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Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 3. Individual Income Tax Returns (Cont. 1)

3.11.3  Individual Income Tax Returns (Cont. 1)

3.11.3.6 
Correspondence

3.11.3.6.3 
General Response Procedures

3.11.3.6.3.1  (01-01-2008)
Return Processable Date (RPD)

  1. A Return Processable Date (RPD) is required ONLY when a reply to correspondence is received AFTER the due date of the return.

  2. Edit the RPD on Form 3471, Line 4, in MMDDYY format. (See Figure 3.11.3–10.)

    Reminder:

    The RPD and the Received Date should never be the same date.

  3. Use the table below to determine the RPD:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (See Figure 3.11.3-13).

  4. Do not edit an RPD if any of the following conditions apply:

    • One or more correspondence conditions were not identified when the first correspondence was sent.

    • The taxpayer has not provided ALL of the requested information.

    • The correspondence has been returned by the USPS as "undeliverable" .

    • The only correspondence item was for withholding support. (See Figure 3.11.3–9.)

    • The correspondence was not required.

    Figure 3.11.3-10
    This image has been removed because it contains Official Use Only.
    Please click here for the text description of the image.

    This image has been removed because it contains Official Use Only.

    Figure 3.11.3-11
    This image has been removed because it contains Official Use Only.
    Please click here for the text description of the image.

    This image has been removed because it contains Official Use Only.

    Figure 3.11.3-12
    This image has been removed because it contains Official Use Only.
    Please click here for the text description of the image.

    This image has been removed because it contains Official Use Only.

    Figure 3.11.3-13
    This image has been removed because it contains Official Use Only.
    Please click here for the text description of the image.

    This image has been removed because it contains Official Use Only.

3.11.3.6.3.2  (01-01-2008)
Reply Instructions

  1. Ensure that the return has been perfected. See IRM 3.11.3.6.3.3. and your Correspondence Action Chart for instructions to process "no reply" , "incomplete reply" and "undeliverable" correspondence.

3.11.3.6.3.3  (01-01-2008)
No Reply/Incomplete Reply/Undeliverable Correspondence

  1. Use the Correspondence Action Chart (See Figure 3.11.3–14) and continue processing the return when any of the following no reply conditions are present:

    • Taxpayer does not provide ALL requested information.

    • Correspondence is returned by the USPS as "undeliverable" .

    • One or more correspondence conditions were not included when the first correspondence was sent.

    Note:

    Do not edit an RPD when any of the above apply.

  2. ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. The only correspondence item was for withholding support.

    2. The correspondence was not required.

    3. One or more correspondence conditions were not included when the first correspondence was sent.

  3. ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Figure 3.11.3-14

    CORRESPONDENCE ACTION CHART
    (Edit CCC "U" on all no reply returns unless instructed otherwise.)
    IF CCC "3" IS EDITED, EDIT IT FIRST.
    CORRESPONDENCE REQUIRED FOR THE FOLLOWING CONDITION ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    FORM 1040 / 1040A / 1040EZ
    TAX PERIOD  
    a. Ending date later than the current date (except for decedent returns). a. Edit Action Code "355" .
    b. Unallowable 52-53 week. b. Process as calendar or fiscal year as appropriate.
    COMBINED TAX LIABILITIES (see 3.11.3.7.2.6) Edit Action Code "355" .
    DEPENDENT TIN
    Dependents claimed with no TIN.     		See IRM 3.11.3.13.3.1(3).
    Line 6c
    Exemption Position 3 missing supporting documentation to substantiate claim for dependent. (Form 8332, Form 2120 or divorce decree is not present.)     		"X" Exemption Position 3.
    SIGNATURE  
    a. Missing Jurat. a. Edit CCC "3" .
    b. Missing or one signature on a joint return. b. Edit CCC "3" .
    c. Refund on a joint return and spouse refuses to sign. c. Edit CCC "3" .
    d. Condition requiring two witnesses. d. Edit CCC "3" .
    e. Minor child's return signed by other than a parent or relationship not indicated. e. Edit CCC "3" .
    f. Photocopied signature. f. Edit CCC "3" .
    POWER OF ATTORNEY missing. If the return is not signed by the taxpayer, edit CCC "3" .
    FIDUCIARY RETURNS - required documentary evidence not present. Edit CCC "3" .
    DECEDENT RETURNS  
    a. Date of death missing. a. Edit CCC "3" .
    b. Required documentary evidence not present. b. Edit CCC "3" . Do not edit the AIL or a CCC "L" or "W" .
    c. Proper additional information line (AIL) cannot be determined. c. Edit CCC "3" . Do not edit the AIL or a CCC "L" or "W" .
    d. Form 1310 not signed or is incomplete. d. Edit CCC "3" . Do not edit the AIL or a CCC "L" or "W" .
    e. Signature missing on Form 1040 / A / EZ but a completed Form 1310 with correct answers and signature is attached. e. Edit CCC "3" . Edit an AIL and a CCC "L" or "W" if a refund.
    f. Signature missing on Form 1040 / A / EZ and Form 1310 is attached, but not signed. f. Edit CCC "3" . Do not edit the AIL or a CCC "L" or "W" .
    FORM 1040 PAGE 1 & 2 TAX DATA
    LINE 12 - Schedule C or statement not attached. Prepare dummy Schedule C. Edit a positive amount on line 1. Edit a negative amount on line 28. Edit Audit Code "B" when the amount on line 12 is a loss of ≡ ≡ ≡ or more.
    LINE 13  
    a. Gain of ≡ ≡ ≡ ≡ ≡ or more and Schedule D not attached. a. Prepare dummy Schedule D and enter the amount on line 7, column (f).
    b. Loss of ≡ ≡ ≡ ≡ ≡ or more and Schedule D not attached. b. Prepare dummy Schedule D and enter the amount on line 7, column (f). Edit Audit Code "B" when the amount on line 13 is a loss of ≡ ≡ or more.
    LINE 14 - Form 4797, Form 4684, or statement not attached. Edit Audit Code "B" if a loss of ≡ ≡ ≡ ≡ or more is claimed.
    LINE 17 - Schedule E, statement, or clear indication of type of income missing. Prepare dummy Schedule E. Edit a positive amount on line 24, a negative amount on line 25. Edit Audit Code "B" when the amount on line 17 is a loss of ≡ ≡ ≡ ≡ or more.
    LINE 18 - Schedule F or statement not attached. Prepare dummy Schedule F. Edit a positive or negative amount on line 11. Edit Audit Code "B" when the amount on line 18 is a loss of ≡ ≡ ≡ ≡ or more.
    LINE 21 - Gambling net loss indicated and Schedule C not attached. "X" line 21.
    LINE 22 - Gain or Loss of ≡ ≡ or more and lines 7 through 21 are blank. Edit the amount on line 21.
    LINE 24- ≡ ≡ ≡ or more and Form 2106 not attached "X" line 24.
    LINE 25 - Amount claimed and Form 8889 not attached "X" line 25.
    LINE 26 - ≡ ≡ ≡ or more and Form 3903 not attached. "X" line 26.
    LINE 34 - Amount claimed and Form 8917 not attached. "X" line 34.
    LINE 35 - Amount claimed and Form 8903 not attached "X" line 35.
    LINE 36 - ≡ ≡ or more and not supported by entries on lines 23 through 36 - dotted portion or a statement. "X" line 36.
    LINE 49 - Amount claimed and Form 8863 not attached. "X" line 49.
    LINE 50- Amount claimed and Form 5695 not attached "X" line 50.
    LINE 51 - ≡ ≡ ≡ ≡ ≡ or more and Form 1116 not attached "X" line 51.
    LINE 55 - ≡ ≡ or more and not supported by Form:
    • 3800 (if indicator box is checked on Form 1040)
    • 8801 (if indicator box is checked on Form 1040)
    • 3468/NPS Form 10-168a (if entry is present to the left of lines 1g and1h, Form 3468).
    • 8864 (if entry is present on line 1m, Form 3800)
    • 8923 (if entry is present on line 1v, Form 3800)     		"X" line 55.
    LINE 56 - ≡ ≡ or more and not supported by an entry on lines 47-55 or a write-in. "X" line 56.
    LINE 58 - Schedule SE not attached Divide SE Tax amount by .153 to determine SE income subtotal amount. then divide the subtotal amount by .9235 to determine the SE income total amount. Edit the total amount on Schedule SE, line 3. Prepare a dummy Schedule SE for the primary taxpayer if Social Security wages are $97,500 or less; otherwise, prepare a dummy Schedule SE for the secondary taxpayer. For prior year, see charts in IRM 3.11.3.57.3.2.9.
    LINE 59 - Amount claimed and no Form 4137 or Form 8919 present. "X" line 59.
    LINE 60 - Amount on line 60 is not 10% of any combination of lines 15b, 16b, or attached Form(s) 1099-R, there is no notation of "No" present, and Form 5329 is not attached. Prepare a dummy Form 5329. Edit the amount from line 60 to line 17 of Form 5329. Process for the primary taxpayer if a determination cannot be made.
    LINE 64 - ≡ ≡ ≡ ≡ or more and withholding is not present on any attached Forms W-2, 1099 (Series), W-2G, Form 4852, or earnings statement with totals. "X" line 64. Do not edit CCC "U" .
    LINE 66a - Amount claimed and no source of earned income indicated. Edit RPC "B" and CCC "8" .
    LINE 67 - ≡ ≡ ≡ or more and either no Form W-2 is attached or not all of the Forms W-2 are attached. "X" line 67.
    LINE 68 - Amount claimed and Form 8812 is not attached. "X" line 68.
    LINE 70 - ≡ ≡ ≡ ≡ or more and Form 2439, Form 4136, or Form 8885 are not attached or credit not identified. "X" line 70.
    LINE 71 - Amount claimed and Form 8801 not attached "X" line 71.
    1040 SCHEDULES AND FORMS
    Schedule A  
    a. Line 15 - Amount present, no entries on lines 10 through 14, and line 6 is blank. a. "X" line 15.
    b. Line 17 - ≡ ≡ ≡ ≡ ≡ or more and Form 8283 not attached or"Art" is indicated on Form 8283 and appraisal not attached. b. "X" line 17.
    c. Line 20 - Amount present and Form 4684 not attached. c. "X" line 20.
    d. Line 21 - ≡ ≡ ≡ ≡ ≡ or more, and Form 2106/EZ or similar statement not present. d. "X" line 24.
    e. Line 27 - Amount claimed and lines 21 through 24 are blank. e. Edit line 27 to line 28. If the amount is ≡ ≡ ≡ ≡ ≡ or more, edit Audit Code "B" .
    Schedule B
    Amount on line 3 and Form 8815 is not attached.     		Adjust line 8a, Form 1040, by adding the amount claimed on line 3, Schedule B. "X" line 3 of Schedule B.
    Schedule C
    Line 31 - Loss of ≡ ≡ ≡ ≡ or more, line 32b box is checked, and Form 6198 is not attached.     		Adjust line 28, Schedule C, to equal line 7, Schedule C.
    Schedule E
    Lines 28A through 28D - Loss of ≡ ≡ or more indicated in column (f) or (h), corresponding column (e) box ("Check if any amount is not at risk" ) checked, and Form 6198 not attached.     		"X" line 31, Schedule E.
    Schedule F
    Box on line 37b checked, line 36 is a loss of ≡ ≡ or more, and Form 6198 not attached.     		Adjust line 35 to equal line 11 if the cash method is used or to equal line 51 if the accrual method is used.
    Schedule R  
    a. Boxes 1 through 9 are blank. a. "X" Schedule R.
    b. No entry on line 11 and box 2, 4, 5, 6, or 9 is checked. b. "X" Schedule R.
    c. No entry on line 13c. c. "X" Schedule R.
    Schedule SE
    Cannot determine the proper allocation of SE amounts.     		Process Schedule SE for the primary taxpayer if primary wages are $97,500 or less. Otherwise, process Schedule SE for the secondary taxpayer.
    Form 2441
    		  
    a. Line 1, Column (c) is blank. a. "X" line 3, Form 2441.
    b. Line 2, Column (b) is blank. b. See IRM 3.11.3.25.4.
    c. Line 3, 4, or 5 is blank, dash, or zero. c. "X" Form 2441.
    Form 3800  
    a. Line 1a - ≡ ≡ ≡ or more and Form 3468 or NPS Form 10-168a (as appropriate) not attached. a. "X" line 1a.
    b. Line 1m - ≡ ≡ or more and Form 8864 not attached. b. "X" line 1m.
    Form 4137
    Cannot determine correct allocation.     		Process Form 4137 for the primary taxpayer if primary wages are $97,500 or less. Otherwise, process Form 4137 for the secondary taxpayer.
    Form 5329
    More than one name in caption and a determination cannot be made.     		Process Form 5329 for the primary taxpayer.
    Form 8606
    More than one name is present in the caption and proper allocation cannot be determined.     		Process Form 8606 for the primary taxpayer.
    Form 8615
    Parent's name control cannot be determined.     		Edit the primary taxpayer's name control.
    Schedule EIC  
    a. Number of months is not indicated. a. "X" the child's name.
    b. Child's TIN is missing an no documentation attached to support a child who was born and died during the tax year. b. "X" the child's name.
    Schedule H
    Cannot determine proper allocation of Schedule H amounts.     		Process Schedule H for the primary taxpayer.
    Loose Schedule H
    Cannot determine if Schedule H should be filed loose or attached to a Form 1040.     		Process Schedule H with a "dummied" Form 1040.
    Form 8812
    Line 7 is blank and cannot be edited.     		Take no action.
    Form 8863
    Name control and/or SSN cannot be perfected.     		Take no action.
    Form 8917
    Name control and/or TIN cannot be perfected or cannot determine which taxpayer is claiming the deduction.     		"X" Form 8917.
    Form 8919
    Unable to determine which taxpayer is filing Form 8919.     		Process Form 8919 for the primary taxpayer if primary wages are $97,500 or less. Otherwise, process Form 8919 for the secondary taxpayer.
    FORM 1040A TAX DATA
    Line 19 - Amount claimed and Form 8917 is not present. X line 19.
    Line 20 - More than ≡ ≡ ≡ ≡ and not supported by entries on lines 16 through 19 or a statement. "X" line 20.
    Line 31 - Amount claimed and Form 8863 not attached. "X" line 31.
    Line 34 - ≡ ≡ or more and lines 29 through 33 are blank. "X" line 34.
    Line 38 - ≡ ≡ ≡ ≡ or more and withholding is not present on any attached Forms W-2, 1099 (Series), W-2G, Form 4852, or earnings statement with totals. "X" line 38. Do not edit CCC "U" .
    Line 40a - Amount claimed and no source of earned income is indicated. Edit RPC "B" and CCC "8" .
    Line 41 - Amount claimed and Form 8812 not attached. "X" line 41.
    1040A SCHEDULES AND FORMS
    Schedule 1
    Amount on line 3 and Form 8815 not attached.     		Adjust line 8a, Form 1040A, by adding the amount claimed on line 3, Schedule 1. "X" line 3, Schedule 1.
    Schedule 2  
    a. Line 1, Column (c) is blank a. "X" line 3, Schedule 2.
    b. Line 2, Column (b) is blank. b. See IRM 3.11.3.25.4.
    c. Lines 3, 4 or 5 are blank, dash, or zero. c. "X" Schedule 2.
    Schedule 3  
    a. Boxes 1 through 9 are blank. a. "X" Schedule 3.
    b. No entry on line 11 and box 2, 4, 5, 6, or 9 is checked. b. "X" Schedule 3.
    c. No entry on line 13c. c. "X" Schedule 3.
    Schedule EIC See 1040 Schedules and Forms.
    Form 8812 See 1040 Schedules and Forms.
    Form 8863 See 1040 Schedules and Forms.
    FORM 1040EZ TAX DATA
    Line 7 - ≡ ≡ ≡ ≡ ≡ or more and withholding is not present on any attached Forms W-2, 1099 (Series), W-2G, Form 4852, or earnings statement with totals. "X" line 7. Do not edit CCC "U" .
    Line 8a - Amount claimed and no source of earned income indicated. Edit RPC "B" and CCC "8" .

3.11.3.7  (01-01-2008)
Special Situations and Returns

  1. While the instructions in this manual are generally based on the typical return, there are some special situations and return types which occur frequently enough to be included.

  2. The instructions included in this subsection of the manual include the following special situations:

    • Combat Zone and Other Military Operations

    • Examination cases

    • Fiduciary relationships (includes Minor and POA)

    • Frivolous Filer/Non-Filer returns

    • Hardship

    • Killed in Terrorist Action (KITA)

    • National Disaster/Emergency Relief Program

    • Refund Schemes

  3. The special return instructions included in this subsection are for the following:

    • Amended returns

    • Blank returns

    • Incomplete returns

    • Blocked or Deferred Income returns

    • CIS Returns

    • Combined Tax Liabilities

    • Community Property returns

    • Injured Spouse returns

    • Innocent Spouse

    • International returns

    • Joint Committee returns

    • Misblocked returns

    • Misfiled returns

    • Reinput returns

    • Returns Secured by Collection

    • Short-period returns

    • Substitute for Return

    • 52–53 week return

3.11.3.7.1  (01-01-2008)
Special Situations

  1. Follow the instructions in this subsection of the manual in addition to the regular editing instructions, unless otherwise specified.

3.11.3.7.1.1  (01-01-2008)
Combat Zone and Other Military Operations

  1. The deadlines for filing an income tax return and paying the income tax may be postponed for certain persons involved in the following types of military operations:

    1. Members of the armed forces and certain persons supporting them in a Combat Zone designated in an Executive Order by the President;

    2. Members of the armed forces serving in a contingency operation designated by the Department of Defense in an area certified by the Department of Defense.

    3. Members of the armed forces serving in an area certified by the Department of Defense for which the member receives hostile fire/imminent danger pay,

    4. Members of the armed forces and certain persons supporting them in a Qualified Hazardous Duty Area (designated by an act of Congress).

  2. Generally, though, military personnel have the same filing requirements as civilians.

  3. Refer any question concerning a military return to your work leader. The work leader will hand carry the return to Tax Accounts when the proper action cannot be determined.

  4. Follow normal correspondence procedures when required information is missing from the return. See IRM 3.11.3.7.1.1.2.

3.11.3.7.1.1.1  (01-01-2008)
Military Operations

  1. Take the following actions when a military operation is noted on the return:

    If the taxpayer notes And the Tax Year is Then

    • "Enduring Freedom"

    • "Operation Enduring Freedom"

    • "Operation Iraqi Freedom"

    • "Iraq"

    • "Operation Noble Eagle"

    • "Combat Zone"
      OR
      similar statement

    		01 or later Edit CCC "K"
    "Desert Storm"
    "Joint Guard"
    "Joint Forge"
    "Northern Forge"
    "Northern Watch" .     		90 or later