3.11.3  Individual Income Tax Returns (Cont. 1)

3.11.3.6 
Correspondence

3.11.3.6.2 
General Correspondence Procedures

3.11.3.6.2.2  (01-01-2015)
Correspondence When Not Sending Returns Back to the Taxpayer

  1. Complete all possible editing and identify all correspondence issues.

    Note:

    If the address is missing or incomplete, perfect from an attached envelope. If unable to perfect from an attached envelope, research.

  2. Do not attempt to dummy missing forms/schedules when corresponding. Instead, include in the correspondence to the taxpayer requests for ALL missing required forms/schedules.

  3. A correspondence action sheet (CAS) is a form used to generate a letter requesting information from a taxpayer. A CAS is used with returns that cannot be sent back to the taxpayer. The following CAS forms are used:

    1. Form 6001 is used to generate 12C letters. See Exhibit 3.11.3-16.

    2. Form 3696-A is used to generate miscellaneous Correspondex (C) letters (e.g., Letter 369C used to deny reasonable cause).

    3. Form 3696 is used to generate miscellaneous service center (SC) letters.

  4. When using Form 6001 to generate Letter 12C, ALWAYS select paragraph (u) regarding electronic filing when the return is:

    • A current year return, and

    • There is no indication of electronic filing.

    Exception:

    NEVER select paragraph (u) when corresponding on the following types of returns:
    • Decedents.
    • Fiscal year filers
    • Address is a U.S. Territory
    • Meets criteria for International Return
    • Indication taxpayer has filed Form W-7 as an attachment. (This includes notations on the return such as "Form W-7 detached," or similar statement.)
    • Form 8948, "Preparer Explanation for Not Filing Electronically," is attached.
    • Form 14039, "Identity Theft Affidavit is attached" .

  5. Prepare the CAS and attach it to Form 1040, Form 1040A or Form 1040EZ below the caption area.

  6. Edit Action Code "211" on all returns requiring correspondence when the return is not being mailed back to the taxpayer. See Figure 3.11.3-9.

  7. If a received date is required and not present on the return, edit the received date before corresponding. Refer to the received date editing instructions in IRM 3.11.3.5.

    Figure 3.11.3-9

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

3.11.3.6.3  (01-01-2015)
General Response Procedures

  1. Move all correspondence sheets to the back of the return.

3.11.3.6.3.1  (01-01-2015)
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.

    Exception:

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

  3. Use the table below to determine the RPD:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡
  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

      Note:

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

      Note:

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

3.11.3.6.3.2  (01-01-2015)
Reply Instructions

  1. Ensure that the return has been perfected. See the Correspondence Action Chart at IRM 3.11.3.6.3.3(4) for instructions to process "no reply," "incomplete reply" and undeliverable correspondence.

3.11.3.6.3.3  (01-01-2015)
No Reply/Incomplete Reply/Undeliverable Correspondence

  1. Use the Correspondence Action Chart 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. For late no reply returns, honor the original received date.

    Exception:

    For missing signature returns, follow the instructions in IRM 3.11.3.5.2(3).

    Note:

    Edit "041515" as the return received date if a timely-filed return is being processed after June 3, 2015, or if the Julian date in the DLN is 155 or later.

  3. Edit a CCC "U" on all no reply returns, except when any of the following apply:

    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.

  4. The Correspondence Action Chart follows.

    CORRESPONDENCE ACTION CHART
    (Edit CCC "U" on all no reply returns unless instructed otherwise.)
    IF CCC "3" IS EDITED, EDIT IT FIRST.
    If a correspondence condition is not identified below, edit CCC "U" and take no further action.
    CORRESPONDENCE REQUIRED FOR THE FOLLOWING CONDITION ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    FORM 1040, Form 1040A and Form 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 (IRM 3.11.3.7.2.6). Edit Action Code "355" .
    Dependent TIN - Dependents claimed with no TIN IRM 3.11.3.13.3.1
    Line 6c -Exemption Position 3 missing supporting documentation to substantiate claim for dependent. (Form 8332, Form 2120 or divorce decree is not present.) Entries must be present on Forms 8332 or 2120. "X" Exemption Position 3.
    Signature
    • Missing Jurat

    • Missing or one signature on a joint return

    • Photocopied signature.

    • Refund on a joint return and spouse refuses to sign.

    • Condition requiring two witnesses.

    • Minor Child's return signed by other than a parent or relationship is not indicated.

    Review unsigned return for possible IVO referral conditions. If found, place the return in the appropriate IVO Review Box with a note indicating the IVO condition:
    • Prisoner Returns

    • OMM Returns

    • Routing numbers in the Direct Deposit area that are either of the following: "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ "


    If no IVO referral criteria is present, route unsigned/undeliverable returns to the Entity Function.

    Note:

    If the taxpayer responds and sends back a return that shows the signature present in an area other than the Sign Here area under the jurat on the return, or has signed on Form 3531, send the return back to the taxpayer a second time.

    Exception:

    If the taxpayer has signed an attached CP59 or Letter 143C, do not correspond for a signature under the jurat on the return. This signature is acceptable.

    Blank Return with Missing Signature If the taxpayer returns an unsigned Blank Return, edit RPC "L" and continue processing.
    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 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, Form 1040A or Form 1040EZ but a completed Form 1310 with correct answers and signature is attached. e. See Signature instruction above.
    f. Signature missing on Form 1040, Form 1040A or Form 1040EZ and Form 1310 is attached, but not signed. f. See Signature instruction above.
    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 - Schedule D or statement is not attached  
    a. Gain of ≡ ≡ ≡ ≡ or more and Schedule D not attached. a. Prepare dummy Schedule D and edit the amount on line 7.
    b. Loss of ≡ ≡ ≡ ≡ or more and Schedule D is not attached. b. Prepare dummy Schedule D and edit the amount on line 7. 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 9. 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 line 23 through 36 - dotted portion or a statement. "X" line 36.
    Line 48 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1116 not attached. "X" line 48.
    Line 49 - Amount claimed and Form 2441 not attached. "X" line 49.
    Line 50 - Amount claimed and Form 8863 not attached. "X" line 50.
    Line 51 - Amount claimed and Form 8880 not attached. "X" line 51.
    Line 52 - Amount claimed, Schedule 8812 not attached, and ITINs are shown for children claiming eligibility for Child Tax Credit on line 6c, Form 1040. "X" line 52.
    Line 53 - ≡ ≡ ≡ ≡ ≡ or more claimed and Form 5695 is not attached. "X" line 53.
    Line 54 - amount claimed and not supported by Form/Schedule "X" line 54.
    Line 55 - ≡ ≡ ≡ ≡ ≡ or more and not supported by an entry on lines 48 - 54 or a write-in. "X" line 55.
    Line 57 - 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 $117,000 or less; otherwise, prepare a dummy Schedule SE for the secondary taxpayer. For prior year, see IRM 3.11.3.64.3.2.10
    Line 58 - Amount claimed an no Form 4137 or Form 8919 is attached. "X" line 58.
    Line 59 - Amount on line 59 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 59 to line 17 of Form 5329. Process for the primary taxpayer if a determination cannot be made.
    Line 60a - Amount claimed and there is an entry on line 60a on Form 1040 and Schedule H is not attached. "X" line 60a.
    Line 64 - Withholding document is not present and withholding of $1285 claimed and the only amounts present are on lines 20a/b and Recovery Rebate noted. "X" line 64.
    Line 66a - Amount claimed and no source of earned income is present. Edit RPC "B" and CCC "8" .
    Line 67 - Amount claimed and Schedule 8812 is not attached. "X" line 67.
    Line 68 - Amount claimed and Form 8863 is not attached. "X" line 68.
    Line 71 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and either no Form W-2 is attached OR not all of the Forms W-2 are attached. "X" line 71.
    Line 72 - Any amount claimed and Form 4136 is not attached. "X" line 72.
    Line 73 - ≡ ≡ or more and Form 2439 or other refundable credits are not attached. "X" line 73.
    Schedule A  
    a. Line 9 -- Amount present, no entries on lines 5 through 8 a. "X" line 9.
    b. Line 15 - Amount present, no entries on lines 10 through 14, and line 6 is blank. b. "X" line 15.
    c. Line 17 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8283 is not attached or≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , "Art" is indicated on Form 8283 and appraisal not attached or≡ ≡ ≡ ≡ ≡ or more and page 2 of Form 8283 is not present or is not signed. c. "X" line 17.
    d. Line 19 -- Amount present, no entries on lines 16 through 18 d. "X" line 19.
    e. Line 20 - Amount present and Form 4684 not attached. e. "X" line 20.
    f. Line 21 - ≡ ≡ ≡ ≡ ≡ ≡ or more, and Form 2106 or Form 2106-EZ or similar statement not present. f. "X" line 24.
    g. Line 27 - Amount claimed and lines 21 through 24 are blank. g. Edit line 27 amount 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 on 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) is marked, and Form 6198 is not attached. "X" line 31, Schedule E.
    Schedule F - Box on line 36b checked, line 34 is a loss of ≡ ≡ ≡ ≡ ≡ or more, and Form 6198 is not attached. Adjust line 33 to equal line 9 if the cash method is used or to equal line 50 if the accrual method is used.
    Schedule R
    • Boxes 1 through 9 are blank

    • No entry on line 11 and box 2, 4, 5, 6 or 9 is checked.

    • No entry on line 13c.

    "X" Schedule R.
    Schedule SE - Cannot determine the proper allocation of SE amounts. Process Schedule SE for the primary taxpayer if primary wages are $117,000 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
    Form 3800 (Part III)  
    Any entries present in Part III must be supported by the source form or show an EIN in Column b, Part III. "X" any credits claimed in Part III not supported by the appropriate source form or without an EIN in Column b, Part III.
    Form 4137 - Cannot determine correct allocation. Process Form 4137 for the primary taxpayer if primary wages are $117,000 or less. Otherwise, process Form 4137 for the secondary taxpayer.
    Form 5405 - Complete settlement statement (Form HUD-1) not present. "X" Form 5405.
    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
    • Number of months is not indicated.

    • Child's TIN is missing and no support for a child who was born in the tax period and died in the same or next consecutive tax period.

    "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. See IRM 3.11.3.41.14.
    Schedule 8812 - Boxes in Part I are not checked and ITIN dependents with corresponding CTC box checked are claimed on Form 1040, Line 6c "X" Line 52 and/or Line 67, Form 1040.
    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 $117,000 or less. Otherwise, process Form 8919 for the secondary taxpayer.
    FORM 1040A TAX DATA
    Line 19 - Amount claimed and Form 8917 not attached. "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 2441 not attached. "X" line 31.
    Line 32 - Amount claimed and Schedule R not attached. "X" line 32.
    Line 33 - Amount claimed and Form 8863 not attached. "X" line 33.
    Line 35 - Amount claimed, Schedule 8812 not attached, and ITINs are shown for children claiming eligibility for Child Tax Credit on line 6c, Form 1040A. "X" line 35.
    Line 36 - ≡ ≡ or more and lines 31 through 35 are blank. "X" line 36.
    Line 40 - Withholding document is not present and withholding of $1285 claimed and the only amounts present are on lines 14a/b, Form 1040A, and Recovery Rebate noted. "X" line 40.
    Line 42a - Amount claimed and no source of earned income is indicated. Edit RPC "B" and CCC "8" .
    Line 43 - Amount claimed and Schedule 8812 not attached. "X" line 43.
    Line 44 - Amount claimed and Form 8863 is not attached. "X" line 44.
    1040A SCHEDULES AND FORMS
    Schedule EIC See IRM 3.11.3.40.
    Schedule 8812 See IRM 3.11.3.42.
    Form 8863 See IRM 3.11.3.44.
    FORM 1040EZ TAX DATA
    Line 8a - Amount claimed and no source of earned income indicated. Edit RPC "B" and CCC "8" .

3.11.3.7  (01-01-2015)
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)

    • Natural Disaster/Emergency Relief Program

    • Refund Schemes

    • Identity Theft

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

    • Amended Returns

    • Blank Returns

    • Incomplete Returns

    • Blocked or Deferred Income Returns

    • Correspondence Imaging System (CIS) Returns

    • Combined Tax Liabilities

    • Community Property Returns

    • Form 8938 (Statement of Foreign Financial Assets)

    • 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  (01-01-2015)
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  (01-01-2015)
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 or arising by operation of law.

    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  (01-01-2015)
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
    "Military Spouses Residency Relief Act" , "MSRRA" or similar statement at the top of their return 09 or later
    1. Edit CCC "M" .

    2. Edit CCC "P" .

      Note:

      If the taxpayer shows no wages present on line 7, withholding is significant on line 64 and line 76a shows a refund of all withholding, edit RPC "G" .

    3. If the MSRRA filing is FS 3 the following signed and dated declaration must be present:
      "I am claiming ___________ as my residence or domicile under the Military Spouses Residency Relief Act (MSRRA). Under penalties of perjury, I declare that I am qualified for relief under MSRRA because I am present in __________ solely to accompany my spouse, who is a servicemember serving in compliance with military orders, and my claimed residence or domicile is the same as my spouse's residence or domicile."

    4. Correspond if this signed and dated declaration is not present on a MSRRA filing claiming FS 3. Stamped or faxed signatures are not acceptable.

    "Haiti" or "Operation Unified Response" 10 - 09 Edit CCC "Z" if Form W-2 is not issued by Department of Defense (DOD) or Defense Finance and Accounting Services (DFAS).
    • "Operation New Dawn"

    • "New Dawn"

    • "Enduring Freedom"

    • "Operation Enduring Freedom"

    • "Operation Iraqi Freedom"

    • "Iraq"

    • "Operation Noble Eagle"

    • "Combat Zone" OR similar statement

    01 or later
    1. Check to see if Form W-2 is from the Department of Defense (DOD) or Defense Finance and Accounting Services (DFAS).

      1. If Form W-2 is issued by DOD or DFAS, take no action.

      2. If Form W-2 is NOT issued by DOD or DFAS, edit CCC "K" .

    • "Desert Storm"

    • "Joint Guard"

    • "Joint Forge"

    • "Northern Forge"

    • "Northern Watch"

    .
    90 or later Edit CCC "Z"
    "Former Yugoslavia" 00 - 94
    1. Edit CCC "D"

    2. Edit CCC "M" if balance due

    • "Haiti"

    • "Operation Uphold Democracy"

    • "Operation GTMO"

    94 or later
    1. Edit CCC "D" .

    2. Edit CCC "M" if balance due.

    • "Somalia"

    • "Somalia Restore Hope"

    93 or 92
    1. Edit CCC "D" .

    2. Edit CCC "M" if balance due.

    "UN Operation" 92 or later
    1. Edit CCC "D"

    2. 2. Edit CCC "M" if balance due.

    Note:

    "Columbia" is not a recognized military operation.

  2. Edit CCC "Y" and an Action Trail when a military operation or tax period other than one listed in the table in (1) above is named.

  3. Edit CCC "Y" and an Action Trail when the taxpayer has excluded income due to combat or military pay.

3.11.3.7.1.1.2  (01-01-2015)
Correspondence on Military Operation/Combat Zone Returns

  1. One signature is acceptable on a joint return in the following situations:

    • Spouse overseas and signing spouse authorized by a power of attorney (e.g., Form 2848) OR similar SIGNED document which clearly defines the scope of authorization granted to the POA.

    • Spouse in combat zone/qualified hazardous duty area and signing spouse attaches statement.

    • Spouse is member of the Armed Forces who is in a missing status in a combat zone.

  2. Follow normal correspondence procedures when other required information is missing from the return.

  3. Address the correspondence to the authorized person when a Power of Attorney (POA), or similar signed document, clearly defining the scope of authorization granted to the POA, is attached.

3.11.3.7.1.2  (01-01-2015)
Examination Cases

  1. Returns with the following notations or attachments have been Examination cases. Edit the return using the regular editing procedures with the exception of the special instructions in this subsection of the manual.

    • "Exam has original delinquent return – Process this copy as an original"

    • "Original delinquent return secured by Examination"

    • Form 3198, Special Handling Notice

    • Examination work papers

    • Copy of Form 5546 (C)

    • Form 13133

  2. Follow the instructions about penalties in the blocks in the special handling area of Form 3198. Also follow the instructions noted in the blocks at the bottom of the Form 3198.

  3. Edit the Received Date, if noted. Otherwise, follow the regular Received Date procedures in IRM 3.11.3.5 .

  4. Do not correspond. Do not send the return back to the taxpayer.

  5. Route the return to Examination for additional action if the return cannot be processed.

    1. Pull an unnumbered return from the batch and route it to Examination.

    2. Edit Action Code "640" when the return is numbered.

    Note:

    Route the return to Examination using Form 4227. Note on Form 4227 that the return needs to be routed to the originator, usually a district office employee.

    Exception:

    Refer an unprocessable return to the work leader when Form 13133 is attached. The work leader will contact the Examining Officer at the number provided to resolve the problem.

3.11.3.7.1.3  (01-01-2015)
Fiduciary Relationships

  1. Fiduciary returns are those which are signed for the taxpayer by a representative, who is often court-appointed.

  2. Edit the fiduciary institution's name or the taxpayer's representative's name, when no institution name is present, as the Additional Information Line (AIL) in the caption. (See IRM 3.11.3.9.2.2.2). Use the abbreviations in the list below as suffixes to the representative's name.

    Fiduciary Relationships: Taxpayer Representatives
    Administrator (ADM) Executor/Executrix (EXEC)
    Commissioner (COMM) Guardian (GDN)
    Conservator (CONS) Personal Representative (PER REP)
    Custodian (CUST) Trustee (TR)

    Note:

    Do not add a Power of Attorney (POA) name as an Additional Information Line.

  3. Delete the word "Incompetent" from the caption when it is present.

3.11.3.7.1.3.1  (01-01-2015)
Documentary Evidence Requirements

  1. Documentary evidence is NEVER required for any of the following relationships:

    • The parent or spouse of an incompetent taxpayer

    • A parent signing for their minor child

    • An attorney or Certified Public Accountant (CPA)

    • A representative of a bank or other fiduciary institution, to include credit unions, pension funds, etc.

    • A Military spouse out of the country on combat duty or located in a qualified hazardous duty area. See IRM 3.11.3.7.1.1 for additional information regarding Combat Zone returns.

    Note:

    See IRM 3.11.3.10.2 for Documentary Evidence requirements for decedent returns.

  2. Documentary evidence is required ONLY if the taxpayer has ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. The parent for a child that is NOT a minor.

    2. Any of the representatives listed in the table at IRM 3.11.3.7.1.3

  3. Documentary evidence is always required for all other relationships. This includes, but is not limited to, the following:

    • son

    • daughter

    • uncle

    • aunt

    • cousin

    • nephew

    • niece

    • POA

    • Attorney-In-Fact

  4. Correspond when documentary evidence is required but is not attached.

3.11.3.7.1.3.2  (01-01-2015)
Minor Child

  1. A minor child is defined by any of the following

    • "Minor" is notated anywhere on the return

    • Any indication the child is under age 18

  2. Edit "MINOR" as a suffix to the child's name in the caption if the return is for a minor child. See Figure 3.11.3-10.

  3. Edit the parent, other fiduciary representative or guardian's name as an additional information line in the caption if that person signs for the child (See Figure 3.11.3-10 and IRM 3.11.3.9.2.2.2). Use the following priority to determine the name or relationship of the person(s) signing the return:

    1. Use information from the signature area.

    2. Use information from Form 8615.

    3. Correspond for documentary evidence if a relationship cannot be determined.

  4. Correspond for missing required documentary evidence. Documentary evidence requirements are:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    3. All other relationships always require documentary evidence.

    Figure 3.11.3-10

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

3.11.3.7.1.3.3  (01-01-2015)
Power of Attorney (POA)

  1. If a POA relationship is indicated, Form 2848, "Power of Attorney and Declaration of Representative," or a general or durable Power of Attorney must be attached. Correspond when missing, unless there is a notation of either of the following:

    • "POA on file" .

    • A Centralized Authorization File (CAF) number is provided on the return or an attachment. See paragraph (2) below.

    Note:

    A Form 2848 authorizes the holder to represent the taxpayer before the Service. The power to sign a tax return is not a power generally authorized by the form; the power must be specified. A Form 8821, Tax Information Authorization, only allows the holder to receive the taxpayer's tax information.

  2. Research the POA when either of the notations in (1) above are present. Correspond, when research does not provide a valid (current) POA.

  3. Never edit a POA name as an additional information line in the caption, unless otherwise instructed.

  4. See IRM 3.11.3.9.2.2.2 for further information on editing additional information lines.

3.11.3.7.1.4  (01-01-2015)
Frivolous Filer/Non-Filer Returns

  1. Prepare Form 4227, indicate "Frivolous" and route to Examination any unnumbered return on which the taxpayer:

    1. Argues -for any reason- the filing of a tax return or the paying of a tax is not required.

    2. Makes use of a frivolous argument to reduce income or tax liability. (See (4) below for examples.)

    3. Marks out or alters -in any manner- the penalty of perjury statement (i.e., jurat) above the signature.

      Note:

      A Frivolous Return Program (FRP) stamp will be present in the upper left corner if the return has already been reviewed by the Exam FRP Coordinator.

  2. Edit Action Code "331" and leave the return in the block when it is numbered. Pull unnumbered returns for routing to Examination.

  3. When a return meets criteria for a frivolous filing determination as shown in paragraph (4) below, route the return to FRP. FRP will review the return and if it meets their criteria for frivolous filing, will edit or stamp Audit Code "R" .

    Note:

    Delete Audit Code "R" and edit Action Code "213" when Form 2439 is attached and the refund is ≡ ≡ ≡ ≡ ≡ or less.

  4. Some common examples of frivolous returns are listed below. This list is not all-inclusive but represents the current most common types of frivolous filings. See Exhibit 3.11.3-11 and Notice 2010-33 for additional examples and complete descriptions.

    • Wages not income

    • Wages of Primary Taxpayer deducted on Schedules A or C

    • Zero return and refund claimed

    • Zero return with frivolous argument

    • Zero or little income return and substitute Form W-2, Form 4852 or Corrected Form 1099

    • Altered Form/Altered Jurat/"UCC 1-207" / "UCC 1-308"

    • Entitlement Refund Requests - Filer claims exempt from taxation and requests a refund related to their birthright. These include Reparations for Slavery (40 Acres and a Mule, Black Investment Tax, African American Tax, etc.), Native American Indian Treaty, Bosnian Refugee, Daughters of the American Revolution, etc.

    • IRC References to avoid tax - 861, 1001, 1341, 3121, etc.

    • Form 2555 Deduction - Eliminates income on line 21 even though individual and their employer are U.S. residents

    • Taxpayer makes claims such as: Taxes are Voluntary/IRS has no authority to collect tax/Law does not require

    • Taxpayer makes claims such as: Not a person, Not a citizen, Untaxed

    • Protests government action or inaction

    • Prisoner returns citing any frivolous argument

    • Prisoner returns attaching calculations of income derived from work assignments within the prison (may be based on minimum wage) and generally claiming a refund of withholding (may be substitute Form W-2)

    • Confused Taxpayer Filings - Outlandish dollar amounts on any line and/or non-sensical or gibberish language.

    • A thumbprint or fingerprint present in the signature area of a return.

3.11.3.7.1.5  (01-01-2015)
Hardship

  1. Taxpayers, their representatives, or IRS employees may complete Form 911, Request for Taxpayer Advocate Service Assistance (and Application For Taxpayer Assistance Order), when a taxpayer is experiencing a hardship. Hardship alone, however, is not a basis for referring cases to the Taxpayer Advocate Service (TAS). The IRS must take steps whenever possible to resolve the matter before referring the taxpayer to TAS.

  2. Refer a return with a notation of an actual or potential hardship to your work leader. The term hardship is used broadly and covers more than just hardship in a financial sense. TAS has developed 9 criteria to determine which taxpayers qualify for TAS assistance.

  3. The Local Taxpayer Advocate will make the final decision on whether a taxpayer meets TAS criteria. See IRM 13.1.7 for a complete list of TAS case criteria. Refer to the Attachment Guide in Exhibit 3.11.3-1 for procedures for routing Form 911 to the TAS Office and Taxpayer Advocate Service Case Criteria, for further instructions.

  4. When Local Taxpayer Advocate walks a return through Code & Edit on the basis of hardship, in addition to normal editing, perform all of the actions below:

    1. Edit CCC "O" .

    2. Edit CCC "Y" .

    3. "X" the refund line on the return.

      Note:

      If correspondence conditions are identified during editing, give the return back to TAS and do not correspond.

3.11.3.7.1.6  (01-01-2015)
Killed in Terrorist Action (KITA)

  1. Route ALL returns identified as "KITA/KIA" , "KITA-Oklahoma City" , "KITA-9/11" or "KITA-Anthrax" to the KITA coordinator in Accounts Management for processing.

    Note:

    Your workleader can access the Servicewide Electronic Research Portal (SERP) for a listing of KITA/KIA coordinators.

  2. Route Form 1040 returns where the taxpayer has written "Sec 692(d)(2)" on the "Other Payments" line (line 65 for 2001 returns and line 59 for 1995 returns only) with a money amount to the right, to the KITA/KIA coordinators. Form 1040A or Form 1040EZ returns with Sec 692(d)(2) written anywhere on the return must be converted to a Form 1040 before sending the return to the KITA/KIA coordinator.

  3. If the KITA coordinator determines that the return does not qualify for KITA/KIA, they will specify "Non-Eligible for KITA" on a Form 4227 and attach it to the front of the return, and return it to Code & Edit for processing.

    Note:

    If the KITA/KIA coordinator determines that the return is not eligible under Sec 692(d)(2), Code & Edit should " X" the amount claimed to the right of the "Other Payments" line.

3.11.3.7.1.7  (01-01-2015)
Natural Disaster/Emergency Relief Program

  1. The taxpayer may identify the name of a disaster or emergency on the front of his/her return or on an attachment.

  2. If the taxpayer requests that a refund be mailed to a temporary mailing address, edit Action Code "341" .

  3. Edit RPC "D" when the taxpayer has attached Form 8915 to his/her return.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    Do not correspond for withholding, excess social security tax, or support for earned income.

3.11.3.7.1.8  (01-01-2015)
Refund Schemes

  1. Look for fraudulent tax returns. There should be review boxes established in Code and Edit for the following functions:

    • Criminal Investigation (CI). CI reviews investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes.. See Exhibit 3.11.3-12.

    • Examination (Exam). See Exhibit 3.11.3-14.

    • Integrity and Verification Operation (IVO). IVO reviews returns in schemes that in general make use of excessive withholding or false earnings. IVO also reviews Operation Mass Mailing (OMM) returns. OMM returns are often identical or vary only slightly. Returns referred to IVO returns are sorted by OMM criteria. See Exhibit 3.11.3-13

    • Frivolous Return Program (FRP). See Exhibit 3.11.3-11 and Exhibit 3.11.3-13.

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

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

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ "

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Edit Audit Code "K" when Accounts Management requests that a return be identified for Examination.

3.11.3.7.1.9  (01-01-2015)
Identity Theft

  1. See Exhibit 3.11.3-1 when the taxpayer submits Form 14039, Form 14039SP or police report(s) claiming Identity Theft.

3.11.3.7.2  (01-01-2015)
Special Returns

  1. Follow the instructions in this section in addition to the regular editing requirements, unless otherwise instructed.

3.11.3.7.2.1  (01-01-2015)
Amended Returns

  1. Route the return to the 1040X Function when any of the following notations/conditions are present:

    • "Amended"

    • "Corrected"

    • "Revised"

    • "Superseding"

    • "Tentative"

    • "Duplicate"

    • "Copy"

    • "Substitute"

    • Attached IRS Notice indicating a previous return posted for the same tax period

    • Taxpayer statement is present indicating the return is a copy of an electronically filed return

    • Taxpayer statement present indicating the return is an amendment to an electronically filed return

    Exception:

    Process the return as an original if "No TC150" has been annotated or if "Secured by Collections" or "TC-599-XX" appears anywhere on the return. Also, process a photocopied return as an original when "Process as Original" has been edited on the return, indicating Exam has the original, delinquent return. If correspondence is required, see IRM 3.11.3.6.1(3).

  2. Process a return prepared (dummied) by Accounts Management as an original return and do not correspond for missing information or a signature.

  3. If a return with or without a notation of "TC150" is received and "PAO" is edited in the upper left margin, continue processing as an original return. Correspond, if necessary.

3.11.3.7.2.1.1  (01-01-2015)
Amended Joint MFA or MFS Return

  1. If a return has "Amended Joint MFA" (married filing alien) or "Amended Joint MFS" (multiple filing status) stamped on top:

    1. Edit Action Code "460" .

    2. Prepare Form 4227 with instructions to route to Examination and leave the return in the batch.

3.11.3.7.2.2  (01-01-2015)
Blank Return

  1. Edit RPC "L" on returns with all zeros or no significant entries present, or edited from attachments, on any of the following T-Lines:

    • Lines 7 through 79, Form 1040

    • Lines 7 through 51, Form 1040A

    • Lines 1 through 14, Form 1040EZ

    Reminder:

    When RPC "L" has been edited on the return, do not edit CCC "B" . RPC "L" does not negate the need for a Dependency Status Indicator (DSI), when applicable.

    Reminder:

    Correspond for a missing signature if one is not present on a blank return.

  2. Refer the return to your work leader when caption information is missing and cannot be perfected using instructions in IRM 3.11.3.9.2.

  3. Treat the blank return as amended when a statement is present indicating that a return will be filed later. See the amended return instructions in IRM 3.11.3.7.2.1.

  4. Edit CCC "E" when a statement indicates that the taxpayer will have no requirement to file returns in the future.

  5. Refer to the instructions in IRM 3.11.3.7.1.4 when the return has been filed as a frivolous filer return.

  6. Refer to IRM 3.11.3.7.2.18 for processing instructions when there is an indication that the return is a Substitute For Return (SFR) or an Automated Substitute for Return (ASFR).

  7. If a return is blank, correspond for the following using Form 3531:

    • Credits

    • Income

    • Other taxes

    • Payment information or statement that taxpayer is not liable for this or subsequent tax year

    • Original signature under a jurat

3.11.3.7.2.3  (01-01-2015)
Incomplete Return

  1. If a Form 1040 or Form 1040A is missing page 1 or page 2, take the return to the work leader. The work leader will:

    1. Research for the status of the return.

    2. If possible, correspond for all missing information.

    3. If unable to correspond, destroy the page in accordance with classified waste procedures.

3.11.3.7.2.4  (01-01-2015)
Blocked or Deferred Income Return

  1. If a return with a notation of blocked or deferred income is attached to another return:

    1. Write "Information Return-Blocked Return-Do Not Process" on the blocked income return.

    2. Place the blocked income return behind the processable return and continue editing.

    Note:

    Blocked or deferred income is not an indication of an International Return.

  2. Prepare Form 4227 and route the return to "Correspondence" when a return with an indication of blocked or deferred income is not attached to another return.

3.11.3.7.2.5  (01-01-2015)
Correspondence Imaging System (CIS) Returns

  1. Process CIS returns as original filings and circle any notations of duplicate, amended or similar statements. Correspond for any missing required information as identified in the line-by-line instructions (except for a missing signature).

    Exception:

    If correspondence is required and Form 13596 and/or Form 3893 is attached, route the return back to Accounts Management.

3.11.3.7.2.6  (01-01-2015)
Combined Tax Liability Return

  1. Returns with any of the following conditions are considered combined tax liability returns:

    • More than one tax period

    • More than one type of tax

    • More than one person filing a joint return other than those taxpayers considered to be spouses.

    • More than one person filing a single return

  2. Correspond to inform the taxpayer(s) that each person (except married couples) must file a separate tax return for each tax period.

  3. Take no action when the return shows an ITIN and supporting documents reflect an SSN for the same taxpayer.

3.11.3.7.2.7  (01-01-2015)
Community Property/Registered Domestic Partnership Return

  1. If there is an indication of Registered Domestic Partnership, "RDP" , "CCA 201021050" , or "CCA" on the return or on an attached Form 8958 or allocation statement, edit CCC "Y" .

  2. "X" any fractional exemption claimed.

  3. "X" the amount claimed for Excess Social Security taxes when wages are less than $58,500.

  4. Edit RPC "C" when there is an indication of a pro-rata share and both of the following additional conditions apply:

    1. An S-TIN is present

    2. Lines 7 to 21 and 23 to 36 (Form 1040) or lines 7 to 14b and 16 to 20 (Form 1040A) have no entries.

3.11.3.7.2.8  (01-01-2015)
Form 8938 (Statement of Foreign Financial Assets)

  1. Process Form 1040 with Form 8938 attached per the instructions in the table below:

    January to May June to December
    Process Form 1040 using current coding instructions, including the editing of CCC "H" .
    1. Fully code Form 1040 and edit a CCC "H" , per Exhibit 3.11.3-1.

    2. Pull the Form 8938 from the return and sequence it to the back of the Form 1040 package, attaching the Form 8938 so that it is back-to-back with the parent return.

    3. Place the Form 1040 with the Form 8938 attached in a designated bin for collection by Code & Edit Clerical function.

    Reminder:

    Do not pull Forms 1040A or Forms 1040EZ with Form 8938 attached.

    Reminder:

    Do not include documents containing a prior year Form 1040 or prior year Form 8938.

3.11.3.7.2.9  (01-01-2015)
Injured Spouse Allocation Return, Form 8379

  1. An "Injured Spouse" claim may be filed by one spouse to protect his or her share of a joint overpayment. These returns either have "Injured Spouse" written on them or have a Form 8379 attached.

  2. Form 8379 may be filed with an original return or by itself. Claims filed without an original return must be sent to Accounts Management.

  3. Remove an unnumbered Injured Spouse return from a block which is not an Injured Spouse block only if the return is a refund/credit elect.

  4. If an Injured Spouse claim is attached to a numbered return, but is not in an Injured Spouse block:

    1. Attach Form 4227 and note "Injured Spouse" .

    2. Edit Action Code "611" .

  5. If a current year Form 1040X is attached to a return with an Injured Spouse indication, take the following actions:

    1. "X" the Form 1040X and do not detach the Form 1040X from the return.

    2. Rebatch the return to an Injured Spouse block following the instructions in (3) or (4) above.

  6. If correspondence is required on an Injured Spouse return, research for TC150 prior to corresponding.

3.11.3.7.2.10  (01-01-2015)
Innocent Spouse Relief Request, Form 8857

  1. A taxpayer may make a claim for relief from joint and separate tax liability or "relief from liability for community income" in the following four ways:

    1. Innocent Spouse Election - An election made by a person who filed a joint return and later showed that:
      • The understatement of tax on the return was attributable to an erroneous item of the other spouse, of which the electing spouse had no knowledge or reason to know,
      AND taking into account all the facts and circumstances, it would be unfair to hold the electing spouse liable for the underpayment of tax.

    2. Relief from Community Property Liability - An election made by a person who did not file a return as married filing jointly in a community property state and later showed that:
      • He or she did not include an item of community income in gross income that was attributable to the other spouse, and did not know or have reason to know of that item of community income.
      AND taking into account all the facts and circumstances, it would be unfair to hold the taxpayer liable for the understatement of tax.

    3. Separate Liability Election - An election made by a person who filed a joint return and later claimed separate liability from their spouse. The electing spouse must be legally separated, living apart for 12 months or more, or no longer married to the spouse with whom he or she filed the joint return at the time the claim was filed and must not have actual knowledge of the item(s) giving rise to the deficiency.

    4. Equitable Relief - Request made by a person who filed either a joint return, or a return that was not filed as "married filing jointly" in a community property state, and later showed that taking into account all of the facts and circumstances, it would be inequitable to hold that person liable.

  2. Taxpayers are instructed to file Form 8857, Request for Innocent Spouse Relief, to request relief if they are making the above claims.

  3. Edit a CCC "3" when the taxpayer either attaches correspondence to the return and indicates "Innocent Spouse" , "Separate Liability Election" , "Equitable Relief" or "Joint and Several Liability" or when a Form 8857 is attached to the return.

  4. Innocent spouse relief requests are processed at Cincinnati Submission Processing Center (CSPC) only. When the taxpayer either attaches correspondence to the return which identifies him/her as a claimant or when a Form 8857 is attached to the return:

    1. Detach and date stamp the correspondence/Form 8857 and all supporting documentation.

    2. Edit Action Trails on both the return and the correspondence/Form 8857.

    3. Prepare Form 4227, notating "Innocent Spouse Request" and attach it to the detached item.

    4. Give the request to the work leader.

    5. Leave the return in the block and continue processing.

  5. Send all claims to CSPC daily, using the following address:
    Internal Revenue Service
    CSPC (Cincinnati Submission Processing Center)
    Stop #840F
    201 West Rivercenter Boulevard
    Covington, KY 41011

  6. For CSPC, follow local procedures for routing the claim to Examination.

3.11.3.7.2.11  (01-01-2015)
International Return

  1. An international return is identified by the presence of ANY of the following:

    • Form 390 (American Samoa) - American Samoa Individual Income Tax Return

    • Form 482.0 (Puerto Rico) - Planilla de Contribucion Sobre Ingresos de Individuous

    • Form 1040 GUAM - Guam Individual Income Tax Return

    • Form 1040CM (CNMI) - Territorial Individual Income Tax

    • Forms W-2 Guam (W-2GU), 499R-2/W2-PR (Puerto Rican Withholding), W-2 CM (CNMI)

    • Form W2-AS (American Samoa) - (Usually a blue form.)

    • W-2VI (Virgin Islands) - (usually a pink form)

    • Form 1040NR - U.S. Nonresident Alien Income Tax Return or 1040NR-EZ - U.S. Income Tax Returns For Certain Nonresident Aliens with No Dependents

    • Form 1040-PR - Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico

    • Form 1040-SS - U.S. Self-Employment Tax Return

    • Form 1042-S, Form SSA-1042S, or Form RRB-1042S

    • Form 2555 - Foreign Earned Income

    • Form 2555-EZ - Foreign Earned Income Exclusion

    • Form 4563 - Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074 - Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

    • Form 8288-A - Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests

    • Form 8288-B - Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests

    • Form 8689 - Allocation of Individual Income Tax to the U.S. Virgin Islands

    • Form 8804, Form 8805, or Form 8813 - Statement of Withholding under Section 1446

    • Form 8833 - Treaty-Based Return Position Disclosure under Section 6114 or 7701(b)

    • Form 8854 - Initial and Annual Expatriation Information Statement

    • Form 8891 - U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans

    • Form 8898 - Statement for Individual Who Begins or Ends Bona Fide Residence in a U.S. Possession

    • An address outside the 50 United States and Washington, D.C. (This does not include APO/FPO/DPO addresses.)

    • Section 911, Section 931 or Section 933 of the Internal Revenue Code

    • A notation of "Dual Status" , "Dual Status Return" , "Dual Status Statement" , "DS" or "D/S" (Always leave Forms 1040 and 1040NR or Form 1040 NR-EZ together.)

    • Exemption or exclusion of the tax or income due to an International Treaty (not an American Indian Treaty)

    • Treaty Trader or Fulbright Grantee

    • Primary taxpayer is a Non-Resident Alien (NRA)

    • Any return with BOTH a Virgin Islands Form W-2 and U.S. Income, regardless of the address.

      Note:

      Do not process or send to AUSPC any Form 1040, Form 1040A or Form 1040EZ with a Virgin Islands address if BOTH of the following conditions apply:
      • The return has a Virgin Islands address, and
      ALL Form(s) W-2 or Form 1099 are from US territories. (Example: All Form(s) W-2 are Form(s) W-2VI)
      Pull these returns and transship to:
      Bureau of Internal Revenue
      6115 Estate Smith Bay, Suite 225

      St. Thomas, Virgin Islands 00802

    Note:

    The presence of Form 1116 alone does not qualify the return for treatment as an international return. DO NOT forward returns to AUSPC solely because a Form 1116 is attached. (See Figure 3.11.3-12).

  2. When the primary taxpayer has notated NRA status, edit the secondary taxpayer as the primary taxpayer and continue processing the return if:

    1. The secondary taxpayer has a TIN and U.S. wages and

    2. The return has a U.S. address.

  3. Immediately forward international returns -- in their entirety -- to the Austin Submission Processing Campus (AUSPC) at the following address:
    Internal Revenue Service
    Austin Submission Processing Campus
    P.O. Box 934
    Austin, TX 78767

  4. If the return is unnumbered, take the following actions:

    1. Remove the return from the batch.

    2. Stop editing.

    3. Use Form 4227 to route the entire return to Receipt & Control for transshipment to AUSPC.

  5. If the return is numbered, take the following actions:

    1. Leave the return in the batch and edit Action Code "651" . See Figure 3.11.3-12.

      Exception:

      AUSPC should use Action Code "610" .

    2. Stop editing.

    Figure 3.11.3-11

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

    Figure 3.11.3-12

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

3.11.3.7.2.12  (01-01-2015)
Joint Committee Return

  1. Route to Examination returns with any of the following characteristics:

    1. The original tax liability on line 44 of Form 1040 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and the total credit amount reported on line 55 of Form 1040 is ≡ ≡ ≡ ≡ ≡ ≡ or more.

    2. The original tax liability on line 44 of Form 1040 is reduced by ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ by any combination of credits or disaster loss from the tax period immediately following the tax period of the return. For example, the return is for tax period 1412, but the disaster loss occurs during 2015.

  2. Prepare Form 4227 and indicate "potential Joint Committee return" when returns with the characteristics listed in (1) above are identified.

    1. Edit Action Code "334" and leave the return in the block if it is numbered.

    2. Pull unnumbered returns for routing to Examination.

  3. Edit CCC "O" and Audit Code "L" if after review Examination indicates that the return is a "Joint Committee Return" .

3.11.3.7.2.13  (01-01-2015)
Misblocked Return

  1. All documents in a block of work must be the same type of return. A misblocked return is one found in a block of work other than the one in which it belongs.

    Example:

    Form 1040 in a Form 1040A batch or an ITIN return in a batch of regular work.

  2. Remove an unnumbered misblocked return for rebatching. (This also includes when an unnumbered return is found in a numbered batch or a numbered return in an unnumbered batch).

    Caution:

    There is a higher potential for misblocked returns after the Code and Edit function. To ensure accuracy in the rebatching of returns the remittance indicator must be true to that batch. For example all full-paid returns must be batched together, all part-paid returns, etc. Also, remember that credit card payments returns must be identified as remittance returns and batched as full or part paid returns.

  3. Numbered returns must not be removed from the block. Instead, take the following actions for all numbered returns:

    If Then
    Form 1040 is found in a Form 1040A or Form 1040EZ block, Edit Action Code "610" for non-remit returns or Action Code "611" for remit returns.
    Form 1040A or Form 1040EZ is found in a Form 1040 block, Convert entries to Form 1040 format and continue editing.
    Form 1040A is found in a Form 1040EZ block, or vice versa, Edit Action Code "610" for non-remit returns or Action code "611" for remit returns.
    If a prior year return is found in a current year block, Process the return using the prior year instructions in IRM 3.11.3.64.
    Form not in the 1040 series is found in a Form 1040 block, Refer the return to your work leader.

    Note:

    When editing either Action Code "610" or "611" , attach Form 4227 with an explanation of the action needed.

3.11.3.7.2.14  (01-01-2015)
Misfiled Return

  1. A misfiled return is a Form 1040, Form 1040A or Form 1040EZ filed instead of the correct Business Master File (BMF) Form.

  2. Route Form 1040, Form 1040A or Form 1040EZ with any indication of Limited Liability Corporation (LLC) in the caption or signature areas to Entity for research.

    Note:

    If the return has already been cleared through Entity, the phrase "Cleared by Entity" will appear on the return.

  3. Send Form 1040, Form 1040A or Form 1040EZ back to the taxpayer if the return meets any of the following criteria:

    • Business entity with an EIN

    • Business entity missing a TIN

    • Individual Master File (IMF) caption with an EIN

    • Individual and business names in the caption area with an EIN.

3.11.3.7.2.15  (01-01-2015)
Reinput Return

  1. Return the block to Receipt and Control when Form 3893 is not attached to a block of reinput returns.

  2. Take the following actions when processing reinput returns:

    1. Delete any unnecessary Action Codes.

    2. Delete any incorrect codes and edit marks.

    3. "X" any purple or blue corrections and re-edit them in red when the marks were made to correct erroneous Code & Edit marks.

    4. Do not delete the original TE number or re-stamp the document with your TE number.

    5. Follow the special editing instructions under "Remarks" on the Form 3893 (See Figure 3.11.3-13)..

    6. Move the Form 3893 to the back of the document, except for the first return, on all blocks with duplicate DLNs.

      Reminder:

      Edit a new issued SSN/ITIN on all attached Form or Schedules when one is required.

      Note:

      Some re-entry returns may be rejected e-file returns coming from Accounts Management. These returns are identified by the presence of Mod e-File printouts (TRPRT- valid for prior year only) in lieu of the actual return. The printout will have "TRPRT PRINT DO NOT PROCESS" or "Efile Graphic Print" present. Do not correspond for missing signatures on these types of returns.

    Figure 3.11.3-13

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. Use the following instructions when editing a received date from the DLN on either a current or prior year reinput return.

    If the reinput return was originally numbered as a Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Non-remittance return, Edit the received date by using the calendar date indicated by the original DLN, minus 10 days.

    Note:

    Remittance returns are identified by either a DLN or a branded (i.e., underlined) money amount in the balance due area of the return.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Also see the received date instructions in IRM 3.11.3.5 for additional information on received date editing.

  5. Edit Action Code "640" when required information is missing. Also attach Form 4227 indicating "Void to Originator" and the reason (e.g., "Missing Schedule A" ). Do not correspond.

    Exception:

    Do not input Action Code "640" or route to originator if prior correspondence has been issued and no reply has been received. Follow normal "no reply" procedures.

  6. Edit Unallowable Code "79" when the document is being reinput to release credit.

  7. If Box 15 on Form 3893 directs you to process the return as a non-remit:

    1. Delete all green or blue marks underlining money amounts.

    2. Delete all green or blue written money amounts.

3.11.3.7.2.16  (01-01-2015)
Returns Secured by Collection

  1. A TC59X–XX or notation of Integrated Collection System ("ICS" ) is entered by Collection in the upper-left margin of Form 1040, Form 1040A or Form 1040EZ on secured returns.

    Exception:

    TC59X-18 is not an indication of a secured return.

    Note:

    Do not research for TC 150 on Secured Returns.

  2. Do not correspond or research for Forms W-2 on secured returns.

    Note:

    This includes support for EIC when wages are present or excess Social Security Tax (SST) is present. Do not correspond for original or photocopied signature if "Process as Original" is present on the return.

  3. Do not refer unprocessable returns secured by Collection to the Collection unit, including those returns with CP 515 or CP 518 attached with notation of "For Signature Purposes" present.

  4. Refer to the Examination case information in IRM 3.11.3.7.1.2 for instructions on returns secured by Examination.

  5. Route a secured return with missing signature back to the originating Collection function unless "Process as Original" or "PAO" is present on the return.

3.11.3.7.2.17  (01-01-2015)
Short Period Return

  1. Taxpayers are allowed to file a return for fewer than 12 months only under one of the following conditions:

    1. An application or authority to file a short period return has been approved by the IRS (Form 1128).

    2. The return is filed under Treas. Reg. Section 1.443-1

    3. The return is filed under Section 1398 (Bankruptcy) Election or Second Short Year after Section 1398 Election.

    4. The taxpayer died during the current processing year and is filing to date of death. (See the decedent return editing instructions in IRM 3.11.3.10).

    5. The return is the final return for the taxpayer.

  2. Correspond for an explanation of the taxpayer's authority to file a short period return when none of the conditions in (1) above apply.

    1. Use Form 3696-A to send the taxpayer a 319C letter.

    2. Edit Action Code "211"

  3. Only Form 1040 may be filed as a short period return. Convert Forms 1040A or Form 1040EZ to Form 1040. See IRM 3.11.3.63 for instructions on converting returns.

  4. Short Period returns require the following additional editing:

    1. Edit CCC "Y" and an Action Trail.

    2. Edit the ending date of the tax period, using "YYMM" format.

    3. Edit the received date when one is not already present.

  5. Determine the number of quarters covered by the short period return when Schedule SE is attached. The Self Employment (SE) Quarters Covered Code is edited on Schedule SE based on the number of quarters reported on the short period return. Use the following information to determine the number of quarters covered:

    1. A fraction of a quarter counts as a full quarter.

    2. The quarters begin in January, April, July, and October.

  6. Edit the SE Quarters Covered Code in the margin to the right of line 4 in the section used Section A or Section B of Schedule SE. Code the SE quarters covered as follows:

    • Code "1" for one quarter.

    • Code "2" for two quarters.

    • Code "3" for three quarters.

    Note:

    Do not code for four quarters.

3.11.3.7.2.18  (01-01-2015)
Substitute for Return (SFR)

  1. An SFR return is prepared by Examination, Collection, or the Automated SFR (ASFR) function.

  2. Do not correspond with the taxpayer for missing information - including signature - on an SFR return. Instead, prepare Form 4227 to route the SFR return to the originating function when any of the following information is missing:

    • Filing status

    • Name(s)

    • TIN(s)

  3. Edit RPC "L" when there are no significant T-line entries on:

    • Lines 7 through 79 of Form 1040

    • Lines 7 through 51 of Form 1040A

    • Lines 1 through 14 of Form 1040EZ

    Note:

    Do not edit CCC "B" when RPC "L" has been edited.

  4. Take the following actions when an SFR return has the words "Possessor of Certain Cash" written on it:

    1. Edit the tax period if other than 1412.

    2. Process the return with a temporary TIN and route the return to Entity using Form 4227 for the assignment of the TIN.

    3. Edit "Possessor of Certain Cash" as the AIL.

  5. Edit an SFR return that has either "IRP" or "RTF" written on it as follows:

    1. Edit the tax period if other than 1412.

    2. Edit today's date as the received date.

    3. Edit CCC "3" and CCC "B" .

  6. Do not refer SFR returns without significant entries for statute clearing. Instead, edit RPC "L" and RPC "K" .

3.11.3.7.2.18.1  (01-01-2015)
Automated Substitute for Return (ASFR)

  1. Route ASFR returns to the Collections unit referenced in the attached Letter 2566 or Letter 3219, if present. If ASFR notated at the top of the return or an ASFR date stamp is present as the only indication, route the return to Austin or Fresno Submission Processing Centers (FSPC) at the addresses shown below.

    • AUSPC, 3651 South IH 35, Stop 5501, Austin, TX 78741

    • FSPC, 5045 E. Butler, Stop 81304, Fresno, CA 93727-5136

    Note:

    AUSPC and FSPC route to Collection unless there is an indication Collection has already cleared the return.

  2. Do not correspond. Do not send the return back to the taxpayer.

3.11.3.7.2.19  (01-01-2015)
52-53 Week Return

  1. This is the only type of return that may have a tax period ending prior to the last day of a month.

  2. Use the following table to determine the correct tax period for a 52-53 week return.

    If Then
    Within the first half of the month, Edit the previous month as the end of the tax period.
    Within the second half of the month, Edit that month as the end of the tax period.

3.11.3.7.2.20  (01-01-2015)
Blind Trust Returns

  1. Taxpayers who are presidential appointees are permitted to file their individual tax returns through a trustee of a blind trust.

  2. If there is any indication on the return or an attachment, a General Power of Attorney, or Form 2848 attached that indicates "Blind Trust" , see IRM 3.28.3.3.

  3. The POA, Form 2848 must be processed to the CAF to reflect the Blind Trust Indicator on Master File to ensure that no correspondence is generated to the taxpayer.

3.11.3.8  (01-01-2015)
Tax Period

  1. These instructions for tax period editing include:

    • General information

    • Current calendar year returns

    • Fiscal year returns

    • Prior year returns

    • Early filed returns

3.11.3.8.1  (01-01-2015)
Tax Period, General

  1. The tax period is indicated at the top of the form above the name area and/or the TIN blocks.

  2. Consider all returns to be current calendar year (i.e., 1412) returns, unless otherwise indicated.

  3. Edit tax periods other than the current calendar year to the right of the preprinted tax year in "YYMM" format (e.g., "1503" ). (See Figure 3.11.3-14).

  4. Edit a received date if not already present on all returns other than a timely filed current calendar year (1412) return. See the instructions for received date editing in IRM 3.11.3.5.

  5. Current year returns include:

    1. Form 1040 - Tax period cannot end earlier than 1412 (December 2014) or later than current year and month

    2. Form 1040A or Form 1040EZ - 1412 tax period only

    Figure 3.11.3-14

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

3.11.3.8.2  (01-01-2015)
Current Calendar Year Return

  1. Process the return as a current calendar year return when the tax form is for a prior year, but the Form(s) W-2 is for the current calendar year. Mark out the line numbers on the prior year forms/schedules and edit current year T-line numbers. Edit tax period to current year.

    Exception:

    Convert to a current year form or use a conversion sheet (Form 6114, Prior Year and Conversion Form 1040) if marking out the line numbers would make transcription more difficult.

  2. When the taxpayer has attached prior year forms or schedules to a current year return, re-number T-lines to match the current year form or schedule.

  3. Number T-lines with entries when line numbers are missing.

3.11.3.8.3  (01-01-2015)
Fiscal Year Return

  1. A fiscal year is twelve full months ending on the last day of any month other than December.

    1. Edit the tax period in YYMM format.

    2. Edit the received date when one is not already present.

  2. Edit Action Code "355" when the ending date of the tax period is after the current date except for decedent returns.

    Note:

    See IRM 3.11.3.10.3 for information on short-period decedent returns.

3.11.3.8.4  (01-01-2015)
Prior Year Return

  1. For purposes of Code & Edit, the statute of limitations for refunds and the assessment of tax on Form 1040, Form 1040A or Form 1040EZ returns generally expires three years after the return due date if the return is timely filed. A return in jeopardy of the expiration of the statute must receive expedited handling to ensure that it is processed before the expiration of the statute. Consider a return to be a potential statute protection case when BOTH of the following conditions apply:

    1. Today's date is within 90 days of the expiration of the statute of limitations.

    2. The return has not been cleared by the Statute Protection Unit.

    Example:

    The statute of limitations will expire on April 15, 2015, for tax period 1112 returns. A 1112 return which has not been cleared by the Statute Protection Unit is a potential statute protection case beginning on January 15, 2015, (i.e., 90 days before the expiration of the statute).

  2. Immediately take all potential statute protection cases to your work leader.

  3. Process the return as a prior year return when the tax form is for the current year, but the Form(s) W-2 is for a prior year. Refer to the line-by-line instructions for prior year editing in IRM 3.11.3.64 for additional information.

3.11.3.8.5  (01-01-2015)
Early Filed Return

  1. If a return reflects a future tax year, take the following actions:

    • Edit tax period in YYMM format.

    • Edit the Received Date when one is not present.

    • Edit Action Code "480" .

3.11.3.9  (01-01-2015)
Taxpayer Identification Information

  1. Instructions and information in this subsection of the manual include:

    • General caption information

    • Caption editing

    • Taxpayer identification numbers

    • Name and additional information lines

    • Mailing addresses

3.11.3.9.1  (01-01-2015)
Caption, General Information

  1. Some instructions for caption editing refer to "name control" . The first four characters of the primary taxpayer's last name is the name control. Refer to the Name Control Job Aid 2303 or Document 7071 if Name Control editing is required.

  2. Caption information can be printed, typed, or handwritten directly on the return or a label. (See Figure 3.11.3-15).

  3. References to the Taxpayer Identification Number (TIN) include Social Security Numbers (SSN), Individual Taxpayer Identification numbers (ITIN), Internal Revenue Service Numbers (IRSN), and Adoption Taxpayer Identification Numbers (ATIN).

    Note:

    An ITIN is a unique nine-digit number assigned by the IRS to individuals who must file a U.S. tax return-or are listed as a spouse or a dependent but do not have and cannot obtain a valid SSN. Taxpayers obtain an ITIN by filing Form W-7.

    Note:

    An IRSN is a temporary number assigned to taxpayers for processing purposes only. They are not valid for subsequent years.

  4. Required caption information includes:

    • Primary taxpayer identification number (P-TIN)

    • Secondary taxpayer identification number (S-TIN)

    • Name

    • Additional information line, when required

    • Mailing address

    • City and State

    • ZIP Code

    Figure 3.11.3-15

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

3.11.3.9.2  (01-01-2015)
Caption Editing

  1. A preprinted IRS label indicates that the taxpayer has filed a return in the past. Only changes or additions to the caption information in the taxpayer's computer record on the Master File need to be input by transcription.

  2. Ensure that the S-TIN and name is present in the caption on FS 2 returns. Also ensure that FS 3 and FS 6 returns have the S-TIN included in the caption.

    Note:

    Edit the S-TIN from attachments when missing.

    Exception:

    For FS 2 returns ONLY, if the secondary taxpayer's name is missing or illegible and the primary taxpayer's name is present and it can be clearly determined from the signature lines or attachments that the last names are the same, accept the primary taxpayer's name for both taxpayers.

  3. Edit to the caption area any change or addition to caption information made by the taxpayer on an attachment or on the return outside of the caption area. (See Figure 3.11.3-16).

    Exception:

    See IRM 3.11.3.9.2.3 for instructions for perfecting a mailing address.

    Figure 3.11.3-16
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  4. Search the return and attachments for any missing caption information and perfect the caption if all missing information is found. See IRM 3.11.3.9.2.3 for instructions for perfecting a mailing address.

  5. Take the following actions if any required caption information is missing and cannot be perfected, see Figure 3.11.3-17:

    1. Edit (or underline, if present) the name control in the caption area.

      Exception:

      Do NOT underline the name control when the TIN only is missing from the caption, or on a "labeled" return. A "labeled" return is one which has the pre-printed IRS label present in the caption area.

      Exception:

      Do NOT underline name control when correspondence is necessary. Perfect caption information from envelope or through research.

    2. Edit the P-TIN (if not present) in the caption area.

    Figure 3.11.3-17

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  6. Do not re-edit green edit markings in the entity area unless the editing is incorrect.

  7. DO NOT change the name control edited in red by RPS employees, even if incorrect. Use the RPS - edited:

    1. Name control for caption editing

    2. TIN to perfect (i.e., edit or change) the TIN on Schedule C, Schedule SE, Schedule H, Form 4137, Form 5405, Form 8853, Form 8863, Form 8919 and/or Form 8941.

  8. Underline the Additional Information Line (AIL) (See IRM 3.11.3.9.2.2.2) when:

    1. A change has been made to the name lines on an IRS labeled return

    2. Present on a non-IRS labeled return

    3. The taxpayer indicates information which should be added to the additional information line. Edit and underline the appropriate information .

  9. Delete "also known as" and "AKA" notations, as well as the name associated with the "AKA" when the taxpayer has notated "also known as" or (" AKA" ) and included an additional name in the caption area of the return.

3.11.3.9.2.1  (01-01-2015)
Taxpayer Identification Number (TIN)

  1. The primary TIN (P-TIN) belongs to the taxpayer whose name appears first on the return. The secondary TIN (S-TIN) belongs to the spouse. The P-TIN must be in the "Your Social Security Number" block.

  2. Search the return for separate numbers when the P-TIN and S-TIN are the same. Delete the S-TIN if separate numbers are not found.

  3. There are different types of valid TINs:

    • IRS Individual Taxpayer Identification (ITIN) Format always begins with the digit "9" and follows the same format as a typical SSN. The fourth and fifth digit range will usually be within the range of 70 through 88. Expansion ranges are 90 - 92 and 94 - 99. Example of an ITIN: 9XX-71-XXXX.

    • Adoption Taxpayer Identification Number (ATIN) Format always begins with the digit "9" and follows the same format as a typical SSN. The fourth and fifth digits will be 93. Example of an ATIN: 9XX-93-XXXX.

    • Internal Revenue Service Number (IRSN) Format always begin with the digit "9" and follows the same format as a typical SSN. The fourth and fifth digits signify the Internal Revenue Service Campus (IRSC) Code where the IRSN was originally assigned or the new expansion range assigned to that campus. Shown below are the numbers allocated to IMF campuses:

    IRSC 4th and 5th Digit Ranges for IRSNs Expansion Ranges
    Austin 18 06
    Fresno 89 10
    Kansas City 09 39
    Example of an IRSN assigned from Austin: 9XX-18-XXXX.
  4. Circle any invalid (e.g., "999-99-9999" , "111-11-1111" ) or incomplete TIN which cannot be perfected, including all notations, (e.g., "NRA" , "SSA 205(c) " , "applied for, " "ITIN Reject," "No W-7" ).

  5. Perfect the TIN, if necessary, on any attached Schedule C, Schedule H, Schedule SE, Form 4137, Form 5405, Form 8853, Form 8863, Form 8919 and/or Form 8941.

  6. Stop editing the return and take the following actions when Form W-7 or Form W-7(SP) is attached to the Form 1040, Form 1040A or Form 1040EZ:

    1. Unnumbered:
      • Pull the return from the batch. Attach Form W-7 to the front of the return.
      • Edit the received date in "MMDDYY" format and route the entire return to Receipt and Control for transshipment to AUSPC.

    2. Complete Form 3696 to generate Letter 86C.

      Exception:

      AUSPC Only: Do not send Letter 86C. Follow local procedures to route both to the ITIN unit.

      Note:

      For numbered returns, edit Action Code "651" .

3.11.3.9.2.1.1  (01-01-2015)
Primary TIN

  1. The P-TIN must be in the "Your Social Security Number" block.

  2. Arrow or edit the P-TIN in the proper block if it appears in the "Spouse's Social Security Number" block or elsewhere.

    Exception:

    Do not arrow or edit the P-TIN to the P-TIN area if the words "applied for" or similar statement is present in the P-TIN area and an ITIN has been edited to the left of the P-TIN area.

  3. If "ITIN Rejected" is present in the P-TIN field, route the return to Receipt and Control for rebatching.

  4. If the P-TIN is missing or incomplete, examine the return and its attachments and edit the P-TIN, if found. Circle an incomplete P-TIN.

    Note:

    If there is an indication the taxpayer has used a TIN that is not her/his own, take no action, e.g., the taxpayer shows an ITIN on the return and an SSN on attached Form(s) W-2.

  5. Correspond for a missing P-TIN when corresponding for other missing return items unless there is an indication of Amish or Mennonite.

3.11.3.9.2.1.2  (01-01-2015)
Secondary TIN (S-TIN)

  1. Circle an S-TIN if it is present and the FS is "1" , "4" , "5" or "7" .

  2. Arrow or edit the S-TIN in the proper block if it appears in the caption area or elsewhere.

    Exception:

    Do not arrow or edit the S-TIN to the S-TIN area if the words "applied for" or similar statement is present in the S-TIN area and an ITIN has been edited to the left of the S-TIN area.

  3. Edit the S-TIN from the return or attachments if it is missing or incomplete, and the FS is "2" , "3" , or "6" . Edit the S-TIN in the correct block if it is blank and the taxpayer has entered a TIN on the line to the right of FS box 3.

    Note:

    If there is an indication the taxpayer has used a TIN that is not her/his own, take no action. e.g., The taxpayer shows an ITIN on the return and an SSN on attached Form(s) W-2.

  4. Correspond for a missing S-TIN when corresponding for other missing return items unless there is an indication of Amish or Mennonite, ITIN Rejected or "NRA" .

  5. Edit CCC "J" when the S-TIN is missing, the filing status is 2, 3, or 6 and there is an indication of Amish or Mennonite or "Form 4029" is notated.

3.11.3.9.2.2  (01-01-2015)
Name and Additional Information Lines

  1. Each return processed must have a legible last name. Research following local procedures when the name is illegible and cannot be perfected.

  2. There are two lines available for taxpayer identification.

    1. The name line is for the first name, middle initial, and last name(s) of the primary and secondary (if present) taxpayer(s). This includes any suffix.

    2. The additional information line (AIL) is used to further identify the taxpayer. For example, additional name, address, or representative information may be shown.


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