- 3.11.3.14 Form 1040
- 3.11.3.15 Schedule A—Itemized Deductions
- 3.11.3.16 Schedule B—Interest and Dividend Income
- 3.11.3.17 Schedule C—Profit or Loss From Business
- 3.11.3.18 Schedule D—Capital Gains and Losses
- 3.11.3.19 Schedule E—Supplemental Income and Loss
-
Edit the Preparer's SSN/PTIN by taking the following actions (See Figure 3.11.3–105):
If Then Blank with either a single SSN or PTIN in the Paid Preparer area, Take no action. Blank with no SSN or PTIN in the Paid Preparer area, Perfect from attachments if possible. Illegible or incomplete, Perfect from attachments if possible. If unable to perfect, delete. Both an SSN and a PTIN are present in the Paid Preparer area, Delete the PTIN. Multiple SSNs or PTINs are present or in the Paid Preparer area, Delete all but the first entry. Note:
PTINs are identified by the alpha character "P" or "S" followed by 8 numerics. The presence of a PTIN negates the requirement for the editing of a Preparer's Code.
-
Edit the EIN by taking the following actions (See Figure 3.11.3–105):
If Then Blank with an EIN in the Paid Preparer area, Take no action. Blank with no EIN in the Paid Preparer area, Perfect from attachments if possible. Illegible or incomplete, Perfect from attachments if possible. If unable to perfect, delete the EIN. Multiple EINs are present, Delete all but the first entry. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Preparer Code "H" and delete from the EIN line. Figure 3.11.3-105
Please click here for the text description of the image.This image has been removed because it contains Official Use Only.
){kind=link}
-
The instructions provided in this subsection of the manual are for editing Schedule A. These instructions include:
-
General editing procedures
-
Medical and dental expenses (lines 1 and 4)
-
Total taxes (line 9)
-
Interest (lines 13 and 14)
-
Gifts to Charity (lines 16 through 19)
-
Casualty/theft loss (line 20)
-
Job expenses and other deductions (lines 21 through 27)
-
Other miscellaneous deductions (line 28)
-
Total itemized deductions (line 29)
-
-
The following lines on Schedule A are T–lines and T-COMPUTE lines:
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
-
Edit Sequence Code "07" in the upper-right margin, if not preprinted.
-
Do not "X" Schedule A when BOTH of the following conditions are present:
-
the return is FS 3 and the taxpayer has claimed zero itemized deductions, AND
-
Schedule A is blank.
-
-
"X" Schedule A when entries are present on Schedule B (reverse side of Schedule A) and Schedule A is blank.
-
"X" Schedule A when line 29 on Schedule A is less than line 40 of Form 1040 and line 40 is equal to the taxpayer's standard deduction amount unless any of the following apply:
-
"IE" is indicated to the left of line 40 on Form 1040.
-
FS 3 is claimed, and there are significant T–line entries on the Schedule A. The box on line 39b may or may not be marked.
-
The box located on line 30, Schedule A is checked.
-
-
Only one Schedule A is processable. If more than one is attached, combine related T–line amounts onto one Schedule A and delete those not used.
-
Do not dummy a Schedule A from attachments when the taxpayer has used one of the standard deduction amounts. Use the Standard Deduction Chart in IRM 3.11.3.14.4.3(1) for the standard deduction amounts.
-
Search Schedule A for unallowables. Code unallowables regardless of where they are found, so long as they meet the tolerance. Specific unallowable conditions are identified in the line by line instructions, as well as the table contained in the following paragraph.
Note:
Unallowable Codes in the 30–49 range are reserved for amounts claimed on Schedule A.
-
Dollar tolerances apply to all Schedule A Unallowable Codes. Code unallowables only when the total deducted amount (i.e., amount after any limitation) of the unallowable item is at least the dollar tolerance reflected in the table below. Code itemized deductions as unallowables only when the Schedule A is used and the amount for the unallowable item is at least ≡ ≡ ≡ .
Exception:
The dollar tolerance associated with Federal Taxes is ≡ ≡ ≡ ≡ .
Reminder:
Enter amounts on Form 3471 in dollars and cents.
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Exception:
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Exception:
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ -
Review all returns with edited unallowables. Check for additional unallowables or frivolous conditions. Correct any unallowables which have been improperly coded.
-
If line 1 is blank and line 4 has a significant entry, enter line 1 from attachments.
-
If lines 1 and 4 are both blank and there is an attachment with an amount for medical deductions present, edit the attachment amount to:
-
Line 1 if line 3 has been computed by the taxpayer or
-
Line 4 if line 3 has not been computed by the taxpayer.
-
-
Compute and enter the total when line 4 is blank, and lines 1 and 3 have entries.
-
Enter Unallowable Code "33" and the lesser of the unallowable amount or the line 4 amount when the taxpayer claims personal living expenses incidental to medical treatment in excess of ≡ ≡ ≡ . Unallowable items include:
-
Meals
-
Lodging in excess of $50 per day per person
-
Health club dues
-
Diet foods
-
Funeral expenses
-
Maternity clothes
-
-
Compute and enter if blank.
-
Enter Unallowable Code "34" and the amount claimed if the taxpayer claims a deduction for Federal taxes of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Unallowable items include Federal taxes for:
-
Income
-
Social Security
-
Medicare
-
Excise tax on autos, tires and air transportation
-
Duties imposed on imports or by Customs
-
-
Enter Unallowable Code "35" and the amount claimed when there is an amount for utility taxes of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Examples include: sewer, water, phone, etc.
Exception:
This does not include sales taxes paid on utilities in Minnesota and Wisconsin.
-
Enter Unallowable Code "36" and the amount claimed if there is an amount for state and local taxes of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Examples include: hotel, meal, airfare, inheritance, stamp, etc.
-
Enter Unallowable Code "37" and the amount claimed if the taxpayer is claiming a deduction of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for personal auto registration, tag and license taxes or fees except for residents of any of the following states:
Alabama Kentucky Nevada Arizona Maine New Hampshire California Massachusetts Oklahoma Colorado Michigan South Carolina Connecticut Minnesota Virginia Georgia Mississippi Washington Indiana Montana Wyoming Iowa Nebraska
-
When the taxpayer has entered amounts in the line 10 and 11 area, take the following actions:
If And Then Line 10 is blank, The taxpayer has clearly identified an amount(s) to be home mortgage, Edit the amount to line 10. Line 11 is blank, The taxpayer has clearly identified an amount(s) has been paid to an individual or individuals, Edit the amount to line 11.
-
Delete the amount if the taxpayer has used line 14 as a subtotal line.
-
Compute and enter line 15 when it is blank.
-
If an amount is entered and no entries are present on lines 10 through 14, take one of the following actions:
-
Edit the line 15 amount to line 10 if there is an amount on Line 6 of Schedule A.
-
Correspond if line 6 on Schedule A is blank.
-
-
Edit Unallowable Code "41" and the amount claimed if there is an amount for personal interest paid of ≡ ≡ ≡ ≡ ≡ or more.
-
When line 17 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8283 is not present, edit Audit Code "C" .
-
When line 17 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ take the following actions:
-
Correspond if Form 8283 is missing.
-
Correspond when a contribution of "Art" is indicated on Form 8283 (e.g., the box is marked in Section B, Part 1, line 1) and a complete appraisal is not attached.
-
-
Edit Unallowable Code "42" and the amount claimed when the taxpayer is claiming deductions of ≡ ≡ ≡ ≡ or more for contributions to:
-
Individuals
-
Non-qualifying organizations (e.g., foreign charities except for those in Canada, lobbying organizations, etc.)
-
-
"X" line 18 when it is a negative amount.
-
Delete the line 18 amount if the taxpayer has used line 18 as a subtotal line.
-
Compute and enter line 19 when it is blank and there are entries leading to a total.
-
Correspond when an amount is claimed on line 20 and Form 4684 is not attached.
-
If line 21 has ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ —and line 27 has a significant entry—Form 2106/EZ must be attached unless there is an explanation of the source of the miscellaneous deductions.
-
This explanation may either be written to the left of line 21 or included on an attachment.
-
Correspond if line 21 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , line 27 contains a significant entry, and Form 2106/2106EZ or similar statement or explanatory attachment is not present.
Note:
A notation of "Business Expense" is not a sufficient explanation. More specific information is required.
-
-
Edit RPC "P" when Form 2106/EZ or similar statement or explanatory attachment is present and lines 21 and 27 both contain significant entries.
-
Edit alimony to line 31a of Form 1040 when it is claimed as an itemized deduction and there is no entry on line 31a. Delete the alimony amount on Schedule A. Refer to the instructions for editing the alimony TIN (line 31b) in IRM 3.11.3.14.3.7.
-
Enter Unallowable Code "38" and the amount claimed if the taxpayer takes a deduction for support of a child or another individual of ≡ ≡ ≡ ≡ ≡ or more.
Note:
These are not child care expenses. The most commonly seen unallowable of this type is for "child support" .
-
Enter Unallowable Code "40" and the amount claimed if the taxpayer is claiming a deduction of ≡ ≡ ≡ ≡ ≡ or more for job education for someone other than the primary and secondary taxpayers. This includes related expenses such as tuition, books, transportation, lodging, etc.
-
Enter Unallowable Code "43" and the amount in excess of 48.5 cents per mile if the taxpayer is claiming a deduction for auto mileage for trade or business of ≡ ≡ ≡ or more.
-
Enter Unallowable Code "45" and the amount claimed if the taxpayer is claiming a deduction of ≡ ≡ ≡ ≡ or more for expenses incurred in the sale or purchase of a personal residence that is not specifically connected with moving expenses. These unallowable items include, but are not limited to:
-
Closing costs
-
Legal fees
-
Realtor commissions
-
Settlement fees
-
-
Enter Unallowable Code "46" and the amount claimed if the taxpayer is claiming a deduction of ≡ ≡ ≡ or more for personal insurance. Examples include life, auto, home liability, etc.
-
If an amount identified as a casualty/theft loss is present:
-
Delete the amount of the loss from line 24.
-
Enter the amount on line 20.
-
Correspond if Form 4684 is not attached.
-
-
Compute and enter line 24 if it is blank and lines 21, 22, or 23 have entries. (See Figure 3.11.3–106.)
Figure 3.11.3-106
This image is too large to be displayed in the current screen. Please click the link to view the image.
-
"X" line 28 when both of the following conditions are present:
-
Line 37, Form 1040 is $156,400 or more ($78,200 or more for FS "3" or "6" )
-
The amount on line 28 includes non-gambling deductions.
-
-
The following are to be included on line 28:
-
Amortizable bond premiums
-
Casualty and theft loss from income producing property
-
Federal estate tax on income in respect of a decedent
-
Gambling losses, only deductible if the loss is equal to or less than the winnings, claimed on line 21, Form 1040
-
Impairment-related work expenses of a disabled person
-
Repayments under a claim of right of over ≡ ≡ ≡ ≡ ≡ ≡
-
Unrecovered investments in a pension
-
Schedule K-1
Note:
Take no action if Schedule K-1 is claimed on line 23 of Schedule A.
-
-
Subtract the total of any miscellaneous deductions not listed in (2) above from the amount on line 28. Add the total of the subtracted deductions to lines 24 and 27. (See Figure 3.11.3–107.)
Note:
Do not move amounts when the taxpayer includes an amount but does not include an explanation for the deduction.
Figure 3.11.3-107
This image is too large to be displayed in the current screen. Please click the link to view the image. -
Allow the taxpayer's gambling losses up to the amount of winnings claimed on line 21 of Form 1040. Adjust line 28 to equal gambling winnings when the taxpayer is claiming more gambling losses on Schedule A than s/he reports as winnings on line 21, Form 1040. (See Figure 3.11.3–108.)
Figure 3.11.3-108
This image is too large to be displayed in the current screen. Please click the link to view the image.
-
If line 29 is blank, compute and enter from total lines (lines 4, 9, 15, 19, 20, 27 and 28).
-
Delete all but the smallest amount when there are multiple entries.
-
The instructions provided in this subsection of the manual are for editing Schedule B. These instructions include:
-
General editing procedures
-
Gross interest (lines 1 and 2)
-
Excludable savings bond interest (line 3)
-
Gross dividends (lines 5 and 6)
-
Foreign account indicator (line 7a)
-
Foreign trust question (line 8)
-
-
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
-
Edit Sequence Code "08" in the upper-right margin if it is not preprinted and any of the following are present:
-
Gross interest is edited
-
Gross dividends are edited
-
Line 3 has an entry
-
Line 7a "Yes" box is marked
Note:
Edit Sequence Code "08" on Schedule 1 if it is attached instead of Schedule B and it has significant T–line amounts.
-
-
Only one Schedule B can be processed. Combine related T–line amounts and "X" the Schedule(s) B not used when more than one is attached to the return.
Note:
References will be made to Schedule B, but instructions also apply to Schedule 1.
-
Edit T–lines from attachments when "see attached" is written on Schedule B. (See Figure 3.11.3–109.)
Reminder:
Further editing of Lines 8a, 8b, and/or Line 9a on Form 1040/A may be required from Schedule B/Schedule 1.
Figure 3.11.3-109
This image is too large to be displayed in the current screen. Please click the link to view the image.
-
The taxpayer may subtract the following adjustments from interest income. Edit the gross interest amount to the left of line 2 by adding the adjustment amount to the line 2 amount when the taxpayer subtracts amounts identified as any of the following (See Figure 3.11.3–110):
-
Nominee distribution
-
Accrued interest
-
Original issue discount (OID)
-
Purchased interest
-
Amortizable Bond Premium/"ABP Adjustment"
Figure 3.11.3-110This image is too large to be displayed in the current screen. Please click the link to view the image. -
-
Correspond when line 3 has a significant entry and Form 8815 is not attached, unless it can be determined that the entry is misplaced.
-
Compute and edit the amount of gross dividends to the left of line 6 when line 5 adjustments are present for nominee distributions . Compute the gross dividend amount by adding the adjustment to the line 6 amount. (See Figure 3.11.3–111.)
Figure 3.11.3-111This image is too large to be displayed in the current screen. Please click the link to view the image.
-
Do not "X" Schedule B when the "Yes" box on line 7a is marked.
-
The instructions provided in this subsection of the manual are for editing Schedule C. These instructions include:
-
General instructions and editing procedures
-
Combining multiple Schedules C and C–EZ
-
North American Industry Classification System (NAICS)
-
Employer Identification Number (EIN)
-
Accounting method
-
Statutory employees
-
Income (lines 1 through 7)
-
Expenses (lines 8 through 27)
-
"At risk" question
-
-
The following lines on Schedule C/C-EZ are T-lines and T-COMPUTE lines:
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡
≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡
-
Up to three Schedules C/C–EZ can be processed. Follow the instructions for combining Schedules C/C–EZ in IRM 3.11.3.17.2 when more than three are present.
-
Enter Sequence Code "09" in the upper-right margin of the first Schedule C/C–EZ if "09" or "09a" is not preprinted. Enter Sequence Code "10" on the second Schedule C/C-EZ and Sequence Code "11" on the third.
-
Search the return and attachments for a missing, illegible or incomplete TIN on Schedule C.
-
"X" Schedule C/C–EZ when the taxpayer specifically states the loss is from a hobby or nonprofit activity or when no money amounts are present.
-
If a Form W–2 wage amount is reported on Schedule C/C–EZ, delete the amount from Schedule C/C–EZ and edit it to line 7 of Form 1040.
Exception:
Do not move the amount if the taxpayer is a minister, insurance salesman, or the Statutory Employee box is marked. Instead, edit RPC "S" .
-
If the taxpayer indicates that Schedule C/C–EZ income is from a partnership or joint venture by noting a fractional share or percentage of the income:
-
Include the net fractional amount on Schedule E, line 30 (gain) or line 31 (loss).
-
Delete the amount from line 12 of Form 1040.
-
Edit or add the amount to line 17 of Form 1040.
-
"X" Schedule C/C-EZ.
Exception:
When the taxpayer indicates that the fractional share of Schedule C income is farm income, enter the taxpayer's share of the gross amount on line 42 of Schedule E.
-