3.11.12  Exempt Organization Returns

Manual Transmittal

November 22, 2013

Purpose

(1) This transmits a complete revision to Section 3.11.12, Exempt Organization Returns, in IRM 3.11, SC Returns and Document Analysis.

Material Changes

(1) Various editorial changes have been made throughout the IRM.

(2) All dates have been changed to reflect tax year 2013, and processing year 2014.

(3) All Alerts and approved QA changes made during 2013 have been incorporated into this IRM.

(4) 3.11.12.1.9.2(s) - Government Instrumentality added.

(5) 3.11.12.1.13 - Special Return section added.

(6) 3.11.12-4 - Due date chart updated.

(7) 3.11.12-13 Schedule D 2013 added to conversion chart.

(8) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.1.16.2(2) - Added 1041-A.

(9) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.1.13.2(3) - Added computer condition code U.

(10) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.8(2) c - reference corrected.

(11) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.8(2) c Note: reference corrected.

(12) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.9(1) e. reference corrected.

(13) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.9(1) e Note: reference corrected.

(14) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.10(1) e - reference corrected.

(15) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.10(1) e Note: reference corrected.

(16) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.11(1) e - IRM reference corrected.

(17) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.13.11(1) e Note - reference corrected.

(18) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.1.14. reference corrected.

(19) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.2.10(3) - Removed required correspondence.

(20) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.2.30 - Schedule C instructions added.

(21) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.7.5 - Computer Condition C instructions added.

(22) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.7.7.1 - Table - Corrected Item I throughout table.

(23) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.10.1(1) - Corrected number of pages for Form 4720.

(24) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.10.2 - 4720-A changes added.

(25) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.10.3 - 4720-A instructions added.

(26) Incorporated IPU 13U1250 issued 07-18-2013 IRM 3.11.12.10.10 - 4720-A instructions added.

(27) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.10.4 - Instructions added to 4720-A.

(28) Incorporated IPU 13U0717 issued 04-10-2013 IRM 3.11.12.10.10 - Instructions added to 4720-A.

(29) Incorporated IPU 13U1250 issued 07-18-2013 Exhibit 3.11.12-4 - Due date chart corrected.

(30) Incorporated IPU 13U0156 issued 01-18-2013 Exhibit 3.11.12-4 - Due dates corrected.

(31) Incorporated IPU 13U0863 issued 05-02-2013 Exhibit 3.11.12-8 - Form 8941 conversion table added.

Effect on Other Documents

Manual Transmittal 3.11.12, dated January 1, 2013, is obsolete as of January 1, 2014.

Audience

Submission Processing Document Perfection

Effective Date

(01-01-2014)

Maria D. Hooke,
Director, Business System Planning
SE:T:BSP

3.11.12.1  (01-01-2014)
Exempt Organization Returns

  1. This section provides instructions for processing exempt organization returns in the Ogden Submission Processing Campus, Code and Edit function.

3.11.12.1.1  (01-01-2014)
Overview of IRM 3.11.12

  1. This IRM is used by the Submission Processing Code and Edit (C&E) functions, and may be cited by other IRMs for processing BMF Exempt Organization (EO) returns. The Ogden Campus is the central processing center for all EO returns (excluding non-Master File returns). Unprocessed EO returns received in other Campuses or field offices must be routed to the Ogden Submission Processing Campus per IRM 3.10.72.

3.11.12.1.1.1  (01-01-2014)
Format of IRM 3.11.12

  1. Numbers in parenthesis (e.g., (1), (2)), indicate paragraph numbers.

  2. Indented numerical lists (e.g., 1., 2.), indicate steps that must be taken in order. For example, the procedure in step one must be completed before the procedure in step two is done, and all steps must be considered.

  3. Indented alphabetical or bullet lists (e.g., a., b.), indicate procedures or informational items where order is not important, however, all items must be considered.

3.11.12.1.2  (01-01-2014)
General

  1. IRM 3.11.12.1.1 through 3.11.12.1.26 provides general information and instructions for EO returns and return processing.

  2. IRM 3.11.12.2 through 3.11.12.15.6 provides the following instructions for a specific EO return:

    1. General instructions and a definition of the organization required to file.

    2. Special instructions relating to the specific EO return.

    3. Tips and reminders for editing, perfecting and corresponding.

    4. Edit sheet T-lines, or coding T-lines.

    5. Tax return and supporting form T-lines and correspondence.

3.11.12.1.3  (01-01-2014)
Exempt Organization Filers Defined

  1. The Internal Revenue Code (IRC) defines the activities of an EO.

  2. The Subsection Code (SSXX) defines the IRC subsection (IRC §) under which the organization is exempt.

  3. The Foundation Code identifies whether an IRC §501(c)(3) organization is a private foundation required to file Form 990–PF, or a public charity required to file Form 990 or 990-EZ and Schedule A.

  4. EO Filers Defined: Figure 3.11.12-1a and Figure 3.11.12-1b define Exempt Organizations in both Subsection/Foundation Code order and tax return number order.

  5. The Subsection Code and Foundation Code can be determined from either the information on the return or attachment(s), or INOLES research.

    Figure 3.11.12-1a

    EO FILERS DEFINED
    SUBSECTION CODE ORDER
    SSXX FOUNDATION CODE ANNUAL RETURN SUPPLEMENTARY RETURN IRC SECTION
    01   None Required. 990–T 501(c)(1)
    02   990
    990–EZ
    990–T §501 (c) (2)
    03 02 990–PF 990–T, 4720 §501 (c) (3)
    03 03 990–PF 990–T, 4720 §501 (c) (3)
    03 04 990–PF 990–T, 4720 §501 (c) (3)
    03 10 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 11 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 12 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 13 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 14 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 15 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 16 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 17 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    03 18 990
    990–EZ
    990–T, 4720 §501 (c) (3)
    04   990
    990–EZ
    990–T, 4720 §501(c) (4)
    05 THRU 20   990
    990–EZ
    990–T §501(c)(5) THRU (20)
    21   990–BL 990–T, 6069 §501(c) (21)
    22 THRU 27   990
    990–EZ
    990–T §501(c)(22) THRU (27)
    28   990
    990-EZ
    990-T §501(c)(28)
    29   990
    990-EZ
    990-T §501(c)(29)
    40   990
    990–EZ
    990–T §501(d)
    50   990
    990–EZ
    990–T §501(e)
    60   990
    990–EZ
    990–T §501(f)
    70   990
    990–EZ
    990–T §501(k)
    71   990
    990–EZ
    990–T §501(n)
    81 09-18 990
    990-EZ
    990-T §529
    82   990
    990–EZ
    1120 POL, 8871, 8872 §527
    90   5227 1041–A, 4720 §4947(a) (2)
    91 00 990
    990–EZ
    990–T, 4720 §4947(a) (1)
    92   990–PF 990–T, 4720 §4947(a) (1)

    Figure 3.11.12-1b

    EO FILERS DEFINED IN
    RETURN NUMBER ORDER
    RETURN SSXX FOUNDATION CODE IRC SECTION
    990
    990-EZ
    28   §501(c)(28)
    990
    990EZ
    29   §501(c)(29)
    990
    990–EZ
    02   §501(c)(2)
      04 THRU 20   §501(c)(4) THRU (20)
      22 THRU 27   §501(c)(22) THRU (27)
    990
    990–EZ
    03 09 THRU 18 §501(c)(3)
      50   §501(e)
      60   §501(f)
      70   §501(k)
      71   §501(n)
    990
    990-EZ
    81 09-18 §529
      82   §527
      91 00 §4947(a)(1)
    990–BL 21   §501(c)(21)
    990–PF 03 02 THRU 04 §501(c)(3)
      92   §4947(a)(1)
    990–T ALL   ALL
    1041–A     TRUST
      90   §4947(a)(2)
    1120-POL 82   §527
    4720 03   §501(c)(3)
      04   §501(c)(4)
      90   §4947(a)(2)
      91   §4947(a)(1)
      92   §4947(a)(1)
    5227 90   §4947(a)(2)

3.11.12.1.4  (01-01-2014)
♦BMF Consistency♦

  1. The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code & Edit processing IRMs.

  2. Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden, and Paper Processing Branch BMF Code & Edit/ERS.

  3. BMF Consistency subsections are identified by a "♦" (diamond) before and after the subsection title.

  4. Text in normal print is the common process for BMF returns. The text in bold print is form-specific and applies to this IRM only.

3.11.12.1.5  (01-01-2014)
General Perfecting of EO Returns

  1. Use the following general information when editing Exempt Organization returns. If the general instructions and the form specific instructions conflict, follow the form specific instructions.

  2. Perfect for legibility. If perfecting a dollar or "total" line and an amount is not present, bring the amount to the line from attachment(s) or from the lines feeding into the "total" line.

    1. "X" the T-line if the taxpayer has crossed out the wording and replaced it with wording with a different meaning from the wording on the return.

    2. "X" the line and edit or add the entry on the correct T-line if the wording has been crossed out and replaced with wording that is on a T-line.

    3. Recompute a "total" T-line if all of the lines above it are also T-lines, and one or more dollar entries have been edited or deleted ("X" ed).

  3. A dollar entry is a positive or negative dollar amount.

    1. Document Perfection is no longer required to edit dollars and cents.

    2. Do not edit brackets or parentheses around amounts clearly indicated to be negative with a bracket or a minus (-) sign. A true negative entry means that, through computation or perfection, the result or entry is actually negative.

      Reminder:

      It is necessary to bracket negative amounts when editing negative entries on transcription lines (i.e., computing and entering a missing line entry, etc.).

3.11.12.1.6  (01-01-2014)
♦Edit Marks♦

  1. Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through ISRP. Code and Edit must edit in red pencil/pen. Other areas can edit in brown, red, orange, purple or green pencil/pen.

  2. The only items edited on the return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

  3. The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

  4. For a description of specific edit marks, see the table below:

    Edit Mark Description
    "X" or "/" The "X" is used to delete tax data or to indicate that an item is not to be transcribed.
    A "/" can be used when deleting a form or schedule not being transcribed.
    "//$" The "//$" is used in the entity area to identify the beginning and ending of a foreign country code. For example, "/EI/$" is edited for "Ireland" and "/GM/$" is edited for "Germany " .
    "%" or "c/o" Indicates an "in-care-of" name for transcription.
    Circle Indicates that an entry is not to be transcribed. Also used to delete Entity data or a Received Date.

    Note:

    If the taxpayer circles an entry, edit the entry.

    Underline Indicates that an entry is to be transcribed (e.g., Name Control, Tax Period, etc.).
    Arrow Indicates the correct placement of a misplaced entry. An arrow may be used if the misplaced item is close to the correct line and there is no question where the entry belongs.

    Note:

    A double arrow (<------->) may be used if the same figure is to be transcribed in two different places (along with any required transcription data between the two arrows).

    Check Mark Indicates that an entry has been manually math verified and is correct.
    Bracket/Parenthesis Indicates a negative numerical amount.

    Note:

    C&E is no longer required to bracket negative amounts when brackets are preprinted on the form or schedule, or when the taxpayer clearly indicates a negative amount with ( ) brackets or "-" minus sign. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (i.e., computing and entering a line entry, entering a missing entry, etc.).

    Vertical Line or Decimal Point Indicates the separation of dollar and cents.
    0 (zero), - (dash), None, or N/A "ZERO" , "DASH" , "NONE" , or "N/A" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions Edit marks entered by other areas, such as Compliance or Accounts Management, are not to be re-edited except to place the marks in the correct area.
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.12.1.7  (01-01-2014)
Attachments to an EO Return

  1. See Exhibit 3.11.12-3 for attachment guidance.

3.11.12.1.8  (01-01-2014)
Researching an EO Return

  1. Use Form 12837 to request research when instructed to do so.

  2. The following IDRS Command Codes may be used for research:

    1. BMFOLE

    2. BMFOLI

    3. BMFOLO

    4. BMFOLT

    5. ENMOD

    6. INOLES

    7. NAMEE/NAMEB

  3. Effective January 2004, Modernized electronic Filing (MeF) became available for Form 990, 990-EZ and 1120-POL filers. Effective January 2005, MeF became available for Form 990-PF filers.

  4. MeF returns can be identified on IDRS by DLNs with a File Location Code of 92 or 93 (first two digits of the DLN).

  5. The return in its entirety can be viewed and/or printed by accessing the MeF Employee User Portal (EUP).

  6. Procedures to access and use the EUP can be found in IRM 3.42.4.4.

3.11.12.1.9  (01-01-2014)
Routing to Other Functions

  1. Use Form 4227 to route either a numbered or unnumbered return, attachment, photocopy, or other document to another function by doing one of the following:

    Exception:

    Route NMF returns per local procedures.

    If the document is Then
    Unnumbered 1. Pull the document from the batch.
    2. Forward the document to the proper function following local procedures using Form 4227.
    Numbered
    1. Perfect only the entity information.
    2. Attach Form 4227.
    3. Edit the appropriate Action Code for Forms 990/990–EZ, 990–PF, 990-T, 1120-POL, 4720-A, 5227, 5768 and 8872 or CCC "U" for all other Master File returns.
    4. Leave the document in the batch.

  2. Examples of reasons for routing and/or instructions to note on Form 4227 include (this list is not all inclusive):

    • Correspondence reply to a letter sent by Rejects

    • Entity issues

    • Examination prepared unprocessable returns

    • IRC 6020(b) unsigned returns

    • Move $$ for Non-Master File Assessment

    • Multiple ERS Action Codes

    • Numbered returns with the wrong DLN (use Action Code 640 for documents batched as Forms 990/990–EZ, 990–PF, 990-T, 1120-POL, 4720-A, 5227, or 8872. Use CCC "U" for all others).

    • Prompt Determinations

    • Returns sent to Rejects

    • Re-entry returns

    • Returns sent to Imaging

    • Statute returns

    • Termination Code, Form 990-PF

    • 4962 Abatement Requests, Form 4720

3.11.12.1.9.1  (01-01-2014)
Routing of Prompt Determination Request

  1. Returns may be received requesting a prompt determination of any unpaid tax liability of a bankruptcy estate. The trustee or debtor-in-possession must file a written request for the determination with the IRS Area Office Director.

  2. If wording similar to "Prompt Determination" , "Title 11, U.S.C. Section 505(b)" , "Rev. Proc. 81–17" , or "Rapid Examination" is indicated on a return or attachment, or a letter to an Area Office Director requesting a prompt determination or a prompt audit is attached, review the return for an Area Office Received Date Stamp. If present, continue processing. If not present, do all of the following:

    1. Photocopy the return and all attachments.

    2. Route the photocopies to the appropriate Area Office, see Exhibit 3.11.12–2, Special Procedures Function (SPF) Bankruptcy Section via Form 4227. Notate on the Form 4227 "Prompt Determination, U.S.C. Section 505(b)" .

    3. Continue processing the original return.

3.11.12.1.9.2  (01-01-2014)
Routing to Entity

  1. Route the following ENTITY ISSUES to Entity if there is no indication Entity worked the issue (e.g. TC 59X, Entity stamp). Follow the procedures in IRM 3.11.12.1.16.1 prior to routing EIN issues to Entity.

    1. Mismatch, multiple, "applied for" , or no EIN.

    2. Name change.

    3. Name and EIN are not legible or not present.

    4. Address changes for affiliates or credit unions.

    5. "We are not required to file."

    6. "We are not an exempt organization."

    7. "Our exempt status has been terminated" or "We are no longer exempt."

    8. We have merged our assets with another organization. Do not route to Entity if CCC F has been edited.

    9. "We have assumed, purchased, acquired, etc. the assets of another organization."

    10. "We are no longer a group or no longer an affiliate of this group."

    11. "We no longer charter credit unions."

    12. Undeliverable CPs 259A–259H, 431.

    13. Form 8872 has the "change of address" box checked. Notate "Oracle update required" in the remarks area of Form 4227.

    14. A CP4XX is attached to an unnumbered return, and the CP has not been cleared by Entity. Attach the CP to the front of the return and pull the return from the pack to be routed to Entity.

    15. Form 990-PF has Item G "Initial Return of a Former Public Charity" checked or "Notice 2008–6" or similar wording on the top of the form.

    16. Forms 990 or 990-EZ have "Announcement 2010–19" or similar wording on the top of the form.

    17. Forms 990 or 990-EZ have the form number crossed through and the filer has changed the form number to 990-N.

    18. Form 990-T has "reinsurance entity" or similar wording on the top of the form.

    19. An organization stating they are a U. S. Government instrumentality.

      Note:

      If a determination letter is attached indicating the organization should file a return, enter ERS Action Code 320.

3.11.12.1.9.3  (01-01-2014)
Preparing Form 4227

  1. Include on Form 4227 all of the following information:

    1. Your name or C&E stamp

    2. Where you are routing the document(s)

    3. The reason why you are routing the document(s) and/or any instructions for the receiving area

  2. Attach a completed Form 4227 under the entity section of the original or photocopied document(s).

3.11.12.1.10  (01-01-2014)
♦Action Codes (ERS)♦

  1. Action Codes are used to indicate whether correspondence, research, or some other action is needed. The Action Code sets the suspense period assigned to the return and places the return in the workable or unworkable suspense inventory.

  2. When necessary, assign a three-digit Action Code. Action Codes are valid for Forms 990, 990-EZ, 990-PF, 990-T, 1120-POL, 4720-A, 5227, 5768 and 8872. Any other returns are processed through a manual correction process. Use Computer Condition Code "U" on these returns when actions such as correspondence are needed.

  3. Edit the Action Code in the bottom left margin of the return.

  4. Assign Action Codes in the following priority:

    1. Action Code 310 (Statute Control)

    2. Action Code 320 (Entity Control)

    3. Action Code 4XX

    4. Action Code 6XX

    5. Action Code 3XX

    6. Action Code 2XX (Correspondence)

    Exception:

    Use Action Code 211, 215, 225, or 226 before Action Code 341 to ensure the return is complete before a manual refund is issued.

    Exception:

    Use Action 2XX before Action Code 480 to ensure the return is being corresponded on for completeness prior to suspending the return as early filed.

  5. Attach Form 4227 when more than one Action Code is needed. Edit the second Action Code on Form 4227.

  6. If more than one Action Code of the same priority is required (e.g., 310 and 341), edit the Action Code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition, see Exhibit 3.11.12-1.

  7. Edit the following Action Codes when a return cannot be perfected from the information present:

    Action Code Description
    211 - Domestic
    215 - International

    Note:

    First Correspondence & for Missing Signature on Form 990, 990-EZ and 990-PF.

    • Return is so illegible, incomplete or contradictory that it is not acceptable for computer processing.

    • The taxpayer notates on the return or attachment that they are reporting tax for more than one Tax Period or for more than one type of tax.

    • Unsigned Form 990, 990–EZ or 990–PF.

    225 (Missing Signature, Domestic - Correspondence)

    Exception:

    Form 990, 990-EZ and 990-PF

    • Unsigned returns (only issue for correspondence).

    226 (Missing Signature, International Correspondence)

    Exception:

    Form 990, 990-EZ and 990-PF

    • Unsigned foreign return (only issue for correspondence).

    310 (Statute)
    • Route return to have Statute cleared.

    320 (Entity)
    • Route return to have Entity issue worked.

    331 (Frivolous Review)
    • Route return to have reviewed by Exam.

    341 (Ten Million Dollar/Manual Refund)
    • Route return to have refund verified/issued.

    420 (Imaging)
    • Route return to have return Imaged.

    450 (Any Other Area)
    • Route return to any other area.

    480 (Early Filed - Suspense)
    • The return is an early-filed return.

    610 (Renumbered Non Remittance) or
    611 (Renumbered with Remittance)
    • A return is mis-blocked (e.g., Form 990 is found in a 4720 batch of work).

    640 (Void)
    • To delete the assigned DLN on the return (e.g., Re-entry Returns).

    650 (International)
    • The return is an International return and must be forwarded to OSPC.

  8. Continue perfecting the return after editing the Action Code(s).

  9. For a list of valid Action Codes, see Exhibit 3.11.12-1.

3.11.12.1.11  (01-01-2014)
Computer Condition Codes

  1. Computer Condition Codes (CCC) identify special conditions or computations to post to the Masterfile.

  2. Edit CCCs in the center portion of the return below the entity section or per specific form instructions.

  3. Edit one or more CCCs when instructed to do so.

    Note:

    If a CCC has been entered in the top right margin of a return by another area, circle the CCC and edit the CCC to the appropriate area of the return.

  4. Do not edit CCC "R" or "V" if you are corresponding for one or more Parts which are IRI items (i.e., the return is still late because it is not complete) with the exception of the following:

    • Zero filer with transcription lines in any parts of Form 990, or Form 990-EZ (2007 and prior revisions). See IRM 3.11.12.1.26.1.

    • Field Secured/Prepared returns when a Revenue Officer notates penalties should not be assessed. See IRM 3.11.12.1.13.9 through 3.11.12.1.13.11.

    Figure 3.11.12-2

    COMPUTER CONDITION CODES
      MEANING USE IF FOR FORM(s)
    A No Estimated Tax Penalty Form 2220 (Lines 37 & 38 are zero or blank) or acceptable substitute statement is attached which shows no liability for the Estimated Tax Penalty. 990–PF
    990–T
    1120–POL
    B Termination of Installment Sale Form 6252, Computation of Installment Sale Income, is attached and there is an indication on the return or attachment that the organization is opting out of the installment plan (e.g., "final lump sum payment" written across the top of Form 6252). 990–T
    C Sequestration Form 990–T is filed claiming 45r (Small Business Health Care Credit., An amount is present on line 44f or Form 8941 is attached. 990-T
    D Reasonable Cause for Failure to Pay Taxes Timely
    • The return is an untimely paid return and reasonable cause is established.

    • The return is stamped "DO NOT ASSESS FAILURE TO PAY PENALTY " .

    • The return is a "Final" , Balance Due return and the Received Date is after the short period due date but before the regular Tax Period due date≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    DO NOT edit CCC D when pre-computed penalty is shown on the return, see

    .
    990–PF
    990–T
    1120-POL
    4720
    4720-A
    F Final Return The "Final" or "Termination" box is checked, or a note such as "Final," "Out of Business," "Termination," etc. is on the return or attachments. 3.11.12.2.8 for Form 990 Revision 2008 and subsequent, 3.11.12.5.9 for Form 990-EZ and 3.11.12.3.10 for Form 990 2007 and prior. See IRM 3.11.12.1.17 for all others. 990
    990–EZ
    990–PF
    1120-POL
    8872 990–T
    1041–A
    4720
    4720-A
    5227
    G Amended Return "Amended" box is checked or any other indication the taxpayer has filed previously. 990
    990–EZ
    990–PF
    1120-POL
    8872 990–T
    1041–A
    4720
    4720-A
    5227
    I Future Contracts and Tax Straddles Form 6781 is attached identifying income or loss from futures, contracts, and tax straddles. 990–T
    L Treaty-Based Return Position Disclosure Form 8833 is attached and/or "Section 6114 Election" on face of return. 990
    990–EZ 990–T
    O Module Freeze Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax is attached. 990–PF
    990–T
    1120-POL
    R Reasonable Cause for Failure to File Return Timely
    • The filer has attached reasonable cause for failure to file timely.

    • Zero filer - Form 990, 990-EZ 2007 and prior only.

    • Field Secured return that has been notated "do not assess failure to file penalty" .

    • FTP not applicable.

    See Figure 3.11.12-3.
    990
    990–EZ
    990–PF
    1120-POL 990–T
    1041–A
    4720
    4720-A
    5227
    T Investor Reporting of Tax Shelter Registration Form 8271, Investor Reporting of Tax Shelter Registration, is attached.

    Note:

    Taxpayers are no longer required to file Form 8271 otherwise due on or after August 3, 2007.

    990
    990–EZ 990–PF
    990–T
    U Unprocessable Document You cannot perfect a numbered or unnumbered document from information present. 1041–A
    4720
    4720-A
    5578
    V Suppress Daily Delinquency Penalty
    • The filer has attached reasonable cause for filing a delinquent return.

    • Zero filer - Form 990, 990-EZ 2007 and prior only.

    • Field Secured return that has been notated "do not assess penalties" .

    See Figure 3.11.12-3.
    990
    990–EZ
    990–PF 1041–A
    5227
    V Therapeutic Discovery Credit Form 3800, Line 1a, has a significant entry and Form 3468, Line 8* contains an entry.
    *(Not applicable for 2009 and prior year revisions of Form 3468.)
    990-T
    W Return Cleared by Statute Statute has cleared the return and it is a true statute return. See IRM 3.11.12.1.13.6. 990
    990–EZ
    990–PF
    1120-POL
    990–T
    1041–A
    4720
    4720-A
    5227
    X Module Credit Freeze The filer wants the overpayment to be applied to another account (e.g., information for two tax years on the same return). 990–PF
    990–T
    4720
    4720-A
    1120-POL
    Y Short Period for Change of Accounting Period The return has a short year because of a change in accounting period. Do not edit on an initial or final/termination return. See IRM 3.11.12.1.25.2.1. 990
    990–EZ
    1120-POL
    990–PF
    990–T
    3 No Reply to Correspondence The filer fails to respond to correspondence or the correspondence is returned undeliverable. All
    7 Reasonable Cause was Considered and Denied The Reasonable Cause statement was not acceptable, see Figure 3.11.12-3. 990
    990–EZ
    990–PF
    1120-POL
    990–T
    1041–A
    4720
    4720-A
    5227
    8 Waiver of Estimated Tax Penalty Form 2220, Part II, "annualized income" installment method box is checked, or Form 990–T, Line 37 contains an amount. 990–T
    990–PF
    1120-POL
    9 Low Income Housing One or more of the following Form(s) is attached: Form 8611, 8693, 8609/Schedule A, 8586 with a credit on line 3. (Exception: If credit is shown only on Line 4 of Form 8586, DO NOT edit CCC "9" ) See IRM 3.11.12.7.15 (10). 990–T

3.11.12.1.12  (01-01-2014)
Correspondence

  1. Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable.

  2. Do not correspond or contact the taxpayer on the following type of returns:

    1. Returns prepared by Compliance (Collections or Examination), Section 6020(b) or for SFR returns.

    2. Form 11249, Taxpayer Advocate Expedite, is attached without contacting the Taxpayer Advocate Office (TAO) for instruction. If Form 11249 is attached, notify your manager. See IRM 3.11.12.1.24.1.1.

  3. Examine the return so that all of the conditions can be included in the same correspondence.

  4. If corresponding for a signature only:

    1. Forms 990, 990-EZ, 990-PF: Attach a Correspondence Action sheet below the entity area and edit ERS Action Code 211 or 215 ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Forms 990-T, 1120-POL, 5227, 5768 and 8872: Edit ERS Action Code 225 or 226 on the bottom left margin of page one of the return.

    3. Forms 1041-A, 4720, and 5578 Edit Computer Condition Code "U" . Attach correspondence action sheet.

  5. Do both of the following when instructed to correspond with the organization with the exception of (4) above:

    1. Attach a completed Correspondence Action Sheet below the entity area.

    2. Edit ERS Action Code 211, 215, 225, or 226 (see Exhibit 3.11.12–1) for Forms 990/990–EZ, 990–PF, 990-T, 1120-POL, 5227, 5768 and 8872.

    3. Edit Computer Condition Code "U" for Forms 1041-A, 4720 and 5578.

  6. Complete the Correspondence Action Sheet using the following letter(s):

    1. Letter 854C is used for an invalid reasonable cause for late filing or late payment.

    2. Letter 2694C is used for Form 990R to request missing IRI and non-IRI items.

    3. Letter 2695C is used for Form 990–EZR to request missing IRI and non-IRI items.

    4. Letter 2696C is a multiple use form , depending on the return involved. This letter is for Form 1120-POL and Form 8872 to request missing information and for all returns to request an explanation for an early filed return or a missing signature.

    5. Letter 2697C is used for Form 990–PF to request missing IRI and non-IRI items.

    6. Letter 2698C is used for Form 990 to request missing IRI and non-IRI items.

    7. Letter 2699C is used for Form 990–EZ to request missing IRI and non-IRI items.

3.11.12.1.12.1  (01-01-2014)
Correspondence Imaging System (CIS) Returns

  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Accounts Management (AM) receipts into digital images and working the cases from those images. At this time, TEGE CIS returns are to be processed no differently than any other paper return that is filed.

    Note:

    See IRM 3.11.12.1.23 for signature requirements.

3.11.12.1.12.2  (01-01-2014)
Correspondence Reply to a Letter Sent By Rejects

  1. If a reply to a letter that was sent by Rejects is attached to a 990 informing the taxpayer to file a 990 instead of a 990-EZ, and there is an indication the return has been worked by Rejects, process the 990 as a new return.

  2. If a reply to a letter that was sent by Rejects is attached to a return:

    1. Perfect the entity information.

    2. Attach the reply to the back of the return.

    3. Edit ERS Action Code 450 for Form 990, 990-EZ, 990-PF, 990-T, 1120-POL, 5227, 5768 and 8872.

    4. Edit Computer Condition Code "U" for Form 1041-A, 4720 and 5578.

    5. Prepare for routing to Rejects per IRM 3.11.12.1.9.3. Notate on Form 4227, "Reply."

    6. Leave return in pack.

3.11.12.1.12.3  (01-01-2014)
Incomplete Return Item (IRI) Program

  1. The Incomplete Return Item (IRI) program is the "incomplete" side of the Daily Delinquency Penalty.

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

    Caution:

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

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

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

3.11.12.1.12.4  (01-01-2014)
♦Use of Fax for Taxpayer Submissions♦

  1. Tax return information can be received via fax as part of return perfection even if a taxpayer's signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable.

  2. Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.

  3. Code & Edit tax examiners will indicate the fax paragraph on the approved Correspondence Action Sheet to advise taxpayers of the option to fax their response.

    Caution:

    Before disclosing tax information by telephone, you must be sure you are speaking to the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3, Required Taxpayer Authentication and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

3.11.12.1.13  (01-01-2014)
Special Returns

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

3.11.12.1.13.1  (01-01-2014)
♦Frivolous Argument♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 4.10.12, Frivolous Return Program, shown in Exhibit 3.11.12-17.

  2. Frivolous returns are not imaged. Do not send a frivolous or potential frivolous return back to Imaging if the return is not stamped "scanned" in the left margin of the return. Continue to process per (3) below.

  3. Review the return to determine whether it appears to be a frivolous return.

    If Then
    The return meets any of the conditions shown in Exhibit 3.11.12-17.

    Caution:

    If the return shows Action Code "331" and has a Form 4227 attached with the remarks "Refer to Exam FRP for audit after processing" , continue to next procedure.



    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.

    Note:

    IRM 4.10.12.1.3.3, Campus FRP Coordinators, requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two (2) business days. If a determination is not made within the allowed timeframe, the Examination examiner will edit Action Code "331" in the lower left margin of the return.

    Examination has selected the return as frivolous (e.g. indicated by an Action Code "331" (OSPC), and a Form 4227 with remarks, "Refer to Exam FRP for audit after processing" ), but sends the return for processing Continue processing the return using procedures in IRM 3.11.12. However, do not circle or void the Action Code indicating a frivolous return.


    Note:

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

3.11.12.1.13.2  (01-01-2014)
Amended Returns

  1. An Amended return may be identified by the "Amended" box being checked and/or by such words as "SUPPLEMENTAL" , "DUPLICATE" , "ADDITIONAL." Filing a "Copy" of a return is not sufficient reason to label a return "Amended" unless accompanied by a positive statement from the taxpayer.

    Caution:

    Process a "copy" return as an original unless a statement is attached indicating it is an amendment.

  2. Examine the return for attachments. Do not separate any related attachments from the return that the taxpayer has submitted to explain the reason for the amended return, as this information will be used by Accounts Management. Detach any unrelated documents and route them to the appropriate function using Form 4227. Edit Action Trail on the return.

  3. If there is an indication the return is amended and:

    If Then
    TC59X or ICS was entered on the return by Compliance Services Do not edit CCC "G" . Process as original.
    The return is stamped "Delinquent Original Cleared for Processing" by Statutes Do not edit CCC "G" . Process as original.
    Form 3893 or 13596 is attached Do not edit CCC "G" . See IRM 3.11.12.1.13.4 and 3.11.12.1.13.5.
    None of the above are present Edit CCC "G" or follow local procedures. No other codes may be used with a CCC "G" except "W" , "3" , "U" , and/or ERS Action Codes.

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

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    2. ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. ≡ ≡ ≡ ≡ "≡ "

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. ≡ ≡ ≡ ≡ ≡ ≡

3.11.12.1.13.3  (01-01-2014)
♦Re-Entry Document♦

  1. A return posted to the wrong account or module, or attempting to post must be reprocessed to post to the proper account or module.

  2. Each re-entry return must have a Form 3893, Re-entry Document Control or Form 13596, Reprocessing Returns, attached.

    1. Form 3893 is used to re-input documents that have not posted to an account or module.

    2. Form 13596 is used to reprocess documents to correct the account or module that had previously posted to the wrong account or module.

  3. Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.

  4. Some re-entry returns may have originally been filed and accepted electronically ("E-File" ). These returns may be identified by the presence of Mod E-File printouts in lieu of an actual return. Do not correspond for missing signatures on these documents. Mod E-File printouts may include a web address of https://eup.eps.irs.gov/mef.rrdprd/sdi/proxy printed on the bottom of the return. Also, the signature line may contain ****** (asterisks) along with a date. Also do not correspond for missing signatures on returns printed from the CIS system, or returns with "This is a live return from SMIP" printed across the top of the return.

  5. Examine Form 3893 and/or Form 13596 to determine the action needed to make the return processable.

    Caution:

    If the Received Date is 2 years and 9 months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return. See Statute Return, IRM 3.11.12.1.13.6.

3.11.12.1.13.4  (01-01-2014)
♦Form 3893♦
Re-Entry Document Control

  1. Form 3893, Re-entry Document Control, is used to reinput a return that has not posted to an account or module.

  2. If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control number), edit all returns using current processing instructions and keep all returns clipped together.

  3. Circle CCC "G" if present.

  4. Do not edit CCC "G" on amended returns.

  5. If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

  6. If the return was edited according to current processing instructions, ensure that the information from Form 3893 is edited to the return.

    Form 3893 ACTION TAKEN
    Box 14 (Remarks) Ensure that the information is edited to the return.
    Box 15 (Process as) 1. Circle out any green rocker and edit marks that may indicate a receipt of remittance.
    2. Do not change any tax due amounts.

  7. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If Then
    Improper perfection Edit the same correction in red to the appropriate area.
    Taxpayer error Leave the entries as shown on the document.

  8. A Received Date must be present on all Re-Entry returns.

    If Then
    Received Date is not present Edit a Received Date to the middle of the return. See IRM 3.11.12.1.14.1.
    Multiple Received Dates are present Circle out all but the earliest date.

  9. When additional information is still needed to make the return processable, prepare Form 4227 for the appropriate action (e.g. correspondence, research, etc.).

    Exception:

    If there is an indication that correspondence has already been issued for the return, edit ERS Action Code 450 for Form 990, 990-EZ, 990-PF, 990-T, 1120-POL, 4720-A, 5227, 5768 and 8872, or CCC "U" for all other returns. Leave in pack.

  10. When perfection is not possible, edit Action Code "640" on the return and attach Form 4227 noting "Perfection not possible" and leave in batch.

3.11.12.1.13.5  (01-01-2014)
♦Form 13596♦
Reprocessing Returns

  1. Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module.

  2. Circle CCC "G" if present.

  3. Do not edit CCC "G" on amended returns.

  4. If the return was edited according to current processing instruction, circle any Action Codes, CCCs and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

    Exception:

    If there is an indication that correspondence has already been issued for the return, edit ERS Action Code 450 for Form 990, 990-EZ, 990-PF, 990-T, 1120-POL, 4720-A, 5227, 5768 and 8872, or CCC "U" for all other returns. Leave in pack.

  5. If the return was not edited according to current processing instructions, ensure that the information from Form 13596 is edited on the return.

    Form 13596 ACTION TAKEN
    Taxpayer Identification Number (TIN) correction Edit the correct TIN on tax return.
    Tax period correction Edit the correct Tax Period ended on the tax return.
    Reasonable cause Edit the appropriate CCC:
    1. Edit CCC "R" if the "FTF" box is checked.

    2. Edit CCC "D" if the "FTP" box is checked.

    3. Edit CCC "V" if the "DDP" box is checked for Forms 990, 990-EZ, 990-PF, 1041-A, and 5227.

  6. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If Then
    Improper perfection Edit the same correction in red to the appropriate area.
    Taxpayer error Leave the entries as shown on the document.

  7. A Received Date must be present on all reprocessed returns.

    If Then
    Received Date is not present Edit a Received Date to the middle of the return. See IRM 3.11.12.1.14.1.
    Multiple Received Dates are present Circle out all but the earliest date.

  8. Circle any green rocker and edit marks or "received with remit" portion of the received date stamp that may indicate a receipt of remittance.

3.11.12.1.13.6  (01-01-2014)
♦Statute Return♦

  1. Any return with a Received Date that is 2 years and 9 month or more after the Return Due Date is a potential Statute Control return.

  2. All potential statute returns (per (1) above) must be routed to the Statute Control Unit daily or more often if needed.

    Exception:

    Edit CCC "W" , continue processing and do not route to Statute Control Unit for clearance if any of the following conditions are present:

    1. Compliance (6020(b)) returns.

    2. A return with "TC59X" or "ICS" is notated on the face of the return.

    3. Returns that are substitute returns prepared by Examination (SFR notated in top margin).

    4. Returns with a stamp indicating a previous clearance by the Statute Control unit within the last ninety days.

    5. CCC "W" is not valid for Form 8872. Do not edit CCC "W" on this form.

    6. Return is for a "zero" filer with no transcribed lines on the following (see IRM 3.11.12.1.26):

      Form 990 (2007 and prior revisions) Parts I-XI
      Form 990-EZ (2007 and prior revisions) Parts I-V

  3. Statute returns are unprocessable until they are cleared by Statute Control.

    If Then
    The return is numbered 1. Edit Action Code 310 for Forms 990/990–EZ, 990–PF, 990-T, 1120-POL, 5227, and 5768 or CCC "U" for all other forms on the return.
    2. Attach Form 4227 and check the box for "Statute Control."
    3. Continue editing and leave in batch.
    The return is unnumbered 1. Do not continue processing.
    2. Pull the return from the batch.
    3. Attach Form 4227 and check the box for Statute Control.

3.11.12.1.13.7  (01-01-2014)
♦Secured/Prepared Returns - Compliance♦

  1. Compliance functions (Collections and Examination) secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

    Note:

    Form 3198, Form 3198–A or Form 13133 may be attached.

    1. Prepared tax returns are notated with "6020(b)" or SFR (Substitute for Return) if prepared by Compliance.

    2. Secured tax returns are notated "TC59X" or "ICS" (Integrated Collections System) or notated "Process as Original" or "Delinquent Return Secured by TE/GE," with an attached Form 3198, Form 3198-A, or Form 13133, Expedite Processing Request. The "Delinquent Return" box on Form 3198, Form 3198-A or Form 13133 may be checked.

3.11.12.1.13.8  (01-01-2014)
♦IRC 6020(b) Prepared by Compliance♦

  1. When the taxpayer fails to file a required return, IRC Section §6020(b) is the authority for IRS to prepare the return.

  2. These returns are identified by the notation "PREPARED AND SIGNED UNDER THE AUTHORITY OF 6020(b) OF THE INTERNAL REVENUE CODE" .

    1. Returns must have a Received Date. If no Received Date is present per the Compliance Function, follow the normal procedures for editing the Received Date.

    2. Returns must be signed by a Compliance Function representative. If not signed, route to Compliance using Form 4227.

    3. Edit CCC "D" , "R" , "V" and/or "8" if the Revenue Officer notates penalties should not be assessed per IRMs 3.11.12.1.11 and 3.11.12.1.14.1.1.

      Note:

      CCC "V" is only valid for Form 990–T if Therapeutic Discovery Credit is claimed. See IRM 3.11.12.1.11.

    4. Do not correspond with the taxpayer for unprocessable conditions. If an unprocessable condition exists, route the return back to the Area Office using Form 4227.

    5. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the return due date. Do not send the return to Statute Control. See IRM 3.11.12.1.13.6.

    6. Do not forward the return to be imaged.

3.11.12.1.13.9  (01-01-2014)
♦Compliance Secured Returns♦

  1. These returns are identified by the notations "TC59X" or "ICS" .

    1. Do Not edit CCC "G" .

    2. Correspond for conditions that cannot be processed (e.g., missing signature, missing schedules, etc.).

    3. On the attached Form 3198, Form 3198-A, or Form 13133, review the "Freeze from Refunding" (Form 3198 and Form 3198-A), "Hold Credit on Module-Generate TC570" (Form 13133) box to determine if the return should be edited with CCC "X" .

    4. Edit CCC "W" if the Received Date is more than 2 years 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.12.1.13.6.

    5. Edit CCC "D" , "R" , "V" and/or "8" if a Revenue Officer notates penalties should not be assessed per IRMs 3.11.12.1.11 and 3.11.12.1.14.1.1.

      Note:

      CCC "V" is only valid for Form 990-T if Therapeutic Discovery Credit is claimed. See IRM 3.11.12.1.11 .

3.11.12.1.13.10  (01-01-2014)
♦Examination Prepared♦

  1. These returns are identified by the notation "SFR" or "SUBSTITUTE RETURN" on Page 1.

    1. Return must have a Received Date. If no Received Date is present, follow the normal procedures for editing the Received Date.

    2. Do not correspond with the taxpayer for unprocessable conditions. If an unprocessable condition exists, route back to Examination using Form 4227.

    3. If Form 3198, Form 3198-A, or Form 13133 is attached, edit the CCCs that are indicated on the form.

    4. Edit CCC "W" if the Received Date is more than 2 years 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.12.1.13.6.

    5. Edit CCC "D" , "R" , "V" and/or "8" if a Revenue Officer notates penalties should not be assessed per IRMs 3.11.12.1.11 and 3.11.12.1.14.1.1.

      Note:

      CCC "V" is only valid for Form 990-T if Therapeutic Discovery Credit is claimed. See IRM 3.11.12.1.11.

3.11.12.1.13.11  (01-01-2014)
♦Examination Secured♦

  1. These returns are identified by the notation "Process as Original" or "Delinquent Return Secured by TE/GE" on page 1 of the return and a Form 3198, Form 3198-A or Form 13133 is attached with the "Delinquent Return" box checked.

    1. Do not edit CCC "G" on these returns.

    2. Correspond for conditions that cannot be processed (e.g., missing signatures, missing schedule, etc.).

    3. On the attached Form 3198, Form 3198–A or Form 13133, review the "Freeze from Refunding" (Form 3198 and Form 3198–A), "Hold Credit on Module - Generate TC570" (Form 13133) box to determine if the return should be edited with CCC "X" .

    4. Edit CCC "W" if the Received Date is more than 2 years 9 months after the Return Due Date. Do not send to Statute Control. See IRM 3.11.12.1.13.6.

    5. Edit CCC "D" , "R" , "V" and/or "8" if a Revenue Officer notates penalties should not be assessed per IRMs 3.11.12.1.11 and 3.11.12.1.14.1.1.

      Note:

      CCC "V" is only valid for Form 990-T if Therapeutic Discovery Credit is claimed. See IRM 3.11.12.1.11.

3.11.12.1.13.12  (01-01-2014)
Unprocessable Return

  1. If a return can be perfected, e.g., Form 990, page 1 is missing, but the entity information can be obtained in an attachment, insert a dummy page 1, edit the entity information on the inserted page, and continue to process the return. If the return cannot be perfected, follow (2)-(6) below.

  2. An unprocessable EO return is when the return cannot be perfected from the return or attachments and either of the following:

    1. A return with completely illegible entries.

    2. A return with completely contradictory and unperfectable entries.

  3. Do not send an unprocessable return back to Imaging if the form is not stamped "scanned" in the left margin of the return. Continue to process per (4)-(6) below.

  4. Correspond for a processable return if both of the following apply:

    1. The name, address, and EIN are perfectible.

    2. The return is unnumbered.

  5. Give the return to your manager to destroy if the name and EIN cannot be perfected on an unnumbered, unprocessable return.

  6. Route a numbered, unprocessable return to Rejects per IRM 3.11.12.1.9.

3.11.12.1.14  (01-01-2014)
Due Date of Return

  1. The return is timely filed if it is postmarked by the next business day after the due date, and the due date falls on a Saturday, Sunday, or federal holiday.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ between the due date and received date. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. See Exhibit 3.11.12–4 for a list of return due dates.

  4. Refer to the following references for delinquent return topics:

    CCCs for late payment IRM 3.11.12.1.11
    CCCs Daily Delinquency IRM 3.11.12.1.11
    Penalty for late filing IRM 3.11.12.1.14.1.2
    Reasonable cause statement IRM 3.11.12.1.14.1.1

3.11.12.1.14.1  (01-01-2014)
Received Date

  1. A Received Date is required on all TEGE returns unless otherwise stated.

    If And Then
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   The return is considered timely.
    The due date falls on a weekend or legal holiday   The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the legal or extended due date The postmark or shipment date is on or before the legal or extended due date Edit the received date to agree with the postmark or shipment date.

    Note:

    For certified mail only If a postmark is not present, look for a “"USPS.com Track & Confirm" emphasis record that has been attached to the return (should be before the envelope). Use the "Acceptance " date on the record to determine timeliness and follow normal editing procedures." USPS.com Track & Confirm" record is not attached, no action is required.

  2. A Received Date is required on the face of all EO returns with the exception of Form 5578.

  3. If the Received Date stamp is not present or the date is illegible or invalid, edit the Received Date in "MMDDYY" format in the middle of Page 1 of the return. Edit the Received Date according to the following priority:

    1. The earliest legible Postmark Date (U.S. Postal Service, Foreign Postmark, or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service Postmark (USPS) or Foreign Postmark date are as follows:

      If Then
      An envelope is not attached Use the postmark date stamped on the face of the return.
      An envelope has a USPS and private metered postmark Always use the USPS postmark.
      An envelope has foreign and private metered postmark Always use the foreign postmark.
      An envelope has two private metered postmarks Always use the latest private postmark.
      An envelope has only one private metered postmark Use the private metered postmark.

      Note:

      A private metered postmark is to be considered timely if received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer/Agent signature date.

    4. Signature date (only if within current processing year).

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  4. Edit the IRS received date as follows:

    If And Then
    A timely Received Date is the only Received Date stamped on the return   No editing is required.
    The stamped IRS Received Date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The postmark date shows a legal timely mailing without regard to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but with regard to a due date falling on Saturday, Sunday or holiday Change the received date to the postmark date.
    Two or more dates are stamped on the return   1. Use the earliest IRS stamped Received Date.
    2. Circle out all other dates.
    A Federal return is addressed to the IRS Delivered to a State agency Use the Postmark Date as the Received Date.
    A Federal return is addressed to a State agency   Use the IRS date stamp as the Received Date.

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

    Note:

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

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

    ≡ ≡

    Note:

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

3.11.12.1.14.1.1  (01-01-2014)
Reasonable Cause

  1. Figure 3.11.12-3, Reasonable Cause Guidelines, states the valid definitions of reasonable cause for late filing or late payment. See IRM 20.1.1.1.3 for additional information of employee responsibilities when determining penalty relief.

    Caution:

    Do not edit CCC "R" or "V" if you are corresponding for one or more Parts which are IRI items (i.e., the return is still late because it is not complete) with the exception of the following:

    • Zero filer with transcription lines in any parts of Form 990, or Form 990-EZ. (2007 and prior revisions). See IRM 3.11.12.1.26.1.

    • Field Secured/Prepared returns when a Revenue Officer notates penalties should not be assessed. See IRM 3.11.12.1.13.9 through 3.11.12.1.13.11.

  2. Do either of the following if a reasonable cause statement for late filing is attached and no IRI correspondence is required:

    1. Edit CCC "R" for all EO Master File returns, and edit CCC "V" for Forms 990, 990–EZ, 990–PF, 1041–A, or 5227 if the reason is valid. Continue perfecting the return.

    2. Edit CCC "7" and send Letter 854C for all EO Master File returns if the reason is not valid. Continue perfecting the return.

  3. Do either of the following if a reasonable cause statement for late payment is attached:

    1. Edit CCC "D" for Forms 990-PF, 990-T, 1120-POL, or 4720 if the reason is valid. Continue perfecting the return.

    2. Edit CCC "7" and send Letter 854C if the reason is not valid; and continue perfecting the return.

    Figure 3.11.12-3

    EXEMPT ORGANIZATION REASONABLE CAUSE GUIDELINES
    The return was mailed in time but was returned to sender.
    The return was filed in time but sent or deposited to the wrong IRS office.
    Delay or failure to file was due to erroneous information given to the taxpayer by an IRS employee.
    Delay was caused by death or serious illness of the taxpayer, or a death or serious illness in his/her immediate family (see Note below).
    Delay was caused by unavoidable absence of the taxpayer (see Note below). NOTE: In case of a corporation, estate, trust, etc., the death, illness or absence must have been of an individual (or a member of the individual’s immediate family) having sole authority to execute the return.
    Delinquency was caused by destruction, by fire, or other casualty of the taxpayer’s place of business or business records.
    Taxpayer requested the proper forms in a timely fashion, but the forms were not furnished in sufficient time to permit the timely filing of the return.
    Taxpayer provides proof that he/she personally visited an IRS office on or before the due date of the return for the purpose of securing the information or advice and was unable to meet with an IRS representative.
    Considering all the facts and circumstances, it is concluded that the taxpayer has reasonable cause for the failure to timely file a return.
    If the organization is a PRIVATE FOUNDATION: The organization has 90 days to file and pay after it receives a determination letter from the Service.
    If the organization is NOT A PRIVATE FOUNDATION with UBIT or NOT A TAXABLE ORGANIZATION (not a Form 990–PF or Form 990–T filer), is a membership organization (PTA, Boy Scout Troop, Garden Club, Homeowners Assn. etc.), and has no full-time employee responsible for administering the organization’s finances, reasonable cause may be granted if the organization:
    1. Clearly shows it exercised normal care and prudence, but was unable to file the return timely due to little continuity or understanding of duties due to frequent officer changes, or
    2. Has no prior history of late filing and claims ignorance of the law (new organizations or those not previously required to file).
    Source: Internal Revenue Manual 4.75.22, Revenue Procedure (Rev. Proc.) 79–8, Policy Statement P–2–7, and Law Enforcement Manual (LEM) (31)20.
    See IRM 20.1.8 for additional discussion of penalty relief.

3.11.12.1.14.1.2  (01-01-2014)
Daily Delinquency Penalty and Payment

  1. A Daily Delinquency Penalty (DDP) is assessed on an organization if Form 990, 990–EZ, 990–PF, 1041–A, or 5227 is late and/or incomplete.

  2. Edit the dollar amount of the DDP paid as indicated by an Area Office, TE/GE, Compliance, or Exam, to Box 7 of the Edit Sheet ), or to the right of Part II for Form 1041–A if the received date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    If the DDP contains both dollars and cents other than ".00" , edit both the dollars and cents to the edit sheet, such as "20.25" . Otherwise, edit the DDP in dollars only such as "20.00" would be edited as "20" .

3.11.12.1.14.1.3  (01-01-2014)
Penalty and Interest Code

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 990–PF, 990–T, 1120-POL, 4720, 4720-A, or 5227 has a pre-computed late filing penalty or interest:

    1. Edit a Penalty and Interest Code 1 to Box 6 of the edit sheet or to the dotted portion of Line 3 for Form 4720.

    2. "X" the entry for tax due and edit the recomputed tax due if the entry for tax due includes a pre-computed penalty and/or interest.

3.11.12.1.15  (01-01-2014)
Edit Sheet

  1. Form 5800, Exempt Organization Return Edit Sheet, is used for Forms 990, 990-EZ, 990-PF, 990-T, 5227, and 1120-POL. See Figure 3.11.12-4.

  2. The Edit Sheet, contains additional items needed for transcription to the Master File.

    Figure 3.11.12-4
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Form 5800, Exempt Organization Edit Sheet

  3. Attach a Form 5800, Exempt Organization Return Forms Edit Sheet, if necessary, under the entity section of the following EO returns:

    Form Daily Delinquency Penalty paid Penalty and Interest Code if required
    990 X  
    990–EZ X  
    990–PF X X
    990–T   X
    1120-POL   X
    5227 X X

  4. Each form procedures lists the required edit sheet T-lines for the return.

  5. Use the remarks section to note any additional action taken or needed to process the return.

3.11.12.1.16  (01-01-2014)
♦Entity Perfection - General♦

  1. The entity area of a tax return identifies the taxpayer on the Business Master File. The entity of the return contains the following:

    1. Employer Identification Number (EIN)

    2. Name

    3. "In-care-of" Name

    4. Address

    Note:

    Some forms have IRS labels printed under the National Change of Address (NCOA) program. These returns can be identified by either a solid black line or by pound signs above and to the left of the entity area. These returns do not contain Check Digits and are not considered to be pre-addressed.

3.11.12.1.16.1  (01-01-2014)
♦Entity Perfection - Employer Identification Number (EIN)♦

  1. The EIN is a nine-digit number (XX-XXXXXXX) assigned to identify the taxpayer.

  2. The EIN is located in the upper right of the Form ("Employer Identification Number" box).

  3. Perfect the EIN as follows:

    1. Non-preaddressed Returns (the entity is handwritten or typed):

      If And Then
      EIN is missing You can determine the correct EIN from the attachments and/or schedules 1. Edit the EIN to the proper location.
      The EIN is either a PTIN or ITIN Unnumbered 1. Remove return from batch.
      2. Route to Entity for EIN assignment.
      Numbered 1. Edit Action Code "320" .
      2. Attach Form 4227 for routing to Entity Control.
      3. Leave document in batch.
      Multiple EINs are present Unnumbered 1. Remove return from batch.
      2. Route to Entity Control for EIN assignment.
      Numbered 1. Edit Action Code "320" .
      2. Attach Form 4227.
      3. Leave in the batch.
      The EIN contains any of the following conditions and cannot be determined from attachments and/or schedules:
      - Illegible
      - Missing
      - Other than 9-digits
      All zeroes
      All nines
      Unnumbered 1. Research IDRS.
      2. If found, edit to the proper location.
      3. If not found, route to Entity for EIN assignment.
      Numbered 1. Circle out all illegible EINs, zeroes, or nines.
      2. Edit Action Code "320" .
      3. Attach Form 4227.
      4. Leave return in batch.
      "Pending" , "applied for" , etc., is indicated in the EIN area. Unnumbered 1. Research IDRS.
      2. If found, edit to proper location.
      3. If not found, route to Entity for EIN assignment.
      Numbered 1. Edit Action Code "320" .
      2. Attach Form 4227
      3. Leave return in batch.

3.11.12.1.16.2  (01-01-2014)
Entity Perfection - Name Control

  1. The Name Control consists of four characters or less.

    1. Valid characters are alpha, numeric, ampersand (&), hyphen (-), and blank. However, blanks are only valid in the last two positions.

    2. Perfect the name control by underlining or editing the first four characters of the name per (1)d)-(6) below.

    3. Disregard the word "The" in the Name Control only when more than one word follows. For example:
      Name: The Flamingo Tree
      Name Control: FLAM

    4. Include the word "The" when it is only followed by one word. For example:
      Name: The Hawk
      Name Control: THEH

  2. For Forms 5227 and 1041-A, trust name control rules apply even if "Fund" or "Foundation" is in the organization's name.

  3. CORPORATION Name Control: For the name control of a corporation, use the first four characters of the corporation's name. A corporate name may include "Corporation" , "Inc." , "Foundation" , "Fund " . Use corporate name control rules if:

    1. The organization's name contains the name of a "corporation" , "Inc" , "Foundation" , or "Fund" and the word "Trust" . For example:
      Name: Jane Dove Family Corporation Trust
      Name Control: JANE

    2. The organization's name contains the word "Fund" or "Foundation" . For example:
      Name: Kathryn Canary Memorial Foundation
      Name Control: KATH

    3. An individual name contains the abbreviations PC (Professional Corporation), SC (Small Corporation), PA (Professional Association), or PS (Professional Service). For example:
      Name: John Stilt PA
      Name Control: JOHN

    4. The organization is a scholarship, and does not contain other indicators such as "Corporation" , "Foundation" , "Trust" , etc., treat it like a Foundation or Fund and apply corporate name control rules. For example:
      Name: John Macaw Scholarship
      Name Control: JOHN

    5. The organization is a corporation and contains the words "Friends of" . For example:
      Name: Friends of Burrowing Owl Corporation
      Name Control: FRIE

    6. Specific name control examples to be used if "Corporation" , "Inc." , "Foundation" , or "Fund" are not present are:
      Local, Chapter, or Post—Edit the first four characters of the name of the national organization if the words "Local" , "Chapter" , or "Post" are contained in the name.
      Habitat for Humanity — Name Control: HABI
      Little League — Name Control: LITT
      American Legion — Name Control: AMER
      AMVETS — Name Control: AMER
      Boy Scouts of America (BSA) — Name Control: BOYS
      BPOE — Name Control: BENE
      FOE — Name Control: FRAT
      VFW — Name Control: VETE
      PTA—Name Control: PTA plus the first letter of the name of the state
      PTO or PTSA— Edit the first four characters of the school

  4. TRUST or ESTATE Name Control: For the name control of a trust or estate, use the first four characters of the last name of the individual, trustee or beneficiary. For example:

    1. If the name contains "Trust" :
      Name: Michael I Finch Trust
      Name Control: FINC

      Name: Sue Kingfisher IRA
      Name Control: KING

    2. If the name contains "Estate" :
      Name: Michael Parrot Estate
      Name Control: PARR

    3. If the name contains Corporation and Trust, apply corporate name control (see (3)(a) above).

    4. For Forms 5227 and Forms 1041-A, trust name control rules apply even if "Fund" or "Foundation" is in the organization's name. For example:
      Name: David L Eagle Fund
      Name Control: EAGL

  5. POLITICAL ORGANIZATION Name Control: For the name control of a political organization, use the first four characters of the individual's first name. If an individual's first name is not present, use the first four characters of the organization's name. For example:

    1. Name: Friends of Jane Gull
      Name Control: JANE

    2. Name: Committee to Elect John Hummingbird
      Name Control: JOHN

    3. Name: Toucan for State Representative
      Name Control: TOUC

  6. If unable to determine the name control by following (2)-(5) above, apply corporate name control rules and edit the first four characters of the name line.

3.11.12.1.16.3  (01-01-2014)
Entity Perfection - Name Change

  1. Continue perfecting the return if the name change has been worked by Entity (e.g. TC 59X, Entity stamp).

  2. Route the return to Entity per IRM 3.11.12.1.9.2, if a name change is indicated on the return (e.g., "name change" box checked) or on attachments, and the return has not been worked by Entity.

3.11.12.1.16.4  (01-01-2014)
♦Entity Perfection - "In-Care-Of" Name♦

  1. An "in-care-of" name can be identified by words "in care of" or symbols "c/o" or "%" (percent).

  2. Ensure the "in-care-of" name is located in the proper location.

    If Then
    The "in-care-of" name is located on the street address line preceding the street address No editing required.
    The "in-care-of" name is located above the first name line or below the street address 1. Arrow the "in-care-of" name so it appears below the first name line and above the street address.
    2. Continue editing the return.
    The "in-care-of" name is shown on an attachment 1. Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    2. Continue editing the return.
    The street address for the "in-care-of" name is different from the street address of the organization 1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if located on an attachment.
    2. Circle the organization's street address and notate "TC 014" in the upper left margin of the return.
    3. Input "TC 014" .
    4. Continue editing the return.

    Note:

    Always circle out the "in-care-of" symbol (% or c/o) if it is present with an address. Do not use the ampersand (&) and the percent sign (%) when editing address information.

  3. A change to the "in-care-of" name can be determined by any of the following:

    • A check mark in the "Name change" box, or

    • A check mark in the "Address change" box, or

    • An indication that the "in-care-of" name is changed (i.e., the taxpayer crossed out the original "in-care-of" name and added the new name or has entered a new "in-care-of" name in brackets).

    If Then
    An "in-care-of" name is changed but there is no indication of an address change 1. Edit the "in-care-of" name as shown in (2) above.
    2. Continue editing the return.
    An "in-care-of" name is present and the "Address change" box is checked (or there is an indication of an address change) 1. Edit the "in-care-of" name as shown in (2) above.
    2. Correct the address.
    3. Continue editing the return.

3.11.12.1.16.5  (01-01-2014)
♦Entity Perfection - Domestic Addresses♦

  1. Perfection of the address is necessary when the mailing address (Street or P.O. Box) is not easily identified.

    Exception:

    Forms 1041–A, 4720, 4720-A, 5578 and 5768 do not require address perfection.

    Exception:

    Do not perfect the address on amended returns (CCC "G" ).

  2. The procedures for perfection of address for pre-addressed returns indicating an address change and non-preaddressed returns are as follows:

    If And Then
    The address contains information other than a street address or a P.O. Box   No perfection is necessary. ISRP will enter the complete address.
    There is an indication on an attachment that the address has been changed   Edit the new address in the Entity section of the return.
    Form 8822, Part II (Address Change Requested) is attached The information is the same Take no action.
    The information is different Detach Form 8822 and route to Entity.
    Both a P.O. Box and a street address are shown   1. Notate "TC 014" in the upper left margin of the return.
    2. Input "TC 014" .
    Two street addresses are shown   1. Underline the second street address.
    2. Notate "TC 014" in the upper left margin of the return.
    3. Input "TC 014" .
     
    One street address is shown The taxpayer changed the address to a P.O. Box 1. Notate "TC 014" in the upper left margin of the return.
    2. Input "TC 014" .
     
    The city and state are not shown on the return, but are shown on an attachment   Edit the city and state on the form in the Entity section or the return.  
    No address is shown on the return or attachment   Leave blank and allow to fallout to ERS.  
    The ZIP Code is missing or illegible Is not available from the return or attachments Determine ZIP Code by using Document 7475.  
    Only the first three digits of the ZIP Code can be determined   Edit "01" for the fourth and fifth digits.  
    The "Address Change" box is checked An "in-care-of" name is present 1. Edit the "%" (percent) or "c/o" to the left of the "in-care-of" name (in the first position) followed by the appropriate name.
    2. Correct the address.
     
    The National Change of Address (NCOA) label is present   Underline the Name Control.  

    Note:

    Always circle out the in-care-of symbol ("c/o" or "%" ) if it is present with an address. Do not use the ampersand (&) or the percent symbol (%) when editing address information.

  3. The U.S. Postal Service established new address requirements for APO/FPO addresses. If the old address appears (i.e., APO New York, NY 091XX), convert to the new state abbreviation based on the zip code (i.e., the previous example would be converted to APO AE 091XX). APO/FPO addresses are considered domestic addresses. Refer to Conversion Chart below:

    ZIP Code Address Country APO/FPO Address
    34000–34049 APO Americas APO AA
    34050–34099 FPO Americas FPO AA
    090XX-094XX
    096XX-098XX
    APO Europe APO AE
    095XX FPO Europe FPO AE
    962XX-965XX
    98700–98759
    APO Pacific APO AP
    966XX and
    98760–98799
    FPO Pacific FPO AP

3.11.12.1.16.6  (01-01-2014)
♦Entity Perfection - Foreign Address♦

  1. A foreign (international) address is any address that is not in the 50 states or the District of Columbia.

    Note:

    If a foreign return is discovered in a batch of domestic returns, pull the return and follow local procedures.

  2. Returns with APO or FPO addresses are considered domestic addresses. (See IRM 3.11.12.1.16.5.)

  3. Route returns with a foreign address to Ogden Submission Processing Center (OSPC) for processing. Prepare 86C to inform the taxpayer that the return has been sent to Ogden.

  4. Returns with addresses in the following U.S. Possessions/Territories are considered to be a foreign address for processing purposes but are edited in the same way as domestic addresses.

    1. A two-character alpha code must be edited for the possession/territory name.

      U.S. Possessions/Territories Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      Virgin Islands (U.S.) VI

    2. A ZIP code must be present for U.S. Possessions/Territories. Edit the appropriate ZIP code if one is not provided, see Exhibit 3.11.12-19 .

  5. All other foreign addresses are edited the same as a domestic address with the following exceptions:

    1. The foreign country must be the last entry in the address.

    2. Circle out the foreign country and edit the country code preceded by a "/" and followed by "/$" . For example "/EI/$" is edited for Ireland. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries for official foreign country codes.

      Note:

      Submission Processing BMF Foreign Address Job Aid (Number 2324–002) provides examples for editing foreign addresses.

    3. A unique country code is edited for returns filed with an address in Canada. See "Country Code - Canada" . See IRM 3.11.12.1.16.7.

    4. If the foreign address is from Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands, check if the address contains a province, state or territory name.

      If Then
      A province, state or territory name is present 1. Circle out the province, state or territory name.
      2. Enter appropriate abbreviation, see Exhibit 3.11.12-18.
      A province, state or territory name is not present Continue editing the return.
      Province, state or territory is shown in abbreviated format, Continue editing the return.

    5. A ZIP code is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

3.11.12.1.16.7  (01-01-2014)
♦Country Code - Canada♦

  1. Edit returns with a Canadian address using a unique country code based on province/territory.

    If Then
    The foreign address contains a Canadian Province/Territory name or abbreviation shown in the table below 1. Circle the country name.
    2. Edit the appropriate Country Code based on the Province/Territory proceeded by a "/" and followed by a "/$" as the last entry in the address.
    The foreign address does not contain a Canadian Province/Territory name or abbreviation shown in the table below 1. Circle the country name.
    2. Edit the Country Code "/CA/$" as the last entry in the address.

    Canadian Province/Territory Province Abbreviation Country Code
    Alberta AB XA
    British Columbia BC XB
    Manitoba MB XM
    New Brunswick NB XN
    Newfoundland and Labrador NL XL
    Northwest Territories NT XT
    Nova Scotia NS XS
    Nunavut NU XV
    Ontario ON XO
    Prince Edward Island PE XP
    Quebec QC XQ
    Saskatchewan SK XW
    Yukon YT XY

  2. The rest of the foreign address is edited using procedures in IRM 3.11.12.1.16.6.

3.11.12.1.17  (01-01-2014)
Final/Termination or Initial Return

  1. Identify a return as initial if the return or attachment indicates this is the initial (or first) EO return the organization has filed under the EIN.

  2. For Final/Termination or Initial Return procedures for Form 990 and Form 990EZ, refer to the following tridocs:

    1. Form 990 (2008 and subsequent revisions), see IRM 3.11.12.2.7.

    2. Form 990 (2007 and prior revisions), see IRM 3.11.12.3.10.

    3. Form 990EZ (all revisions), see IRM 3.11.12.5.9.

  3. All other returns: Edit a CCC "F" (Final/Termination) if ANY of the following apply:

    1. The return or an attachment indicates this is the last EO return the organization will ever file under the EIN.

    2. The organization has indicated it is out of business, closed, or merged.

    3. The return or an attachment is marked "Final/Termination" .

3.11.12.1.18  (01-01-2014)
♦Foreign Currency♦

  1. For tax returns completed in other than U.S. currency, process as filed. However, if corresponding for missing/incomplete item(s), include in the letter to resubmit in U.S. currency.

3.11.12.1.19  (01-01-2014)
Imaging Process

  1. All Forms 990/990–EZ, Forms 990–PF, Forms 990-T, Forms 4720, Forms 5227, Forms 8872 and related schedules will be scanned through the imaging process.

  2. If a Form 990/990–EZ, Form 990-PF, Form 990–T, Form 4720, Form 5227 or Form 8872 is not stamped "scanned" in the left margin of the first page of the return, route the return to the Imaging Unit as an expedite as follows:

    If Then
    Return is numbered Leave the perfected numbered return in the batch. Attach a completed Form 4227, notate "route to Imaging" , and edit ERS Action Code 420.
    Return is not numbered Pull the unperfected unnumbered return from batch. Attach a completed Form 4227, notate "please scan" and expedite to the Imaging Unit.

  3. Do not route the following returns to Imaging:

    • Forms 4720-A

    • Foreign currency returns

    • Frivolous returns

    • Reprocessable/Re-Entry returns

    • Substitute for Returns (SFR)

    • "back-up with holding (BUWH)"

    • 990-T returns, "8941 Only"

    • Unprocessable returns

3.11.12.1.20  (01-01-2014)
Prior Year Return

  1. If a current/prior year return is filed on a tax form for other than the current processing year, convert the transcription lines to the current year format by using the Prior Year Conversion Charts See Exhibits 3.11.12-5 through 3.11.12-16.

3.11.12.1.21  (01-01-2014)
♦Refund Returns
45-Day Jeopardy
10 Million Dollar Refunds♦

  1. Document Perfection is responsible for identifying refunds and for initiating requests for manual refunds. TAS will provide the W&I SP Liaison written approval (upon request) to issue a manual refund on TAS returns.

    Note:

    Expeditious processing of refund returns is critical if the 45–day period is about to expire.

    If Then
    A Refund Return is batched in a non-refund batch
    1. Completely edit the return.

    2. Pull the return from the non-refund batch and merge into a refund batch using local procedures.

    Note:

    Follow the instructions below when the processing date is more than 20 days after the received date or the return due date OR the refund is $10,000,000 or more.

    The processing date is more than 20 days after received date or the return due date (whichever is later) and the refund amount is $25,000 or more

    Note: "Refund" in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other periods.
    1. Edit Action Code "341" .

    2. Give the return to the manager.

    The refund is $10,000,000 or more
    Note : "Refund" in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other periods.
    1. Do not leave the return in the pack.

    2. Edit Action Code "341" for numbered and unnumbered returns on Form 990-PF, 990-T, and 1120-POL.

    3. Give the return to the manager.

    The W&I Submission Processing TAS Liaison walks a return through Code & Edit In addition to normal editing, perform the actions below:
    1. Edit CCC "O" to freeze the refund and provide TAS with the validated credit amount.
    2. Edit CCC "Y" to send the return to ERS.


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