3.11.6  Data Processing (DP) Tax Adjustments (Cont. 2)

3.11.6.8 
Specific IMF Adjustments

3.11.6.8.6 
Credits - Non Refundable (Line 7)

3.11.6.8.6.4  (05-23-2013)
Form 8396, Mortgage Interest Credit (Line 7)

  1. To qualify for the Mortgage Interest Credit, the taxpayer should have received a Mortgage Credit Certificate (MCC) issued under a qualified MCC program in connection with their principal residence.

    Note:

    The Mortgage Credit Certificate is not required to be attached to the Form 8396.

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

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

    Note:

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

    ≡ ≡

  4. If amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ , route to Category A.

3.11.6.8.6.5  (08-06-2013)
Form 8839, Qualified Adoption Expenses (Line 7)

  1. The 1040X Units will not process the adoption credits . Route Form 8839 Qualified Adoption Expenses to CIS/AM.

    Note:

    When routing these claims to CIS/AM place in a specific sort and identify on a cover sheet as Form 8839, Qualified Adoption Expenses. Follow local procedures.

3.11.6.8.6.6  (09-16-2013)
Form 8863, Education Credit (Line 7)

  1. Form 8863, Education Credit is for qualified education expenses paid to an eligible post secondary educational institution. This credit is composed of two separate credits: The American Opportunity Credit and The Lifetime Learning Credit.

    Note:

    A non-refundable amount of up to $1,500 may be available for the American Opportunity Credit. See IRM 3.11.6.8.6.7 paragraph 5 for adjustment instructions.

  2. The maximum amount for each credit:

    Credit Maximum non-refundable credit amount
    Lifetime $2,000
    American Opportunity Credit $1,500

  3. Refer to CIS/AM if the taxpayer Indicates a religious group (e.g. Amish/Mennonite) or conscience based objection to obtaining a TIN.

  4. Taxpayer claims Education Credit and the adjusted gross income (AGI) is over:

    • TY 2013 -- $63,000 ($127,000) for married filing joint)

    • TY 2012 -- $62,000 ($124,000 for married filing Joint)

    • TY 20011 -- $61,000 ($122,000 for married filing joing)

    • TY 2010 -- $60,000 ($120,000 for married filing joint)

    • TY 2009 -- $60,000 ($120,000 for married filing joint)

      Note:

      These are the elimination amounts for the Lifetime learning credit only. The credit is completely eliminated when these amounts are reached or exceeded. See table below for letter instructions:

    Form 8863 is the only issue:
    Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit because your modified adjusted gross income (MAGI) is $0.00 or more for 200X (use appropriate amount for the tax period concerned).

  5. Claims Education Credit and the adjusted gross income (AGI) is between these numbers.

    • 2013 $53,000-$63,000 ($107,000-$127,000 married filing joint)

    • 2012 $52,000-$62,000($104,000-$124,000 married filing joint)

    • 2011 $51,000-$61,000($102,000-$122,000 married filing joint))

    • 2010 $50,000-$60,000($100,000-$120,000 married filing joint)

    • 2009 $50,000-$60,000($100,000-$120,000 married filing joint)

    Note:

    These are the phase out amounts for the Hope and Lifetime learning credit only. The credit phases out 5% for every $1,000 that exceeds the threshold amount for married filing joint and 10% for every $1,000 that exceeds the threshold amount for single, head of household and qualifying widower. See table below for letter instructions:

    The credit is being phased out but not eliminated
    Send a 105C/106C letter disallowing the exceeded amount. Use the following for the fill-in: "We disallowed part of your credit on Form 8863, Education Credit because the credit begins to be reduced when your modified adjusted gross income exceeds $ (use appropriate amount for filing status and tax year).

  6. Research TRDBV/RTVUE to determine if the student claimed on Form 8863 was claimed as an exemption on Form 1040X. Student(s) must be either the primary or secondary taxpayer or claimed as a dependent of the taxpayer. If the student was claimed as an exemption, continue processing the claim; otherwise see the table below.

    Note:

    For tax year 2012 and onward the student's name and TIN will be listed on page 2, Part III of Form 8863.

  7. Use the following table to determine if the education credit claim must be disallowed:

    If Then
    Through research, it is determined the person listed as the student was not a dependent of the taxpayer Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You can claim this credit only if the person listed as a student was claimed as an exemption for (1) Yourself, (2) Your Spouse, (3) a dependent that was claimed on your tax return."
    The taxpayer (or his spouse) were a nonresident alien for any part of the tax year and did not elect to be treated as a resident alien for tax purposes. Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit if you (or your spouse) were nonresident aliens for all or part of the tax year."
    The taxpayer claimed both the American Opportunity Credit and Lifetime Learning Credit for the same student in the same year Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim both the American Opportunity Credit and the Lifetime Credits for the same student for the same tax year. "
    The taxpayer is filing as FS 3 (married filing separate) Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim this credit if you are married filing separate."
    The student indicates that they are claimed on another return Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim this credit if you are claimed as a dependent on your parent's or another person's return. "

    American Opportunity Credit  
    IF THEN
    The student for which the Hope or American Opportunity Credit is claimed indicates the credit has been claimed for any 4 prior tax years. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because you may only claim the Hope Scholarship Credit or American Opportunity Credit for 4 tax years for each student."
    The student for which the credit is claimed indicates they were not enrolled at least half-time for at least one academic period (that began in the tax period for which the credit is claimed) at an eligible education institution. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because the student listed must be enrolled at least half-time for at least one adademic period."
    The student for which the credit is claimed indicates they completed the first 4 years of post-secondary education before the tax period in which the credit is claimed. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because the student listed has already completed the first 4 years of post-secondary education prior to 20XX."
    The student for which the credit is claimed indicates they were convicted of a felony for possession or distribution of a controlled substance and the conviction was before the end of the tax period for which the credit is claimed. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because the student listed has been convicted of a felony for possession or distribution of a controlled substance."

  8. If unable to determine for whom the credit is being claimed or if the student's name and/or TIN is illegible, missing, or cannot be determined, correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 6; or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form 8863 to support the changes you have made."

    Note:

    Form 1098-T (Tuition Statement) may be used to determine the student's name and/or TIN if attached.

    Note:

    For tax year 2012 and onward the student's name and TIN will be listed on page 2, Part III of Form 8863.

  9. If Form 1098-T is being used as support for the Tuition and Fees deductions on Line 1 of Form 1040X, correspond for Form 8917)

  10. Since the AOTC is based on qualified education expenses paid to an eligible post secondary educational institution, when the age of the student is such that the credit becomes questionable or there are other circumstances that are questionable and the Form 1098-T is not present on IRPTR, no consider the claim and request a copy of the Form 1098-T, Tuition Statement. Use the 916C letter paragraphs B, F, R, W, 4 (open para) or use the Form 8009-A and insert the following paragraph. " We did not receive a Form 1098-T, Tuition Statement from your education institution for the student to support your claim on Form 8863. This form is used to verify enrollment and qualified educational expenses. Please contact the educational institution and ask them to issue Form 1098-T to the IRS to verify the enrollment status and qualified expense information. "

    Note:

    It is not required to research IRPTR on all claims. The return should be questionable prior to researching IRPTR.

  11. If the taxpayer claims both the Education Credit and the Tuition and Fees Deduction and the previously filed Form 8917 indicates that the credits were for the same student, disallow the education credit . Send a 105C/106C with the following fill-in: "We disallowed your claim on Form 8863, Education Credits. You may not claim both the deduction for Form 8917, Tuition and Fees Deduction and Form 8863, Education Credits for the same student."

  12. If the taxpayer claims more than the maximum credit allowed (see 2, 3 and 4 above) calculate and input the correct credit. Refer to IRM 3.11.6.6.5 This section will provide all instructions including letters and paragraphs to use.

  13. Form 8863 must be attached for the initial claim for each dependent If form is present, process using RC 035, If missing correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5, or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form 8863 to support the changes you have made."

    Note:

    Update the DUPOL database to add or delete a Form 8863, Education Credit record using CC DDBCK

    Note:

    It is not necessary to update the DUPOL database if the taxpayer is amending a previously claimed education credit amount for the same student that was originally claimed; unless the credit for that student is reduced to zero.

  14. For TY 2012, if the taxpayer does not complete the boxes in Part III of Form 8863, return the claim to the taxpayer using Form 8009-A box 6 or a 324C letter, paragraphs A, V, Y, 8 with fill-in: "Please complete line(s) XX on Form 8863."

3.11.6.8.6.7  (01-01-2014)
American Opportunity Tax Credit

  1. The American Opportunity education tax credit (AOTC) (a modification of the Hope credit) is available for 2009, 2010 2011 and 2012.The American Opportunity Tax Credit is a tax credit of up to $2,500 per student for the cost of tuition and related expenses paid during the taxpayer year. This credit is one of the credits reported on Form 8863, Education Credits (American Opportunity, Hope and Lifetime Learning Credits). Under the new tax credit, taxpayers will receive a tax credit based on hundred percent (100%) of the first $2,000 of tuition and related expenses (including books) paid during the taxable year and twenty-five percent (25%) of the next $2,000 of tuition and related expenses paid during the taxpayer year. Forty percent (40%) of the credit (up to $1,000) is refundable for many taxpayers.

    Note:

    Form 8863 must be attached for the initial claim of the refundable portion of the American Opportunity Credit.

  2. Since the AOTC is based on qualified education expenses paid to an eligible post secondary educational institution, when the age of the student is such that the credit becomes questionable or there are other circumstances that are questionable and the Form 1098-T is not present on IRPTR, no consider the claim and request a copy of the Form 1098-T, Tuition Statement. Use the 916C letter paragraphs B, F, R, W, 4 or use the Form 8009-A and insert the following paragraph. " We did not receive a Form 1098-T, Tuition Statement from your education institution for the student to support your claim on Form 8863. This form is used to verify enrollment and qualified educational expenses. Please contact the educational institution and ask them to issue Form 1098-T to the IRS to verify the enrollment status and qualified expense information. "

  3. The amount of the credit for 2009 is gradually reduced (phased out) if the taxpayer’s modified adjusted gross income (MAGI) is between $80,000 and $90,000 ($160,000 and $180,000 if married filing joint. The credit cannot be claimed if the MAGI is $90,000 or more ($180,000 or more if married filing joint).

    Note:

    The phase out is 5% per $1,000 over the threshold amount for married filing joint and 10% per $1,000 over the threshold amount if single, head of household or qualifying widower. See phase out letters below:

  4. If the MAGI is $90,000 or more send a 105C/106C letter disallowing the claim and input the adjustment perIRM 3.11.6.9.3 . Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit because your modified adjusted gross income is $90,000 or more ($180,000 or more if married filing joint) .

  5. Taxpayers with at least one student attending an eligible educational institution in a Midwestern disaster area may elect to continue the Hope credit for all students based on the previous Hope credit.

    IF Then
    The credit is being phased out but not eliminated Send a 105C/106C letter disallowing the exceeded amount. Use the following for the fill-in: "We disallowed part of your credit on Form 8863, Education Credit because the credit for tax year 2009 begins to be reduced when your modified adjusted gross income exceeds $ (use appropriate amount for filing status).

  6. Adjusting the tax account

    1. Adjust the non refundable portion of the credit with a TC 29X. Do not use a credit reference number for the non refundable portion of the credit. Use RC 035.

    2. Use credit reference number 260 to allow/increase the refundable portion of the credit.

    3. Use credit reference number 260 with a minus sign (-) to decrease the refundable portion of the credit.

      Reminder:

      The credit reference number will convert to a TC 766/767 Reference 260 at Master File.

    4. Use RC 106 (Refundable American Opportunity Credit) and the appropriate SC and blocking series for the refundable credit portion of the adjustment. CRN 260 must have RC 106.

3.11.6.8.6.8  (05-23-2013)
Form 8880, Credit for Qualified Retirement Savings Contributions (Line 7)

  1. The credit for Qualified Retirement Savings Contributions is a non-refundable income tax credit for taxpayers whose AGI is equal to or less than:

    TY 2012 $28,750($43,125 if Head of Household, $57,500 if Married Filing Jointly)
    TY 2011 $28,250($42,375 if Head of Household, $56,500 if Married Filing Jointly)
    TY 2009 and Tax Year 2010 $27,750($41,625 if Head of Household, $55,500 if Married Filing Jointly)

  2. An eligible individual must:

    • be at least 18 as of the close of the tax year

    • not be claimed as a dependent on someone's tax return

    • not be a full-time student

  3. Taxpayers may be able to take a credit of up to $1,000 ($2,000 if married filing jointly) for making eligible contributions to an employer-sponsored retirement plan or to an Individual Retirement Arrangement (IRA). The credit is a percentage of the qualifying contributions. See Form 8880.

  4. Qualified retirement savings contributions are the sum of participant contributions and elective deferrals made to qualified plans, traditional IRAs and Roth IRAs.

  5. If present, math verify the taxpayer's figure. Continue processing using RC 036 If missing and the amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond using either Form 8009-A, box 4 or 5 or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form XXXX to support the changes you have made."

  6. If claim is being disallowed for any reason, set a math error per IRM 3.11.6.6.5

3.11.6.8.6.9  (05-23-2013)
Schedule R and Schedule 3, Credit for the Elderly or the Disabled (Line 7)

  1. To qualify for the credit, taxpayer must be:

    • U.S. citizen or resident alien

    • Within certain income limits

    • Age 65 or older by the end of the tax year.

      Exception:

      If under age 65 see paragraph 2 below.

      Note:

      A taxpayer is considered age 65 on the day before the 65th birthday.

  2. A taxpayer under the age of 65 must be considered permanently and totally disabled in order to take this credit, and all of the following conditions must be met:

    • The taxpayer retired on permanent and total disability

    • They received taxable disability income during the tax year

    • On January 1st of the tax year they had not reached mandatory retirement age

  3. Schedule R (Form 1040) or Schedule 3 (Form 1040A) must be submitted ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the following must be present. If missing or incomplete, correspond:

    • Filing status/age must be checked

    • A physician's statement must certify the disability condition or the box must be checked to indicate the statement was filed or obtained in a previous year

    • On a joint return, if both spouses are disabled, both must submit a statement

      Note:

      A physician's statement is only required if the taxpayer(s) checked box 2, 4, 5, 6, or 9 in Part I of the Schedule R and did not check the box in #2 of Part II.

    Note:

    Correspond ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form XXXX to support the changes you have made."

    Note:

    If the taxpayer requests that the IRS compute the credit, route to CIS/AM.

  4. Taxpayers may qualify for this credit, but cannot take the credit if the following applies:

    If filing status is Adjusted gross income (AGI) is equal to or more than Or the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than
    Single, head of household, or qualifying widow(er) with dependent child $17,500 $5,000
    Married filing a joint return and both spouses qualify $25,000 $7,500
    Married filing a joint return and only one spouse qualifies $20,000 $5,000
    Married filing a separate return and you lived apart from your spouse the entire year $12,500 $3,750

  5. If present, continue processing with RC 036.

  6. If claim is being disallowed for any reason, set a math error per IRM 3.11.6.6.5.

3.11.6.8.6.10  (05-23-2013)
Form 3800, General Business Credits (Line 7)

  1. Taxpayers use Form 3800 to report General Business credits.

  2. Taxpayers can file the Form 3800 and/or the specific form for the credit they are claiming, but at least one must be present. If not present, correspond following instructions in IRM 3.11.6.9 requesting the specific form ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Use Form 8009-A, box 4 or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form XXXX to support the changes you have made." to request the correct form(s).

  3. If the taxpayer claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Forms 6765 or 8586, route to CIS/AM.

  4. Use CRN 884 when adjust Form 8864 Biodiesel and Renewable Diesel Fuels credit or 6478, Alcohol and Cellulosic Biofuel Credit and CRN 883 when adjusting Form 8907, Nonconventional Source Fuel Credit.

  5. If Form 5884-B either attached to the Form 3800 or loose should be routed to CIS/AM.

3.11.6.8.6.10.1  (08-13-2013)
Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit

  1. Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, is used to claim a credit for qualified plug-in electric drive motor vehicles placed in service during the tax year.

  2. The credit can be claimed as a general business credit on Form 3800, General Business Credit, if the vehicle is property subject to an allowance for depreciation.

  3. The credit is equal to 10% of the purchase price of the electric vehicle up to $2,500. Use RC 036 when adjusting the credit.

    Caution:

    See SERP Alert 13A0258 issued 4/2/2013.

  4. The following requirements must be met to qualify for the credit:

    1. Taxpayer is the owner of the vehicle

    2. Taxpayer placed the vehicle in service during the tax year for which the credit is claimed

    3. The vehicle is manufactured primarily for use on public streets, roads and highways

    4. The original use of vehicle began with the taxpayer claiming the credit

    5. The vehicle was acquired by the taxpayer for use or to lease to others and not for resale

    6. The vehicle is used primarily in the United States

    7. In the case of the qualified two or three wheeled plug in electric vehicle the vehicle is acquired after 2011

  5. In addition to entering the Vehicle Identification Number (VIN) on line 2 of Form 8936 the taxpayer must furnish a copy of the registration and a copy of the vehicle title to substantiate ownership of the vehicle. Additionally they should provide dealer certification the vehicle qualifies for the credit and if applicable the amount of the credit. Generally the taxpayer can rely on the manufacturer’s certification that a specific make, model and model year qualifies for the credit and if applicable the amount of credit for which it qualifies.

    Note:

    If the Service publishes an announcement that the certification for any specific make, model and model year has been withdrawn the taxpayer cannot rely on the certification for such a vehicle purchased after the date of the withdrawal announcement.

    Exception:

    If the taxpayer purchased a vehicle and its certification was withdrawn on or after the date of purchase the taxpayer can rely on such certification even if the vehicle had not been placed in service or had not claimed the credit by the date the withdrawal announcement was published by the Service.

  6. If taxpayer does not provide the documentation cited in paragraph 5 send a 916C letter with paragraphs B,R,W,3 explaining the missing documentation. Use fill-in: "We could not process your claim for Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit because the required documentation was not submitted. You did not provide [insert a description of the missing information]."

  7. The maximum allowable credit is $2,500. If the taxpayer claims more than $2,500 set a math error per IRM 3.11.6.6.5

    Exception:

    In TY 2011, the taxpayer can claim a credit over $2,500 if they meet the requirements and provide documentation. See page 2 of the TY 2011 Form 8936 "General Instructions " for requirements when the credit being claimed is over $2,500. If the taxpayer does not provide the required documentation, send a 916C per paragraph 6 above.

3.11.6.8.7  (09-16-2013)
Other Taxes (Line 9)

  1. Taxpayers use Line 9 to report additional taxes owed.

    Note:

    Uncollected Taxes "UT" from line 60 of Form 1040 may be reported on line 9 or 10 of Form 1040X. Use RC 049 when adjusting UT.

  2. Refer to CIS/AM if the taxpayer is amending any of the following:

    1. Form 4137, Social Security and Medicare Tax on Unreported Tip Income

    2. Form 5329, Additional Taxes on Qualified Plans (Including IRA's) and Other Tax Favored Accounts -- with Parts III - VIII completed

    3. Form 8919, Uncollected Social Security and Medicare Tax on Wages

    4. Advanced Earned Income Credit (AEIC)

      Note:

      AEIC has been eliminated after tax period 201012

    5. Schedule H, Household Employment Taxes

    6. Any change to Form 5405, FTHBC recapture.

    Note:

    If there is an unexplained entry on line 9, and the type of income or reason for the change cannot be determined through attachments or IDRS research, refer to your manager or lead.

3.11.6.8.7.1  (04-04-2013)
Additional Tax on Early Distribution-Form 5329/ Form 1099-R (Line 9)

  1. Taxpayers use Form 5329 or Form 1099-R to report the amount and the penalty for early withdrawal/distribution or an excess contribution of their IRA. Taxpayers may explain they are claiming this amount in lieu of submitting Form 5329 or Form 1099-R

    Note:

    If taxpayer sends in both Form 5329 and 1099-R, follow the 1099-R instructions.

  2. When a taxpayer submits Form 5329, only process claims that have Part I or Part II of Form 5329 completed. Refer to CIS/AM any Form 5329 with entries in Parts III through VIII. Use the following Reason Codes when processing:

    1. RC 016 for the IRA distribution

    2. For Distribution Code 1, RC 048 for the 10% penalty unless exception code 1-11 is provided

  3. If the taxpayer used Form 1099-R instead of Form 5329 to report the amount, process only those claims that have a Distribution Code of "1" or "7" . Refer as CIS/AM any Form 1099-R with a Distribution Code other than a 1 or 7.

    Exception:

    If the taxpayer is claiming ONLY withholding from a 1099-R that has a distribution code other than a 1 or a 7, continue processing the return. Use reason code 051.

    1. For Distribution Code 1, the taxpayer should report the taxable portion of the distribution (box 2a of Form 1099-R) on Line 1 of Form 1040X. The taxpayer is also generally subject to a 10% penalty for early withdrawal which is reported on Line 9 of Form 1040X as "Other Taxes." .

      Note:

      If the Distribution Code of Form 1099-R is "1" and the taxpayer did not include the 10% penalty and no Form 5329 is attached, refer to CIS/AM.

    2. For Distribution Code 7, the taxpayer is not subject to any penalty. This distribution is a "Normal Distribution" from Education Accounts.

      Note:

      If the taxpayer does not provide a Form 1099-R, research IDRS using CC IRPTR to determine the distribution code. If unable to determine the distribution code through IDRS research, refer as CIS/AM. Prior year data will be available; however current year data will not be available until mid-year.

  4. If the taxpayer is reporting that they are not subject to the 10% penalty, Form 5329 must be attached with an Exception Code 01 through 11, listed on Line 2 of Form 5329. Lines 1 and 2 of Form 5329 should show the entire distribution amount with a breakdown of the amount that is not listed to the penalty; otherwise refer as CIS/AM.

3.11.6.8.7.2  (08-06-2013)
Self-Employment (SE) Tax (Line 9)

  1. Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Taxpayers can also deduct a portion of their SE tax when figuring adjusted gross income (AGI), SE tax is figured using Schedule SE and is reported on Line 9 of Form 1040X.

  2. Taxpayers must pay SE tax if they had net-earnings ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ from a non-exempt trade or business. The Social Security Administration (SSA) uses the information from Schedule SE to figure the taxpayer's benefits under the social security program.

    Note:

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

  3. Earnings from one of the following occupations may be subject to SE tax:

    Note:

    This is not an all-inclusive list.

    • Retired or former insurance agent

    • Fishing crew member

    • Newspaper carrier or distributor

    • Newspaper or magazine vendor

    • Public official

    • Real estate agent or direct seller

    • Dealer in securities

    • Executor or administrator

    • Minister, Christian Science practitioner; or member of a religious order

    • Member of recognized religious group

    • Trader in security

    • Native American Tribal income is not subject to SE Tax.

  4. SE income is reported on Schedules C, C-EZ, E, F or as Other Income on Form 1040, Line 21 (e.g. Form 1099-MISC) If the taxpayer is a statutory employee (indicated on Form W-2, box 15), use Schedule C or C-EZ, line 1, as earned income. This income is not subject to SE tax.

    Note:

    When making an SE Tax adjustment, use the appropriate reason code for the source of SE income.

    Note:

    If taxpayer receives wages from ministerial duties, some of the income reported on Form 1040, line 7, may also be shown on Schedule SE, line 2. Refer to CIS/AM.

  5. In tax year 2011 a new form 1099-K has been adopted. Payment settlement entities may have to report merchant card payments and third party network payments on Form 1099-K instead of Form 1099-MISC. New lines have been added to Schedule C, C-EZ, E , and F to account for these entries. Self-Employed taxpayers will be responsible for reporting this income on the respective schedules. The affected forms will be worked no differently than in the past. The 1099-K is merely breaking down the source of income into different source categories.

  6. Take the following action based on the chart below:

    If And Then
    Any Form 1099-MISC ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ SE Tax not reported Refer to Exam
    • Indicate "Questionable SE income " on routing slip
    Form 4361 is attached, or mentioned, or minister is indicated and the taxpayer is reducing their SE tax. Research ENMOD 1. MIN-SE present
    2. MIN SE is not present
    1. Refer to CIS/AM
    2. Mail to PSPC P.O. Box 16325 Min Waiver Philadelphia, PA 19114-0425
    Input a TC 971, AC 016 for an audit trail.
    There is an indication of partnership (i.e. Schedule E) SE Tax is based off this income Refer to CIS/AM
    The Optional Method in Section II of Schedule SE was used to calculate SE tax   Refer to CIS/AM
    On a joint return both taxpayers have self-employment income Taxpayers combined their SE Tax onto one Schedule SE Correspond using Form 8009-A box 12 or a 324C letter, paragraphs A,V, Z, 7 with fill-in:
    • "Taxpayers filing jointly must file separate Schedules SE if they both have self-employment income. If only one spouse has self-employment income list only that spouse's name on the Schedule SE. Otherwise file two separate Schedules SE."
    On a joint return, both taxpayers have SE Tax You are unable to determine which taxpayer's account to adjust Correspond for the correct TIN to adjust the SE Tax per IRM 3.11.6.9 For Form 8009-A, use box 12 For a 324C letter, use paragraphs A, L, Z, 7.

  7. The adjustment to the account will be the difference between the amounts shown on TXMOD (if any) to the amended return.

    1. Always use the primary taxpayer's account when you research, even if the change is to the secondary taxpayer's account.

    2. Verify the requested change against the posted information on TXMOD/RTVUE.

    3. Do not decrease any posted amounts to less than zero.

    4. Adjust the taxpayer's SE Tax, SE Social Security, and SE Medicare as appropriate.

  8. In tax year 2010 only, the taxpayer may reduce their self-employment income by the amount of self-employed Health Insurance.

3.11.6.8.7.2.1  (02-01-2013)
Adjusting SE Tax

  1. In addition to SE tax, Line 9 is used to report various "other taxes" (e.g. changes to Form 5329). Do not include these amounts when adjusting SE tax. To verify Line 9 is only composed of SE tax, compare the posted total of SE tax "SET>" on TXMOD/IMFOL to Line 9 of the Original Amount Column, if column is present on Form 1040X..

    Note:

    Use RC 044 for Self Employment Tax, RC 030 for the deductible part of Self Employment Tax (adjustment to income), and the specific RC for the specific type of income reported.

  2. Compute the difference between the posted SE tax on TXMOD (SET>) to the amended Schedule SE. On Schedule SE this is:

    • Line 5 (short Schedule SE)

    • Line 12 (long Schedule SE)


      Use Reference Number (RN) 889 for changes only to SE Tax and RC 044.

  3. When the taxpayer adjusts SE tax on Line 9 they should have included as a deduction to Line 1 (AGI) an amount equal the deductible part of the SE tax change from Line 9, column B. Verify the taxpayer included this amount by comparing the correlating lines from Form 1040 on RTVUE. If not considered, recompute the tax using the deductible part of SE tax included into Line 1.

    1. If the difference in line 10 is within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , adjust the account using the taxpayer's figures.

    2. If the difference in line 10 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , adjust the account using the recomputed figures and set a math error. See IRM 3.11.6.6.5.

3.11.6.8.7.2.2  (09-16-2013)
SE Social Security

  1. The self-employment tax rate is 15.3% and consists of two parts: 12.4% for social security (old-age survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).

    Exception:

    A self-employment tax holiday was created for tax year 2011, and extended through 2012, which reduces the social security tax from 12.4% to 10.4%.

  2. Only a portion of the taxpayer's SE income is subject to the social security part of SE tax. See the table below for the maximum amounts for the tax year. The adjustments for the 878 or 879 cannot exceed this amount.

    If Tax Year is: Maximum amount subject to SE Social Security
    2013 $113,700
    2012 $110,100
    2011 $106,800
    2010 $106,800
    2009 $106,800

  3. When adjusting SE social security, use:

    1. RN 878 to identify the primary taxpayer (PRIM-SE-INCM)

    2. RN 879 to identify the secondary taxpayer (SECND-SE-INCM)

  4. For each taxpayer whose SE Social Security is changing, compute the difference between the original posted total on TXMOD to the amended Schedule SE. On the Schedule SE, this is:

    • Line 4 (short Schedule SE)

    • Smaller of line 6 or line 9 (long Schedule SE)

3.11.6.8.7.2.3  (01-01-2014)
SE Medicare

  1. All of the taxpayer's SE income is subject to the 2.9% Medicare portion of SE tax, even if the entire SE Social Security portion has been met.

  2. When adjusting SE Medicare, use:

    1. RN 895 to identify the primary taxpayer (PRIM-MEDICARE-INC)

    2. RN 896 to identify the secondary taxpayer (SECND-MEDICARE-INC)

  3. For each taxpayer whose SE Medicare is changing, compute the difference between the original posted total on TXMOD to the amended Schedule SE. On the Schedule SE, this is:

    • Line 4 (short Schedule SE)

    • Line 6 (long Schedule SE)

3.11.6.8.8  (08-12-2013)
Total Tax (Line 10)

  1. Line 10 is used to indicate the taxpayer's total tax liability. Total tax liability is the sum of:

    • Tax before credits (based on taxable income)

    • Minus any non-refundable credits from Line 7

    • Plus any additional "other taxes" from Line 9

      Note:

      Unless otherwise indicated, any reference to "total tax " is referring to Line 10 of Form 1040X.

  2. If the amount on Line 10, is from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, move the amount to Line 14.

  3. All processable claims require either a Transaction Code (TC) 290 or 291:

    Transaction Code Tax Adjustment
    Use TC 290
    Increase in line 10

    No change on line 10 (zero tax change)
    Use TC 291

    Decrease on line 10

  4. Always verify the entry on Line 10 of the Original Amount Column, if column is present on Form 1040X to TXMOD/IMFOL prior to making an adjustment. See IRM 3.11.6.6.4.

  5. Never adjust Line 10 below zero, regardless of what the taxpayer has indicated.

  6. Math Verification is required on a total tax change of $3,500 or more. if there is a discrepancy between IRS and taxpayer's figures, or there is a math error. SeeIRM 3.11.6.6.4.

  7. The amount of Total Tax Based on the originally filed return is represented by a TC 150 on IDRS.

3.11.6.8.9  (08-06-2013)
Federal Income Tax Withholding (Line 11)

  1. Taxpayers use Line 11 to report their Federal income tax withheld (TC 806/807) and/or any excess Social Security/Railroad Retirement Tax Act (RRTA) Tier 1 (TC 766). Use RC 051 when making an adjustment to withholding.

  2. If the amount on Line 11 is from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, move the amount to Line 14.

  3. Never adjust Line 11 below zero; regardless of what the taxpayer has indicated.

  4. If Form W-2 or Form 1099 series is missing and withholding credit is ≡ ≡ ≡ ≡ ≡ ≡ or more and you are unable to verify the credit on IRPTR, correspond per IRM 3.11.6.9 using either Form 8009-A, box 16, or a 324C letter paragraphs A, M, Y, 6.

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "

      Caution:

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

3.11.6.8.9.1  (08-06-2013)
Excess Social Security and Railroad Retirement Tax Act (RRTA)

  1. To process an excess social security/RRTA claim the individual taxpayer ( see following chart for the wage base limit for the year):

    • Must report wages from more than one employer

    • Their total wages must exceed the wage base limit for the tax year

    • The social security/RRTA tax withheld must exceed the maximum amount required for the tax year

  2. Excess Social Security/Medicare and Railroad Retirement Benefits Tax Act (RRTA)

    Year Maximum SS and RRTA Tier 1 (Wages) Maximum SS and RRTA Tier 1 (Tax Limit – 6.2%)
    2013 $113,700  
    2012 $110,100 4,624.20
    2011 $106,800 $4,485.60 (See Note)
    2010 $106,800 $6,621.60
    2009 $106,800 $6,621.60

    Note:

    A payroll tax holiday was created for tax year 2011, and extended through 2012, which reduces the employee's portion of the social security tax from 6.2% to 4.2%..

  3. Use CRN 252 for an increase or decrease to excess social security/RRTA Tier 1. RC 055

    Note:

    If an error message is displayed input "N" in the override field.

  4. Use the following when the taxpayer does not meet the necessary qualifications to claim excess social security/RRTA Tier 1:

    IF Then
    The excess social security was withheld by only one employer. Return the claim to the taxpayer and send a 404C letter with paragraphs A, C, D, E, M (8374), P, & S.

    Exception:

    If additional issues are present do not return the claim to the taxpayer. Continue to process for the remaining issues.

    The taxpayer is MFJ and used earnings / social security from both the primary and secondary taxpayers to calculate excess social security. Return the claim to the taxpayer and send a 404C letter paragraphs A, C, F, M (8374).

    Exception:

    If additional issues are present do not return the claim to the taxpayer. Continue to process for the remaining issues.

    The taxpayer’s wages do not exceed the wage base limit for the tax year. Send a 105/106C letter disallowing the claim per IRM 3.11.6.9. Fill-in: "We disallowed your claim for excess social security withheld. Your wages do not exceed $XXX,XXX. for tax year XXXX. In order to claim excess social security, you must have reported wages from more than one employer, your total wages must exceed the wage base limit and the social security tax withheld must exceed the maximum amount required for the tax year."
    The taxpayer’s social security withheld does not exceed the maximum amount required for the tax year. Send a 105/106C letter disallowing the claim per IRM 3.11.6.9. Fill-in: "We have disallowed your claim for excess social security withheld. Your social security withheld does not exceed $XXXX for tax year XXXX. In order to claim excess social security, you must have reported wages from more than one employer and the social security tax withheld must exceed the maximum amount required for the tax year."

3.11.6.8.10  (08-06-2013)
Estimated Tax Payments (Line 12)

  1. Estimated tax payments are payments made by the taxpayer. They are normally recorded as TC 430, 660, 710 or 716 payments. Sometimes they are recorded as TC 670 payments. If the total posted to the module matches the amount claimed on Line 12, Correct Amount Column and this is the only issue, adjust the account with TC 290 .00, RC 061, and SC 1.

  2. If the total estimated tax payments do not match the amount claimed and other issues are present route to CIS/AM regardless of the other issues on the claim. The payment may have been misapplied and the adjustment and estimated payment discrepancy need to be resolved at the same time.

    Note:

    If the taxpayer submits a payment with their amended return (TC 670) then line 12 may not match. These should not be referred to CIS/AM.

3.11.6.8.10.1  (09-16-2013)
Estimated Tax Penalty

  1. Sometimes a taxpayer may file an amended return that changes their estimated tax penalty (TC 170/176). Since the estimated tax penalty is based on the original return the penalty cannot be changed unless the taxpayer submits either a superseding return or a Form 2210 - (meeting at least one of the conditions in Part II).

    Note:

    If the taxpayer is calculating their penalty based on an amended return that is not superseding input the adjustment and send a 369C letter per (11) below. If the penalty is less than $100 adjust the penalty and do not send the 369C letter. Use Penalty Reason Code 016.

  2. If the taxpayer is requesting a change to the penalty due to a filing status change to FS 2 refer to CIS/AM.

  3. A superseding return does not require Form 2210 to be attached to reduce/remove the estimated tax penalty.

    Note:

    An amended return filed before the due date or extended due date (TC 460) is considered a superseding return. See IRM 3.11.6.2.3

  4. Send a 369C letter per (11) below if a Form 2210 is not attached unless:

    • The taxpayer is submitting a superseding return or

    • The Form 1040X will be referred to Category A or routed to examination.

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

    Exception:

    Do not correspond for Form 2210 or adjust the penalty if the claim is being routed to Exam or Cat A.

    Note:

    If a TC 170/176 is posted and you are unable to determine if the ES penalty is changing continue processing the return and do not send a 369C letter.

  5. If the taxpayer is not submitting a superseding return and none of the boxes in Part II of Form 2210 are checked the penalty reduction/removal is not allowed. If the estimated tax penalty reduction/removal is:

    IF THEN
    The ES penalty is the only issue
    1. Input a TC 290 for .00 with blocking series 99, reason code 065 and Hold Code 3. Attach an IMFOLR screen print.

    2. Send an 854C letter. Use paragraphs A, U, 0.

      Note:

      If the original return was paper filed use blocking series 98, do not attach an IMFOLR screen print.

    There are other tax issues Two adjustments are required.
    1. The first adjustment should be the tax issue and include Hold Code 4.

    2. For the second adjustment

      • Input a TC 290 for .00 with blocking series 99, reason code 065, Hold Code 3 and Posting Delay Code 1. Attach an IMFOLR screen print.

      • Send an 854C letter using paragraphs A, S, U, 0. For paragraph S use fill-in "We adjusted your [issue(s) (list issues) as requested."

    Note:

    If the original return was paper filed use blocking series 98, do not attach an IMFOLR screen print.

       

    Note:

    See link to Penalty Appeals Coordinator Penalty Appeals Coordinator

  6. If the taxpayer is requesting a change to the estimated tax penalty and Form 2210 is attached verify the estimated tax penalty amount using the AMS worksheets. If the difference between the AMS penalty amount and the taxpayer’s amount is:

    1. More than $100 – adjust the account using the recomputed amount. See IRM 3.11.6.6.5

    2. $100 or less – adjust the account using the taxpayer’s amount.

    3. If unable to math verify correspond per 3.11.6.6.4.

  7. When adjusting the account use TC 170 to increase the ES penalty or TC 171 to reduce the ES penalty. Reason Code 065 is always required when adjusting the estimated tax penalty.

  8. When the estimated tax penalty is being reducedor removed (TC 171) a Penalty Reason Code (PRC) is required in the fourth reason code position of the ADJ54 screen. See Penalty Reason Code chart below.

    IF AND THEN USE
    A TC 170 is posted on the account The taxpayer is filing a superseding return PRC 010
    A TC 170 is posted on the account The taxpayer is providing a corrected computation PRC 016
    A TC 176 is posted on the account
    • The taxpayer is filing a superseding return

    • The taxpayer is providing their own penalty computation

    PRC 013
    A TC 170 or 176 is posted on PRC 044 the account
    • Penalty is being abated based on a waiver in Part II of Form 2210

    • The penalty was assessed based on reliance of erroneous written IRS advice

    PRC 044
    A TC 170 or 176 is posted on PRC 044 the account Correcting an IRS computational error PRC 045

  9. Use Priority Code 8 when adjusting withholding (RN 806/807) and there is a prior TC 17X posted on the account to prevent an unpostable condition.

  10. When instructed to send a 369C letter input the adjustment and send the letter using paragraphs A,G,I,O,4,d. Include call-back number 1-800-829-1040.

3.11.6.8.11  (09-16-2013)
Earned Income Credit (EIC) Adjustments (Line 13)

  1. The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC) is available for certain low-income individuals who meet earned income, AGI and certain other requirements. EIC greater than the total tax liability may be refunded to the taxpayer.

  2. The following items are necessary for EIC to be claimed on an amended return:

    • Schedule EIC is required to be attached if qualifying child(ren) (not claimed as EIC dependents originally) are being claimed for EIC

    • Schedule EIC must contain the qualifying children's SSN information

    • The type of income must be identified

  3. Update the DUPOL database using CC DDBCK when processing TY 2010 and subsequent amended returns/Forms 1040X resulting in an increase to EIC due to adding, changing, or deleting an EIC dependent. DDBCK must be input before adjusting the account

    Exception:

    On amended returns Forms 1040X involving an increase to EIC and CC DDBCK cannot be used then CC DUPED should be used to update DUPOL. For TY 2012 and prior continue to process the return, but do not update DUPOL. When CC DDBCK is not available, use CC DUPED for current year returns, and do NOT update CC DUPED for prior year returns. (See IRM 3.11.6.7).

    .

  4. Route to CIS/AM if:

    • If an EITC Recertification indicator is present on IDRS and there is a change to EIC

    • If Advanced EITC is also being claimed

    • Form 8862, Information to Claim Earned Income Credit After Disallowance, is attached

    • Math Error Code 653 is posted on IDRS

    • Qualifying child for EIC was born and then died in the filing year

3.11.6.8.11.1  (02-01-2013)
EIC Eligibility Criteria

  1. Adjusted Gross Income (AGI) must be less than:

    Tax Year Adjusted Gross Income (AGI) Maximum credit allowed
    2012 -- $44,060 ($50,270) for married filing joint) if you have three or more qualifying children
    $41,952 ($47,162) for married filing joint) if you have two qualifying children
    $36,920 ($42,130) for married filing joint) if you have one qualifying child or
    $13,980 ($19,190 for married filing joint) if you do not have a qualifying child
    --$5,891 with three or more qualifying children
    -- $5,236 with two qualifying children
    -- $3,169 with one qualifying child
    -- $475 with no qualifying child
    2011 -- $43,998 ($49,078 for married filing joint) if you have three or more qualifying children
    $40,964 ($46,044 for married filing joint) if you have two qualifying children
    $36,052 ($41,132 for married filing joint) if you have one qualifying child or
    $13,660 ($18,740 for married filing joint) if you do not have a qualifying child
    --$5,751 with three or more qualifying children
    -- $5,112 with two qualifying children
    -- $3,094 with one qualifying child
    -- $464 with no qualifying child
    2010 -- $43,352 ($48,362 for married filing joint) if you have three or more qualifying children
    -- $40,363 ($45,373 for married filing joint) if you have two qualifying children
    -- $35,535 ($40,545 for married filing joint) if you have one qualifying child, or
    -- $13,460 ($18,470 for married filing joint) if you do not have a qualifying child
    -- $5,666 with three or more qualifying children
    -- $5,036 with two qualifying children
    -- $3,050with one qualifying child
    -- $457 with no qualifying child
    2009 -- $43,279 ($48,279 for married filing joint) if you have three or more qualifying children
    -- $40,295 ($45,295 for married filing joint) if you have two qualifying children
    -- $35,463 ($40,463 for married filing joint) if you have one qualifying child, or
    -- $13,440 ($18,440 for married filing joint) if you do not have a qualifying child
    -- $5,657 with three or more qualifying children
    -- $5,028 with two qualifying children
    -- $3,043 with one qualifying child
    -- $457 with no qualifying child
    2008 -- $38,646 ($41,646 for married filing joint) if you have more than one qualifying child
    -- $33,995 ($36,995 for married filing joint) if you have one qualifying child, or
    -- $12,880 ($15,880 for married filing joint) if you do not have a qualifying child
    -- $4,824 with two or more qualifying children

    -- $2,917 with one qualifying child
    -- $438 with no qualifying child
    2007 -- $37,783 ($39,783 for married filing joint) if you have more than one qualifying child
    -- $33,241 ($32,241 for married filing joint) if you have one qualifying child, or
    -- $12,590 ($14,590 for married filing joint) if you do not have a qualifying child
    -- $4,716 with two or more qualifying children

    -- $2,853 with one qualifying child
    -- $428 with no qualifying child

  2. Taxpayer must have a valid Social Security Number to claim the EIC (and spouse if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Any qualifying child listed on Schedule EIC must also have a valid SSN. A valid SSN does not include the following:

    • ITIN - Individual Taxpayer Identification Number

    • ATIN -- Adoption Taxpayer Identification Number

    • IRSN -- Internal Revenue Service Number

    Note:

    If taxpayer's spouse has an ITIN and taxpayer had originally received the earned income credit the earned income credit will have to be disallowed. Make the filing status change and use IRM 3.11.6.9.3 to disallow the earned income credit. Fill-in 105C/106C letter: "We have disallowed your claim for the Earned Income Credit because both the primary and secondary taxpayers listed on the return must have a valid Social Security Number."

    Note:

    If the qualifying dependent has an ITIN number send a 105C/106C letter fill-in:"We have disallowed your claim for the Earned Income Credit because the qualifying person must have a valid Social Security Number."

  3. Taxpayers filing married filing separate do not qualify for the credit.

  4. Taxpayer must be a U.S. Citizen or Resident Alien all year.

  5. Taxpayer cannot file Form 2555, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion.

  6. Taxpayer investment income must be less than:

    Tax year Investment Income
    2012 $3,200
    2011 $3,150
    2009 and 2010 $3,100

    Note:

    If the taxpayer's investment income is more than the designated limit send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Use fill-in: "We have disallowed your claim for the Earned Income Tax Credit because your investment income is greater than $XXXX."

  7. Taxpayer must have earned income, refer to IRM 3.11.6.8.12 to determine what qualifies as earned income.

  8. Taxpayer (and spouse if filing jointly) is not the qualifying dependent of another person for the same year.

3.11.6.8.11.2  (08-13-2013)
Taxpayer With/Without Qualifying Child(ren) on Schedule EIC

  1. Taxpayers with qualifying children must also meet the following three tests:

    • Relationship

    • Age

    • Residency

    Note:

    The Additional Child Tax Credit may have to be recomputed if EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit. See IRM 3.11.6.8.12

    TEST REQUIREMENTS
    Rleationship test To be your qualifying child, a child must be the taxpayers':
    • Son, daughter, stepchild, foster child or a descendent of any of them (i.e. grandchild), adopted child or
    • Brother, sister, half brother, half sister, stepbrother, stepsister or a descendent of them (i.e. niece or nephew)
    Age test Your child must be:
    • Under age 19 at the end of the calendar year
    • Under age 24 at the end of the calendar and a student, or
    • Permanently and totally disabled at any time during the calendar year, regardless of age

    Caution:

    If the children do not meet the lower end of the age requirements do not assume they are college students or disabled unless the taxpayer identifies this condition.

    Residency Test The child must live with the taxpayer in the U.S. for more than half the tax year. Temporary absences such as for schooling, medical care or vacation are counted as time lived at home. If a child fails the residency test solely because the child was born or died during the tax year, the child is treated as meeting the test, if the child lived with taxpayer for the entire time the child was alive during the tax year.
    • A foster child (child placed with the taxpayer by an authorized placement agency) and who lived with the taxpayer for more than half of the year will pass the residency test.

    Note:

    If the qualifying dependent fails either the relationship, age, or residency test. Send a 105C/106C letter, fill-in: "We have disallowed your claim for the Earned Income Credit because the qualifying person did not meet either the Relationship, Age, or Residency requirements in order to claim this credit."

    Note:

    Taxpayer's child does not have to be a dependent of the taxpayer in order for the taxpayer to claim the EIC.

  2. The taxpayer's kidnapped child can meet the residency requirement if the following requirements are also met. If met the child is treated as meeting the residency requirement for all taxable years ending during the period that the child is kidnapped.

    • The child must be presumed by law enforcements authorities to have been kidnapped by someone who is not a member of the family of the child or the taxpayer

    • The child must have had, for the taxable year in which the kidnapping occurred, the same principal place of abode as the taxpayer for more than half of the portion of the year before the date of the kidnapping.

      Note:

      This rule applies for all tax years ending during the period that the child is kidnapped. It does not apply as of the first tax year beginning after the year in which the child is determined to be dead ( or, if earlier, the year in which the child would have reached age 18).

  3. Taxpayer's with no qualifying child must also meet these requirements:

    • Taxpayer must be at least 25 but under age 65 (either spouse, if joint)

      Example:

      For a taxpayer whose birthday is on January 1st and is turning 25 or 65 on January 1st of a year immediately subsequent to the tax year (i.e. taxpayer turns 25 or 65 on January 1st, 2008 and is filing a TY 2007 return) the service will allow the claim for EIC provided other eligibility criteria are met.

    • Taxpayer's principal place of abode must be in the U.S. for more than one-half of the tax year (both spouses, if joint)

    • Taxpayer must be able to claim his/her exemption on the return (both spouses, if joint)

    Note:

    If the taxpayer does not meet the requirements outlined in paragraph (3) send a 105C/106C letter. Fill-in: "We have disallowed your claim for the Earned Income Credit because in order to qualify for this credit you must meet the Age, Residency, and Exemption requirements."

3.11.6.8.11.3  (08-06-2013)
Adjusting the EIC Account

  1. Before allowing the EIC, verify the validity of the name(s) and SSN(s) submitted by the taxpayer for the individual(s) with the invalid indicator on CC RTVUE. Research using CC INOLE, CC NAMES, and CC RTVUE to verify the name, number, and date of birth.

    Exception:

    Do NOT disallow the claim or set a math error if the taxpayer provides a valid SSN for the exemption.

    Note:

    If the qualifying child's SSN does not verify based on CC INOLE, NAMES, or DDBKD correspond. Use Form 8009-A box 22 or a 324C letter paragraphs A, V, Y.

    Fill-in: "The SSN provided on your Schedule EIC for the qualifying child was either incomplete or did not match our records. Please verify your information."

  2. When the taxpayer makes an initial claim for EIC or when adding a qualifying child, Schedule EIC must be attached, correspond if missing per IRM 3.11.6.9

    Note:

    Correspond using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Schedule XXXX to support the changes you have made."

    Exception:

    When claiming EIC for self and/or spouse only, Schedule EIC is not required.

  3. If asked by the taxpayer to compute their EIC, and they qualify compute using CC EICMP with Definer R. Input the following fields as applicable:

    • Tax year

    • Earned Income

    • Adjusted Gross Income

    • Married filing joint (Y or N)

    • Number of qualifying children. Enter "0" for no children, "1" for one child, and "2" for 2 children and "3" for 3 or more children.

  4. Always verify the amended EIC amount on line 13, Correct Amount Column of Form 1040X when the credit or AGI changes using either CC EICMP or EIC worksheet on AMS or from a 1040 instruction booklet. (Earned Income must be verified)

    If And Then
    The EIC amount matches taxpayer's figure   Continue processing the return
    The allowable EIC amount does not match taxpayer's figure The taxpayer's figure is within ≡ ≡ ≡ ≡ of the allowable EIC. Accept the taxpayers figure and continue processing the return
    1. The taxpayer's figure is ≡ ≡ ≡ or more than the allowable EIC.



    Adjust the amount for the correct amount and set the math error per IRM 3.11.6.6.5
    The allowable EIC amount does not match taxpayer's figure The allowed EIC is ≡ ≡ ≡ ≡ or mor than the taxpayer's figure (taxpayer is due more EIC) Adjust the EIC amount using your recomputed figure. Do not correspond or set a math error.

    Note:

    Use CC RTVUE and the taxpayer's explanation when determining Earned Income.

    Exception:

    Do NOT exceed the maximum credit dollar limit for that tax year. Example: Do not adjust EIC for more than $5,657 for TY 2009 with 3 qualifying children even if the taxpayer indicates $5,659 and IRM says to accept TP figure.

  5. If the taxpayer has already received EIC, send a 76C letter with the following fill-in "We did not allow the Earned Income Credit because our records indicate that you previously received the credit as part of your original or amended return."

  6. EIC allowed on the original return posts as a computer-generated TC 768 with a minus after the amount.

    Note:

    Check any previous EIC amounts to verify taxpayer is claiming correct amount.

  7. Update the DUPOL database using CC DDBCK prior to making any adjustments when:

    • adding/deleting a qualifying child for EIC

    • increasing EIC

      Exception:

      Do not update when EIC increase is due to additional Form W-2, or when working EIC Non-TIN related math error responses except for ME 653 (see paragraph 9 ME 653). SP is now working TIN related math errors. TIN related math error codes include 604, 610, 605, 654, 667, 701, 702, 741, 743, 745 and 748.

      Note:

      If the DDBCK response states that the child failed validation (other than an invalid TIN/Name issue) refer to CIS/AM.

  8. When making an adjustment to EIC, use RC 053 and:

    • CRN 764 for increases

    • CRN 765 for decreases

    Note:

    Priority code ''8'' is required when a TC 764 is input with TC 29X and there is a prior posted TC 29X (except a previously posted TC 290 with priority code 6 or a TC 290 with Julian Date 999). Use priority code ''1'' if both priority code ''1'' and ''8'' are required to adjust the account. Example: Account with -L freeze and the conditions above would require priority codes ''1'' and ''8'' and therefore ''1'' would be used.

3.11.6.8.11.4  (09-23-2013)
CP 09 Earned Income Credit for Taxpayer with Qualifying Children

  1. The CP 09 notice, Earned Income Credit - You May Be Entitled to EIC, is generated from criteria on the original return. A CP 09 notice is issued to low income taxpayers with qualifying children who appear to qualify for Earned Income Tax Credit (EITC) but did not claim it on their original return.

    Note:

    If the taxpayer claims children on the CP 09 that were not claimed on the original return, issue correspondence informing the taxpayer of the requirement to file a Form 1040X to claim these as qualifying children. Send a 76C letter (paragraphs A, L & O allowing the qualifying child(ren) claimed on the original return and input the adjustment per IRM 3.11.6.9.5. Use the following for the fill-in: "We disallowed part of your claim for the Earned Income Credit because the children shown on your CP 09 notice were not claimed on your original return. In order to claim additional qualifying children, you must file a Form 1040X. "

  2. Follow instructions in IRM 3.11.6.8.11.1 and IRM 3.11.6.8.11.2 for determining taxpayer's EIC eligibility.

    Caution:

    If the children do not meet the lower end of the age requirements do not assume they are college students or disabled unless the taxpayer identifies this condition.

  3. Compute the EITC amount using IDRS CC EICMP definer " R" and adjust the account accordingly.

  4. If current year, update Command Code DUPED when allowing EITC based on a CP 09.

  5. When adjusting an account based on a CP 09 use:
    A) If allowing the credit:

    • BS 05

    • SC 1

    • Reason Codes (RC) 017 and 053

    • CRN 764

    • Priority Code 3

      Note:

      Do not input the amended claims date.


    B) If disallowing the credit:

    • BS 05

    • SC 1

    • RC 054

      Note:

      Do not input an amended claims date.

  6. If the taxpayer is not eligible for EITC based on our computations or eligibility criteria, disallow the credit: -- Send a 76C letter (paragraphs A, L & O) disallowing the claim and input the adjustment per IRM 3.11.6.9.5. -- Use the following for the fill-in:We are writing in response to the Notice Number CP 09 we recently mailed to you.We are sorry to inform you that you do not qualify for the Earned Income Tax Credit. We apologize for this inconvenience. Use BS 05, SC 1, RC 054 and TC 290 .00. If the original return was filed electronically attach a copy of the IMFOLR print.

  7. If the filer requests direct deposit, use Form 8009-A, Box 14 see IRM 3.11.6.9.6.

  8. The Additional Child Tax Credit may have to be recomputed if EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit.

3.11.6.8.11.5  (08-15-2013)
CP 27, EIC Potential for Taxpayer Without Qualifying Children

  1. The CP 27 notice, EIC Potential for T/P Without Qualifying Children, is generated from criteria on the original return. A CP 27 notice is issued to low income taxpayers without qualifying children who appear to qualify for Earned Income Tax Credit (EITC) but did not claim it on their original return.

  2. Follow instructions in IRM 3.11.6.8.11.1 for determining taxpayer's EIC eligibility.

  3. Compute the EITC amount using IDRS CC EICMP definer " R" and adjust the account accordingly.

  4. When adjusting an account based on a CP 27 use:
    A) If allowing the credit:

    • BS 05

    • SC 1

    • RC 017 and 053

    • CRN 764

    • PC 3

      Note:

      Do not input an amended claims date


    B) If disallowing the credit:

    • BS 05

    • SC 1

    • RC 054

      Note:

      Do not input an amended claims date.

  5. If the taxpayer is not eligible for EITC based on our computations or eligibility criteria, disallow the credit: -- Send a 76C letter (paragraphs A, L & O) disallowing the claim and input the adjustment per IRM 3.11.6.9.5. -- Use the following for the fill-in: "We are writing in response to the Notice Number CP 27 we recently mailed to you. We are sorry to inform you that you do not qualify for the Earned Income Tax Credit. We apologize for this inconvenience. " Use BS 05, SC 1, RC 054 and TC 290 .00. If the original return was filed electronically attach a copy of the IMFOLR print.

  6. If the filer requests direct deposit, use Form 8009-A, Box 14 seeIRM 3.11.6.9.6

3.11.6.8.12  (02-01-2013)
Earned Income

  1. Earned income includes all employee compensation subject to income tax, net earnings from self-employment (SE), and gross income received by a statutory employee.

  2. Taxable earned income includes:

    • Wages

    • Salaries

    • Tips

    • Strike pay

    • Sick pay

    • Union strike benefits

    • Net earnings from self-employment (SE) or gross income received by a statutory employee.

    • Disability benefits (not disability Social Security) received by taxpayers under minimum retirement age (normally, this is reported on the Form 1040 as wages).

    Note:

    Minimum retirement age may vary.

  3. An amount paid to an inmate in a penal institution, for work, is not considered earned income for EIC purposes. Check envelope for indication such as the name of the institution, or a number that is assigned to the inmate. If there is any indication that the TP is an inmate in a penal institution, refer the case to CIS/AM regardless of whether or not he/she is claiming EIC.

  4. For EIC purposes, use SE income as reported on Schedule SE, minus the deductible part of SE tax or use EIC Worksheet B in Publication 596, Earned Income Credit.

  5. If Schedule SE is not present because the net earnings from self-employment shown on Schedule C, C-EZ, or F (or the combined net earnings) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , use the amount of net profit or loss reported on Schedule C, C-EZ or F.

  6. If Schedule SE is not present and there is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ reported, refer to Exam.

  7. If SE income is a loss, subtract the amount from other earned income.

  8. If the optional method is used, use the optional amount as income; do not subtract the SE loss.

  9. If the taxpayer is a statutory employee (indicated on Form W-2, box 15), use Schedule C or C-EZ, line 1, as earned income.

    Note:

    If taxpayer receives wages from ministerial duties, some of the income reported on Form 1040, line 7, may also be shown on Schedule SE, line 2. Refer to CIS/AM.

  10. Native American Tribe Members who report Form 1099-MISC tribal related income on a Form 1040X are not subject to SET, nor is the amount considered as "earned income" for EITC purposes. The literals are:

    1. Indian gaming

    2. Indian Gaming Proceeds

    3. IGP

    4. Indian tribal distribution

    5. Indian tribal income

    6. Indian tribal fund

    7. Indian tribal earnings

    8. Native American

    9. IGE

    10. ITI

    11. Alaska Permanent Fund

    12. Alaska Permanent Fund DIV

    13. APF

    14. APFD

  11. Earned Income includes:

    • Form· W-2 or similar statement

    • Form 1099-MISC

    • Form 1099R with Distribution Code 3 and/or Disability

    • Form 4137

    • Form 8919

    • Schedule C

    • Schedule E, Part II (Line 29a col g, 34a col d, 29b col f, 34b col c and line 40)

    • Schedule F

    • Schedule SE

    • Notation of "HSH"

    • Notation to the left of line 21 indicating self-employment

    • Notation of prior year earned income (PYEI)

    Note:

    Not all income reported on a 1099-MISC is considered earned income.

  12. Income that is not Earned Income:

    • Interest

    • Dividends

    • Welfare payments

    • Pensions

    • Veteran benefits

    • Taxable scholarships or fellowship grants not reported on Form W-2

    • Alimony

    • Child support

    • Social Security and Railroad Retirement benefits

    • Workers compensation benefits

    • Unemployment compensation (insurance)

    • Alimony and child support

    • Interest and dividends

    • Non-disability pensions and annuities (e.g., Form 1099R showing income other than Distribution Code 3)

    • Nontaxable foster care payments

    • Social Security and railroad retirement benefits (including disability benefits)

    • Unemployment compensation (insurance)

    • Veterans' benefits (including VA rehabilitation benefits)

    • Welfare benefits

    • Workers' compensation benefits

    • Earnings while an inmate

    • Workfare payments

    • Conservation Reserve Program (CRP) payments

    • Nontaxable military pay

      Exception:

      Taxpayers can elect to include nontaxable COMBAT pay in earned income for the earned income credit.

3.11.6.8.12.1  (08-15-2013)
EIC and Investment Income Limitations

  1. EITC is denied if taxpayer receives investment income (sometimes referred to as disqualified income) of more than a certain amount. The maximum amount of investment (disqualified) income is:

    • $3,200 for tax year 2012

    • $3,200 for tax year 2011

    • $3,100 for tax year 2010

    • $3,100 for tax year 2009

3.11.6.8.13  (09-16-2013)
Credits -- Refundable (Line 14)

  1. The following subsections provide processing instructions for Line 14:

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4136, Credit for Federal Tax Paid on Fuels

    • Form 5405, First-Time Homebuyer Credit

    • Form 8812, Additional Child Tax Credit

    • Form 8863, Education Credits (American Opportunity Credit)

    • Schedule M, Making Work Pay and Government Retiree Credits

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

3.11.6.8.13.1  (08-06-2013)
Forms 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains (Line 14)

  1. A regulated investment company (RIC) may elect to keep and pay income tax on certain capital gain income it received during the tax year. The RIC is required to issue a Form 2439 to each of its shareholders for the amount of the undistributed capital gain to be included on the shareholders Schedule D, Form 1040. In addition, the tax paid by the RIC may be claimed by its shareholders as a credit on their respective Form 1040s.

    Note:

    Be aware of frivolous claims (e.g. "Reparation Tax" ) filed on this form. (See Exhibit 3.11.6-4, Frivolous Claims)

  2. The shareholder should attach Copy B, Form 2439, to the original or amended tax return. Do not reject claim or correspond for a missing Form 2439 if the taxpayer claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the amount claimed on Line 14 (1040X) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    Note:

    Correspond per IRM 3.11.6.9 use either Form 8009-A, box 18 or a 324C letter paragraphs A, V, Y fill-in: Please provide Form 2439 to support your change to line 14. A duplicate or photocopy is acceptable

  3. Loose Forms 2439, Copy A and/or B, may be received. If " NOMINEE" is noted at the top of the form, no adjustment is made to the taxpayers account. Associate the form with the return of the taxpayer who appears in the "Shareholder's" name and address box. (If this is a company entity, route to BMF.)

  4. Action required:

    1. Input TC 290 .00 if no other adjustment is required.

    2. Use credit reference number 766 to allow the credit.

    3. Use Reason Code 057

3.11.6.8.13.2  (05-23-2013)
Form 4136 Credit For Federal Tax Paid on Fuels (Line 14)

  1. Form 4136 must be attached to an income tax return (Form 1040) or an amended tax return (Form 1040X), if credit claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and be filed within the statute of limitations. If not present, correspond. If credit claimed is less than ≡ ≡ ≡ ≡ , and no form attached, do not correspond, process using CRN 362 and RC 061. If present, process using CRNs on the Form 4136 that correspond with the changes the taxpayer has made and RC 061.

    Note:

    Correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, V, Y, Use fill-in: "Please complete Form XXXX to support the changes you have made."

  2. Form 4136 claiming a credit of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is CAT A criteria .

  3. Include priority code 8 when making an adjustment.

3.11.6.8.13.3  (08-06-2013)
Form 8812, Additional Child Tax Credit (Line 14)

  1. This refundable credit is for certain individuals who receive less than the full amount of the child tax credit. The additional child tax credit (ACTC)may result in a refund even if no tax is owed.

    Note:

    For TY 2012, Form 8812 was changed to Schedule 8812. Form or schedule is used interchangeably.

  2. This credit has been expanded to include taxpayers with any number of qualifying individuals.

    Note:

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

  3. If a taxpayer (or the spouse if married filing jointly) received nontaxable combat pay, they must include the amount in figuring their earned income when figuring the additional child tax credit.

  4. Route the following cases to CIS/AM:

    • Taxpayers indicating a religious or conscience-based objection to obtaining a TIN

      Note:

      IRS will allow the credit if the taxpayer identifies as either "Amish", "Mennonite" or "Exempt 4029, even if the individual does not have a valid TIN. If the credit should have been allowed during original processing, adjust the account and/or process the claim.

  5. If the credit was allowed during the original processing, TC 766 with CRN 336 will be present on the tax module.

  6. If Form 8812 is incomplete or missing, and cannot be perfected or "dummied" by using AMS worksheets, correspond per IRM 3.11.6.9 for required information to complete processing.

    Note:

    Correspond using either Form 8009-A, box 4 or 5; or a 324C letter with paragraphs A, V, Y. Use fill-in: "Please complete [Form/Schedule] 8812 to support the changes you have made."

  7. Math verify the taxpayer's figure by completing the appropriate worksheet in the instruction booklets, publication, or electronic web-based worksheets on AMS.

    If And Then
    The allowable ACTC matches taxpayer’s figure   Continue processing the return
    The allowable ACTC does not match taxpayer’s figure
    • 1. The taxpayer's figure is less than $100 of the allowable ACTC

    • 2. The taxpayer’s figure is $100 or more than the allowed ACTC

    • 3. The allowed ACTC is $100 or more than the taxpayer’s figure (taxpayer is due more ACTC)

    • 1. Accept the taxpayers figure and continue processing the return

    • 2. Adjust the ACTC for the correct amount and set the math error per IRM 3.11.6.6.5

    • 3. Adjust the ACTC amount using your recomputed figure. Do not correspond or set a math error.

  8. To increase or allow the credit, input CRN 336 with a positive amount; to decrease or remove a previously posted credit, input CRN 336 with a amount followed by a hyphen (-) and RC 061.

    Note:

    If the taxpayer makes a claim for Additional Child Tax Credit for a qualifying dependent and Child Tax Credit is not claimed, update the DUPOL database using CC DDBCK prior to inputting adjustment.

3.11.6.8.13.3.1  (09-23-2013)
CP 08, Additional Child Tax Credit

  1. The CP 08, You May Qualify for a Refund From the Additional Child Tax Credit, is generated from criteria on the original return. Taxpayers will be issued a CP 08, informing them of their potential eligibility to claim the Additional Child Tax Credit, when they:

    1. Compute an amount for the Child Tax Credit, have no total tax liability, and fail to use the remaining portion of the credit to claim the Additional Child Tax Credit, or

    2. Indicate eligibility for the Child Tax Credit (by checking the boxes on line 6c), do not claim the Child Tax Credit due to no tax before credits and do not claim the Additional Child Tax Credit.

  2. In order to qualify for the Additional Child Tax Credit (ACTC) the taxpayer must meet the qualifications for the child tax credit. If the taxpayer does not meet all of the criteria, partially/completely disallow the claim depending on the issues. Follow instructions in IRM 3.11.6.8.6.1 and IRM 3.11.6.8.13.3 for determining taxpayer’s Additional Child Tax Credit eligibility.

    Note:

    The CP 08 is an informal claim and is IRS initiated. As a consequence these claims should not be referred Cat A.

  3. Compute the amount of the credit based on the qualifying children claimed on the CP 08 that meet the following criteria:

    1. the same children were allowed as dependent exemptions on the original return

    2. the children are less than 17 years old at the end of the calendar year.

  4. If the taxpayer claims additional children on the CP 08 that were not claimed on the original return as dependent exemption, issue correspondence informing the taxpayer of the requirement to file a Form 1040X to increase the number of dependents

    IF THEN
    Taxpayer claims additional children on the CP 08 that were not claimed on the original return
    OR
    Taxpayer claims ANY children on the CP 08 that were disallowed as exemptions
    Send a 76C letter (paragraphs A, L & O) and adjust for the originally claimed children who qualify. Use the following for the fill-in: "We disallowed part of your claim for the Additional Child Tax Credit because of the additional children shown on your CP 08 notice. In order to claim additional dependents, you must file a Form 1040X. ."
    If some of the children that the taxpayer claimed on the CP 08 notice are eligible, allow the ACTC for those dependents 1. Input the adjustment: -- TC 290 .00 -- Use CRN 336 and the recomputed credit change -- Use RC 061
    There are other issues in addition to the taxpayer claiming more children on the CP 08 then were claimed on the original return Route to CIS/AM.

  5. Follow the procedures below when a taxpayer claimed the Child Tax Credit on their original return, and submits a CP 08 with less than 3 qualifying children claimed and does not submit Form 8812, Additional Child Tax Credit:

    1. Verify the taxpayer meets the criteria for receiving the Child Tax Credit, and if eligible, compute the amount of the Additional Child Tax Credit per Form 8812 instructions.

    2. If the refundable portion of the tax credit is determined with reference to the taxpayer's earned income, the credit is refundable to the extent of 15% of earned income greater than:
      -- TY 10 -- $3,000
      -- TY 09 -- $3,000
      -- TY 08 -- $8,500

    3. Research CC RTVUE to determine if the taxpayer used non-taxable combat pay when figuring his/her earned income tax credit. If claimed, then do not include that amount when figuring the amount for earned income on Form 8812.

  6. If the taxpayer did not use an amount for non-taxable combat pay when figuring EITC, or if EITC was not claimed, then include the amount of non-taxable combat pay when figuring earned income on Form 8812.

  7. When adjusting an account based on CP 08:

    1. Use BS 05

    2. Use CRN 336 to allow the credit

    3. Use RC 061, SC 1

    4. Use Priority Code 3 to allow interest to be systemically calculated as an IRS initiated adjustment. Do not input the amended claims date.

  8. If the filer requests direct deposit, use Form 8009-A, Box 14 IRM 3.11.6.9.6

3.11.6.8.13.4  (08-06-2013)
Form 5405, First Time Homebuyer Credit (Line 14)

  1. The Worker, Homeownership, and Business Assistance Act of 2009 (WHBAA): For homes purchased after November 6, 2009 and before May 1, 2010, the taxpayer can claim a credit of the lesser of 10% of the purchase price of the home or $8,000 (4,000 for FS 3).

    • A revised Form 5405 is required. Correspond if missing.

    • A settlement statement is required. Correspond if missing.

  2. Under WHBAA, for homes purchased after April 30, 2010 and before October 1, 2010, the taxpayer must enter into a binding contract before May 1, 2010 an close before October 1, 2010 and can claim a credit of the lesser of 10% of the purchase price of the home or $8,000 (4,000 for FS 3).

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

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

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

    Note:

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

  3. Under WHBAA, Long time residents (LTHBC): For homes purchased after November 6, 2009 and before May 1, 2010, the taxpayer can claim a credit of 10% of the purchase price up to $6,500.

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

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

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

    Note:

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

  4. Under WHBAA, Long time residents (LTHBC): For homes purchased after April 30, 2010 and before July 1, 2010 the taxpayer must enter into a binding contract before May 1, 2010 and must close before October 1, 2010. The taxpayer can claim a credit of 10% of the purchase price up to $6,500.

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

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

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

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

    Note:

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

  5. Under WHBAA, members of the armed services, Foreign Service officers and the intelligence community must close before May 1, 2011. This applies to any individual (and, if married the individual's spouse) who serves on qualified official extended duty service outside of the U.S. for at least 90 days during the period beginning December 31, 2008, and ending before May 1, 2010. For homes purchased after April 30, 2011 and before July 1, 2011 the taxpayer must close on the home before October 1, 2011 and the taxpayer must have entered into a binding contract as of April 30, 2011. A taxpayer that qualifies for this extension can claim FTHBC or LTHBC.

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

  7. Any recapture of the First Time Homebuyer Credit or acceleration of recapture will be routed to CIS/AM.

    Note:

    Any recapture or acceleration of the credit should be reported on Form 5405. For prior revisions, accelerated recapture will be reported on Form 5405 part III or IV. . However you may receive claims asking forgiveness of the credit due to foreclosure, short sale etc. These claims fall under the recapture and acceleration category and also are routed to CIS/AM. You may also receive claims asking for forgiveness of the credit due to the death of the taxpayer. This type of claim is reported in part III and is also routed to CIS/AM.

3.11.6.8.13.4.1  (01-01-2014)
Form 5405, First Time Homebuyer Credit CAT A Screening

  1. Expedite all Form 5405 claims that meet CAT A criteria to exam by placing a coversheet identifying these claims.

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

    Note:

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

  3. If xClaim indicates a claim should be disallowed send a 105C letter, see IRM 3.11.6.8.13.4.3

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

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

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

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

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

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    10. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    11. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

      Note:

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

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

      Note:

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

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

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

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

    Note:

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

3.11.6.8.13.4.2  (09-16-2013)
Form 5405 Requirements

  1. A complete claim must include all of the following:

    1. For homes purchased after November 6, 2009, a revised Form 5405 MUST be submitted with supporting documentation

    2. Supporting documentation:
      1. Conventional Homes – Settlement Statement (HUD-1) must include buyer and seller’s name, Property Address, Sales Price, and date of purchase
      2. Mobile Homes – Settlement statement if available. If no settlement statement is available, an executed retail sales contract must be attached. The buyer, seller, property address (delivery address), sales price and date of purchase are required as well as both the buyer's signature(s) and the seller's signature(s).
      3.Newly Constructed Homes – Settlement statement if available. If no settlement statement, a Certificate of Occupancy must be attached showing the owner’s name, property address, and date of the certificate.

    3. A signed Form 1040X

      Note:

      If the taxpayer submits alternative documentation in lieu of the supporting documentation listed in paragraph (1)b above, and it contains all the required elements, route as CAT-A. Otherwise correspond for a complete settlement statement.

      Note:

      If the taxpayer is not able to obtain the Certificate of Occupancy, he must submit the following with the claims:
      A statement that the Certificate of Occupancy is not available.
      Documentation to substantiate a home was built (i.e. sales tickets for building materials).
      Three examples of proof that the home is occupied and showing name and new address. These items include: Utility bill, copy of Driver's License or State ID, recent pay stub, Post Office change confirmation, current automobile registration, or moving contract.

      Note:

      Route as CAT-A if all documentation is present, otherwise correspond for a complete settlement statement.


      The following are examples of alternative documentation:
      Homestead exemption forms
      Promissory notes
      Warranty deeds
      Deeds of trust
      Insurance papers
      Mortgage loan agreements
      Loan disbursement statements
      Pre-approval letters
      Construction receipts
      Rent to Own or Lease to Own
      Any other documents not listed

      Note:

      Refinances do not qualify for the FTHBC and should not be considered alternative documentation. Disallow the claim per IRM 3.11.6.8.13.4.3

  2. If a return is missing any of the required elements, return the claim to the taxpayer requesting the missing required elements.

    Exception:

    If the xClaim tool states to disallow the claim it will not be necessary to correspond for the settlement statement, if missing. The claim should be disallowed without any further action. The Form 1040X does need to be signed with the Form 5405 attached.

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

3.11.6.8.13.4.3  (08-06-2013)
Form 5405 Disallowance and Correspondence Procedures

  1. Reason for disallowance, required letter and corresponding fill-ins.

    Reason Letter & Fill-in
    Taxpayer is under age 18 (only one spouse must meet this requirement) Send a 105C/106C letter with the fill-in: "We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because you are under the age of 18. In order to qualify for the credit, you must be 18 or older."
    Home Purchase exceeds $800,000 Send a 105C/106C letter with the fill-in: "We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because the purchase price of your home exceeds $800,000."
    Taxpayer is a dependent on another taxpayer’s return. Send a 105C/106C letter with the fill-in: "We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because our records indicate that you were claimed as a dependent on another person’s return."
    Real estate taxes, mortgage interest, mortgage interest points, qualified mortgage insurance premiums, residential energy efficient property credit, or proceeds from real estate transactions. Send a 105C/106C letter with the fill-in: "We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because our records indicate that you previously claimed one of the following: real estate taxes, Form 8396, Mortgage Interest Credit, mortgage interest points, qualified mortgage insurance premiums, Form 5695, Residential Energy Efficient Property Credit, or proceeds from real estate transactions."
    LTRC purchase date is prior to 11-07-09 or after 04-30-2010. Send a 105C/106C with the following fill-in: "We have disallowed your claim on Form 5405, First-Time Homebuyer Credit, because you purchased your home prior to the November 7, 2009 date or after the April 30, 2010 date. In order to qualify for the Long Time Resident, your home must be purchased between these dates."
    The acquired date is a future date compared to the received date on Form 1040X Send Form 8009-A per IRM 3.11.6.9.2. For Box 25, use the following write-in: “The First-Time Homebuyer Credit is not available until a home has been purchased. The date entered on the Form 5405 indicates you plan to purchase the home in the future. We cannot allow the credit until after you have acquired the home. Please resubmit your claim at that time.”
    The acquired date is incomplete or missing Send Form 8009-A per IRM 3.11.6.9.2. For Box 25, use the following write-in: “The date you acquired your home must be present on Part I line B of the Form 5405, First- Time Homebuyer Credit and the home must have been already purchased in order to claim this credit.”
    The taxpayer already received the credit. Send a 76C letter per IRM 3.11.6.9.5. Use the following fill-in: "We did not allow the First- Time Homebuyer Credit because our records indicate that you already received the credit on a previous return."
    The taxpayer is claiming the credit for a home purchased after April 30, 2010

    Caution:

    If box D is marked on Form 5405 see IRM 3.11.6.8.13.6 paragraph (6) for allowable dates before disallowing.

    Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3. Use the following for the fill-in: “We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because you purchased your home after the April 30, 2010 date to qualify for this credit.”
    The credit is eliminated completely when the taxpayer’s Modified Adjusted Gross Income (MAGI) reaches $95,000 ($170,000 married filing jointly). For purchases after November 6, 2009 the limitation increases to $145,000 MAGI ($245,000 married filing jointly). Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3. Use the following fill-in: "We disallowed your claim on Form 5405, First-Time Homebuyer Credit, because the credit is phased out and eliminated completely when Modified Adjusted Gross Income reaches $95,000 ($170,000 married filing jointly). For purchases after November 6, 2009 the limitation increases to $145,000 MAGI ($245,000 married filing jointly)."
    The credit begins to phase out when the taxpayer's Modified Adjusted Gross Income (MAGI) exceeds $75,000 ($150,000 married filing jointly) but is less than the maximum of $95,000 ($170,000 married filing jointly), or for purchases after November 6, 2009 : Gross Income (MAGI) exceeds $125,000 ($225,000 married filing jointly) Send a 105C/106C letter disallowing the exceeded amount. Use the following for the fill-in: "We have disallowed your claim because the credit on Form 5405, First-Time Homebuyer Credit, begins to be phased out when your modified adjusted income exceeds $##,###."
    LTRC purchase date is prior to 11-07-09 or after 04-30-2010. Send a 105C/106C with the following fill-in: “We have disallowed your claim on Form 5405, First-Time Homebuyer Credit, because you purchased your home prior to the November 7, 2009 date or after the April 30, 2010 date. In order to qualify for the Long Time Resident, your home must be purchased between these dates.”
    The taxpayer submits a refinance settlement statement or indicates a refinance. Send a 105C/106C letter with the following fill-in: "We have disallowed your claim on Form 5405, First-Time Homebuyer Credit, because your settlement statement indicates a refinance. Refinances do not qualify for the FTHBC."
    The taxpayer submits the incorrect Form 5405. Correspond using Form 8009-A , box 25. Use the following write-in: "New legislation on The First-Time Homebuyer Credit requires a revised Form 5405. (The revision date in the upper left hand corner of the form states “Rev. December 2009”). Please re-submit your Form 1040X with the new Form 5405 and any documentation requested. Please ensure all questions on the Form 5405 are addressed and/or answered. Please check www.irs.gov to download the revised form or you can secure the form at your local library. The form became available January 15, 2010. We apologize for any inconvenience."
    A valid settlement statement is not attached Correspond with Form 8009-A, box 25, using the following write-in: "We cannot allow the First-Time Homebuyer Credit until we have the following documentation. Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names, property address, sales price and date of purchase. Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties' names, property address, purchase price, signatures and date of purchase. Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner's name, property address and date of the certificate."
    A home purchased in 2008 claimed on a return other than TY 2008. Send a 105C/106C letter with the following fill-in: “We have disallowed your claim on Form 5405, First-Time Homebuyer Credit, because a home purchased in tax year 2008 may only be claimed on a 2008 tax return.”

  2. Use the following chart to determine if the taxpayer has submitted a claim for the correct tax year based on the year in which the home was purchased:

    Year of Home Purchase Year Credit can be claimed Year Credit can be claimed
    2009 2008 2009
    2010 2009 2010
    2011 2010 2011

    Note:

    If the taxpayer has submitted a claim for the incorrect tax period correspond using a Form 8009-A box 25 with the fill-in: “Based on the year in which you purchased your home, in order to claim the Form 5405, First Time Homebuyer Credit, you should submit a Form 1040X for tax year: #### or ####.”

3.11.6.8.13.4.4  (08-06-2013)
Adjusting Accounts

  1. When adjusting an account for the FTHBC use Credit Reference Number (CRN) 258 to allow/increase the credit and CRN 258 with a minus sign (-) to decrease the credit.

    Note:

    Remember to use the correct Reason Codes when working FTHB claims.

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

    Note:

    When adjusting a home purchased in 2010, input CRN 880 .10 (home purchased in 2011 under the 1 year military extension only, input CRN 880 .11) and either RC 121 for the primary taxpayer (single, head of household or married filing sepatate) or RC 000 for both taxpayers (filing status 2) along with the appropriate RC 110, 125, 126, 128 or 129. This must be done to show the correct year on IMFOLF.

    Note:

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

  2. The Revised December 2010 Form 5405 can be used to claim the credit only in the following situations:

    • The taxpayer is claiming the credit on their 2010 original or amended return for a home purchased in 2010 (or in 2011 if either the primary or secondary if married are, or were a member of the uniformed service or Foreign Service or an employee of the intelligence community and meet the one year military extension requirements.

  3. If the taxpayer's account contains ME 641 and is adding or changing the FTHBC / LTRC refer as CIS/AM. Do NOT apply CAT-A or disallowance criteria.

    Note:

    Taxpayers may submit Form 1040X to remove Mortgage Interest / Real Estate taxes in order to claim the FTHBC / LTRC on a different year. Process these claims using normal processing procedures. Do NOT refer these cases to CAT-A or CIS/AM.

3.11.6.8.13.5  (08-13-2013)
Making Work Pay and Government Retiree Credits - Schedule M

  1. For tax year 2010, the Making Work Pay provision of the Schedule M provides a refundable tax credit up to $400 for individuals and $800 for married taxpayers filing a joint return.

  2. The Making Work Pay credit is calculated at a rate of 6.2% of earned income when earned income is less than $6,451 ($12,903 if married filing jointly).

    Example:

    The taxpayer’s earned income (married filing jointly) is $10,500. The credit would be calculated by multiplying $10,500 by .062 for a total credit of $651.

    Reminder:

    Nontaxable Combat Pay is used in calculating the credit.

  3. The Schedule M may be submitted with Form 1040X. For 2010, the Schedule M will be required for an initial claim when the credit cannot be verified with income information available or when the credit cannot be verified due to the taxpayer receiving and Economic Recovery Payment (ERP). Correspond using Form 8009-A box 25 or a 324C letter paragraphs A, V, Y. Fill-in: "Schedule M is required, please send us the completed schedule."

    Exception:

    It is not necessary to correspond for the Schedule M if the credit can be verified based on IDRS research and attachments.

    Reminder:

    Some taxpayers received Economic Recovery Payments from U.S. Government, U.S. State or local government from work not covered by social security. These payments are not transcribed on our system.

  4. The credit will begin to phase out for taxpayers with an adjusted gross income (AGI) in excess of $75,000 ($150,000 for married filing joint). The credit is reduced by 2% of the dollar amount that exceeds the threshold amount and is eliminated completely when the AGI reaches $95,000 ($190,000 for MFJ) or more. See IRM 3.11.6.8.13.6 for disallowance procedures.

    Example:

    Taxpayer filing singles has an AGI of $79,873. The credit reduction would be calculated by $79,873 - $75,000 = $4,873. Then take $4,873 x .02 = $97.46 reduction. Next $400 - $97.46 = $302.54 total credit allowed.

    Note:

    The xClaim tool will perform these calculations automatically but the credit may have to be computed manually if the use of xClaim is not available. xClaim will calculate the credit in dollars and cents. If the taxpayer has indicated whole dollars on Form 1040X round as appropriate. Do not adjust the credit for more than the maximum as this will create an unpostable condition.

  5. The Economic Recovery Payment (ERP) is a $250 payment sent to the taxpayer directly by the U.S. Treasury representing social security benefits, supplemental social security benefits, veteran’s disability benefits and/or rail road retirement benefits. Each taxpayer may have received a $250 payment from a different agency. These payments were NOT issued from IRS accounts. This information can be researched on CC INOLE. The payments could have been issued in either 2009 or 2010 but not both years.

  6. CC INOLE will display the literal “ERP” on the 2nd line from the top of the right hand side of the IDRS screen. INOLEX will display the literal on the 3rd line from the top of the right hand side of the IDRS screen. The following literals will be displayed next to “ERP” to indicate from which agency the ERP was received:

    1. SSA or SSI

    2. RRB

    3. VA

    4. NP (This indicates "No Payment Received" “

      Note:

      Only one agency code will be displayed and the year in which the payment was made will not be reflected.

  7. The Making Work Pay Credit will be reduced if the taxpayer (and/or spouse if married filing joint) received a $250 Economic Recovery Payment from SSA/VA or RRB during 2010.

  8. To take the credit, the taxpayer must have a valid social security number. A TIN issued by IRS is not valid for this credit.

    Exception:

    For married filing joint only one valid SSN is required and it can be either the primary or secondary taxpayer’s.

  9. Taxpayers are not eligible for the Making Work Pay credit if they can be claimed as a dependent on someone else’s return. If the taxpayer removes his personal exemption the Making Work Pay credit will have to be removed. See IRM 3.11.6.8.13.6.

  10. When adjusting the account use CRN 259 and RC 105.

  11. When reviewing Forms 1040X and math error 664, 665, or 667 is present determine using CC INOLE if the taxpayer has received and ERP. If the taxpayer states he did not receive the payment do not allow the $250 amount unless there is a letter from the agency stating there was an error. If there is no letter or statement from the agency indicating there was an error route the return to CIS/AM as an unsubstantiated math error protest.

  12. If math error 661 is present and the taxpayer is submitting a new claim for the Schedule M see IRM 3.11.6.8.13.6.

    Note:

    If the taxpayer is correcting the original math error see IRM 3.11.6.6.5.1

  13. If there are no math errors present and the taxpayer has calculated the credit incorrectly due to the taxpayer receiving an ERP recalculate the credit, and set a math error perIRM 3.11.6.6.5. Use the following fill-in: "We have information from another agency that indicates you received an Economic Recovery Payment of $XXX and therefore we reduced the Schedule M credit by this amount."

3.11.6.8.13.6  (01-01-2014)
General disallowance procedures and required Schedule M letters

  1. The Schedule M credit is completely eliminated due to the Adjusted Gross Income

    If Schedule M
    The credit is eliminated completely when the taxpayer's Adjusted Gross Income (AGI) reaches $95,000 ($190,000 married filing jointly) Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3. Use the following for the fillin: "We disallowed your claim on Schedule M, Making Work Pay and Government Retiree Credits, because the credit is eliminated completely when Adjusted Gross Income reaches $95,000 ($190,000 married filing jointly).

  2. The Schedule M Credit is being phased out and the taxpayer has not addressed the phase out amount and/or has calculated the phase out amount incorrectly.

    Note:

    The phase out does not apply to the Government Retiree Credit. It only affects the Making Work Pay credit.

    IF Schedule M
    The credit begins to phase out when the taxpayer's Adjusted Gross Income (AGI) exceeds $75,000 ($150,000 married filing jointly) Send a 105C letter disallowing the claim for the exceeded amount and input the adjustment TC290 .00, use CRN 259 and the recomputed credit. Use the following for the fill-in: "We disallowed a portion of your claim on Schedule M, Making Work Pay and Government Retiree Credits, because the credit begins to be phased out when Adjusted Gross Income exceeds $75,000 ($150,000 married filing jointly). The credit was reduced by (insert actual dollar amount).

  3. If the taxpayer already received the Making Work Pay or the Government Retiree Credit Schedule M

    Schedule M is the only issue Other issues are present
    Send a 76C letter per IRM 3.11.6.9.5. Use the following fill-in: We did not allow Making Work Pay and Government Retiree Credit because our records indicate that you previously received the credit as part of your original or amended return. Send a 76C letter per IRM 3.11.6.9.5. Use the following fill-in: "We did not allow Making Work Pay and Government Retiree Credit because our records indicate that you previously received the credit as part of your original or amended return." Recompute the correct column without the credit and continue to process the return for other issues.

  4. The taxpayer is not eligible for the credit:

    1. Taxpayer is claimed on someone else’s return

    2. Taxpayer is a non-resident alien

    3. Taxpayer removes exemption but does not remove credit

    4. Taxpayer calculates the credit incorrectly or claims more than the maximum credit

    Schedule M is the only issue Other issues are present
    Send a 4364C letter disallowing the credit amount in question. Set the math error per IRM 3.11.6.6.5 Send a 4364C letter disallowing the credit amount in question. Set the math error perIRM 3.11.6.6.5 Continue to process the return for other issues.

3.11.6.8.13.7  (01-01-2014)
American Opportunity Credit

  1. For claims involving the refundable portion of the American Opportunity Tax Credit (Form 8863) see IRM3.11.6.8.6.7 for processing procedures.

    Note:

    Form 8863 must be attached for the initial claim of the refundable portion of the American Opportunity Credit.

3.11.6.8.14  (10-22-2013)
Credit Elect (Line 22)

  1. A "credit elect" occurs when the taxpayer requests to have all or a portion of their overpayment from Form 1040X credited as an estimated tax (ES) payment to a succeeding tax year. Taxpayers request a “credit elect” by either entering an amount on Line 22 of Form 1040X, or in a written statement.

    Note:

    If the taxpayer requests to skip a consecutive tax year (e.g. 2012 to 2014) the credit can be moved if the credit module does not have a TC 150 posted.

  2. If the taxpayer is making a credit elect request and has a tax liability on another tax year or requests to transfer the "" credit to a prior year, the computer will automatically offset the correct amount and send a notice to the taxpayer explaining the offset. If the credit elect amount on Form 1040X is larger than the outstanding tax liability, transfer only the remaining credit amount. If not, continue processing the return.

    Note:

    An outstanding tax liability can be identified by an amount next to “TOTAL MOD BALANCE” field on IMFOLI. FMS debts can be found on IMFOLE with "I" , "B" or "F" next to the “FMS CD” field. If there are any balance(s) owed or the FMS CD is an "I" , "B" or "F" or then refer as CIS/AM. An "N" in the FMS CD field or it is blank indicates there is no debt.

  3. If the taxpayer requests a credit transferred to a full paid module, continue processing the return and input the credit transfer.

    Note:

    A credit posting to a full paid module will automatically refund. However the taxpayer could possibly have a situation where the credit is needed on the account. Either way we have honored the taxpayer's request.

  4. If the taxpayer is requesting a credit transfer larger than the overbalance on 1040X, transfer only the amount that is available and correspond with the taxpayer explaining the difference in amounts. Send a 474C letter with paragraphs C, U, 7. Use fill-in: "We did not apply the full amount of your credit to your tax for 20XX, because your overbalance of $X,XXX.XX is less than the amount requested."

    Note:

    If the taxpayer has a balance due on the 1040X, do not transfer any amount.

  5. For the last filed return, check TXMOD/IMFOL for the “UNAPPLD-CR-ELECT” amount (TC 836).

    If the amount on Line 22 of Form 1040X is THEN
    Equal to or less than the UNAPPLD-CRELECT amount (TC 836)
    1. Continue processing the return.

    2. Use RC 099.

    • Greater than the UNAPPLD-CR-ELECT amount (TC 836) or

    • The UNAPPLD-CR-ELECT field is not displayed

    1. Input the adjustment and include a Hold Code “1” to prevent an erroneous refund. Use RC 099.

    2. Move the credit using the IAT Credit Transfer Tool.

    Note:

    An unapplied credit elect occurs during original processing when the taxpayer’s overpayment is less than the requested credit elect. The unapplied credit elect reflects the difference between the requested credit and the credit available to transfer. Unapplied credit elects are created systemically. Any attempt to transfer more than the available credit manually will result in an unpostable condition.

  6. To process the credit transfer, first input the 1040X adjustment. Then open the IAT Credit Transfer Tool from TXMODA for the year of the Form 1040X.

    1. In the "Post Credit To (module) section" , change the tax period (TXPD) to the tax year that will receive the credit and then click on the Continue button.

    2. Click on the "Credit Elect" button and then verify the TC 710, Cr Date (041520XX) and credit amount post in the Post Credit As section.

    3. In the "Post All Credits With" section, verify XRET is in the Remarks field; otherwise, edit it in the Additional Remarks field.

    4. Click the Transfer button and review the adjustment on the DRT48 screen.
      - Debit: TRANS-DT>041520XX, TC 830, AMT>XXX.XX (amount being transferred out)
      - Credit: TRANS-DT>041520XX, TC 710, AMT>XXX.XX- (amount being transferred in).

    5. Transmit the credit transfer from IDRS.

    Note:

    Close the IAT Credit Transfer window that is displayed asking if another transfer is being requested.

  7. A "credit elect" can be recognized by TC 836 on the current year’s (2013) module and TC 716 on the following year’s (2014) module.

  8. If the taxpayer requests their "credit elect" from their original filed return to be applied to pay the balance owed on Form 1040X or to be refunded and:

    The taxpayer Then
    Files a superseding return (See IRM 3.11.6.2.3)
    1. Input the adjustment and include a Hold Code “1” to prevent an erroneous refund. If the taxpayer is only requesting the credit elect to be refunded, input TC 290 for .00.

    2. Move the allowable amount using the IAT Credit Transfer Tool.

    Does not file a superseding return
    1. Continue processing the return.

    2. Send a 247C letter using paragraphs A, D, S.

      Note:

      For paragraph D, use the credit elect amount from the taxpayer’s original return.

      Note:

      For paragraph S, use 0922.

  9. When moving the credit amount as stated in (9) above:

    1. Begin on the tax year receiving the credit (MFREQC if necessary).

    2. Verify a TC 710 and/or 716 is posted. If the amount requested by the taxpayer is not present, refer to CIS/AM.

    3. Open the credit transfer tool.
      - In the Post Credit To (module) section, change the tax period (TXPD) to match Form 1040X and click the Continue button.
      - In the Transferable Credits section, highlight the TC 716 (or TC 710). - Click the Move button.
      - In the Post Credit As section, change the TC 716 to TC 832.
      - In the Post All Credits With section, check the Credit Freeze box only if the credit is being used to pay tax.
      - In the Additional Remarks field edit XRET.
      - Click the Transfer button; review the credit transfer adjustment on the DRT48 screen. - Transmit the adjustment from IDRS.

  10. When a taxpayer requests a credit elect it is a binding election and can only be reversed and refunded to the taxpayer per the exceptions below. In order to process a credit elect reversal for IMF accounts, the request must be received:

    • Files a superseding return (See IRM 3.11.6.2.3)

    • Before the return for the credit year has posted, and

    • Before March 1, of the year following the year to which the credit was applied

      Example:

      A request to reverse a credit elect from a 2012 account back to the 2011 account must be received before the 2012 return has posted and by March 1, 2013.

      Exception:

      Requests received after March 1 can be considered if one of the conditions below applies:

    • There was an error in processing that can be verified, or

    • If the taxpayer erred on entering the overpayment as a credit elect, does not have an ES tax requirement, and the taxpayer does not have a filing requirement as determined by the income information on CC IRPTR (IRPTR information is usually available by June, or July at the latest, so anything prior to that would not involve a filing requirement determination).

  11. When reversing credit elects credit transfer the credit elect back to the year it generated from and allow it to refund.

3.11.6.9  (08-06-2013)
Correspondence Procedures

  1. It is sometimes necessary to correspond with the taxpayer:

    • When required information is needed to complete a claim, such as missing required forms or schedules, or missing signature(s) (Form 8009-A or the 324C letter)

    • Do not correspond when you can "dummy" the form or schedule from the information attached .

    • when disallowing or partially disallowing a claim (105C or 106C letter)

    • when correcting the computation for a claim (4364C letter)

    • when the taxpayer is claiming a credit which they already received (76C letter)

    • when the taxpayer is requesting direct deposit of a refund.

  2. Use the following guidance for correspondence unless otherwise directed with a specific instruction.

  3. Once you have determined the case is incomplete do not route it to Cat-A/Exam. Follow normal correspondence procedures.

  4. All correspondence issues need to be identified prior to initiating correspondence to ensure all items are requested at the same time.

    Note:

    Ignore dollar limit tolerances once correspondence has been initiated. Example: Correspondence is initiated because Form 1040X is missing a Schedule EIC but there is also an unexplained entry on line 7 of $400. Correspond addressing both issues

  5. Research TXMOD/IMFOL for various Transaction Codes, Freeze Codes, etc., that would result in routing the amended return. Do not correspond on a return that will be routed to an area other than CAT-A or EXAM. See IRM 3.11.6.6.4 . Also see IRM 3.11.6.10 when corresponding for missing forms, schedules or signature(s).

  6. IMFOLR screen prints are not required to be attached on paper filed returns.

  7. If correspondence is for a missing signature and the taxpayer is making a PECF request, wait until you secure a signature before processing the PECF request.

  8. In general, correspondence is issued on:

    1. Form 8009-A for net result refund or zero balance on Form 1040X. Form 1040X will be mailed back to the taxpayer with the Form 8009-A requesting the required information. Unless otherwise directed, input a TC 971 with AC 270 and use the current date for TRANS-DT field. Edit a brief action trail in the left margin of return of what is being requested from the taxpayer. See IRM 3.11.6.9.2.

    2. Letter 324C for net result balance due on Form 1040X, APO/FPO, and Disaster claims. Form 1040X is held in a suspense file (maximum 45 days) awaiting for the taxpayers reply. See IRM 3.11.6.9.1.

  9. When using Form 8009-A to correspond for missing Forms or Schedules per the chart below:

    1. Use box 4 if there is a form or schedule missing and it is clear which form or schedule is needed.

    2. Use box 5 when a form or schedule is missing, but it is not clear which one is needed (i.e. taxpayer has an entry on a line, and there is no indication what adjustment is involved).

  10. If the signature is present on a net zero tax change (e.g. TC 290 for .00) and the return is submitted only to provide additional information, do not correspond. For example, if the taxpayer states, "I forgot to attach Schedule B" and it's still not attached, do not correspond for the Schedule. Do not correspond if the change is the result of a ripple effect and the schedules or forms needed to support the change are missing.

  11. Follow the instructions below when the address on the Form 1040X does not match IDRS.

    IF AND THEN
    Corresponding using Form 8009-A An address change can be made per IRM 3.11.6.6.1 (4) Correspond using the address on the Form 1040X. Do not update IDRS (CC ENMOD) until reply is received.
    Corresponding using Form 8009-A An address change can not be made per IRM 3.11.6.6.1 (4) Correspond using the address of record on IDRS
    Corresponding using a C letter An address change can be made per IRM 3.11.6.6.1(4) Correspond using the address on the Form 1040X. (see IRM 3.11.6.9.1 further instructions)
    Corresponding using a C letter An address change can not be made for reasons other than missing signature Correspond using the address of record on IDRS (see IRM 3.11.6.9.1 further instructions)
    Corresponding using a C letter An address change can not be made due to a missing signature Correspond using the address of record on IDRS and suspend the return.

  12. Use Paragraph "Z" instead of "Y" when a contact name and number is not available, or when it is applicable to your campus.

3.11.6.9.1  (09-23-2013)
Corresponding on Net Balance Due Returns (324C Letter)

  1. When an amended return, reflects an overall balance due and is missing the required forms, schedules, signature(s), or other necessary information, input the adjustment using CC TXMOD and requesting the information using a 324C letter. Unless TIN validation is required, missing information including signatures can be allowed based on the taxpayer or IRS request.

    Exception:

    If the only issue is a missing signature you can issue your correspondence (324C Letter) at the same time you input your adjustments. When the taxpayer responds, associate the information with the adjustment document.

  2. If you suspend the return, the suspense period for the taxpayer to respond to the correspondence is a maximum of 45 days. Follow any local procedures for creating and maintaining suspense files.

    Note:

    Close any open case controls to your IDRS number before inputting an adjustment, routing, or no considering the claim.

    Note:

    Suspend the return if missing information prevents an adjustment from being made to the taxpayer's account.

  3. Do not correspond for an incorrect signature on a child's return, if the Form 1040X was signed by the parent identified on an attached Form 8615 (Line A)..

  4. After reviewing the taxpayers reply to suspended correspondence, it is determined that the correspondence was sent by IRS in error , process the return only for issues that can be determined. Send a 916C explaining why some issues were not addressed. Using paragraphs B,R,W,3 and fill-in: "We could not process a portion of your claim because the requested information was not submitted or it was unclear what adjustment was being requested." Include "You did not provide [insert a description of the missing information]" . Also include a "Corrected" Form 1040X showing the adjustment being processed as an enclosure. When inputting the return on IDRS, use the Received Date from the return as the Received Date and Amended Claims Date. See IRM 3.11.6.2.4

  5. If the reply to suspended correspondence is received within the 45 day suspense period and:

    1. All the requested information is supplied, continue processing the return. On the ADJ54 screen, use the original or edited Received Date from the return as the Received Date and the Received Date from the taxpayers reply as the Amended Claims Date.

    2. The taxpayer does not supply all the requested information and the return is still incomplete and unprocessable, correspond with the taxpayer following the procedures outlined below

  6. If no reply is received, after the 45 day suspense period input the return for only the issues that can be determined. Send a 4364C letter per IRM 3.11.6.6.5. Also include the statement "You did not provide (insert a description of the missing information." If no issues are processable send a 916C letter per IRM 3.11.6.9.10

  7. If a reply is received after the amended return is closed per paragraph (6) route the claim to CIS/AM as research and corrective action will need to be taken that cannot be done by SP.

3.11.6.9.2  (09-23-2013)
Corresponding on Net Refund and Zero Balance Returns (Form 8009-A)

  1. When an amended return reflects a net overall refund or zero balance and is missing required forms, schedules, signature(s), or other necessary information, complete Form 8009-A and attach to Form 1040X. Circle out the Received Date and input a TC 971 with Action code 270 and use the current date in the TRANS-DT field. Place your employee number and the current date in the top left margin of the return, or in the appropriate place as specified by your site. The amended return with the Form 8009-A attached is to be mailed back to the taxpayer. For a missing Received Date see IRM 3.11.6.2.4

    Exception:

    If the signature is missing on an overall zero balance return. Use a 324C letter to request signature if the signature is the only issue and process the return at the same time., Otherwise mail back using Form 8009-A requesting the signature and other necessary information..

    Note:

    Do not input a TC 971 on CP - 08, 09 or 27 notices that are being sent back to the taxpayer.

    Note:

    If a TC 971 AC 270 is entered on IDRS and the correspondence will not be sent to the taxpayer, use CC TERUP (work leader CC RVIEW) to cancel the pending transaction. If past the time frame where TERUP/ RVIEW can be used, input a TC 972 AC 270 to reverse the transaction, using the date from the TC 971 AC 270 in the TRANS-DT field. A TC 972 should be input by work leaders and reviewers only.

  2. When the taxpayer responds with all the requested information, continue processing the return. On the ADJ54 screen, use the Received Date from the taxpayers reply as both the Received date and Amended Claims Date.

    Note:

    To prevent the IRS from erroneously having to pay interest on the taxpayers refund, do not use the original circled out Received Date.

  3. If the taxpayers reply on a refund return is incomplete or unprocessable, adjust the account for only the issues that are processable and send the 4364C letter per IRM 3.11.6.6.5. Essentially this tells the taxpayer we cannot process the claim for certain items and they will now be required to file a new claim with the required information for these items. Include "You did not provide [insert a description of the missing information]." If no issues are processable send a 916C letter per IRM 3.11.6.9.10

  4. If it is determined that the correspondence was sent by IRS in error, process the return. for only issues that can be determined. Send a 916C with paragraphs B,R,W,3 explaining why some issues were not addressed. Using fill-in: "We could not process a portion of your claim because the requested information was not submitted or it was unclear what adjustment was being requested. You did not provide [insert a description of the missing information]." Include a "Corrected" Form 1040X showing the adjustment being processed as an enclosure. When inputting the return on IDRS, use the original Received Date as the Received Date and Amended Claims Date. See IRM 3.11.6.2.4.

  5. If a signature is missing on a Disaster Claim, correspond using a 324C Letter. Do not mail back the return regardless if it is a refund or zero tax change return. Suspend the return until you secure a signature only on refund returns. Use the statement "You did not provide [insert a description of the missing information]." Include the toll free linephone number on the letter. If no reply is received return the entire claim to the taxpayer using a 916C letter, paragraphs B, F, R, W, 4. Essentially this tells the taxpayer we cannot process the claim and they will now be required to file a new claim with the required information..

  6. If returning a CP notice for a missing signature, see IRM 3.11.6.11(6)

  7. A new Form 8009-A was developed for SP. When using Form 8009-A verify the box used is the correct issue needing correspondence.

3.11.6.9.3  (08-06-2013)
Correspondence for Disallowing a Claim (105C and 106C Letters)

  1. Use the 105C letter for disallowing the total claim and the claim is the only issue. Use paragraphs A, C, 5, 6 and e with the appropriate fill-in provided in the specific instruction. Input the adjustment as follows: -- TC 290 .00 -- Blocking Series 99 -- Source Code 0 -- Reason Code for what is being disallowed. Attach an IMFOLR screen print to the front of the 1040X below the entity section.

    Note:

    If the original return was paper filed, use blocking series 98.

  2. Use the 106C letter for disallowing the total claim and there are other issues present. Use paragraphs A, D, H, I, M with the appropriate fill-in provided in the specific instruction. Recompute the Correct Amount column without the disallowed claim and input the adjustment as follows: -- TC 29X for the corrected total tax Blocking Series 00 -- Source Code 1 -- Appropriate RNs/CRNs and RCs to process the return for other issues. Attach an IMFOLR screen print to the front of the 1040X below the entity section.

    Exception:

    When the disallowance of a claim results in a balance due then send a 105C letter. Input the adjustment following procedures outlined in (2) above.

    Note:

    If the original return was paper filed .use blocking series 18.

  3. When the claim is being disallowed due to the Statute of Limitations SeeIRM 3.11.6.3.3

3.11.6.9.4  (08-19-2013)
Correspondence for Correcting a Claim (4364 Letter)

  1. Use the 4364C letter for partially disallowing a claim where the claim is allowed and is not computed correctly. The 4364C letter provides only generic information and is utilized for returning a corrected copy of the taxpayer's Form 1040X. The corrected copy of the 1040X is routed to the Letter Processing unit by printing the IDRS Letter Enclosure (Form 5703), the 4364C correspondence enclosure cover sheet, and attaching a printed copy of the xClaim Corrected 1040X screen.

  2. When sending a 4364C and setting a math error (tax increases/credit decreases) on the module per IRM 3.11.6.6.5:

    1. Send a 4364C letter to explain the changes. Use paragraphs B, F, Z, 0, 1 when setting a math error and the TP has income subject to SE tax and use paragraphs B, F, Y, 0, 1 when setting a math error for all other adjustments. Include fill-in: "Specifically, we corrected Line #, Column # of Form 1040X, due to [description of error]." Print a copy of the 4364C correspondence enclosure cover sheet. Print two copies of the xClaim Corrected 1040X screen. Attach one copy behind the 4364C correspondence enclosure cover sheet and one copy behind the taxpayer’s Form 1040X. Follow local procedures for routing the enclosure to the letter processing unit.

    2. Input the adjustment:
      -- TC 29X for recomputed corrected tax
      -- Blocking Series 78
      -- Source Code 6
      -- Appropriate RNs/CRNs and RCs to process the return for the corrected amount(s) and any other issues.

      Note:

      If the original return was filed electronically, use blocking series 77 and attach a copy of the IMFOLR print to the front of the 1040X below the entity section.

  3. When sending a 4364C and a math error is not being set (tax decreases/credit increases) on the module per IRM 3.11.6.6.5:

    1. Send a 4364C letter to explain the changes. Use paragraphs A, F, Y, and 0 Include fill-in: "Specifically, we corrected Line #, Column # of Form 1040X, due to [description of error]." Print a copy of the 4364C correspondence enclosure cover sheet. Print two copies of the xClaim Corrected 1040X screen. Attach one copy behind the 4364C correspondence enclosure cover sheet and one copy behind the taxpayer’s Form 1040X. Follow local procedures for routing the enclosure to the letter processing unit.

    2. Input the adjustment:
      -- TC 29X for recomputed corrected tax
      -- Blocking Series 05
      -- Source Code 2
      -- Appropriate RNs/CRNs and RCs to process the return for the corrected amount(s) and any other issues. Attach an IMFOLR screen print to the front of the 1040X below the entity section.

3.11.6.9.5  (08-13-2013)
Correspondence for Requesting Credit Previously Received (76C Letter)

  1. Use the 76C letter, "Claim for Refund Approved/Correct/Reduced/Math Error" , when disallowing a total claim when a taxpayer is eligible for and has already received the credit being claimed. An example of this is when a credit is automatically generated and sent to the taxpayer and the taxpayer also submits a claim for the credit.

  2. When sending the 76C letter and the claim is the only issue, use paragraphs A, L, and O with the appropriate fill-provided in the specific instruction. Input the adjustment as follows:
    -- TC 290 .00
    -- Blocking Series 05
    -- Source Code 0
    -- No reason code
    -- Attach an IMFOLR screen print to the front of the 1040X below the entity section.

  3. Use the 76C letter for a claim and there are other issues present, use paragraphs A, L, and O with the appropriate fill-in provided in the specific instruction. Recompute the Correct Amount column without the disallowed claim and input the adjustment as follows:
    -- TC 29X for the corrected total tax
    -- Blocking Series 05
    -- Source Code 1
    -- Appropriate RNs/CRNs and RCs to process the return for other issues
    -- Attach an IMFOLR screen print to the front of the 1040X below the entity section.

  4. If a fill-in is not provided in the specific instructions use the following: "We did not allow (Appropriate Title) Credit because our records indicate that you previously received the credit as part of your original or amended return."

    Note:

    Appropriate Title will be the title of the Form or Schedule previously received.

3.11.6.9.6  (08-06-2013)
Corresponding on Direct Deposit Issues

  1. If Form 1040X is being routed out, direct deposit issues do not need to be addressed.

  2. If the taxpayer is requesting direct deposit of a refund or is changing their direct deposit information, send a Form 8009-A with box 13 checked back to the taxpayer.

    Note:

    Do not input a TC 971.

  3. If the taxpayer requests Direct Deposit or submits a Form 8888, Direct Deposit of Refund to More Than One Account, correspond using Form 8009-A , box 13. This also applies to CP notice requests for Direct Deposit.

    Note:

    If taxpayer provides a void check return it with the Direct Deposit request.

  4. Take the following action for processing the Form 1040X

    If Then
    Form 1040X has issues other than the direct deposit Continue to process the return
    Direct deposit is the only issue Input TC 290 .00.

    Note:

    TC 290 .00 does not require a reason code.

3.11.6.9.7  (01-01-2014)
Amended Claims Date

  1. Use REQ54 to input the AMD-CLMS-DT.

    1. Use the IRS received date as the amended claims date. .

    2. For suspended correspondence, the Amended Claims Date is the received date on taxpayer's reply that allows you to process the return.

    3. An amended claims date is now required on every adjustment regardless of the 45 day period.

      Exception:

      A correction of a math error will NOT receive an amended claims date. However, if a taxpayer is responding to a math error and also claiming an additional change to the original return, two adjustments will be necessary if working the claim 45 days or less from the received date, one without the amended claims date (for the math error issue) and one with the amended claims date (for the non-math error issue). Use Hold Code (HC) 4 on the first adjustment and a Posting Delay Code (PDC) of 1 on the second.

      Reminder:

      On math error corrections use Source Code 2.

      Note:

      This change in the amended claims was implemented so areas required to calculate manual interest and penalties had a computation date on which to base their calculations.

  2. For CP 08, 09 and 27 processing, use Priority Code "3 " instead of Amended Claims Date.

  3. See IRM 3.11.6.2.4 for determination of Received Date.

3.11.6.9.8  (01-01-2014)
Undelivered Correspondence

  1. When correspondence to the taxpayer is return undelivered, research IDRS for a better address, the return envelope/packet, or use the yellow address change sticker provided by the U.S. Postal Service on the envelop. Compare the entity on the yellow sticker to the name and address using CC ENMOD to verify it is the same taxpayer.

    Note:

    CC: INOLES has a bad address indicator "UAA" in field 7.

  2. When a new address is found:

    IF   THEN
    The undeliverable correspondence was returned with a United States Postal Service (USPS) yellow sticker and contains a new address. Verify the person listed on the sticker is the taxpayer. 1. If the person listed is the taxpayer then reissue the correspondence using the new address.

    Caution:

    Do not use CC ENREQ/INCHG to update the address on IDRS to the address listed on the yellow sticker.

    Note:

    If it is a suspense case close and then re-open the suspense case to allow the taxpayer 45 days to respond from the date of the newly issued letter.

    There is not a USPS yellow address sticker with a new address or the person listed on the sticker was not the taxpayer but a new address is found on IDRS or attachments.   Re-issue the correspondence using the address found on IDRS or attachments.

    Note:

    If it is a suspense close and then re-open the suspense case to allow the taxpayer 45 days to respond from the date of the newly issued letter.

    Note:

    When determining which address is newer always compare using the cycle of the address.

  3. When a new address is NOT found:

    IF THEN
    The return is a zero balance return Adjust the account per the return. Use the earliest received date.
    Correspondence was an 8009-A or a 324C letter requesting missing information Use Form 9856 to route the correspondence to files based on the DLN of the TC 29X which corresponds to the return. If a TC 29X is not present use Form 9856 to associate the correspondence with the controlling DLN of the return (TC 150).

    Exception:

    1.DO NOT attach information to an ELF return. To identify an ELF DLN refer to Document 6209, Section 4, Part 3 Campus and Filing Location Codes. File the information using TC 290 with the blocking series 05.DO NOT use Form 9856.

    Correspondence was a 916C letter with the original 1040X attached or was generated for missing information. Input a TC 290.00 and route the return to files.
    Correspondence was a 916C letter with a “Corrected” Form 1040X attached or a 4364C letter that does not contain appeal rights Use Form 9856 to route the correspondence to files based on the DLN of the TC 29X which corresponds to the return.
    The correspondence was a formal disallowance or contained appeal rights Use Form 9856 to route the correspondence to files based on the DLN of the TC 29X which corresponds to the return. If a TC 29X is not present use Form 9856 to associate the correspondence with the controlling DLN of the return (TC 150).

    Exception:

    1.DO NOT attach information to an ELF return. To identify an ELF DLN refer to Document 6209, Section 4, Part 3 Campus and Filing Location Codes. File the information using TC 290 with the blocking series 05.DO NOT use Form 9856.

    Correspondence was for informational purposes (such as Direct Deposit) Destroy as classified waste per local management.

  4. For undelivered CP 08, 09 and 27 notices, destroy as classified waste per local procedures.

3.11.6.9.9  (09-23-2013)
Correspondence Received, Unable to Locate Amended Return

  1. When the taxpayer replies to correspondence and you are unable to locate the suspended original amended return and the return was not forwarded to AM proceed as follows:

    If the correspondence was And
    Received after 45 calendar days 1. The correct assessment was not made, use the TC 290 DLN when completing Form 10054 or Form 9856 to associate the correspondence and route to Files.
    2. Request the missing suspended original amended return be submitted again using the 282C Letter. Use paragraphs A, D, K, W, 0, with the following fill-in: "Please file another Form 1040X and attach copies of any schedules or documents included with the original Form 1040X. Sign and date the return(s). If you are filing jointly with your spouse, he or she must also sign."
    Received within 45 calendar days Request the missing suspended original amended return be submitted again using the 282C Letter. Use paragraphs A, D, K, W, 0, with the following fill-in: "Please file another Form 1040X and attach copies of any schedules or documents included with the original Form 1040X. Sign and date the return(s). If you are filing jointly with your spouse, he or she must also sign."
    Amended return was forwarded to AM. CIS/AM

3.11.6.9.10  (08-13-2013)
Correspondence for “No Consideration” of a Claim (916C Letter)

  1. Use 916C letter to no consider a claim when insufficient information has been provided to process the entire return. A 916C letter informs the taxpayer we cannot process their claim and they now must file a new claim with the requested information.

  2. When issuing a 916C letter, and the entire claim is being returned to the taxpayer use paragraphs B, F, Q, R, W, 4. If a corrected Form 1040X is being sent to the taxpayer use paragraphs B, Q, R, W, 3. If the return is being no considered due to unsubstantiated withholding benefits from Social Security use paragraphs, B, F, Q, R, W, Z, 4. For paragraph Q use fill-in: You did not provide [insert a description of the missing information].For paragraph R use fill-in: "When resubmitting your claim, please include Form 1040X in addition to your supporting documentation. If you need forms, schedules or publications to respond to this letter, you can obtain them by visiting the IRS website at www.irs.gov or by calling 1-800-TAXFORM (1-800-829-3676)." .

    Note:

    If the entire return is being sent back to the taxpayer circle out all received dates.

  3. When issuing a 916C letter, include “Y” in the enclosure field on CC LPAGE.

  4. Input a TC 971 AC 270 when returning the entire claim to the taxpayer.

  5. If a reply to the 916C is received and the taxpayer still has not submitted the requested information then input a TC290 for .00 and route to files.

  6. For statute returns see IRM 3.11.6.3.3

  7. If a response to a 916C letter is received with no amended return attached, route to CIS/AM.

3.11.6.10  (05-23-2013)
Correspondence Chart of Issues, Appropriate Letters and Paragraph Fill-ins

  1. The following table is a guide in corresponding with the taxpayer on a multitude of issues. It is not all inclusive, but should cover most situations.

    Note:

    In a cost savings initiative the enterprise is discontinuing the practice of sending blank forms in taxpayer correspondence. The Form 8009-A will be updated to direct the taxpayer to the IRS website and/or contact for Forms and Publications so the taxpayer can download or order necessary forms. Currently not all the "C" letters offer this alternative. Unless enclosing a form is absolutely necessary tax examiners will not use the form enclosures on the letter and will insert the following fill-in paragraph "If you need forms, schedules or publications to respond to this letter, you can obtain them by visiting the IRS website at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676). " Currently the 324C letter (para V) and the 105C letter (para 9) offer this fill-in. Since it will be some time before all the "C" letters are updated the 324C letter has been updated to allow a letter to be sent without enclosures. See note below for examples.

    Note:

    Multiple forms and schedules can be requested in paragraph V of the 324C. Examples: "Please complete Form XX and Schedule XX to support the changes you have made." or "Please complete Schedule XX, Schedule XX, and Form XX to support the changes you have made." The paragraph change and the fill-in has been incorporated into the tables below.

        ENTITY ISSUES    
      IF AND 324C (8009-A)
    1. Tax Period is missing You cannot determine the correct tax period through IDRS research and attachments, for ANY dollar amount. Paragraphs: B, Y Box 11 Note: Do not input TC 971 and AC 270
    2. Primary TIN cannot be determined ALL attempts have been made (e.g. reviewed attachments, IDRS research, etc.) to secure the TIN Paragraphs: D, Y Box 12 Note: Do not input TC 971 and AC 270 (only when the primary TIN cannot be determined)
    3. TP is changing to FS 2 and the Secondary TIN cannot be determined ALL attempts have been made (e.g. reviewed attachments, IDRS research, etc.) to secure the TIN Paragraphs: D, Y Box 12 Note: Do not input TC 971 and AC 270 (only when the primary TIN cannot be determined)
    4. The TP is changing to FS 4 TP is claiming a qualifying non-dependent and the name of the QND is not provided Paragraphs: A, F, Y Box 9 Fill-in: Please provide the name of the person who qualifies you as Head of Household.
    5. TP is FS 4 Removing all dependent exemptions and does not change to FS 1 or provide the name of the QND. Paragraphs: A, F, Y Box 9 Fill-in: Please provide the name of the person who qualifies you as Head of Household.
        MISSING FORMS AND OR SCHEDULES    
    6. Forms or schedules to support the change are missing Change is the result of a ripple effect Do NOT correspond Do NOT correspond
    7. Schedule A is missing The TP is changing from a standard deduction to itemized deduction or TP is increasing deductions on an existing Schedule A and does not explain the type of deduction and the change is not the result of a ripple effect Paragraphs: A, V, Y
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
     
    8. Schedule EIC is missing The change is not the result of a ripple effect A, V, Y
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
    Box 4 or 5
    9. Schedule L is missing (TY 2009 & 2010 only) TP is increasing deductions and is not the result of a ripple effect (i.e. FS change from 1 to 4) Paragraphs: A, V, Y
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
    Box 4 or 5
    10. Schedule M is missing Taxpayer is claiming The Government Retiree Credit Paragraphs: A, V, Y
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
    Box 25 Fill-in: Schedule M is required, please send us the completed schedule.
    11. Schedule R/3 is missing or incomplete Any amount claimed Paragraphs: A, V, Y
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
    Box 4 or 5
    12. Schedule SE (TP is FS 2 and both taxpayers have SE tax) They have combined their SE tax onto 1 Schedule SE Paragraphs: A, V, Z Fill-in: Taxpayers filing jointly must file separate Schedules SE if they both have self-employment income. If only one spouse has self-employment income list only that spouse’s name on the Schedule SE. Otherwise, file two separate Schedules SE. Box 13
    13. Schedule SE (TP is FS 2 and both taxpayers have SE tax) Schedule SE is missing and you cannot determine which TP account to adjust Paragraphs: A, L, Z Box 13
    14. Form 1099-G for unemployment compensation is missing (TY 2009 only) Taxpayer is reporting all or a portion of their unemployment benefits are non-taxable and the income cannot be verified on IRPTR (TY 2009 only) Paragraphs: A, V, YFill-in: Please provide a copy of your Form 1099-G to support your unemployment compensation amount. Box 25 Fill-in: Please provide a copy of your Form 1099-G to support your unemployment compensation amount.
    15. Form 1099-G for unemployment compensation is missing There is a change to withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and it cannot be verified on IRPTR Paragraphs: A, V, YFill-in: Please provide a copy of your Form 1099-G to support your change in withholding. Box 17
    16. Form 2106, Employee Business Expense, is missing; there is no explanation of source of the miscellaneous deductions The amount of the unreimbursed employee expense ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    17. Form 2120, Multiple Support Declaration is missing Form 8332 or a copy of the divorce decree is not attached See box 32 See box 32
    18. Form 2439, Notice to Shareholders of Undistributed Long-Term Capital Gains, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 14 of Form 1040X Paragraphs: A, V, Y Fill-in: Please provide Form 2439 to support your change to line 14. A duplicate or photocopy is acceptable. Box 18
        MORE MISSING FORMS AND SCHEDULES    
    19. Form 2441, Child and Dependent Care Credit is missing The change is not the result of a ripple effect Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    20. Form 2441, Child and Dependent Care Credit is missing Lines 1c and 2b cannot be determined through research Paragraphs: A, K, Y Box 19:
    21. Form 2441, Child and Dependent Care Credit is missing Line 4 Part II is blank and cannot be determined through research Paragraphs: A, V, Y Fill-in: Please provide your Earned Income amount on Line 4, Part II. This line must be completed. Box 21
    22. Form 2441, Child and Dependent Care Credit is missing line 5 is blank and cannot be determined through research (FS 2 only) Paragraphs: A, V, Y Please provide the spouse’s Earned Income amount on Line 5, Part II of Form 2441 This line must be completed when married filing a joint return. Box 22
    23. Form 3800, General Business Credit, or the supporting forms are missing for a specific credit. Any amount claimed Paragraphs: A, V, Y Note: Request the specific credit form. If the specific credit is not known, request Form 3800
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 Note: Request the specific credit form. If the specific credit is not known, request Form 3800
    24. Form 4136, Credit for Federal Tax Paid on Fuels, is missing The amount claimed ≡ ≡ ≡ ≡ Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    24a Form 5329, Addtional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts If the taxpayer is reporting they are not subject to the 10% penalty, Form 5329 must be attached. See IRM 3.11.6.8.7.1 paragraph 4. Paragraphs A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    25. Form 5405, First Time Homebuyer Credit Any amount claimed and Form is missing Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4
    26. Form 5405, First Time Homebuyer Credit Form 5405 revision date is NOT (Rev. Dec 2009) and the home was purchased on or after November 7, 2009 A, V, Y Fill-in: Use the fill-in from 8009-A column. Box 25 Fill-in: New legislation on the First Time Homebuyer Credit requires a revised Form 5405. Please re-submit your Form 1040X with the new Form 5405 and any documentation requested. Please ensure all questions on the Form 5405 are addressed and/or answered. Please check www.irs.gov to download the revised form or you can secure the form at your local library. We apologize for any inconvenience.
    27. Form 5405, First Time Homebuyer Credit The acquired date is a future date compared to the receive date on Form 1040X A, V, Y Fill-in: The First Time Homebuyers Credit is not available until a home has been purchased. The date entered on the Form 5405 indicates you plan to purchase the home in the future. We cannot allow the credit until after you have acquired the home. Please resubmit your claim at that time. Note: If other issues are present refer to 76C letter instructions. Box 25 Use 324C Fill-in. Note: If other issues are present refer to 76C letter instructions.
    28 Form 5405, First Time Homebuyer Credit The acquired date is incomplete or missing and cannot be verified on the settlement statement or attached documents Paragraphs: A, V, Y The date you acquired your home must be present on Part I line B of the Form 5405, First Time Homebuyer Credit and the home must have been already purchased in order to claim this credit. Note: If other issues are present refer to 76C letter instructions. Box 25 Use 324C fill-in Note: If other issues are present refer to 76C letter instructions.
    29. Form 5405, First Time Homebuyer Credit One of the following is not attached:
    A valid settlement statement, or
    A valid executed retail sales contract, or
    An Occupancy statement
    A, V, Y Fill-in: We cannot allow the First Time Homebuyer Credit until we have the following documentation. Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names, property address, sales price and date of purchase. Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price, signatures and date of purchase. Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address, and date of the certificate. Box 29 Use 324C fill-in
    30. Form 5695, Residential Energy Credits The change is not the result of a ripple effect Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    31. Form 6478, Alcohol and Cellulosic Biofuel Credit, is missing and Form 3800 is not attached Any amount claimed Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    32. Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents is not attached. A copy of the divorce decree or Form 2120 is not attached Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 15
    33. Form 8396, Mortgage Interest Credit, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 5
    34. Form 8826, Disabled Access Credit, is missing and Form 3800 is not attached The amount claimed Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    35. Form 8834, Qualified Electric Vehicle Credit is missing, and Form 3800 is not attached The amount claimed is not the result of a ripple effect Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    36. Form 8839, Qualified Adoption Expenses is missing 1040X Units are not working these claims in the current year or prior year.    
    37. Form 8835, Renewable Electricity, Refined Coal, and Coal Production Credit is missing, and Form 3800 is not attached. The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    38. Form 8863, Education Credit (Line 7 or 14 of Form 1040X) Is missing, any amount claimed and the change is not the result of a ripple effect. Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    39. Form 8863, Education Credit (Line 7 and/or 14 of Form 1040X) Is attached, the student’s name and/or TIN is missing and cannot be determined Note: Form 1098-T may be used to determine the student’s name and/or TIN Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    40. Form 8864, Bio-diesel and Renewable Diesel Fuel Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    41. Form 8880, Credit for Qualified Retirement Contributions The change is not the result of a ripple effect Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    42. Form 8907, Non-conventional Source Fuel Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    43. Form 8910, Alternative Motor Vehicle Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    43a Form 8917 Any amount claimed Paragraphs A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    44. Any Form or Schedule (not previously listed) is missing to support the change The refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, V, Y
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
        WITHHOLDING    
    45. Form W-2 or Form 1099 Series is missing. Exception: Form 1099-G, Unemployment Compensation. The change to withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and cannot be verified on IRPTR Paragraphs: A, M, Y, 6 Box 17
    46. Form W-2 or W-2C is missing IRC 127 exclusion ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, V, Y Fill-in: Please provide a copy of your Form W-2 to substantiate your claim for a reduction of wages due to employer provided educational assistance benefits. We will accept a duplicate from your employer or a photocopy. Box 25
        SIGNATURE ISSUES    
    47. A signature is missing Conditions 1 or 2 do NOT apply:
    1.Taxpayer is divorced (net zero or tax increases only), spouse overseas, or
    2.An “amended” Form 1040 reflecting the 1040X information is attached & signed
    Paragraphs: A, P, Y, b Box 1

    Note:

    Include box a. if it is a joint return.

    48. A signature is missing on a decedent return The return is not signed by a surviving spouse, an attorney, CPA, or representative of a bank/fiduciary institution Paragraphs: A, P, Y, b Note: Do NOT address correspondence to the deceased taxpayer Box 1 Exception: Do Not correspond on refund returns.
    49. A signature is someone other than the taxpayer (there is clear indication that the TP is a minor child) A parent did not sign, or fiduciary relationship such as a Guardian is clearly identified and the tax decrease/credit increase ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A, P, Y, b Box 1 and box c.
    50. The return is signed by someone other than the taxpayer The following apply:
    1.No General/Durable POA is attached
    2.Form 2848 is not attached
    A, P, Y, 5, b Box 2 Note: Include Form 2848 as an enclosure
    51. The return is signed by someone other than the taxpayer There is no declaration of good standing attached and POA is granted to an attorney, CPA enrolled agent, or enrolled actuary A, P, Y, 5, b Box 2 Note: Include Form 2848 as an enclosure
    52. The return is signed by someone other than the taxpayer Form 8821 is attached and the appointee signed the return A, P, Y, 5, b Box 2 Note: Include Form 2848 as an enclosure
    53. The return is signed with an “X” Two witnesses did not sign A, P, Y, b Box 1b
    54. The jurat is missing

    Note:

    if the jurat has been altered route as Frivolous.

    There is no amended Form 1040 attached or if attached the jurat is missing A, P, Y, b Send 324C letter do not mail the return back.
        EXEMPTIONS    
    55. TP is claiming an exemption who did not live with him/her due to a divorce or separation   See box 32 See box 32
    56. Name and/or TIN is missing, or TIN and/or name does not match INOLE, or TIN cannot be determined through IDRS research
    1.Amish or Mennonite is not indicated, or
    2.Form 4029 is not indicated or attached, or
    3.The dependent was not born and died in the same year.
    Paragraphs: A, T, Y Box 10
        EXPLANATION    
    57. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is no explanation of the change and you are unable to determine through attachments Paragraphs: A, V, Y For the fill-in in paragraph V use: "We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 4 and 16
    58. There is a new unsubstantiated credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is no explanation of the change for the credit Paragraphs:A, J, V, Y For the fill-in use:"We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 5 and 16
    59. Form 1040X Lines 1 – 14 columns A and C match the information on IDRS. (For the single column Form 1040X there is no indication of a change) There is no explanation of the change, and you are unable to determine through attachments Paragraphs: A, V, Y For the fill-in use: "We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 16
        Estimated Tax Penalty    
    60. Amending to change the estimated tax penalty (TC 170 / 176) No Form 2210 Send the taxpayer a 369C letter using paragraphs: A,G, I, O, 4, d

    Note:

    For telephone number use 1-800-829-1040

    N/A

3.11.6.11  (08-06-2013)
1040X Routing Guide

  1. Dollar ($) Tolerance is the change to Total Tax (Line 10) unless otherwise indicated. CAT A tolerances refer to Total Tax decrease as a direct result of the specific condition without regard to the module balance.

  2. If an IRM tridoc and the routing guide contain conflicting information; the specific section instruction takes precedence over the general instruction contained in the routing guide.

  3. The Condition column cited in the 1040X Routing Guide pertains to a known change in the issues contained therein. If it is clear the Condition is not changing then the claim should be worked following IRM procedures and Not routed. If it is unclear, due to lack of information provided, whether or not the claim involves a change to the Condition then the claim should be referred to the work leader or manager for clarification.

      CONDITION TOLERANCE ACTION
      9th Amendment to the U.S. Constitution Taxpayer’s objection to military spending   Frivolous
    A) Advanced EIC (change to)   CIS/AM
      Affordable Care Act   CIS/AM
      African-American Reparation Tax   Frivolous
      Age Discrimination Claims (IRC 104(a)(2))   CIS/AM
      Alimony Paid deduction (TIN of recipient provided)   CIS/AM
      Altered Form Tax returns with altered line item(s) with the intent of showing noncompliance with the tax laws   Frivolous
      Alternative Minimum Tax (Form 6251 – Alt Min Tax)   See IRM 3.11.6.8.5
      American Indian Credit (Form 8845) Claim reducing taxable income by substantial amounts citing American Indian Employment Credit   Frivolous
      Archer MSA (Form 8853) Any CIS/AM
      Argument Filing of tax return or paying tax Government action/inaction (claim of deduction or credit based on dissatisfaction with government action or spending)   Frivolous
    B) Black Taxes   Frivolous
      Bosnian Refugees Claim eliminating tax based on status as Bosnian refugee   Frivolous
      Burleson Tax Court Decision Transportation Expense tax deduction   Cat A
      Butcher’s Union Co. City vs. Crescent City, CO (IRC 1001)   Frivolous
    C) Casualty Loss    
      Non-Disaster ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Disaster (Fm 4684 / Sch A) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Expedite to CAT A
      CIS imaged Form 1040X   CIS/AM
      City of Detroit Policemen and Firemen disability retirement benefits   Cat A
      Clean-Fuel Vehicle - (IRC 179A)   CIS/AM
      Code of Federal Regulations (CFR 1.86   Frivolous
      Court Cases cited    
      Butcher’s Union City vs. Crescent City, CO   Frivolous
      Eisner vs. Macomber   Frivolous
      Mayo Clinic   Cat A
      Minn vs. Apfel   Cat A
      U.S. vs. Long   Frivolous
      Williams Claims   CIS/AM
      Constitutional objection to income tax   Frivolous
      CONDITION TOLERANCE ACTION
      Combat Zone Balance due return CIS/AM
      CP Notices    
      CP 59   Collections
      CP 85/ A/B/C with correspondence attached   See IRM 3.11.6.8.3.1.1

    Note:

    These CPs are worked with Form 1040X or loose.

      CP 87 /A/B/C/D with correspondence attached   SeeIRM 3.11.6.8.3.1.1

    Note:

    These CPs are worked with Form 1040X or loose.

      CP 503 / 504 / 523   Collections
      CP 2000 / 2005 / 2006 / 2057 / 2501 Check last process code of the TC 922   Underreporter
    D) Disabled Access Credit (Form 8826) ≡ ≡ ≡ ≡ ≡ Return contains Sch C, E, F, or evidence of “other” income Cat A
      Decedent Return
    • Form 1310 is attached

    • MFR 08 present on INOLES

    • Refund returns

      CIS/AM
      Disaster Claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Disaster Return (no TC 150)   Expedite to CIS/AM
      Disallowed claim resubmitted   CIS/AM
      Domestic Production Activities Deduction (Form 8903)   CIS/AM
      Defense of the Married Act (DOMA)   CIS/AM
      Dual Status   CIS/AM
    E) Eisner vs. Macomber Wages reported, but all or portion of income is deducted as nontaxable compensation with Eisner vs Maccomber reference   Frivolous
      Erroneous Refunds   CIS/AM
      Estimated Tax (ES) Penalty TC 170/176 on the account Any These claims are workable. The estimated tax penalty is based on the original return. SeeIRM 3.11.6.8.10.1
      Examination Classification Disallowed or Rejected   CIS/AM
      Excess Contributions to an IRA   CIS/AM
      Extraterritorial Income exclusion (Form 8873)   CIS/AM
    F Federal Reserve Notes are not Legal Tender - Argument that Federal Reserve notes are not money so they are not income when received   Frivolous
      Fellowship, grant, or stipend ≡ ≡ ≡ ≡ Cat A
      FICA (SS Tax) / RRTA - Refund claim for students based on IRC 3121(b)(10) ≡ ≡ ≡ ≡ ≡ Cat A
      FICA (SS Tax) / RRTA - Refund claim for student nurses based on IRC 312(b)(13) ≡ ≡ ≡ ≡ Cat A
      FICA (SS Tax) / RRTA - Refund Claim by foreign student   CIS/AM
      FICA (SS Tax) / RRTA - Refund Claim by religious group   Cat A
      Fifth Amendment Improper blanket assertion of the Fifth Amendment right against self-incrimination as a basis for not providing financial information   Frivolous
      Fisher vs. U.S. Protective Claim   Cat A
      Fiscal Year Filer   CIS/AM
      CONDITION TOLERANCE ACTION
    F) Foreign
    • Address

    • Income excluded

      CIS/AM
      Forms    
      433-D Installment Agreement   Collections (CSCO)
      499/W-2PR/W-3PR Withholding Statement   CIS/AM
      843-Claim for Refund and Request for abatement   CIS/AM
      906-Closing Agreement Reference   Cat A
      911-Request for Taxpayer Advocate Service Assistance   TAS
      926, Return by a U.S. Transferor of Property to a Foreign Corporation   CIS/AM
      982-Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)   CIS/AM
      1040 (unrelated)   Detach and route to Receipt and Control
      1040-C U.S. Departing Alien income tax return   CIS/AM
      1040 Guam   CIS/AM
      1040-MISC (questionable income)   CIS/AM
      1040-NR/EZ U.S. Nonresident Alien Tax Return   CIS/AM
      1040-PR   CIS/AM
      1040-SS U.S. Self-Employment tax return   CIS/AM
      1040X (Unrelated)   Detach and process
      1042-S Foreign Person's U.S. Source Income Subject to W/H   CIS/AM
      1045 Application for Tentative Refund   CB/CF
      1099-OID (Return with withholding in the exact amount as income   Frivolous
      1099-Q-Payments from Qualified Education Programs   CIS/AM
      1099-R Distributions from Pensions, Annuties, Retirment or profit sharing plans, IRAs, insurance contracts, etc.Distribution code other than 1 or 7   CIS/AM
      1099-R Distributions from Pensions, Annuties, Retirment or profit sharing plans, IRAs, insurance contracts, etcOnly one attached: handwritten, altered or is a substitute Refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ CI FDC
      1099 Series    
      Withholding Credit: 1099 missing ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Research on IRPTR
      Only one attached: handwritten, altered, or is a substitute ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IVO
      1099-VI (Virgin Island)   See IRM 3.11.6.3.11
      1116, Foreign Tax Credit   CIS/AM
      1310, Statement of Person Claiming Refund Due to a Deceased Taxpayer   CIS/AM
      2106, Employee Business Expenses    
      New or added expenses ≡ ≡ ≡ ≡ CAT A
      Missing and Sch A has an unexplained entry on Line 21 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for Form 2106
      Form 2159, Payroll Deduction Agreement   Detach Form from the amended return and route to http://serp.enterprise.irs.gov/databases/irm.dr/current/5.dr/5.14.dr/5.14.10.dr/5.14.10.3.htm The address will be found at IRM 5.14.10.3 (1) c Process 1040X as normal.
      2210F, Underpayment of Estimated Tax by Individuals, Estates, and Trusts Any CIS/AM
      2439, (claiming Reparation Tax)   Frivolous
      2555/25555EZ, Foreign Earned Income   CIS/AM
      3115, Application for Changing in Account Method Any CIS/AM
      CONDITION TOLERANCE ACTION
      3520, Annual Return of Foreign Trust with U.S. Owner   CIS/AM
      3949 Route to your local function based on the checked box on Line 9-14 on the second page.  
      3949-A Fresno Submission Processing Center (FSPC) Stop C 2003
      4136, Credit for Federal Tax Paid on Fuels ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      4137, Social Security and Medicare Tax on Unreported Tip Income Any CIS/AM
      4563, Exclusion of Income for Bona Fide Residents of American Samoa   CIS/AM
      4852, (Prisoners explain the income is based on computation of min wage for hrs worked in the prison)   Frivolous
      5074, Allocation of Individual Retirement Arrangement Tax to Guam or Commonwealth of the Northern Mariana Island   CIS/AM
      5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations   CIS/AM
      5884-B New Hire Retention Credit   CIS/AM
      6118, Claim for Refund of Tax Return Preparer and Promoter Penalties Tax decrease resulting in a net refund or balance due CAT A
      6251, Alternative Minimum Tax (Alt Min Tax) (No indication of a net operating loss)   Workable if there is zero tax or no change to tax as a result of the Form 6251 IRM 3.11.6.8.5
      6765, Credit for Increasing Research Activities ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) ≡ ≡ ≡ CAT A
      8275, Disclosure Statement (or written disclosure statement citing Section 6662) ≡ ≡ ≡ ≡ CAT A
      8288 A/B, Withholding on Distributions by Foreign Persons of U.S. Real Property Interests   CIS/AM
      8396, Mortgage Interest Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      8379, Injured Spouse   See IRM 3.11.6.3.18
      Form 8609, Low- Income Housing Credit Allocation and Certification ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      8586, Low-Income Housing Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      8615, Tax for Certain Children Who Have Investment Income of More Than $1,900   CIS/AM
      8689, Allocation of Individual Income Tax to the U.S. Virgin Islands   See IRM 3.11.6.3.11
      8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      8801, Credit Paid for Prior Year Minimum Tax   CIS/AM
      8813, Partnership Withholding Tax Payment Voucher   CIS/AM
      8826, Disabled Access Credit Return contains Sch C, E, F, or evidence of “other” income ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)   CIS/AM
      8839 Qualified Adoption Expenses   CIS/AM
      8845, Indian Employment Credit   CIS/AM
      8846, Credit for Employer Social Security and Medicare Taxes paid on Certain Employee Tips   CIS/AM
      8853, Archer MSAs and Long-Term Care Insurance   CIS/AM
      8854, Initial and Annual Expatriation Information Statement   CIS/AM
      8859, District of Columbia First-Time Homebuyer Credit ≡ ≡ ≡ ≡ Cat A
      CONDITION TOLERANCE ACTION
      8862, Information To Claim Earned Income Credit After Disallowance   CIS/AM SeeIRM 3.11.6.8.11.3paragraph 9
      8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Met ≡ ≡ ≡ ≡ Cat A
      8873, Extraterritorial Income Exclusion   CIS/AM
      8885, Health Coverage Tax Credit    
      Credit ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      Credit ≡ ≡ ≡ ≡ Input TC 971 AC 013 ACTON history to “EXAM/AUSC” Mail return with 3210 to: IRS 3651 SIH 35 Austin, TX 73301 STOP: 4103 AUSC
      Reconsideration Letter attached   Input TC 971 AC 010 Mail return w/ 3210 to: IRS Andover Campus 310 Lowell St Andover, MA 01812
      8889, Health Savings Account   CIS/AM
      8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans   CIS/AM
      8903, Domestic Production Activities Deduction   CIS/AM
      8913, Credit for Federal Telephone Excise Tax Paid ≡ ≡ ≡ ≡ Cat A
      8919, Uncollected Social Security and Medicare Tax on Wages   CIS/AM
      8939, Allocation of Increase in Basis for property received from a Decedent   Process the amended return as normal. Route Form 8939 to
    Estate and Gift Tax Operation
    201 W Rivercenter Blvd
    Covington, KY 41011
    Attn: Stop 824G
      9465, Installment Agreement Request   Collections
      Form 8941, Credit For Small Employer Health Insurance Premiums   CIS/AM
      14039, Identity Theft Affidavit   See IRM 3.11.6.3.7
      14157 Complaint: Tax Return Preparer   Send completed form along with any supporting information to:
    Attn: Return Preparer Office
    401 W. Peachtree Street
    Mail Stop 421-D
    Atlanta, GA 30308
      14157-A Tax Return Preparer Fraud or Misconduct Affidavit   IRS AM - Preparer Complaints
    Mail Stop 58
    5333 Getwell Road Memphis, TN 38118
      W-2 / W-2G Wage and Tax Statement    
      Only one attached: handwritten, altered, or is a substitute ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IVO
      Missing ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Research on IRPTR
      W-2AS, W-2CM/CNMI, W-2GU, W-2PR Wage and Tax Statement   CIS/AM
      W-2VI, U.S. Virgin Islands Wage and Tax Statement   IRM 3.11.6.3.13
      W-7, Application for IRS Individual Taxpayer Identification Number / Application for Taxpayer Identification Number for Pending U.S. Adoptions
    • Attached, or the taxpayer requests additional information to complete processing

      Austin Submission Processing Campus
    ITIN Operation Stop: AUSC 6090 P.O. Box 149342
    Austin, TX 78714-9342
      W-7/A Application for Taxpayer Identification Number for Pending U.S. Adoptions (ATIN) is attached to a Form 1040X   Austin Submission Processing Campus
    ATIN Unit P.O. Box 934 -- Stop 6182
    Austin, TX 78767
      W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding   CIS/AM
      Freeze Codes (posted on IDRS)    
      -D Freeze   Statute
      E- Freeze   CIS/AM
      F- Freeze   Frivolous
      G- Freeze   CIS/AM
      -I / I- Freeze   CIS/AM
      -J Freeze   CIS/AM
      J-   CIS/AM
      CONDITION TOLERANCE ACTION
      M- Freeze   CIS/AM
      P- Freeze   CIS/AM
      -Q Freeze   CIS/AM
      -R Freeze   See IRM 3.11.6.6.8
      S- Freeze   CIS/AM
      -U Freeze   CIS/AM
      -V Freeze   CIS/AM
      -W Freeze   CIS/AM
      Y- Freeze   CIS/AM
      -Z / Z- Freeze   CI FDC
      Fuel Tax Credit Returns Return reflects fuel tax claimed for occupations that would not justify the use of fuel used for non-taxable purposes, such as hairdressers, housekeepers, nurse, etc.   Frivolous
      Fulbright Grantee   CIS/AM
    G) Gambling Losses (Sch A)    
      Losses greater than winnings   CIS/AM
      Golden Parachute Claims   Cat A
      Goldmine Claims Investment losses or developmental expenses/interest from a Colorado goldmine   Cat A
      Grants ≡ ≡ ≡ ≡ ≡ ≡ Cat A
    H) Health Care Act Excluding student loan amount   CIS/AM
      Health Coverage Tax Credit – HCTC (Fm 8885)    
      Credit ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      Credit ≡ ≡ ≡ ≡ ≡ ≡ Input TC 971 AC 013 ACTON history to “EXAM/AUSC” Mail return w/ 3210 to: IRS 3651 S IH-35 Austin, TX 73301 STOP: 4103 AUSC#
      Reconsideration Letter attached   Input TC 971 AC 010 Mail return w/ 3210 to: IRS Andover Campus 310 Lowell St Andover, MA 01812
      Health Savings Account HSA Form 8889)   CIS/AM
    I) Identity Theft   CIS/AM
      Immediate disallowance requested   CIS/AM
      Immediate examination requested   Cat A
      Income Changes of any income from taxable to non-taxable (i.e. reclassify wages as non-taxable income, such as worker’s compensation or statement that income is not taxable because of a specific reason) ≡ ≡ ≡ ≡ ≡ ≡ CAT A
      CONDITION TOLERANCE ACTION
      Insolvent Farmer   CIS/AM
      Claim reducing CG preference items for AMT (PL 99-272)   CIS/AM
      Interest Refund or abatement of any previous interest assessments made by Examination, DATC/ASTA, or AUR and Substitute for Returns program ≡ ≡ ≡ Cat A
      International Return originally filed return or Form 1040X   CIS/AM
      International Treaty cited income or tax excluded   CIS/AM
      IRA    
      Deduction   CIS/AM
      ROTH   CIS/AM
      Rollover of Airline Payments to Traditional IRAs   CIS/AM
      IRC Section    
      26 CFR 1.931.1   CIS/AM
      83 – Request for abatement of previously assessed taxes and/or penalties – generally in the form of Form 843, Claim for Refund and Request for Abatement   Frivolous
      104a 2– Claim that income from payment is based on age discrimination are excludable   CIS/AM
      127 – Change to employer provided educational assistance ≡ ≡ ≡ ≡ CIS/AM
      134 – Claim that compensation as JROTC instructors is tax exempt   CIS/AM
      165 – Claim for theft losses due to corporate misconduct and Ponzi schemes ≡ ≡ ≡ ≡ Cat A
      179A – Clean Fuel Vehicle   CIS/AM
      280G – Golden Parachute claims   Cat A
      301 – Veteran’s Disability Compensation is excluded from gross income   CIS/AM
      616(a) – Goldmine claims   Cat A
      692 – Federal Income Tax Forgiveness for Certain U.S. Military and Civilian Employees and Other Individuals   KITA
      803 – Victims of Nazi Regime   CIS/AM
      911, 913, 931, or 933   CIS/AM
      1001 – Claim on Sch A Other Miscellaneous Deductions – no gain realized for even exchange of property – Labor (property) – Employer’s (property) with No Gain Realized   Frivolous
      1341 -Repayments of Debt Cancellation   CIS/AM
      1341 -Claim that compensation for personal labor is not taxed   Frivolous
      3121 – Claims that exempt the FICA portion of earnings from wages   Frivolous
      3121 b 10 or 3121 b 13 – FICA ref. for student or nurse ≡ ≡ ≡ Cat A
      3401 – FICA   Frivolous
      4999 – Golden Parachute claims   Cat A
      6405 – Joint Committee ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      6702 – Non-taxpayers filing on behalf of a taxpayer as a tax shelter   Frivolous
      CONDITION TOLERANCE ACTION
      6851 – Tax Year terminated by the IRS   Cat A
    J) Johnson Island Income (IRC 6405   CIS/AM
      Joint Committee Return Refund > 2 million Cat A
      Jurat (altered)   Frivolous
    L) Lottery Winnings(lump sum payment change from ordinary income to capital gain   CIS/AM
      Lump sum payment excluded from income   CIS/AM
    M) Mariner’s Tax Deduction   Frivolous
      Maritime Claims    
      With a breakdown of days, localities, and rates ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Without a breakdown of days, localities, and rates   CIS/AM
      May Dept. Store vs. Sequa Rev. Ruling 99-40   CIS/AM
      Medical / Dental Residents FICA Minnesota vs. Apfel or U.S. vs. Mayo Clinic   Cat A
      MFR 08 on CC INOLES   CIS/AM
      Misapplied Payment   CIS/AM
      Mortgage Interest Credit (Form 8396) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
    N) Native American Indian Treaty Usually a Form 1099-MISC or other income documents that include withholding generally greater than 18% of income and results in a refund   Frivolous
      Net Operating Loss NOL Any indication of a NOL loss   Carryback Carryforward
      Non-Disaster Casualty Loss ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Non-Negotiable Charge Back An attempt to sell birthright back to the government for a large dollar amount with request for a Treasury Direct Account be set up to hold the money   Frivolous
      Non-Resident Aliens   CIS/AM
    O) Outlandish Credits   Frivolous
    P) Passive activities reclassified as active Schedule E ≡ ≡ ≡ ≡ Cat A
      Penalties    
      Manual Adjustment to penalties and/or interest on tax liabilities. This is not the same as ES Penalties (TC170/176)   CIS/AM
      Refund or abatement of any previous penalties manually assessed by Examination, DATC/ASTA, or AUR and Substitute for Return SFR program ≡ ≡ ≡ Cat A for more information see IRM 3.11.6.3.5
      Tax return preparer, promoter, and appraisal penalties   Cat A
      Pension Protection Act PL 109-280   CIS/AM
      Personal injury damages excluded from income (IRC Section 104 a 2   CIS/AM
      Police Meal Expense   CIS/AM
      Ponzi Scheme IRC 165    
      Tax change ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
      Tax change ≡ ≡ ≡ ≡ ≡ Cat A
      CONDITION TOLERANCE ACTION
      Protective Claim refund / zero balance / blank   Cat A
      Prisoners supplying a substitute W-2   Frivolous
      Public Law 99-272 Insolvent Farmer / AMT   CIS/AM
      Public Safety Officer PSO Exclusion indicated on return   CIS/AM
    Q) Quality Stores Inc. vs. U.S. located in Kentucky, Michigan, Ohio, and Tennessee   Cat A
    R) Reed Slatkin Claim eliminating interest, dividend, capital gain income, and theft or casualty losses associated with Reed Slatkin Investment Club   Cat A
      Refund    
      Net Refund Refund < 1 CIS/AM
      Net Refund Refund > 10 million CIS/AM
      Refund Inquiry   CIS/AM
      Scheme   CI SDC
      Registered Domestic partners (RDPs). Can also be identified as CCA201021050 or CCA. For 2010 and subsequent years, RDPs must each report half of their community income. Amended returns for 2007 and subsequent could be received for these RDP taxpayers. CIS/AM
      Reparation Tax / Black Taxes Request for a reparation settlement based on the impact of slavery   Frivolous
      Resubmitted Claim Resubmission of a previously rejected claim   CIS/AM
      Revenue Ruling    
      1.90-23 Transportation expenses   CAT A
      94-97 Transportation expenses   CAT A
      57-383 (Strike Fund Benefits Claim for refund)   CIS/AM
      99-40   CIS/AM
      Roth IRA   CIS/AM
    S) Safe Harbor (Disaster claims)   Expedite to CIS/AM
      Schedules    
      Schedule A – Itemized Deductions All or substantially all gross income non-religious sources claiming a vow of poverty is claimed as a contribution on Sch A.   Frivolous
      Schedule C – Profit or Loss from Business    
      New / additional Expenses not claimed on original return
    1. Basic criteria – Includes changes to income and/or deductions, unless the only change is due to depreciation. See (b) below.

    2. If the only change is due to depreciation, refer to criteria (b) in the next column.

    1. ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡

    Cat A
      Deduction equal to or nearly equal to amount claimed as wages   Frivolous
      Schedule E – Supplemental Income and Loss    
      New / additional Expenses losses not related to Sch K-1 (Sch E, Parts II and III ≡ ≡ ≡ ≡ Cat A
      Passive income reclassified as Active ≡ ≡ ≡ ≡ ≡ Cat A
      Schedule F – Profit or Loss from Farming new / additional Expenses not claimed on original return ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Schedule H – Household Employment Taxes change to   CIS/AM
      Schedule J – Income Averaging for Farmers & Fisherman ≡ ≡ ≡ ≡ ≡ ≡ claimed on Schedule J CIS/AM
      Schedule SE – Self-Employment Tax Source of SE income is based on Partnership income Schedule E   CIS/AM
     

    Note:

    $ Tolerance is the change to Total Tax (Line 10) unless otherwise indicated. CAT A tolerances refer to Total Tax decrease as a direct result of the specific condition without regard to the module balance

       
      CONDITION TOLERANCE ACTION
      Self-Employment Income which appears to be subject to self-employment tax, but the taxpayer is not addressing/assessing the self-employment tax. ≡ ≡ ≡ ≡ ≡ ≡ ≡ EXAM (Questionable SE income)
      Seller Paid Points    
      Claimed for tax period other than year of purchase   CIS/AM
      HUD-1 or Settlement Statement not attached   CIS/AM
      Loan origination fees, Loan discount, Discount Points, Paid Points, not mentioned on HUD-1 or Settlement Statement   CIS/AM
      Property taxes, appraisals, inspections, title, or attorney fees included as deductable points   CIS/AM
      Sequa Corp vs. U.S.   Cat A
      SFR literal on TXMOD or SUBST4 literal on IMFOLI TC 150 for .00   Collections
      Sick pay excluded from income IRC 104 a 2   CIS/AM
      Social Security and Medicare Tax on Unreported Tip Income Form 4137   CIS/AM
      State Returns (original / signed)   Detach and route to Receipt & Control
      Student Loan Forgiveness   CIS/AM
    T) Tax Assessment    
      Refund or abatement of any previous tax assessed by Examination, or Substitute for Return Program Exception: Route to CIS/AM if the EXAM case had no additional tax assessed and was closed as Non-Examined. ≡ ≡ ≡ ≡ Cat A
      Claims with Project Codes: 0173, 0263, 0584, 0611 Including open Z- Freeze cases   Cat A
      Taxpayer Advocate Service Cases Form 911   TAS
      TETR -Telephone Excise Tax Refund. TETR interest with Formm 8913, Credit for Federal Telephone Excise Tax Paid attached ≡ ≡ ≡ ≡ ≡ ≡ Cat A
      Thumbprint (used in lieu of a signature)   Frivolous
      Transportation Expenses (Rev. Ruling 90-23 or 94-97)   Cat A
      Treaty Any indication of an international treaty or U.S. Tax Treaty   CIS/AM
      Treaty Trader   CIS/AM
      Trusts Claim that attempts to flow income through a trust to avoid personal tax liability   Frivolous
    U) Uncollected Social Security and Medicare Tax on Wages (Fm 8919)   CIS/AM
      United Mineworkers of America (UMWA) Refunds claimed for premiums paid   CIS/AM
      United States Tax Treaty Taxpayer claiming benefits under   International
      U.S. vs. Long Return with no money amounts   Frivolous
      Veteran’s Disability Compensation Excluded from gross income IRC 301   CIS/AM
      Vow of Poverty issues   Frivolous
    W Walker Tax Court Decision Transportation expense tax deduction   CIS/AM
      Withholding from one Form W-2, W-2G, or 1099 (Handwritten, altered name, or TIN, substitute, or TIN mismatch) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Route to local IVO
      Withholding on a W-2 or substitute W-2 and no income   Frivolous
      Work Opportunity Tax Credit WOTC / Welfare-to-Work ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Cat A

Exhibit 3.11.6-1 
Current Form 1040X Editing Roadmap

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Exhibit 3.11.6-2 
Current Form 1040X Editing Roadmap

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Exhibit 3.11.6-3 
Form 1040 Reference Guide (Reason Codes for Form 1040 Changes)

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Line Description Reason Code
Line 7 Wages, salaries, tips, etc. Attach Form (s) W-2 007
Line 8a Taxable interest. Attach Schedule B if required 008
Line 8b Tax-exempt interest. Do not include on line 8a 008
Line 9a Ordinary dividends. Attach Schedule B if required 008
Line 9b Qualified dividends (see page 23) 008
Line 10 Taxable refunds, credits or offsets of state and local taxes (see page 24) 021
Line 11 Alimony received 021
Line 12 Business income or (loss). Attach Schedule C or C-EZ 012
Line 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 013 is used when there is a change to the amount of the capital gain or (loss)
Line 14 Other gains or (losses). Attach form 4797 013
Line 15a IRA Distribution 016
Line 15b Taxable amount (see page 25) 016
Line 16a Pension and annuities 016
Line 16b Taxable amount (see page 26) 016
Line 17 Rental real estate, royalties, partnership, S corporation, trust, etc. Attach Schedule E 018
Line 18 Farm income or (loss). Attach Schedule F 019
Line 19 Unemployment compensation 020
Line 20a Social security benefits 029
Line 20b taxable amount (see page 27) 029
Line 21 Other income. List type and amount (see page 29) 021
Line 23 Archer MSA deduction. Attach Form 8853 CIS/AM
Line 24 Certain business expenses of reservists, performing artists and fee-basis government officials. Attach Form 2106 or 2106-EZ. 030
Line 25 Health savings account deduction. Attach Form 8889 CIS/AM
Line 26 Moving expenses. Attach Form 3903 030
Line 27 One-half of self-employment tax. Attach Schedule SE 030
Line 28 Self-employed, SEP, SIMPLE, and qualified plans 025
Line 29 Self-employed health insurance deduction (see page 29) 030
Line 30 Penalty on early withdrawal of savings 027
Line 31a Alimony paid 030 - without TIN
Line 31b Recipients SSN with TIN CIS/AM
Line 32 IRA deduction (see page 31) CIS/AM
Line 33 Student loan interest deduction (see page 33) 030
Line 34 Jury Duty pay you gave to your employer CIS/AM
Line 35 Domestic production activities deduction. Attach Form 8903 CIS/AM
Dotted portion of line 36 Other 030
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Line Description Reason Code
Line 40 Itemized deduction (from Schedule A) or your standard deduction (in left margin) ITEM DED 076; STND DED 092
Line 42 If line 38 is $117,300 or less multiply $3,500 by the total number of exemptions claimed on line 6d. If line 38 is over $117,300, see the worksheet on page xx 006/8914 -- 104
See Line 013 above. 043 is used when there is an adjustment/change to the tax computation using the Schedule D worksheet
Line 44 Tax (see page 36) Check if any tax is from Box a Form 8814 -- 033, Box b Form 4972 033; Box c Form 8889 CIS/AM; 043 Schedule D Tax Computation from Schedule D worksheet
Line 45 Alternative minimum tax IRM 3.11.6.8.5Attach Form 6251 045
Line 47 Foreign Tax Credit. Form 1116 CIS/AM
Line 48 Credit for child and dependent care expenses. Attach Form 2441 036
Line 49 Education credits. Attach Form 8863 RC 35
Line 50 Retirement savings contributions credit Attach Form 8880 036
Line 51 Child tax credit. Attach Schedule 8812 if required 036 Workable CTC: CIS/AM others
Line 52 Residential energy credit. Attach Form 5695 036
Line 53 Other Credits Form 3800, Form 8801 036
Schedule R CIS/AM
8839 CIS/AM
Line 56 Self Employment Tax. Attach Schedule SE 044
Line 57 unreported social security and Medicare tax from Form 4137 or 8919 CIS/AM
Line 58 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required 048 (Parts I & II)
Line 59a Household employment taxes. Attach Schedule H. CIS/AM
Line 59b First Time Homebuyer Credit Repayment Form 5405 CIS/AM
Line 60 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required 048 (Parts I & II)
Line 61 Add lines 56 through 60. This is your total tax 099 (Uncollected Taxes)
Line 62 Federal Income Tax withheld from Forms W-2 and 1099 051
Line 63 2012 estimated tax payments and amount applied from 2011 return 099 (Uncollected Taxes)
Line 64a Earned Income Credit (EIC) 053
Line 64b Non-table combat pay election CIS/AM
Line 65 Additional child tax credit. Attach Form 8812 061
Line 65 2008 estimated tax payments and amount applied from 2007 return 051
Line 66 American Opportunity Credit Form 8863 106
Line 69 Excess social security and tier 1 RRTA tax withheld (see page 60) 055
Line 70 Federal Tax on Fuels Form 4136 061
Line 71 payments from: Form 2439 -- 057; Form 4136 -- 061; Form 8885 -- CIS/AM
Line 71 Refundable credit for prior year minimum tax from Form 8801, line 27 CB/CF
Line 75 Amount of line 73 you want applied to your 2009 estimate tax CIS/AM (applied to another yr)
Line 77 Estimated tax penalty  

Exhibit 3.11.6-4 
Frivolous Claims

The following is a list of recognized frivolous arguments made by both individuals and businesses, but are not limited to this list. (This information can be found in Notice 2007-30) If you identify any of the frivolous issues, refer to the instructions in IRM 3.11.6.3.12 paragraph (4) (b) for routing to the Frivolous Returns Program (FRP).

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

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

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

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

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

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

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ s.

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  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Exhibit 3.11.6-5 
International Returns

The following is a list of International claims. Refer to IRM 3.11.6.3.13 for additional instructions .

  • Claims with foreign addresses on either the original or amended return (other than APO and FPO addresses)

  • Form 499R/W-2PR, Puerto Rico Withholding Statement

  • Form 1040 GUAM

  • Form 1040C, U.S. Departing Alien Income Tax Return

  • Form 1040NR, U.S. Non-resident Alien Income Tax Return or Form 1040NR-EZ. Always leave the Form 1040X attached.

  • Form 1040PR, U.S. Self-Employment Tax Return-Puerto Rico

  • Form 1040SS or Form 1040SS, U.S. Self-Employment Tax Return-Virgin Islands, Guam, American Samoa

  • Form 1042S, Foreign Persons US Source Income subject to Withholding, Form SSA, Social Security Administration 1042S, or Form RRB, Railroad Retirement Benefits-1042S

  • Claims with Form 2555, Foreign Earned Income or Form 2555EZ, Foreign Earned Income Exclusion, attached or noted on the return

  • Form 3520 Annual Return to Report Transactions with Foreign Trusts and Receipt of Foreign Gifts

  • Form 3520-A Annual Return of Foreign Trust with U.S. Beneficiaries

  • 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

  • Form 8288A, Statement of Withholding under Section 1445

  • Form 8288B, Application for Withholding Certificate for ISRP position

  • Form 8689, Allocation of Individual Income Tax to the 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, Expatriation Information Statement

  • Form W-2AS, American Samoa Islands

  • Form W-2CM, Common Mariana Island

  • Form W-2CNMI, Common Northern Mariana Island

  • Form W-2GU, Guam Wage and Tax Statement, W-2PR, Puerto Rico Wage and Tax Statement, W-2VI, US Virgin Islands Wage and Tax Statement, or 1099VI

  • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding

  • Claims involving IRC Sections 911, 913, 931, or 933

  • A notation on the return of Dual Status

  • An indication on the return of Dual Status

  • Claims for an exemption or exclusion of the tax or income due to an international treaty or United States Tax Treaty

  • Claims involving Treaty Trader or Fulbright Grantee

  • Claims citing income from Johnston Island (26 CFR 1.931.1)

  • Income paid in foreign currency, whether or not it was converted to U.S. currency

  • Primary or both taxpayers are Non-Resident Aliens (NRA)

  • Any indication on the Form 1040X the taxpayer originally filed an International return and is requesting a conversion to a Domestic return (i.e., originally filed Form 1040-NR and request conversion to Form 1040)

Exhibit 3.11.6-6 
Glossary

Acronym Definition
AAR Administrative Adjustment Request
ACTC Additional Child Tax Credit
ACTC Advance Child Tax Credit
AFC Adjustment Function Criteria
AGI Adjusted Gross Income
AIMS Audit Information Management System
AM Accounts Management
APO Army Post Office
ASED Assessment Statute Expiration Date
ASTA Alternative Strategies for Tax Administration
ATAO Application for Taxpayer Assistance Order
ATIN Adoption Taxpayer Identification Number
AUR Automated Underreporter Program
BMF Business Master File
CAF Centralized Authorization File
CAT A Category A (Examination criteria)
CC Command Code
CI Criminal Investigation
CIS Correspondence Imaging System
CP Computer Paragraph
CRN Credit Reference Number
CSR Customer Service Representative
CTC Child Tax Credit
DATC Deferred Adverse Tax Consequence
DLN Document Locator Number
DP Data Processing
EITC Earned Income Tax Credit
EIN Employer Identification Number
FDC Fraud Detection Center
FDIC Federal Deposit Insurance Corporation
FICA Federal Insurance Contribution Act
FNS Fuel from Non-Conventional Sources
FPO Fleet Post Office
FS Filing Status
FYM Fiscal Year Month
HUD Housing and Urban Development
ICP Integrated Case Processing
IDRS Integrated Data Retrieval System
IMF Individual Master File
IRAF IRA File
IRC Internal Revenue Code
IRM Internal Revenue Manual
IRP Information Returns Program
IRS Internal Revenue Service
ISRP Integrated Submission and Remittance Processing
ITIN Individual Taxpayer Identification Number
KIA Killed in Action
KITA Killed in Terrorist Action
MFT Master File Tax (Code)
MMDDYY Month Month Day Day Year Year
OCR Office Collection Representative
O/S Original/Signed
OMB Office of Management and Budget
PECF Presidential Election Campaign Fund
POA Power of Attorney
POW Prisoner of War
PSPC Philadelphia Submission Processing Center
RA Revenue Agent
RC Reason Code
RDD Return Due Date
RN Reference Number
RO Revenue Officer
RR Revenue Representative
RRTA Railroad Retirement Tax Act
RTC Resolution Trust Company
SC Source Code
SP Submission Processing
SSN Social Security Number
TC Transaction Code
TIA Taxpayer Information Authorization
TIN Taxpayer Identification Number
TSR Taxpayer Service Representative
TSS Taxpayer Service Specialist
TY Tax Year
U/A Unallowable
URP Underreporter Program
YYMM Year Year Month Month

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