Code & Edit works the Form 1040/A/EZ programs listed below:

A "numbered" return has a fourteen-digit Document Locator Number (DLN) imprinted in the top right margin. Do not remove a numbered return from the block.

An "unnumbered" return has no DLN. These documents are numbered after coding and editing. Unnumbered returns may be removed from the block, as instructed.

After coding and editing:

CAPR is the computer-based system for tracking the causes of errors on returns processed to the Error Resolution System (ERS).

Every Code & Edit Tax Examiner (TE) is assigned a unique, 3-digit TE Number.

Stamp your TE number in the upper left-hand corner of the document. All returns must be stamped with your TE number.

Line through the TE number when corresponding and the return is going to be sent to the taxpayer.

Line through the old TE number and stamp the document with your TE number when working returns which were TE stamped before (e.g., misblocked, converted or correspondence returns).

Not all entries on forms and schedules are entered into the computer during processing. Only the information from transcription lines (T–lines) or computed transcription lines (T–COMPUTE lines) is entered into the computer after coding and editing.

T–lines and T–COMPUTE lines are listed in this manual in the overview information for each form or schedule. The edited locations of all T–lines and T–COMPUTE lines are illustrated in the Job Aid.

Always compute and enter a T-COMPUTE line when it is blank and there are entries leading to a total. Compute and enter a T-COMPUTE line that is not blank only when required to do so in the line-by-line instructions.

Enter T–line and T–COMPUTE line amounts when they are illegible, obviously misplaced, or when instructed to do so in the line-by-line instructions. Correct the entry by referring to other schedules, attachments, or entries on the return only when directed.

Delete an entry on a transcribed line when the meaning of the line has been changed, unless otherwise instructed. (See Figure 3.11.3-1a). Also, edit an obviously misplaced amount to the correct T-line or T-COMPUTE line when appropriate. (See Figure 3.11.3–1b.)

Use attachments to prepare "dummy" forms or schedules when they are required to support entries on transcribed lines.

Edit the combined total of the amounts when a T–line or T–COMPUTE line has multiple entries. (See Figure 3.11.3–2.)

DO NOT MATH VERIFY the transcribed lines on forms or schedules unless specifically directed to do so in the line-by-line instructions.

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Title reads, "Editing Misplaced Entries" .

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Editing Multiple Entries

Organize the Form 1040 return and its transcribed schedules and forms according to sequence code. Sequence Codes are preprinted numbers, usually present in the upper right margin. See the table at the end of this subsection for a list of the Sequence Codes of all transcribed schedules and forms. Any document not on the list is not a transcribed form or schedule and should be deleted or moved. Also delete any form that shares a sequence number with a transcribed form. Examples include, but are not limited to, Forms 3468 (Seq. 52), Forms 3903 (Seq. 62), and prior years Forms 2106 (Seq. 54).

Leave Forms W–2 and 1099, Form 1040V, taxpayer statements, deposit slips, small forms, and other items where found when they do not obstruct T–lines or any part of the caption area.

Delete or move any document which will not be transcribed. Documents which are not transcribed may be in any order behind the last transcribed page.

Form 8888 is the only valid attachment for Form 1040EZ.

Two general internal-use forms are used in Code & Edit. They are:

The conditions requiring these forms are found in the line-by-line instructions.

An "Action Trail" is written on a return/document as a record of actions taken.

Always leave an Action Trail when Computer Condition Code "Y" is edited. Give the reason for the "Y" code in the Action Trail.

Edit an Action Trail when a return/document is detached. For example, notations such as "detached 1040X" or "detached taxpayer correspondence" must be made.

The Action Trail is written on Forms 1040/A/EZ in the lower-left margin of page 1. Refer to the Job Aid for an illustration of the editing location.

Examine all attachments to the return. Leave the attachments with the return unless specifically instructed otherwise. Refer to the Attachment Guide in Exhibit 3.11.3–1 for specific attachment-by-attachment instructions. Research either an attachment or a notation on the return, as appropriate.

Immediately take any discovered remittance to the work leader. (Work leader shall refer to IRM 3.8.46, Discovered Remittance and IRM 3.0.273, Administrative Reference Guide).

Take either of the following actions when there is a notation on the return that indicates it needs to be routed elsewhere:

Generally, all taxpayer-initiated correspondence must be responded to within 30 days.

Route to Examination any taxpayer-initiated correspondence related to Earned Income Credit fraud. Use Form 4227 and notate "EIC fraud informant" . Correspondence that must be routed to Examination will state the following:

When a taxpayer submits a credit card and/or credit card number, immediately take the return and all attachments to your work leader. The work leader will:

Certain conditions require the editing of processing codes. There are five types of processing codes. They are:

Processing codes may be either letters or numbers. Use CAPITAL BLOCK LETTERS when editing codes which are letters. Write the codes legibly.

The edited location of most of these codes varies by return type.

Refer to the Job Aid for an illustration of the editing locations of processing codes.

The conditions for editing processing codes can be found in the line-by-line instructions.

Certain conditions on a tax return are unallowable by law. Search all attachments to find unallowable items.

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Do not edit unallowable codes (UACs) when the only dollar amount is a total of allowable and unallowable items. There must be separate dollar figures for unallowable coding, unless otherwise instructed.

Prepare Form 3471 when coding unallowables. Enter amounts on Form 3471 in dollars only.

Pull unnumbered returns from the block for post-edit review. Leave numbered returns with the block for review. Use local procedures for flagging these returns for review.

The unallowable conditions are described in the specific line-by-line instructions and in the table in Exhibit 3.11.3–6.

A return is unprocessable when all of the entity data is missing or illegible and the entity cannot be perfected from attachments or through research.

Handle unprocessable returns as follows:

An uncomputed return is one filed by a taxpayer expecting the IRS to figure his/her tax. Do not confuse an uncomputed return with a return that has no tax due.

An uncomputed return can be identified as follows:

An unnumbered, uncomputed return can be sent back to the taxpayer when corresponding.

Edit CCC "Y" —and enter an Action Trail—on an uncomputed return when both of the following conditions are present:

Always use red for edit markings. Perfect taxpayer-entered red marks which might interfere with transcription.

Never alter, erase, or obliterate a taxpayer's entry.

Any reference to "significant entry" or "significant amount" is defined as a positive or negative number/dollar amount other than zero.

Different edit conditions require different types of edit markings. Edit markings consist of:

Allow taxpayers to round or truncate (i.e., "drop the cents" ) amounts. Use only dollar amounts when computing amounts on forms or schedules.

Draw a vertical line between the dollars and cents figures when dollars or cents are in the wrong column:

Dollars and cents editing is required on certain T–lines for any of the following conditions:

Edit all forms and schedules in dollars only, WITH THE FOLLOWING EXCEPTIONS:

A received date is always required when the return is:

Circle a received date when it is present on a return that does not need one. (See Figure 3.11.3-4).

Enter the received date in "MMDDYY" format when it is required but not already present. MMDDYY format is Month Month Day Day Year Year. For example, April 23, 2010, when edited in MMDDYY format is "042310" .

Edit the received date on the front of the return in the following locations:

Perfect the received date when it is required and not legible and in complete MMDDYY format.

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Determine the received date in the following priority when it is required and there is no valid date stamp (e.g., TAS date stamp) or handwritten received date:

Figure 3.11.3-5

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Graphic is titled, "Editing a Received Date"

For 2010, a current-year return is a return filed for tax year 2009. A current calendar-year return (0912) is considered to be timely filed when it is mailed on or before the due date of April 15, 2010.

Any return—other than a current calendar-year timely-filed return—always requires a received date.

Generally, a current calendar-year (0912) return received on or before April 15, 2010, does not require a received date.

For current calendar-year (0912) other than full paid returns, received on or before April 15, 2010:

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A return is delinquent when it is filed after the due date without an approved extension.

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When the received date on a current calendar-year (0912) return ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " or later), examine the envelope and:

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Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, may be filed to extend the due date for filing an individual tax return until October 15, 2010.

Extension forms are not required to be attached to the return when filed.

Take one of the following actions when an original Form 4868 is attached to a return:

Edit CCC "R" when the taxpayer has a Form 4868 or Form 6401 attached to the return and an ITIN or IRSN is present in the primary SSN field. Both Individual Tax Identification Numbers (ITINs) and Internal Revenue Service Numbers (IRSNs) begin with the digit, "9" .

Examine the envelope postmark date. If the received date is "≡ ≡ ≡ " or later, and the postmark date or designated PDS mark date is on or before October 15, 2010, edit the postmark date as the received date.

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Taxpayers are liable for delinquency penalties and interest on the unpaid taxes on returns received after the due date. However, penalties for late filing, or late payment, may be excused when the taxpayer has a reasonable cause for the delay. See Exhibit 3.11.3–8 for examples of reasonable cause.

Failure to make estimated (ES tax) payments can not be waived due to reasonable cause. See IRM 3.11.3.14.8.5 for waivers of the estimated tax penalty.

Edit CCC "N" when the taxpayer is qualified for an automatic two-month extension. A taxpayer qualifies for this special extension if—on the date his/her return is due—the taxpayer meets any of the following criteria:

When the taxpayer's reasonable cause statement is not acceptable:

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Correspondence conditions are listed in the Correspondence Action Chart (See Figure 3.11.3–14.) All correspondence conditions are also included in the line-by-line instructions.

All missing required information must be requested when corresponding. DO NOT CORRESPOND WITH A TAXPAYER MORE THAN ONE TIME.

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

DO NOT correspond when information is missing and any of the following conditions apply:

With the exception of returns coming from Collection and CIS, send an unnumbered return to the originating area indicating what information is required.

Do not correspond for missing forms or schedules to support a credit or exemption claimed for a dependent when both of the following conditions apply: