat as a supplemental return.

  3. Staple TRNS 193 to duplicate return when appropriate.

    Note:

    If original return was secured, staple duplicate return behind original (non CIS environment) and use appropriate BS (00-09).

  4. If account needs to be finalized, but still has active filing requirements, input TC 591 cc 75 using cc FRM49. (See IRM 5.19.2.6.5.4.5, BMF Response Taxpayer Not Liable, for more information.)

21.7.9.4.1.4  (10-01-2009)
Two Returns Post to Same Account, TC 976 Return is Amended/Corrected or Supplemental Return

  1. When it is determined the TC 976 is a corrected, amended, or supplemental return for the same period, take the following action.

    1. If the return is a Form 941, 943, 944, 945, or CT-1, follow the procedures for the specific form and appropriate tax change in IRM 21.7.2.5.8, Exception Processing - Incorrect Filing, Forms Routed to AM from SP.

    2. For other BMF forms, and a tax increase, See IRM 21.7.9.4.1.5, Amended/Supplemental Return-Increase. For tax decreases, See IRM 21.7.9.4.1.6, Amended Return-Decrease.

21.7.9.4.1.5  (10-01-2009)
Amended/Supplemental Return - Increase

  1. Returns reporting tax increases are sometimes marked as "amended" returns. They can also be marked as "corrected" or "supplemental" . Additional tax is usually paid with these returns. Follow (4) below if the return is an amended/corrected/supplemental return.

  2. Taxpayers do not always explain why a second return was submitted. Entities with more than one business location are supposed to be combined and reported on one return. Many times taxpayers file separate returns for each location. Thoroughly research account on IDRS/CFOL using all available tools to determine whether to assess liability on second return. Consider such items as the following:

    1. Do the filing/signature dates, liability periods, credits claimed or payments made, relate to any other tax period?

    2. Is there any change to the entity information which could indicate a different taxpayer?

    3. Are there any open modules (for example, no TC 150) for which second return is intended?

    4. Is there an indication the second return is in response to previous Campus correspondence?

  3. If the reason for filing the second return is not clear, additional information is needed. Action required:

    1. Request TC 150/976 documents, if necessary.

    2. Attempt to contact the taxpayer for additional information.

    3. Document call attempts and any conversations with the taxpayer.

    4. Correspond (generally Letter 418C, Amended/Original Return Unavailable; Copy Requested) or Letter 31C, Duplicate Returns Filed; Explanation Requested ), with the taxpayer if unable to contact by phone.

    5. If corresponding, suspend for 40 days.

  4. Take the following action after completing research and a proper determination can be made on the correct resolution of the case, or if you are unable to determine because you receive "no reply" from the taxpayer:

    1. Re-compute tax liability. A tax increase on a supplemental return is increased for the amount of the supplemental return. A tax increase on an amended return is increased for the difference between the original and amended returns.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. Compare information on TRNS 193 with IDRS data. Consider any action which has taken place since TRNS 193 generated, before adjusting account.

    4. Increase tax with TC 29X and adjust any appropriate IRNs, abstract numbers etc. Use blocking series 00 if the TC 150 document has been secured . Use blocking series 18 on superseding returns only.

    5. Adjust penalty and interest if necessary. See IRM 20.1. 4.11.8.3, Amended or Supplemental Return, before adjusting the FTD penalty and IRM 20.2, Interest, respectively.

    6. Allow adjustment notice (CP 210/220) to generate. If the adjustment is different than what the taxpayer expected, correspond with the appropriate "C" letter and explain the changes to the taxpayer.

    7. If taxpayer filed separate returns for several businesses/locations, send Letter 673C and advise taxpayer to file only one tax return per tax period (in the future), even though several businesses are involved.

      Note:

      If adjusting Forms 1041 and 1120, an increase in income may meet the criteria for an Examination initiative. See IRM 21.5.3.4.7.4, Taxable Amended Return Program, for more information.

  5. See IRM 21.7.2.5, Adjusted Employer's Federal Tax Return or Claim for Refund for processing 94XX and CT–1X stand alone forms.

21.7.9.4.1.6  (10-01-2009)
Amended Return - Decrease

  1. Amended returns filed to decrease tax are required to have backup information (required forms, schedules, etc.) attached, unless return is correcting a reporting error.

  2. Refer to the appropriate section of this IRM for required documentation for each form. Refer to IRM 21.7.2.4.18.1.13, Frivolous Employment Tax Claims, if TP is attempting to reduce their employment tax to zero.

  3. See IRM 21.5.3, General Claim Procedures, for information on the processing of claims.

  4. Do the following:

    1. Recompute tax liability.

    2. Compare information on TRNS 193 with IDRS data. Consider any action which has taken place since TRNS 193 generated, before adjusting account.

    3. Decrease tax with TC 29X and appropriate IRNs, CRNs, etc. using appropriate BS and HC.

      Note:

      If the adjustment results in a refund of $10 Million or more, follow procedures in IRM 21.5.2.4.11, Assessments or Refunds over $10 Million.

    4. Adjust penalty and interest, if necessary. (See IRM 20.1, Penalty, and IRM 20.2, Interest, respectively.)

  5. See IRM 21.7.2.5, Adjusted Employer's Federal Tax Return or Claim for Refund for processing 94XX and CT–1X stand alone forms.

21.7.9.4.1.7  (10-01-2009)
Duplicate Filing Conditions Involving Returns Prepared Under IRC Section 6020(b)

  1. When a taxpayer fails to file required returns or files false or fraudulent returns, IRS prepares returns under IRC section 6020(b) and processes them as originals. The following actions occur:

    1. Tax liability is proposed to taxpayer before assessment is made.

    2. Taxpayer is given opportunity to either file a voluntary return to correct proposed assessment, or to agree to assessment.

    3. If the taxpayer fails to file a return or fails to agree to the assessment, tax may be assessed using the 6020(b) return (if the tax is not subject to deficiency procedures) and taxpayer is billed for the balance due.

  2. A 6020(b) return is identified on module/transcript by CCC 4 and certain closing codes. Closing codes post with TC 59X. Some of the most common closing codes are 08, 09, 38, 39, 63, and 64.

    1. Closing codes 08, 38 and 63 indicate a return prepared by IRS (un-agreed case), for example, from prior quarters liabilities. Statutory period begins when taxpayer files a signed return.

    2. Closing codes 09, 39 and 64 indicate taxpayer agreed to proposed assessment. (See IRM 25.6.1.9,Assessments, for more information on statute considerations.)

  3. When an amended return is sent directly from R & C to AM and it is intended as the original taxpayer's return for a module that contains a TC 150 that is a 6020(b), send the return to batching so that the return will post as a TC 976 and set the ASED on the account.

  4. Always adjust a 6020(b) account to reflect taxpayer’s figures shown on their return. However, do not adjust account if sending the return to batching. Do not request information from taxpayer to support a tax decrease.

    Exception:

    On Form 940, certification must be requested from the appropriate state. See IRM 21.7.3.4.2,Manual Certification Required (FUTA).

  5. When a module contains the 6020(b) return as original (TC 150), (taxpayer's return is TC 976):

    1. Math verify tax liability on taxpayer’s return (TC 976), if over tolerance.

    2. Input TC 29X using appropriate IRNs, CRNs, etc. using appropriate BS.

      Note:

      The taxpayer's (TC 976 document) return is not considered the original return. If you are only attaching the TC 976 document to your adjustment, do not use blocking series 00/05. Only use blocking series 00 when you have the TC 150 document.

    3. Manually compute and assess correct FTF, FTP, FTD, and ES penalties (if applicable) based on amounts reported on taxpayer’s signed return. See paragraphs (6), (7) & (8) below for more information. Also, see IRM 20.1.2.1.4, Substitute for Return IRC section 6651(g), for adjusting penalties on 6020(b) modules.

      Exception:

      Not required if penalties were not previously manually assessed and tax is reduced to zero.

  6. Manual computation of FTF and FTP is not necessary if all the following conditions are meet:

    1. The return due date is after 12/31/2000, and

    2. Neither penalty has previously been restricted (TC 160, 161, 270, 271), and

    3. The adjustment to tax is a decrease, and

    4. The MFT is 01, 03, 04, 05, 07, 08, 09, 10, 11, 12, 14 (tax period 200612 and subsequent), 16, 58, 60, 61, 62, 63 or 64.

  7. When manual computation is required, compute FTP and FTF from the return due date (without regards to extensions) on the underpayment (consider timely payments and credits) reported by the taxpayer.

  8. Always consider manual computation of ES Penalty and FTD penalty when decreasing or increasing tax on 6020(b) modules.

  9. Manual abatement is not necessary if penalties were not previously manually assessed, and tax is being reduced to zero.

  10. When a module contains 6020(b) return as TC 976 (taxpayer's return is TC 150):

    1. No tax adjustment is required.

    2. Input TC 290 $.00 to release -A freeze using appropriate BS.

21.7.9.4.1.8  (10-01-2009)
FTD Discrepancies on Duplicate Filing Cases

  1. When resolving duplicate filing conditions involving returns subject to FTD penalty, compare "Record of Federal Tax Liability" (ROFTL) section of return against deposits and payments posted to modules involved. This applies to returns posted to correct modules as well as those being reprocessed to other modules.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Before closing the case, check IDRS to see if a TRNS 194 or CP 207 was issued. If so, coordinate with FTD Penalty Function to prevent erroneous FTD Penalty Assessments. (The amended return could be taxpayer’s response to CP notice.)

21.7.9.4.1.8.1  (10-01-2009)
In-House Research Procedures

  1. Verify return tax computation to ensure FTD information was correctly entered. If an error is found due to addition, subtraction, transposition of numbers, or misapplied entries:

    1. Correct deposit amount claimed on return.

    2. Reprocess return to correct module, if necessary.

  2. If FTD payments are missing or misapplied, research the FTD Credit Module (MFT 01, tax period 000000), the Unidentified Remittance File, and prior and subsequent tax periods to locate payments.

  3. Transfer any erroneously posted payments to correct modules. (See IRM 21.5.8, Credit Transfers.)

21.7.9.4.2  (02-29-2008)
Incorrect Use of Preprinted Label/Form

  1. Duplicate filing conditions are sometimes caused by the incorrect use of a tax form or preprinted label. To resolve these issues, see the information below:

    If caused by Then advise via Letter 673C
    Pre-printed label Use only for the intended form/period.
    Wrong tax year form Use correct tax year in future.
    Correct year/wrong checkbox Ensure correct period is marked.

  2. The taxpayer does not need to be notified if the return was a final return, or if the taxpayer indicated on the duplicate return the correct period and C&E did not properly code the return.

21.7.9.4.3  (01-01-2005)
Multiple TINs

  1. On cases involving multiple TINs, determine if either account needs to be deleted.

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

21.7.9.4.4  (01-01-2005)
Transferring Accounts Which Cannot Be Transferred Using MF Procedures

  1. When account to be transferred contains transactions which cannot be transferred using MF procedures:

    1. Prepare Form 12810, Transfer Request/Checklist.

    2. Route to Accounting Function for preparation of Form 514-B transactions.

21.7.9.4.5  (04-02-2008)
Unnumbered Amended Income Tax Returns Containing Adjustment Function Criteria (AFC)

  1. Prior to April, 2008, Submission Processing worked Form 1120X amended returns that met certain criteria. Unnumbered amended income tax returns (Forms 1120X) containing Adjustment Function Criteria (AFC) were routed directly or hand carried to Accounts Management for expedited handling.

  2. Anytime taxable income is changed due to an adjustment (including TC 290 $.00) to an income tax return (Forms 1041, 1120, 1120S, 990-C/1120C, 990-T), IRN 886 must be input to correct the taxable income/ordinary income/unrelated business taxable income on the MF. Action required:

    1. Input TC 29X to adjust tax.

    2. Input IRN 886 to correct taxable income, etc.

    Note:

    When decreasing taxable income, etc., use IRN 886 with a minus (−) behind the money amount.

21.7.9.4.6  (10-01-2009)
TEFRA/AARs on Flow-through Entities

  1. Form 1065 TRNS 193s may involve an Administrative Adjustment Request (AAR) allowed under the Tax Equity and Fiscal Responsibility Act (TEFRA), and must be sent to the Examination function before processing. IRM 21.7.4.4.2.9, Duplicate Filing Conditions on Form 1065, provides the specific criteria for this situation. .

  2. For a general listing of CAT-A criteria, See IRM 21.5.3–2, Examination Criteria (CAT-A) – General

21.7.9.4.7  (01-01-2005)
Document Code 51 Assessments - Employment Code Discrepancies

  1. Document code 51 assessments unpost when entity employment code (EC) indicates taxpayer is not liable for type of tax assessed. Since document code 51 transactions are manually assessed in the Accounting Function and a bill issued to taxpayer, assessment must be posted at MF before taking corrective action. Entity verifies correct EC.

    If Then
    EC is incorrect Entity corrects EC and posts assessment.
    EC is correct Entity changes EC to allow assessment to post, cycles correct EC, and forwards case to Accounts Management on Form 3210.

  2. Each case sent by Entity has Form 8749, Unpostable Action and Routing Slip, attached. Input appropriate adjustment action specified on Form 8749; e.g., abatement of erroneous assessment.

21.7.9.4.8  (10-03-2007)
CP 170/170A Duplicate Filing Condition

  1. Prompt, Quick, and Jeopardy Assessments are expeditious assessments made by area office Exam, Collection, or Campus functions when a statute is imminent or collection of taxes is in jeopardy. Tax data necessary for these assessments is transmitted to Accounting Function by telephone, mail, facsimile, or IDRS letter. The Accounting Function:

    1. Manually assesses tax, penalty, and interest

    2. Prepares a balance due notice to taxpayer

    3. Enters information in ISRP to post to MF

  2. These pre-itemized transactions are numbered with a document code 51. They are identified by TC 370.

  3. Prompt assessment billings attempting to establish a tax module (TC 150) when a TC 150 is already present result in:

    1. Posting of a TC 290.

    2. Establishment of -A freeze.

    3. Generation of a CP 170/170A instead of TRNS 193/193A.

  4. To resolve -A freeze:

    1. Follow normal duplicate filing adjustment procedures.

    2. Determine reason for prompt assessment.

    If Then
    Additional assessment is valid Input TC 290 $.00 to release -A freeze.
    Additional assessment is erroneous/duplicate 1. Input TC 291 to abate additional assessment.
    2. Address penalty and interest, if necessary.

    Note:

    Most Prompt, Quick, and Jeopardy Assessments are statute periods and need to be reviewed and/or cleared by the Statute Area before adjusting the tax.

21.7.9.4.9  (10-01-2009)
TRNS 293, Duplicate Return With TC 420 Present

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

  2. Use procedures for duplicate filing conditions. Be sure to consider the open TC 420 when adjusting account. (See IRM 21.5.3, General Claims Procedures, when working claims.)

21.7.9.4.10  (01-01-2005)
Section 338 Filers

  1. Corporations making an election under IRC Section 338 can file two Forms 1120, thus creating a duplicate filing condition. Both returns are short period returns covering different periods.

  2. Determine proper period for each return, and:

    1. If both periods end in the same month, input first return with an FY ending for that month and subsequent return with an FY ending for following month.

    2. Since re-inputting return creates an unpostable due to a mismatch on the FY ending, attach instructions for Unpostables to force return to post.

    3. To work case, See IRM 21.7.9.4.1.1.2, Two Returns Posted to Same Account, Incorrect Return Posted First, TC 976 Return is Correct Return, or See IRM 21.7.9.4.1.1.1.1, Reprocessing TC 150 Return to Module with No TC 150, as applicable.

21.7.9.4.11  (10-01-2009)
TRNS 190, Amended Return - No Original Posted

  1. TRNS 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. TRNS 190 is associated with TC 976 return and forwarded to Accounts Management for resolution.

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

    • TC 971 ac 002

    • TC 150

  4. Accounts Management must determine disposition of TC 976 return.

    1. Check IDRS for an unpostable or rejected TC 150. (Follow local procedures for working these cases.)

    2. Analyze return and any attached schedules for possible re-input to another tax period or TIN.

    3. If TC 150 has posted to account since TRNS 190 was generated, close the base for the TRNS 190 to the DUPF control after it has been assigned to an employee. Resolve duplicate filing condition.

    4. If further information is needed, call or send taxpayer a copy of the return using the appropriate C Letter. (Suspend case for 40 days if corresponding.)

21.7.9.4.11.1  (02-23-2009)
TC 976 Return Intended as Original

  1. If TC 976 return needs to be re-input to the same module, to post as the original (TC 150), the return must be edited and reprocessed using Form 13596, Reprocessing Returns. Input TC 971 ac 002 to prevent the generation of TRNS 193. If the module is in MF Status 02/03, input TC 599 closing code (cc) 18 using FRM 49.

  2. Follow instructions in IRM 21.5.2.4.23, Reprocessing Returns/Documents, when reprocessing documents.

21.7.9.4.11.2  (02-29-2008)
TC 976 Return Posted to Incorrect TIN/Tax Period, Account for Which It Was Intended Contains the Original Return (TC 150)

  1. When it is determined TC 976 return was intended for another module which contains the original return, action must be taken on both accounts.

  2. On module which the TC 976 is being moved to:

    1. Input TC 29X with appropriate reference numbers to adjust tax to the amount reflected on TC 976 return.

    2. Adjust penalty and interest if necessary.

    3. Input TC 971 ac 017 using REQ 77.

    4. Attach TC 976 return to adjustment document.

  3. On module which TC 976 return is being moved from:

    1. Transfer any credits which do not belong on module. See IRM 21.5.8.4.1, IDRS Guidelines for Credit Transfers. (Input TC 570 if necessary.)

    2. Input TC 971 ac 002 to release E- freeze.

21.7.9.4.11.3  (04-28-2009)
TC 976 Return Posted to Incorrect TIN/Tax Period, Account for Which It Was Intended Does Not Contain an Original Return (TC 150)

  1. If TC 976 return was intended for another module which does not contain an original return, action must be taken on both accounts.

  2. On module which TC 976 return is being moved to:

    1. Use Form 13596, Reprocessing Returns, to reprocess return to correct TIN/tax period. See IRM 21.5.2.4.23, Reprocessing Returns/Documents for reprocessing instructions.

    2. Input TC 599 cc 18 (if module is in MF Status 02 or 03).

    3. Input TC 971 ac 017. ( See IRM 21.7.9.4.1.1(3) , for proper input.)

  3. On module which TC 976 return is being moved from:

    1. Transfer any credits which do not belong on module. See IRM 21.5.8.4.1, IDRS Guidelines for Credit Transfers. (Input TC 570, if necessary.)

    2. Input TC 971 ac 002 to release E- freeze. ( See IRM 21.7.9.4.1.1(3)for proper input.)

21.7.9.4.11.4  (02-29-2008)
TC 976 Return Posted to Correct Module, Original Return Posted to Incorrect Module

  1. When TC 976 return posts to correct module, but original return intended for that module incorrectly posts to another module, the original return on the incorrect module must be secured.

  2. On module containing the incorrect original return:

    1. Abate tax assessed on incorrect module using appropriate HC. (Also abate penalty and interest if restricted.)

    2. Transfer credits to correct module. See IRM 21.5.8.4.1, IDRS Guidelines for Credit Transfers . Input TC 570, if necessary.

    3. Input TC 971 ac 001. ( See IRM 21.7.9.4.1.1(3) , TRNS 193s Involving Reprocessing Returns, for proper input.)

    4. Reprocess the TC 150 document to the correct period. However, if the return belongs on the module where the TRNS 190 generated, and the TC 976 amended return on that period is reporting the correct amount of tax, reprocess the TC 976 as the original. Edit an X on the TC 150 document and attach it behind the TC 976 return. Edit, on the return: "Do Not Detach" . Also, edit the earliest received date from either document onto the document you are sending to be reprocessed.

  3. On module where the TRNS 190 generated which contains the TC 976 return:

    1. Reprocess either the original or amended return as the TC 150. (Follow (2)(d) directly above if reprocessing the TC 976.)

    2. If the TC 150 from the incorrect module contains the most current tax reporting information, reprocess it as the original to the module. Only reprocess the TC 150 if it contains more current information than the TC 976, otherwise reprocess the TC 976. Edit an X on the TC 976 document and attach it behind the TC 150. Edit, on the return: "Do Not Detach. " Also, edit the earliest received date from either document onto the document you are sending to be reprocessed.

    3. Input TC 971 ac 002 to prevent generation of TRNS 193.

21.7.9.4.11.5  (01-01-2005)
TC 976 Return Cannot Be Obtained From Files

  1. When working TRNS 190, and TC 976 return cannot be obtained from Files, follow procedures below:

    1. Correspond (use Letter 418C) or call taxpayer to obtain a copy of original and amended returns. Request a "special search" from Files, using Form 2275, Records Request, Charge and Recharge.

    2. Put case in "M" Status and suspend for 40 days.

  2. If taxpayer does not reply and TC 976 return still cannot be located, follow the chart below:

    If Then
    There are no credits on module Input TC 971 ac 002 to release E- freeze.
    There are credits on module which do not belong on any other module (appropriate research must be performed) Prepare a dummy return using DLN of TC 976 return, with a tax liability equal to credits.

    Note:

    Use this procedure only if sufficient information is not available to process a return as original.


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