The objectives of the extracting and sorting functions are as follows:

Throughout this manual references are made to actions required by management. It is to be understood that if a Manager delegates authority to someone to act on behalf of management, the person to whom the authority is delegated is considered to be management regarding the item(s) in question. Therefore, no additional reference will be made in this IRM to "management or their designee" , "analyst" , etc.

Some logs, such as the Candling Log and other Security type reports will be maintained in a log book. Other reports will be maintained electronically. Local management will deem the most appropriate method.

Throughout this manual, references are made to other IRMs in relation to instructions necessary to properly perform tasks in IRM 3.10.72. Management shall be responsible for having at least one of the referenced IRMs in the work area. However, at management's discretion, it may be worthwhile for each employee to keep a copy of the IRM 3.10.72 at their work station. In either case, management is required to update the IRMs distribution pattern and the volume required for each area. Additional reference IRM's are:

IRM 10.2.1, Physical Security and IRM 10.4.1, Manager's Security Handbook, are the prevailing manuals concerning security measures necessary for date stamps, Document Locator Number stamps, payee name stamps (for negotiating checks), and other stamp devices. Each manual shall be consulted to determine the level and type of security required. Particular attention shall be given to the requirements to limit (one specific individual) and protect against unauthorized use of all stamp devices. Serial numbers (where available) shall be associated with the specified user(s).

IRM 11.3.1 Introduction to Disclosure, should be consulted when disclosure issues are in question.

Throughout this manual, references are made to "Returns" and "Documents" . A "return" is a form required by law to be filed (e.g., Form 1040, Form 720, Form 990, etc.). A "document" is a form not required by law but is relevant to the particular account (e.g., a subsequent payment, a Computer Paragraph (CP) notice, a "C" letter, etc.).

A list of some of the acronyms (and definition) used in this IRM are found below. This list is not all inclusive. For details on other acronyms, use the Search feature on the IRS Home Page.

All mail received in the Mail Room, Sorting, SCAMPS area requires the indication of the date received or accepted by the carrier.

Retain integrity of incoming mail by date. Process all mail on date received. Do not intermingle separate days' receipts. Use the first-in, first-out (FIFO) method for controlling the mail in consecutive days.

Mail forwarded to the sorting area must be controlled using the following procedures:

A date mark is applied to each envelope by the sorter during mail sorting. IRM 3.10.72, Receiving, Extracting, and Sorting, contains instructions on when and under what circumstances the sorter applied date may be used in association with the envelope contents.

This section includes Culling, Sorting, Reporting, and Delivery of processed mail.

Inspect the mail and remove Misdirected (non-IRS) mail, Certified or Registered mail, and non-machinable mail that cannot be processed through the SCAMPS machine using the guidelines in this section.

Process white mail, misdirected mail, and undelivered mail as detailed in this section.

Use the SCAMPS machine to capture mail counts, and count the fats/flats/boxes by manual, estimates, or weighed estimates to prepare daily reports of total receipts.

Prepare incoming mail for automated sorting as follows:

Each Submission Processing Campus (SPC) is assigned a unique 5-digit Zone Improvement Plan (ZIP) code that allows the United States Postal Service (USPS) to expedite mail delivery to the IRS. The unique U.S. Postal Sectional Center Facility (SCF) ZIP Codes (also known as unique Zip Code) for the IRS centers are as follows:

IRS return envelopes carry ZIP+4 codes that are provided to taxpayers in correspondence and "Where to File" instructions for tax forms. This code is the combination of the above ZIP codes plus the 4 digit Code Format Number (CFN) codes assigned. See Exhibit 3.10.72-5 for a list of valid Code Format Numbers (CFNs) that can be read by the SCAMPS machine and sorted in the appropriate pocket. Example: Fresno SPC, CP 2000 notices use 93888-0021. When taken out of the pocket and routed to Extraction, Secondary Sort can look at the "0021" and route directly to Automated Underreporter Branch (AUR). The CFNs can also be used to determine the Originator when routing Undeliverable mail.

The street address for the Submission Processing Campuses, required by Private Delivery Services, are as follows:

The Campus Support Sites are also called Accounts Management Centers (AMC). Currently, the sites are Andover, Brookhaven, Memphis, and Philadelphia. If necessary to transship items to these sites, use the following address.

The main function of the Mail Room is to open, sort, count and route all incoming mail and packages to their appropriate destinations. Mail cages are delivered to mail function personnel for opening using SCAMPS, if available, or Slicers as an alternative. Daily counts of the different types of mail are maintained and logged onto the Daily Activity Log/Report. The majority of all incoming mail will be placed in trays and sent into the Mail Extraction unit to be processed.

Following are the various types of mail received with a brief description.

The "Admin" Mail Rooms are "mini" Post Offices for the entire campus for some Incoming and Outgoing Mail. The SCAMPS area should route all "Admin-type" mail (if it can be identified to the Admin Mail Room) and by-pass Extraction. It will still be sliced in the area, but does not have to be extracted. Some common examples of Admin Incoming Mail, but not limited to the following, are:

This type of Incoming mail can be segregated from the mail that needs to go to Extraction. It can be routed to the Admin Mail Room and the functional area can pick it up. The area should still be in the ventilated area and the person can extract their mail in the area before transporting to their own area.

If the box or package is from a known source, it is not necessary to extract it in the ventilated area.

If the package addressed to a specific function or person contains a Form 3210, the individual or designee for the function should sign their own Form 3210 and keep the copies. The Mail Room can stuff it in an envelope and meter it for the USPS, if requested.

There is also an Outgoing Mail function necessary to service employees in the Campus. They accept:

All mail accepted as Outgoing should contain the complete Name, Street Address, City, State Code, and Zip in the format acceptable for the USPS. If it is going to another IRS office, be sure it includes a Stop #. If mail is submitted with a P.O. Box and the request is for Overnight or 2-Day, request a street address. United Parcel Service (UPS) is our contract carrier for Private Delivery Service packages. At this time, they cannot accept mail addressed to a P.O. box. Use all available resources such as Outlook, Discovery Directory, and the Routing Guide Exhibits in the back of the IRM to obtain a street address and Stop # for all outgoing mail to other IRS sites.

The official Routing Guides for this IRM are found in Exhibit 3.10.72-1, Exhibit 3.10.72-2, Exhibit 3.10.72-3, and Exhibit 3.10.72-4. They are broken down by Forms, "C" letters, CP notices, and Miscellaneous Forms and key words on Correspondence.

Use the Routing Guides as an aid to help you properly route Documents and Forms, in addition to your local Job Aids and Maildex. If the Address is complete on the Exhibits, that means it is always transshipped to the site when received in a site other than the one listed. If the space is blank in this column, you may enter your local Mail Stop. In addition, all Campuses should develop their own local Maildex with local Stop Numbers to expedite routing to the proper area.

This guide can also be used to route Undeliverable Mail when Exhibit 3.13.62-56 instructs you to route the Undeliverable CP notices to the "Originator" .

International returns are processed in two sites. Austin processes IMF forms and Ogden processes most BMF, unless form filing (e.g. excise tax) is unique to CSPC. Certain Amended International forms are processed by Philadelphia Accounts Management. See IRM 3.10.72.15.7.

An International or US Possession return is:

Remittance received with international and possession returns will be deposited where received.

All IMF International and US Possession returns will be processed at AUSPC only. If returns are misdirected, transship to AUSPC after deposit activity.

All BMF International and US Possession returns will be processed at OSPC. If returns are misdirected, transship to OSPC, Mail Stop 4091, after deposit activity unless the form filing is unique to CSPC.

International and domestic Estate tax returns (Form 706, Form 709, and Form 4768) should be transshipped after Deposit Activity to Cincinnati, Ohio 45999. International Exempt Organization (EO) returns (e.g., Form 990 series, Form 1041A, Form 1120-C, Form 4720, and Form 5227) should be transshipped after Deposit Activity to Ogden.

Taxpayers and Tax Preparer's sometimes request the IRS to acknowledge receipt of data.

Immediately stamp all government checks as soon as they are extracted, even if they have a notation of "VOID" . Extraction personnel are to stamp each check with "Unless for Credit to the United States Treasury this Instrument is Non-Negotiable" . The check should be stamped underneath the " Pay to the Order of."

All Return Refund/Government checks along with return and any attachments will be forwarded to the Payment Perfection.

If a Remit is made payable to " Area Director" or "Social Security Administration" or "EFTU" , it is a payment to the United States Government. Route to Payment Perfection.

Stamp "United States Treasury" on the Payee line at the point of extraction unless the Payee line is one of the following:

A product review of overstamping Government/U.S. Treasury checks is required daily of each employee. This can be achieved by the Lead, or designee for each employee's sorting table once daily, prior to forwarding of remittances to other areas/functions.

Any return or document with an item of value other than a check or money order shall be handled as instructed in "Handling of Currency and Items of Value" found in IRM 3.10.72.5.10, Processing Cash and Handling of Currency and Items of value.

All types of remittance are forwarded to the Deposit Function, along with the tax return or source document.

Timely Filed 1040 Sort is determined by a review of Balance Due line on the return and the remit:

If returns do not meet "Full Paid" criteria (includes all delinquent filed), sort item as "PART PAID"

If "one remittance" is received with more than one return or document, assemble the multiple returns/documents to the back of the first in a staggered format. Route to Payment Perfection. See IRM 3.10.72.6.2 for date stamping of multiple returns and documents received in one envelope.

If "more than one remittance" is received with only one return or document, stagger the checks. Route to Payment Perfection.

A remittance received alone in an envelope addressed to the Internal Revenue Service, no matter the condition (endorsed or not or made out to appropriate payee or not), shall be date stamped on the envelope or check stub. Do not stamp over pertinent Taxpayer information. If the check contains a Name, one TIN, Form Type, and one or more Tax Period(s), sort as "perfect" . If Name or TIN or Form Type or Tax Period is missing, or more than one TIN is shown, sort as "imperfect" and route to Payment Perfection. For BMF, use care for Forms with multiple series, such as Form 1120. If in doubt, route to Payment Perfection.

Double check Balance Due returns or notices for the presence of a remittance.

Extraction procedures for voluntary contributions to Bureau of Public Debt (BPD) are as follows:

All User Fee documents (even scannable ones) should be routed as "Imperfect" to PPU.

Candling is a term used for passing the envelope over the light on an Extracting table or Final Candling table. Initial Candling is the process of looking for documents and/or remittance left inside envelopes after extraction, but prior to dropping in the bag/container. Final Candling is the process of looking for documents and/or remittance left inside envelopes after the Extractor's bag/container has been transferred to the Final Candling area. Most sites use the large Final Candling tables in a separate area within the Restricted Area to perform this procedure. All employees should fully understand the difference between Initial and Final Candling and be able to provide a description, if requested on a review.

Initial and Final Candling must take place within the Restricted Area. Various factors determine the proper method for Initial Candling (Extracting). It is determined by the following characteristics of various envelopes:

SCAMPS defines Flats/Fats based on the size or thickness of the envelope and the capability of the machine to sort and slice it. However, for Extraction of the contents and Candling purposes, we will follow guidelines based on whether "see-through" , the Extractor's ability to easily cut/slice the envelope easily and quickly, or if the fabric content of the envelope is designed for contents to slide out (which are usually the ones with more plastic content than paper). Always remember that the purpose of Candling is to ensure that no contents are left in the envelope. Final Candlers may identify envelopes that are not sliced on 3 sides, but the harm to the taxpayer is when items are left in the envelope and not processed timely.

For the normal letter size envelopes or what we refer to as "see-through envelopes" , the Campus has a choice between two methods of extracting contents during Initial Candling.

Slice the following types of envelopes on 3 sides:

For the combination "paper/plastic envelopes" (usually white (with windows) and green diamond shape marks), you do not have to slice them. Open the end, extract contents, and manually search the inside for any remaining contents before dropping in your Extractor's bag. Any type of envelope such as this that is specifically designed not to cut or tear easily does not require slicing on 3 sides, unless you want to. Generally, the material content is "slick " and designed to make items easily fall out. Watch out for any static electricity on some of the plastic envelopes, which tends to make items "cling" to the envelope.

For the envelopes with the "fuzzy padding" , it is recommended that each site have the SCAMPS area sort them separately from the other fats/flats. Extraction area can rotate opening of these envelopes among all extractors, (i.e. set up a daily rotation among all in a Unit). This will allow the person to prepare by dressing appropriately, securing a face mask, or paper gown, if desired. Try to use the pull tab on the envelope or detach the staples/tape on the end of the package to open the envelope without cutting into the fuzzy padding. Once contents are extracted, drop these envelopes in a separate tagged bag from your other extracted envelopes. This ensure that the fuzz is not distributed throughout your other bagged envelopes and onto the Final Candling table (and those individuals).

An Identifying Tag must be placed in the bag of all extracted envelopes during Initial Candling. The Identifying Tag (locally developed) must contain at a minimum the Name (preferably SEID or Employee Number of the Extractor) and the date. Prior to transporting the bags to the Final Candling area, someone other than the person who performed the Initial Candling should ensure that the tag is in the bag. If tag is not visible, the "sweeper/runner" should request one from the Extractor prior to transporting to the Final Candling area. The tag should be placed in the bag so that it is easily visible when picked up. Place the tag either as the first item in the center bottom or on top of the contents of the bag. If your campus uses "stickers" , make sure all old stickers are clearly "X'd" (or deleted) before placing your new one on the bag. If your campus uses the red buckets (similar to USPS containers), ensure your Name/SEID is attached.

After the bags have been securely tied at the top to ensure no contents can fall out in transit to the Final Candling area, the "runner/sweeper" will transport them to the Final Candling area. They will be staged and worked in Received Date order.

Final Candling has several definitions based on the type of envelope, but it is the final search prior to destruction to find any remaining contents following Extraction. Final Candling of all "see-through" envelopes is when envelopes are again passed over a light source which meets the minimum standard (on a Final Candling or Extracting Table). If you are unable to "see through" the envelope using a light source, the envelope must be manually searched for any remaining contents. If the envelope is a "heavy duty" bubble material, cardboard, or thin plastic, ensure that it was sliced on 3 sides and all contents extracted. If the envelope is a "paper/plastic " type material, manually search the inside to ensure no contents remain.

The "fuzzy padded" envelopes should be in a separate bag. Manually search inside the envelopes for any remaining items and drop them back in the same bag for destruction (or with other ones, if ready to be destroyed).

Final Candling must be performed by an employee in the Restricted Area (Receipt & Control) and in clear view of another employee. It is generally performed at large Final Candling tables, but can be done at an Extraction table.

Boxes, carts, crates, etc. should not block the view of any employee performing Final Candling work. Any employee performing Final Candling should be in clear view of another employee and both must be stationed in the Restricted Area. These Final Candling rules apply whether performed at the big tables, or at Extraction Tables.

If the light on your Extracting Table or Final Candling Table appears to be dim, or dimmer than normal, contact your Manager to perform the light meter test. If not meeting the minimum standard of 174 FC (Foot Candle) or greater, move to another table until a new bulb is installed.

Any Non-Remit item or any envelope not properly sliced found during Final Candling will be given to management to provide feedback to the Extractor. The item should be attached to the Extractor's Identifying Tag when routed to the Manager. The Manager will determine the disposition of any item found. Non-Remit items do not have to be recorded on the Form 13592, Final Candling Log.

ALL Remit items, will be recorded on the Form 13592, Final Candling Log, and given to management. Ensure that any checks/money orders found are properly overstamped prior to giving to the Manager. Complete all applicable information on the Final Candling Log, then give the remit and Identification Tag to the Manager.

The Manager will review the Form 13592, Final Candling Log and validate that all available information is correctly entered and remittance amount matches the content found. The employee who found the remit will complete the following columns on the Form 13592:

The Manager will complete "R&C Initials and Date" column, then make a photocopy. The Manager will take the Original and Photocopy of the log, along with the remit(s) to the Deposit Function. This transfer of remit(s) to Deposit must be performed as many times in a day as necessary to ensure timely deposit rules are met. At a minimum, it must be done once daily, at a designated time set by Deposit that will allow them enough time to post the remits found that day. All remaining remits found in Final Candling after the last daily transfer must be stored in a secure box or designated area temporarily, or overnight. The previous day's remit items will be taken to Deposit the following day in the first transfer. Make every attempt to deposit multiple times on Friday, or make sure you get your Friday finds to Deposit in time for them to process them. Be especially careful that only small volumes of Candling finds are held over a weekend, especially a holiday weekend.

Upon receipt of the Remit(s) and the Log Sheet, a designated Deposit employee will initial and date the Original copy of the Form 13592 log, indicating receipt of the Remit in the "Deposit Initials & Date" column. Leave the photocopy of the log with Deposit function and return the Original signed (initialed) copy of the Form 13592 log sheet book in the Final Candling area. You can continue filling up the entire page if it is the same workday. If the sheet is full, or another sheet started, or more than one sheet was needed for the same day, mark the sheets "Page 1 of X" , etc. at the end of the day, or before starting a new sheet the following workday.

Form(s) 13592, Receipt & Control Final Candling Log (May 2008 revision) should be kept in the Final Candling area for recording any contents found during Final Candling. All logs should be kept in one log book separated by Month tabs in consecutive date order. Retention period is 1 year, including the current month for the log sheets. The Log book should be available for the Monthly reviewer.

Candling Equipment Maintenance – (for Management Officials Only)

Attach envelopes to the back of returns or documents in a vertical position ensuring postmark/PDS label is facing outward. When envelope is too long, fold and attach in a horizontal position with Postmark/label facing outward. See Figure 3.10.72-1 for an example of an envelope attached in a vertical position. See Figure 3.10.72-2 for an example of an envelope attached horizontally. Both are acceptable methods of attaching envelopes based on the type of document.

Figure 3.10.72-1

For the larger USPS, FedEx, UPS, etc. envelopes/fats/flats/packages, you can either:

Always attach envelopes and stamp Received Date on the following:

Returns received with an annotation of one of the following literals are to be processed as Amended returns:

When any "Amended Return" , "Claim for Refund" , or "Request for Abatement" (e.g. Form CT-1X, Form 720X, Form 941X, Form 943X, Form 944X, Form 945X, Form 1040X, Form 1120X, Form 843, Form 1045, Form 1139, Form 8379, or Form 8849) is received:

When multiple returns or documents are received in one envelope and each requires a "Postmark Date" to indicate whether timely mailed, attach envelope to the first one and stamp the Postmark Date and Received Date. On the remaining returns, use a Dual Date stamp or stamp the Postmark Date on the top left side margin using the earliest postmark date shown on the envelope and the Received Date in the normal area. For envelopes that do not specify the Postmark Date or "drop-off" date, refer to IRM 3.10.72.6.2.4 to determine the Postmark Date to stamp.

Take the following actions for any tax returns received in an envelope addressed to IRS which should have been filed with a State or local jurisdiction, the District of Columbia, the Commonwealth of Puerto Rico, Guam, Virgin Islands, Northern Mariana Islands, American Samoa, or any possession/territory of the United States.

With-Remit:When a Federal return is received with a State return (or correspondence for the State):

Non-Remit: When a Federal return is received with a State return, use the attached Forms W-2 to try to determine the proper routing:

Route all "loose" State tax returns to the appropriate state. Follow local procedures for misdirected mail.

If a State return is attached to one of the following, keep together and route to the appropriate function.

Envelopes addressed to IRS that are erroneously delivered by the USPS to the state taxing agency are timely filed if:

When IRS receives a return from a state agency ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ if the taxpayer's envelope was addressed to a state agency. Date stamp the return with IRS Received Date and attach envelope. If no envelope is available, date stamp return and consider not timely filed.

When IRS receives returns from a state agency after the grace period, it will be considered timely filed if the taxpayer's envelope was addressed to the IRS and postmark is on or before the due date or was received by the State within the grace period. For IMF, do not date stamp. For BMF, only date stamp if return requires a date stamp. Always attach the envelope.

If an envelope is received with correspondence intended for other than IRS, you must determine if there is any Remit that is directed to IRS, or to another entity or person (i.e. Birthday Card, VISA bill, etc.).

When U.S. currency is received in any amount in the Extracting function, it shall immediately be taken to the Manager.

When any item of value other than U.S. currency is discovered, handle in same manner as outlined in (1) above. An item of value can be gold, silver, jewelry, savings bonds, "loose" postage stamps, Treasury Notes/Bonds, Stocks, Gift Cards, Credit/Debit Cards, etc. Checks and money orders are not classified as items of value in this instance. They are discussed under separate instructions. If in doubt as to an "item of value" , treat it as if it is.

When postage stamps are received in amounts less than "$3.00" , cross through and permanently affix stamps to related return or document and retain in regular work flow.

A teller from the Deposit Function is responsible for collecting the locked container contents. If the discovered item(s) is not retrieved at least once daily per shift, the Extracting Manager will inform the Deposit Manager. The Manager will open the envelope(s) and verify the content with the teller. The teller must initial and date the Form 4287 that the items listed were received. The Manager retains the duplicate copy as proof of discovery and gives the item to the Deposit Function with the other 2 parts of the Form 4287.

Please refer to IRM 3.8.46 Discovered Remittance for complete processing instructions.