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Part 3. Submission Processing

Chapter 0. General

Section 101. Schedule K-1 Processing

3.0.101  Schedule K-1 Processing

All Official Use Only content has been replaced with ≡.

3.0.101.1  (01-01-2008)
Purpose

  1. The 3.0.101 IRM is intended to provide instructions regarding the processing of Schedules K-1 through Integrated Submission and Remittance Processing (ISRP) and Service Center Recognition/Image Processing System (SCRIPS).

3.0.101.1.1  (01-01-2008)
Scope

  1. These instructions supersede all instructions in other IRM's regarding the processing of Schedule K-1's.

3.0.101.2  (01-01-2008)
Program Codes

  1. The K-1 program codes listed below should be used when performing the functions involved with processing Schedule K-1's through ISRP unless otherwise instructed:

    Return Type Program Code Tax Class/Doc Code Parent Tax Class/Doc Code
    1041 K-1 44380 566 244
    1065 K-1 44381 565 265
    1120S K-1 44382 567 316

  2. The K-1 program codes listed below should be used when processing Schedule K-1's through SCRIPS unless otherwise instructed:

    Return Type Program Code
    1041 K-1 44386
    1065 K-1 44387
    1120S K-1 44388

  3. The K-1 program codes listed below should be used when processing Schedule K-1's through E-File unless otherwise instructed.

    Return Type Program Code
    1041 K-1 4439X
    1065 K-1 4436X
    1120S K-1 4437X

    1. Code & Edit: should use the parent return program codes for coding both the parent returns and the Schedule K-1's. Do not use a 4438X-program code when coding the K-1's.

    2. Batching/Numbering: should use the K-1 program codes for time actually spent batching and numbering Schedule K-1's.

    3. Data Conversion: should use the parent return program code when transcribing the parent return and the K-1 program code when transcribing Schedule K-1's. (See program codes listed above that should be used)

    4. For transcription of Schedule K-1 Error Register, program code 44920 should be used.

    5. For transcription of Schedule K-1 BOB Register, program code 44930 should be used.

    6. Error Resolution : should use function/program code 340–44380

    7. BOB Register: should use function/program code 620–44380

3.0.101.3  (01-01-2008)
Extracting and Sorting

  1. Because Schedules K-1 will be attached to the parent returns during the sorting function, no sorts will be performed on the K-1's. However, because of Schedule K-1 processing, parent returns will require additional sorts.

  2. The parent returns will be sorted in the following categories:

    1. Remittance vs. Non-remittance

    2. Refund vs. Non-refund

    3. Tax period

      • Current timely filed calendar year (current processing year minus 1)

      • Prior Year (current processing year minus 2 or more)

      • Current fiscal and delinquent current year (current processing year minus 1)

      • Future Years (current processing year)

    4. Current Forms and Future 1041 with Schedules K-1 attached vs without K-1's attached.

3.0.101.4  (01-01-2008)
Code & Edit

  1. This section contains instructions for processing Parent returns with Schedules K-1 through Code and Edit.

  2. K-1 editing in Cincinnati Submission Processing Center (CSPC) and Ogden Submission Processing Center (OSPC) will be done in Green ink.

  3. If the return is for prior year, do not code or detach the Schedule K-1.

  4. Schedule(s) K-1 filled out by the taxpayer in RED, ORANGE, PURPLE, or PINK ink cannot be read by the SCRIPS scanners. Photocopy the schedule(s) K-1, notate on original "Copy processed" , process the photocopy and leave the original attached to the parent return.

  5. If the pre-printed year of the Schedule K-1 is different from the tax year of the parent return, correct the pre-printed tax year of every Schedule K-1 by lining through the last digit of the pre-printed year and editing the correct year digit to the right of the lined through digit. Example: 2006 should be 2007. Line through the last digit 200/ and edit the new year number to the right of the tax year.

    Note:

    When making this correction do not edit above the tax year in the DLN area, edit to the right of the printed tax year.

  6. If an exact duplicate of a K-1 has been filed with the parent return, process one K-1 and cross out the duplicate K-1 with an X and leave the duplicate attached to the parent return.

  7. If Schedule K-1 is attached to a Re-processable/Re-entry, current year parent return, and has not been processed, Detach K-1 and treat as "Loose Schedule K-1" . (See IRM 3.0.101.5 for Loose K-1 Instructions).

  8. If there are two pages, ensure there is some type of identifier. If no identifier (i.e. Parent/Payee Name and/or TIN) is present, write the last four digits of the payee TIN in the top center margin of page 2.

  9. Do not bracket negative amounts. (See IRM 3.0.101.6 for Money Amount Fields instructions)

  10. If the IMF Payee SSN or BMF Payee EIN is not located in the correct box but it is located in the name and address box, re-write the SSN/EIN in the SSN/EIN box

  11. A payer TIN must be present on at least the first Schedule K-1. If not present, enter the TIN from the parent return in the EIN/SSN box. If the TIN on the parent return has changed, enter the new parent TIN on the Payer TIN Line.

  12. If the words "amended" or "corrected" are present on the parent return of the Schedule K-1 and the amended box is not checked, edit a check mark or "X" to the box. Edit the Payor and Payee TIN's, if necessary. Do not edit the payor/payee address information. Detach from parent and continue processing.

    Exception:

    For Schedule K-1's that will be processed through ISRP do not check the Amended box. Edit a "G" in the payee entity area on every K-1 attached to the parent return.

    Note:

    For Form 1041 K-1 - edit in "Beneficiary" box, Form 1065 K-1 - edit in "Partner" box, and Form 1120S K-1 - edit in "Shareholder" box.

    The amended checkbox is located in the following position on the Schedule K-1:

    Type of K-1 Location of Checkbox
    Form 1041 K-1 Above part III
    Form 1065 K-1 Above part III
    Form 1120S K-1 Above part III

  13. When Schedules K-1 are received in continuous formats (e.g. computer listings, and typed listings) correspond requesting separate Schedules K-1. Do not dispose of the listing as it is an attachment to a tax return.
    When correspondence is required for the paragraph above, any one of the following letters should be used:

    • Letter 177C for Form 1041 Schedule K-1.,

    • Letter 1355C for Form 1065 Schedule K-1, edit "1355 sent" in lower right margin

    • Letter 118C for Form 1120S Schedule K-1.

    • When sending the return back to the taxpayer, use Form 6800 (Request For Missing Information or Papers to Complete Your Return), Check the appropriate box.

  14. Do not correspond for the missing Schedule K-1 for Form 1065 on the following types of returns:

    • Sec. 6020(b) returns

    • Sec. 501(d) returns, Religious and Apostolic Organizations

    • Returns filed under a Common Trust

    • Sec. 761(a) returns

    • Nominee returns

    • Inactive returns

    • IRC 1.736.1 (Payments to a retiring partner)

    • Final returns

    • Amended ("G" coded) returns

    • Payee is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  15. When reviewing 1065 Schedule K-1 and the partnership has indicated that the number of Schedules K-1 is "1" and/or the Schedule K-1 attached to the return has 100% interest in the partnership then follow the instructions in IRM 3.11.15.15 (4 )When the Schedule K-1 shows two names listed in the partner's name and address section,

    • Correspond requesting separate schedule K-1 using letter 1355C or approved local correspondence procedures.

    • Notate the letter sent in the lower right margin of Form 1065.

    • Continue editing the return.

  16. Do not correspond for missing Schedule K-1 for Form 1120S on the following types of returns

    • Sec. 6020(b) returns

    • Examination Secured (SFR) returns

    • Re-entry returns

    • Amended ("G" coded) returns

    • Payee is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  17. Do not correspond for missing Schedule K-1 for Form 1041 on the following types of returns.

    • Sec. 6020(b) returns

    • Examination Secured (SFR) returns.

    • Re-entry returns.

    • Amended ("G" coded) returns.

    • ESBT, Grantor Type Trust, or Bankruptcy Estate.

    • Payee is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

    • Section 642(i) Trust (Maintenance of Cemetery Property or Number of Gravesites)

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  18. Form 1041 Grantor Trust Filers are not required to file Schedule K-1's. Do not process or detach any Schedule K-1 attached to a Non-taxable or Taxable Grantor Trust. These are trusts that will be coded with a Fiduciary Code of 2 or 4 and a Trust Code of 3.

3.0.101.4.1  (01-01-2008)
Unprocessable Schedule K-1

  1. The criteria for unprocessable Schedules K-1 are as follows`

    • The tax period is 200612 or prior.

    • The payer information indicates a different entity than the parent entity.

    • Form 1065B Schedule K-1 or Schedule K-1 attached to a Form 1065B

    • Schedule K-1's attached to Form 1041 Non-taxable and Taxable Grantor Trust

  2. Discontinue processing any Schedule K-1 if income reported is for a different tax year than the form.

    Note:

    If after information is requested, and it is not received or not found, route to Accounts Management.

3.0.101.4.2  (01-01-2008)
Standard Schedule K-1

  1. In order to be processable, standard Schedules K-1 must meet all of the following requirements:

    • Must contain the payer and recipients name, address and SSN/EIN

    • Each taxpayer's information must be on a separate sheet of paper

      Exception:

      Do not correspond if a husband and wife (same last name) are filing a Schedule K-1 as "one partner" in the corporation , trust or partnership and does not report 100% interest (partnership only).

    • The amount of each partner's, shareholder's or beneficiary share cannot be combined as one total

  2. If the standard Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found, research IDRS. If unable to locate the missing information, and the Payee is not a foreign entity correspond requesting a valid Schedule K-1, using Form 3696 (Balance due or delinquent) in house or Form 6800 (Request for Missing Information Or Papers to Complete Your Return) when returning to a taxpayer, check box number 25 or appropriate box. Use the following language "Please provide us the identifying numbers for every partner/shareholder/beneficiary listed on each K-1. The identifying number for an individual partner/shareholder/beneficiary is the Social Security Number. Also, give us the names and addresses of all partners/shareholders/beneficiaries."

    Exception:

    Do not correspond if Schedule K-1 is not required per IRM 3.0.101.4.

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  4. See Exhibit 3.0.101-1 for example of Standard Schedules K-1.

3.0.101.4.3  (01-01-2008)
Substitute Schedule K-1

  1. Schedule K-1 can be submitted in substitute format. ( e.g. 2D Bar Code)

  2. Payor information is inserted in Section (16) to indicate Payor information. Edit (16) to tell data transcribers where to put payor information.

  3. In order to be processable, substitute Schedules K-1 must meet all of the following requirements:

    • Must contain the payer and recipients name, address and SSN/EIN

    • Each taxpayer's information must be on a separate sheet of paper

      Exception:

      Do not correspond if a husband and wife (same last name) are filing a Schedule K-1 as "one partner" in the corporation, trust or partnership and does not report 100% interest (partnership only).

    • The amount of each partner's, shareholder's or beneficiary share cannot be combined as one total.

  4. If the substitute Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found research IDRS. If unable to locate the missing information, and the Payee is not a foreign entity,correspond requesting a valid Schedule K-1, using Form 3696 (Balance due or delinquent) or Form 6800 (Request for Missing Information Or Papers to Complete Your Return), check box number 25 or appropriate box.. Use the following language "Please provide us the identifying numbers for every partner/shareholder/beneficiary listed on each K-1. The identifying number for an individual partner/shareholder/beneficiary is the Social Security Number. Also, give us the names and addresses of all partners/shareholders/beneficiaries."

    Exception:

    Do not correspond if Schedule K-1 is not required per IRM 3.0.101.4

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. See Exhibit 3.0.101–8 for example of Substitute Schedule K-1

3.0.101.4.4  (01-01-2008)
Non- Standard Schedule K-1

  1. Schedule K-1 can be submitted in non-standard format. A non-standard K-1 will be missing lines.

  2. Payor information is inserted in Section (16) to indicate Payor information. Edit (16) to tell data transcribers where to put payor information.

  3. For all processable non-standard K-1's that do NOT have a bar code, black out the Forms Identification Number found in the upper right corner of the Schedule K-1. (If bar code is present, do NOT black out Forms Identification Number).

  4. In order to be processable, non-standard Schedules K-1 must meet all of the following requirements:

    • Must contain the payer and recipients name, address and SSN/EIN

    • Line items may be missing, however, line items that are present must be in the same order as those on the official form

    • Each taxpayer's information must be on a separate sheet of paper

      Exception:

      Do not correspond if a husband and wife (same last name) are filing a Schedule K-1 as "one partner" in the corporation, trust or partnership and does not report 100% interest (partnership only).

    • The amount of each partner's, shareholder's or beneficiary share cannot be combined as one total.

  5. If the non-standard Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found research IDRS. If unable to locate the missing information, and the Payee is not a foreign entitycorrespond requesting a valid Schedule K-1, using Form 3696 (Balance due or delinquent) or Form 6800 (Request for Missing Information Or Papers to Complete Your Return), check box number 25 or appropriate box. Use the following language "Please provide us the identifying numbers for every partner/shareholder/beneficiary listed on each K-1. The identifying number for an individual partner/shareholder/beneficiary is the Social Security Number. Also, give us the names and addresses of all partners/shareholders/beneficiaries."

    Exception:

    Do not correspond if Schedule K-1 is not required per IRM 3.0.101.4

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.0.101.5  (01-01-2008)
Loose Schedule K-1

  1. If loose Schedule K-1's are received in Code & Edit , research for the parent return DLN and proceed as follows:

    If parent return DLN And Schedule K-1 Then
    Is found Is for either current or future year Take the following actions:
    • Write the parent DLN in the upper left of the Schedule K-1

    Note:

    If the DLN is an E-filed DLN (Beginning with 14, 16, 22, 35, 38, 41, 43, 52, 64, 65, 72, 75, 76, 92, 93 or 95) route directly to appropriate Campus


    • Edit the Schedule K-1
    • Place the Schedule K-1 in a gusset folder
    • Forward the folder with the Schedule K-1 to Batching/Numbering to continue processing
    Is not found Is for either current or future year Hold in suspense and monitor weekly until parent return DLN is found

    • Current Year: Hold until six weeks after parent return PCD.

    • Future year: Hold for six weeks (research ERS Suspense and Master File)

    • Note: All Schedules K-1 need to be suspended for research of parent DLN for a minimum of six weeks

    Is not found Is for a prior year Route to Accounts Management as a loose schedule

3.0.101.6  (01-01-2008)
Money Amounts Fields

  1. Do not bracket negative amounts.

  2. If taxpayer enters a negative amount in a positive only field, "X" the negative amount. See table below for positive only fields for each Schedule K-1.

    Note:

    Lines with multiple entries, edit the first line only

    Figure 3.0.101-1a

    Form 1065

    Line Title
    Guaranteed Payments
    Interest Income
    Ordinary Dividends
    Royalties
    Section 179 deduction

    Figure 3.0.101-1b

    Form 1120S

    Line Title
    Interest Income
    Ordinary Dividends
    Royalties
    Section 179 Deduction
    Credits and Credit recapture

    Figure 3.0.101-1c

    Form 1041

    Line Title
    Interest Income
    Ordinary Dividends
    Net Short-Term Capital Gain
    Net Long Term Capital Gain
    Other Rental Income
    Other Information

  3. Amounts are transcribed in dollars only. If taxpayer enters a positive or negative $.49 or less, "X" the amount. If taxpayer enters a positive or negative $.50 to $.99, edit a $1 or -$1, respectively.

  4. A Schedule K-1 with zeros, blanks or dashes in the entire money amount T-Lines are considered a "Zero Balance K-1" and are valid, continue processing.

  5. Ogden Campus Only

    • Foreign documents – if a circled "U." is coded to the right of the name on name line 1, enter "U." in the 2nd TIN Notification field in Section 02. The "U." code is valid with File Location Code 98 (Ogden) only.

    • When transcribing money amounts, the equivalent U.S. cents amount (e.g.. Euro Dollars.) should not be transcribed. Many Europeans currencies use commas for decimals and decimals for commas. Do not transcribe punctuation. Do not transcribe the last two numerics of a foreign money amount if that amount is preceded by either a decimal or a comma.( e.g.) Deutsche Marks may be written as "DM 2.941,18" ; only 2941 should be transcribed).

3.0.101.7  (01-01-2008)
Converting K-1 Forms

  1. If the payer entity data matches the parent return entity but the wrong K-1 form type is used (e.g. 1041 Schedule K-1 is attached to a Form 1065),convert the Schedules K-1 by .

    • Changing the T-lines as indicated below

    • Circling out the original form type

    • Editing the form number to which it is being converted into in the upper left hand corner.

    • Blacking out the Forms ID Number found in the upper right corner of the Schedule K-1.

    Figure 3.0.101-2

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

    Exception:

    Do not convert a Form 1120S or 1065 Schedule K-1 into a Form 1041 Schedule K-1. There must be a valid 1041 Schedule K-1 attached to the Form 1041. If not present, follow the instructions found in IRM 3.11.14.20.4(4) or 3.11.14.20.4.(5) 1

    Converting Form 1065 Schedule K-1

    Change this Form 1065 K-1 Line To Form 1120S K-1 Line
    1 1
    2 2
    3 3
    4 "X" -out
    5 4
    6a 5a
    7 6
    8 7
    9a 7a
    12 11

    Converting Form 1041 Schedule K-1

    Change this Form 1041 K-1 Line To Form 1065 K-1 Line To Form 1120S K-1 Line
    1 5 4
    2a 6a 5a
    3 8 7
    4a 9a 8a
    5 7 6
    7 "X" out "X" out
    8 3 3
    14 (first line) "X" out 13

    Converting Form 1120S Schedule K-1

    Change this Form 1065 K-1 Line Change this Form 1065 K-1 Line
    1 1
    2 2
    3 3
    4 5
    5a 6a
    6 7
    7 8
    8a 9a

3.0.101.7.1  (01-01-2008)
Non-Standard or Prior Year Format for Schedule K-1's thru ISRP

  1. All current year K-1’s on a prior year form must be reformatted to current year format. See Exhibit 3.0.101-9.

  2. If the K-1 is on other than current year format (may be either a prior year or non-standard form) and the lines cannot be numbered to agree with the current year Schedule K-1, correspond with the taxpayer.

3.0.101.7.2  (01-01-2008)
Prior Year Format for Schedule K-1's thru SCRIPS

  1. All current year K-1’s on a prior year form must be reformatted to current year format. See Exhibit 3.0.101-9.

  2. Black out the Forms ID Number found in the upper right corner of the Schedule K-1, if 2006 revision or prior. See Figure 3.0.101-3.

  3. If there is a bar code present on the prior year revision (2006 and prior for Forms 1120S Sch. K1 and Forms 1065 Sch. K-1 or 2006 and prior for Forms 1041 Sch. K-1) return, using a marker, black out the straight lines on both sides of the bar code. See Figure 3.0.101-3.

    Figure 3.0.101-3

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

3.0.101.8  (01-01-2008)
Moving Schedules K-1

  1. All K-1's should be left together. Processable or Unprocessable. If under tolerance, and information is not found, process. If K-1's are needed, and any K-1 information is missing, correspond and keep All K-1's together until information is received..

3.0.101.9  (01-01-2008)
Numbering Parent Returns

  1. When Numbering the parent return , the Numbering function will:

    1. Provide Batching with an estimated count of K-1's.

    2. Separate the Schedules K-1 from the parent return.

    3. Assign and stamp a DLN on the parent return. Stamp this same DLN in the upper left, at least 2 inches from the edge, of the first K-1 from that parent return as a cross-reference. If there is no room in the upper margin stamp DLN in the right side margin. Do Not use the Entity area. See Figure 3.0.101-4.

      Note:

      If there are no Schedules K-1, stamp the repeating number on a piece of scratch paper.

      Figure 3.0.101-4

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

    4. Place the parent returns into a folder and forward to Data Conversion.

    5. Place a copy of the parent return transmittal Form 9382 in the first slot of the K-1 batch cart.

      Note:

      When separating these documents, two batch carts will be required. One for the parent returns and the other for the Schedules K-1.

3.0.101.10  (01-01-2008)
Batching

  1. Set up the Schedule K-1 batches on BBTS. (See IRM 3.42.4.37) for specific instructions) Maintain the integrity of the parent return DLN.

  2. Document count will be 80 documents for each block.

  3. Forward to Numbering. CSPC and OSPC will forward to Doc- Prep- Unit.)

3.0.101.10.1  (01-01-2008)
Loose K-1's

  1. Batching will keep loose K-1's in a colored folder, and notate "Re-file" on the outside, route to Doc Prep Unit.

3.0.101.11  (01-01-2008)
Numbering Schedule K-1's

  1. When Numbering the Schedule K-1, the Numbering function will:

    1. Assign and stamp a K-1 DLN on each processable K-1.

    2. Edit the two digit year at the top right-hand corner of the 1332.

    3. Number the Schedules K-1 from 00–79 in upper right hand margin as normal.

    4. If there are more than 80 K-1's create a new block and write the parent DLN on the first K-1 of the new block in the upper left of the K-1.

    5. Count the number of parent return DLN's cross-referenced in the K-1 block and annotate the Form 1332 in the transaction code box with PF count.

    6. Place the Schedule K-1 in a separate gusset folder keeping the K-1's in parent return DLN order.

    Exception:

    Schedule K-1's that will be processed through SCRIPS will be sent to the Doc- Prep -Unit.

    Note:

    Ensure document "00" is blocked correctly, and there is information in Payer Section.

3.0.101.11.1  (01-01-2008)
K-1's Processed Through SCRIPS

  1. . Prepare the K-1 folders at the same time the parent returns are numbered

    • Assign and stamp a DLN on the parent return

    • Stamp this same DLN in the upper left of the first K-1 from that parent return as a cross-reference.

    • Stamp the parent return folder and the K-1 folder with the FLC, tax class and document code

    • Write the block number of the parent return on the folder

    • Place K-1's in folder and put on batch cart

    • If batch of work is for future year (2009), notate on the 9382 (Batch Transmittal) "Future Year 2009" .

    • Forward to the Pre Doc-Prep Unit

3.0.101.12  (01-01-2008)
Schedule K-1 Processing Through ISRP

  1. This section provides instructions for entering data using the Integrated Submission and Remittance Processing System.