3.11.15  Return of Partnership Income

Manual Transmittal

October 28, 2014

Note:(DO NOT REMOVE AND INSERT PAGES OR DISPOSE OF OBSOLETE TRANSMITTALS PRIOR TO JANUARY 1, 2014.

Purpose

(1) This transmits revised IRM 3.11.15, Returns and Documents Analysis - Return of Partnership Income.

Material Changes

(1) This IRM is being sent out for Review and Clearance before final decisions have been made regarding the prioritization of Unified Work Request (UWRs). This IRM will be updated accordingly once the UWRs scheduled implementation dates have been determined.

(2) Minor editorial changes have been made throughout this IRM (i.e. line number updates, spelling, punctuation, etc.). Other significant changes to this IRM are shown below.

(3) IRM 3.11.15.2 Combined paragraphs (9), (10) and (11). These three paragraphs were redundant in nature.

(4) IRM 3.11.15.2.1(4) Clarified Edit Mark instructions. (IPU 14U0582 issued 03–28–2014)

(5) IRM 3.11.15.3.1.1(4) Additional information added for CIS returns. (IPU 14U1327 issued 09–10–2014)

(6) IRM 3.11.15.3.7 "BMF Identification (ID) Theft" , - New - Added information pertaining to BMF Identification (ID) Theft.

(7) IRM 3.11.15.4.1 Revised Routing Guide for Form 1128 and Form 8716 to be consistent with changes to CCC "Y" and Change in Accounting Period instructions.

(8) IRM 3.11.15.4.1 Deleted second IRM reference from Form 1065X portion of Routing Guide

(9) IRM 3.11.15.4.1 Added IRM reference to Form 1065X and Form 5471.

(10) IRM 3.11.15.4.1 Revised instructions for SS-4.

(11) IRM 3.11.15.4.1 Changed Form 8621 Line numbers to match the current Form 8621 (IPU 14U0763 issued 04–24–2014).

(12) IRM 3.11.15.4.1 Added instructions for Forms 8866 and 8697.

(13) IRM 3.11.15.4.1 Changed transcription lines on Form 8941.

(14) IRM 3.11.15.4.1 Added IRM reference to Routing Guide for Schedule D.

(15) IRM 3.11.15.4.1 Combined Routing Guide instructions for Form 2848 and 8821 instructions to one box each.

(16) IRM 3.11.15.4.1 Added CP 2030 and CP 2531 to Routing Guide.

(17) IRM 3.11.15.4.1. Added Form 3520 to the Routing Guide.

(18) IRM 3.11.15.4.1 Added information in Routing Guide for Petitions in opposition of tax law provisions. (IPU 14U1327 09–10–2014)

(19) IRM 3.11.15.5.1 Added a new paragraph with instruction to handle an OAR when the return needs statute clearance and clarified exceptions for routing returns to Statute.

(20) IRM 3.11.15.5.3.1(2) Removed instructions to edit CCC 6 if number of partners is greater than 100. (IPU 14U0320 issued 02-13-2014)

(21) IRM 3.11.15.5.4(2) Added instructions for Re-Entry returns. (IPU 14U0610 issued 04–02–2014)

(22) IRM 3.11.15.5.4.1 Deleted Note (IPU 14U0610 issued 04–02–2014)

(23) IRM 3.11.15.5.4.2 Deleted Note (IPU 14U0610 issued 04–02–2014)

(24) IRM 3.11.15.5.4.1(10) - Change note type from "Exception" to a "Reminder" . (IPU 14U0520 issued 03-19-2014)

(25) IRM 3.11.15.5.4.2(10) - Change note type from "Exception" to a "Reminder" . (IPU 14U0520 issued 03-19-2014)

(26) IRM 3.11.15.5.5(3) - Update last sentence on table per the C&E coding consistency template. (IPU 14U0520 issued 03-19-2014)

(27) IRM 3.11.15.5.5(3) -Exception - Reworded the Exception to clarify the information. (IPU 14U0558 issued 03–26–2014)

(28) IRM 3.11.15.5.4.1(5) - Added instructions to edit CCC "6" if number of partners is greater than 100. (IPU 14U0320 issued 02-13-2014)

(29) IRM 3.11.15.5.4.2(4) - Added instructions to edit CCC "6" if number of partners is greater than 100. (IPU 14U0320 issued 02-13-2014)

(30) IRM 3.11.15.5.5 - Add "Exception" per the C&E coding consistency template. (IPU 14U0520 issued 03-19-2014)

(31) IRM 3.11.15.5.5 - Change note type from "Exception" to a "Reminder" . (IPU 14U0520 issued 03-19-2014)

(32) IRM 3.11.15.5.5 Deleted "No other codes may be used with CCC G " from the amended instructions.

(33) IRM 3.11.15.5.6 Added instructions to the second reminder to not edit "Date Business Started" on a Short Record return.

(34) IRM 3.11.15.5.6.1(7) - Note - Removed instructions to edit CCC "6" if number of partners is greater than 100. (IPU 14U0320 issued 02-13-2014)

(35) IRM 3.11.15.5.6.2(3) - Reminder - Removed instructions to edit CCC "6" if number of partners is greater than 100. (IPU 14U0320 issued 02-13-2014)

(36) IRM 3.11.15.6 Received Date - Removed the Note about the Private Meter postmark from (5). Added a Caution to (2) table about Private Meter postmark.

(37) IRM 3.11.15.6(4) Added the word may to the paragraph as a BMF Consistency procedure. (IPU 14U0320 issued 02-13-2014)

(38) IRM 3.11.15.6.3 Added the word "edit " to the reminder.

(39) IRM 3.11.15.5.6.4 (1) Clarified Inactive Return instructions.

(40) IRM 3.11.15.5.6.4 (3) Clarified instructions for number of partners. (IPU 14U0704 issued 04–16–2014)

(41) IRM 3.11.15.7 Clarified exceptions for corresponding for the signature on Form 1065.

(42) IRM 3.11.15.7(1) Added bullet to include signed Form 1065X.

(43) IRM 3.11.15.8.4 Added instructions to clarify procedures for combining a Final Return and an Initial Return.

(44) IRM 3.11.8.5 Changed "Change in Accounting Period" instructions to reflect request from Unpostables to discontinue editing CCC "Y" under certain circumstances. Removed Paragraph 2.

(45) IRM 3.11.15.8.6 Deleted instruction to route "Early Filed" returns to Rejects. Action Code "480" is edited to accomplish this.

(46) IRM 3.11.15.8.6 Changed dates to reflect PY 2015.

(47) IRM 3.11.15.8.6 Added Form 8822–B to the "Change of Address " instructions.

(48) IRM 3.11.15.9.1.1(2) Clarified Audit Code "1" instructions for Disregarded Entities.

(49) IRM 3.11.15.9.2 Removed information in the first "and " box and moved to the first "then" box.

(50) IRM 3.11.15.10 Clarified North American Industry Classification System (NAICS) Code instructions.

(51) IRM 3.11.15.13 Deleted instructions to mark the Initial Return Box when an initial return is indicated.

(52) IRM 3.11.15.13 Added a new section 3.11.15.14 for the Technical Termination Code.

(53) IRM 3.11.15.14.20(1) Removed three conditions when to edit CCC "6" . (IPU 14U0320 issued 02-13-2014)

(54) IRM 3.11.15.15.1(2) Added IRM reference to Schedule D instructions in the Routing Guide.

(55) 3.11.15.13 Deleted instructions to mark the Final Box when a Final return is indicated.

(56) IRM 3.11.15.15.13 Added instructions for CCC "X" .

(57) IRM 3.11.15.15.14 Delete CCC "Y" instructions from form 1065.

(58) IRM 3.11.15.15.20(1) Added instructions for previously e-filed returns. (IPU 14U0610 issued 04–02–2014)

(59) IRM 3.11.15.16 Changed K-1 instructions to mirror Form 1120S and Form 1041. (IPU 14U0763 issued 04–24–2014)

(60) IRM 3.11.15.16.(7) Clarified instructions for number of partners. (IPU 14U0704 issued 04–16–2014)

(61) IRM 3.11.15.19.1(5) Deleted "Reminder " to clarify conflicting information.

(62) IRM 3.11.15.19.1 Changed line number references for Form 8621.

(63) IRM 3.11.15.21.3 Changed Line 1e to Line 1c.

(64) IRM 3.11.15.21.6 Clarified editing Form 1065 from line numbers on Form 4797.

(65) IRM 3.11.15.22.2 Clarified Schedule B instructions when question 2 is answered "Yes" . Also clarified where to edit the "3" when both boxes are checked.

(66) IRM 3.11.15.23.1 Added Audit Code "2" instructions.

(67) IRM 3.11.15.23.7 Clarified Schedule B instructions. (IPU 14U0763 issued 04–24–2014)

(68) IRM 3.11.15.23.13 Added Audit Code "2" instructions.

(69) IRM 3.11.15.27 Revised instructions for deleting Schedule L.

(70) IRM 3.11.15.30 Clarified Schedule D editing procedures. (IPU 14U0543 issued 03-24-2014)

(71) IRM 3.11.15.31 Clarified Schedule D instructions (IPU 14U0634) issued 04–04–2014.

(72) IRM 3.11.15.31 Revised Schedule D instructions.

(73) IRM 3.11.15.34 Changed transcription lines on Form 8941.

(74) IRM 3.11.15.44.2 Added instructions to clarify procedures for combining a Final Return and an Initial Return on Form 1065–B.

(75) IRM 3.11.15.49.12 Delete CCC "Y" instructions from form 1065–B.

(76) IRM 3.11.15.67 Changed transcription lines on Form 8941.

(77) IRM 3.11.15.57.4 Changed line number references for Form 1065-B Line 28.

(78) IRM 3.11.15.60.2 Changed line number references for Form 1065-B Schedule K.

(79) IRM 3.11.15.61 Revised instructions for editing Schedule L on Form 1065–B.

(80) Figure 3.11.15–4, Potential Frivolous Argument Criteria - Added "Code of Federal Regulations" to define CFR.

(81) Figure 3.11.15–5 Deleted CCC "6" . (IPU 14U0655) 04–08–2014

Effect on Other Documents

IRM 3.11.15, dated November 8, 2014 (effective January 1, 2014) is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs) - 14U0320, 14U0520, 14U0543, 14U0558, 14U0582, 14U0610, 14U0634, 14U0655, 14U0704, 14U0763, 14U0829, 14U0842, 14U0856, 14U0927, 14U0931, 14U0951, 14U0955, 14U1015, 14U1064, and 14U1327.

Audience

Wage and Investment (W&I) Code and Edit Tax Examiners

Effective Date

(01-01-2015)

Paul J. Mamo
Director, Submission Processing
Wage and Investment Division

3.11.15.1  (01-01-2015)
Overview

  1. The information captured on Form 1065 is used by several functions within the Internal Revenue Service. For example, Statistics of Income tabulates the data and shares it with agencies outside of the IRS. All information is then used in developing the Gross Domestic Product (GDP) and in the economical module of tax law changes.

  2. The purpose of Document Perfection is to Code and Perfect (Edit) documents being input to the Automated Data Processing (ADP) System to make them adaptable to computer processing and to recognize and properly dispose of accompanying attachments.

  3. Beginning January 1, 2001, partnership with more than 100 partners were mandated to file Form 1065, U.S. Return of Partnership Income, electronically. The electronic filing was mandatory beginning with tax year 2000 returns filed in 2001.

3.11.15.1.1  (01-01-2015)
IRS Employee Contacts - RRA 98 IRC §3705(a)

  1. The Restructuring and Reform Act of 1998, RRA 98 IRC §3705(a), provides identification requirements for all IRS employees working tax related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

  2. All IRS employees who communicate by telephone, correspondence, or face to face with taxpayers or their personal representatives on tax-related matters are required to provide (at a minimum) the following information:

    1. Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), last name, and badge identification (ID Card) number.

    2. Face to Face Contact - Their title (e.g., Mr., Mrs., Ms., Miss), provided as appropriate during the conversation, their last name, and badge identification (ID Card) number.

    3. Correspondence - All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually generated and handwritten correspondence must have their title (e.g., Mr., Mrs., Ms., Miss), last name, and IDRS (Integrated Data Retrieval System) number, letter system number, or their badge identification (ID Card) number.

    4. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the badge identification (ID Card) number must be used. Toll-free employees may also provide their location for identification purposes. Faxes to taxpayers on tax related matters is considered manually-generated correspondence and must include the required information.

    5. Correspondence, whether sent directly to the taxpayer or to the taxpayer's personal representative, must contain the required information.

    6. When a taxpayer requests to speak with a specific employee who previously handled their inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer's inquiry. If the issue cannot be resolved, the employee should refer the inquiry using established procedures to his or her manager.

    7. Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence is in the best position to respond to any questions that the taxpayer may have about the correspondence, or if the employee is asking the taxpayer to provide additional case-related information.

    8. Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

    9. Secretaries, receptionists or other people who answer the telephone in functional offices need to identify themselves and should provide their badge identification (ID Card) number only if they are answering telephones which are routinely used to provide tax or account information.

    10. It is not necessary to repeat the badge identification (ID Card) number on a subsequent taxpayer contact, when the nature of an employee's work involves multiple contacts, with the same taxpayer and the employee has given the taxpayer (either telephone or in-person) his or her badge identification (ID Card) number on the first contact.

3.11.15.1.2  (01-01-2015)
♦BMF Master File (BMF) Consistency♦

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

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

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

  4. Text in normal print is the common processes for BMF returns. Text in BOLD print is form specific and applies to this IRM only.

3.11.15.1.3  (01-01-2015)
♦Taxpayer Advocate Service (TAS)♦

  1. Refer taxpayers to the Taxpayer Advocate Service (TAS) (See IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) or has Form 911 attached, and you can't resolve the taxpayer's issue the same day. The definition of "Same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS in accordance with your local procedures.

3.11.15.1.3.1  (01-01-2015)
♦TAS Service Level Agreement (SLA)♦

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business and Self Employed (SB/SE) Division, Tax Exempt and Government Entities (TE/GE), Criminal Investigations (CI), Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

  2. The SLAs are located at http://tas.web.irs.gov/policy/default.aspx.

3.11.15.1.4  (01-01-2015)
Form 1065, U.S. Return of Partnership Income (Program #12200)

  1. Form 1065, U.S. Return of Partnership Income is an information return used to report the income, deductions, gains, losses, etc., from the operation of a partnership. A partnership does not pay tax on its income but "passes through" any profits or losses to its partners. Partners must include partnership items on their tax returns.

    Exception:

    Partnership returns identified as a "PUBLICLY TRADED PARTNERSHIP" will pay a tax on income derived from the active conduct of all trades and businesses of the partnership (per IRC 7704(g)(3)(A)). These returns will have the annotation "3.5% GROSS INCOME TAX" on the return or attachment or between Lines 21 and 22 of the Form 1065 (below the Ordinary Business Income (Loss) amount). (SeeIRM 3.11.15.22.14).

  2. The due date for a partnership return is the 15th day of the 4th month following the close of the taxable year. April 15th is the due date for a calendar year return.

3.11.15.1.5  (01-01-2015)
♦Foreign Currency♦

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

3.11.15.2  (01-01-2015)
General Editing Guidelines

  1. The following general information can be used when editing Form 1065 returns.

  2. General instructions eliminate repetition of the same instructions for each return. If the general instructions and the specific instructions conflict, follow the specific instructions.

  3. All money amounts must be edited in dollars only.

    Reminder:

    Do not edit a vertical line, 00, dash or decimal point in a dollars and cents field when the partnership has entered dollars only.

  4. Do not edit brackets or parentheses around amounts clearly indicated to be negative by the presence of a minus sign (-).

    Reminder:

    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 line entry, etc.).

  5. Reference is made throughout this IRM to "significant entries" . A significant entry is defined as any amount other than zero.

    Note:

    Blank, Dash, "None" , "N/A" , or zero are not significant entries unless otherwise specified.

  6. Instructions for editing Schedules K-1 are in IRM 3.0.101, General - Schedule K-1 Processing.

  7. Received date is edited in MMDDYY format.

  8. The proper presentation of income and deduction items for subsequent input by the Integrated and Remittance Processing System (ISRP) and computer processing is essential. Document Perfection is responsible for arranging the return in the following order:

    1. Form 1065, page 1

    2. Form 1065, page 2

    3. Form 1065, page 3

    4. Form 1065, page 4

    5. Form 1065, page 5

    6. Schedule F (Form 1040), Profit or Loss From Farming, Lines 1c and 9

    7. Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation

    8. Schedule D (Form 1065), Capital Gains and Losses

    9. Form 1125-A, Cost of Goods Sold

    10. Form 8913, Credit For Federal Telephone Excise Tax Paid

    11. Form 8941, Credit For Small Employer Health Insurance Premiums

    12. Form 5884-B, New Hire Retention Credit

      Note:

      Place all Schedules K-1 (Form 1065), filed as attachments to Form 1065, as the last attachment in the package or follow local agreement. Detach current year Schedules K-1 through November 30th and all future year Schedules K-1. IRM 3.0.101, for Schedule K-1 editing procedures.

  9. If a current year (2014) return or a prior year return is filed on a tax form for other than the current tax year revision, convert the tax return to the current year format using the prior year conversion charts found in job aid book.

3.11.15.2.1  (01-01-2015)
♦Edit Marks♦

  1. Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through ISRP. The editing can be entered 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:

    Types of Edit Marks
    "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/$" is edited for "Ireland" or "/GM/$" is edited for "Germany" .
    "c/o" or "%" 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 not 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 "-" sign. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (e.g. computing and entering a line entry, entering a missing line entry, etc.).

    Vertical Line or Decimal Point Indicates the separation of dollars and cents.
    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 Collection, Entity or Accounts Management, are not to be re-edited except to place the marks in the correct area. Do not edit (or write) over another area's edit marks.
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.15.2.2  (01-01-2015)
♦Action Codes♦

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

  2. When necessary, a three-digit Action Code will be assigned by the tax examiner.

  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:

      When more than one Action Code is needed attach Form 4227. 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. Use Action Code 211, 215, 225, or 226 before Action Code 341 to ensure the return is complete before a manual refund is issued.

  5. Edit the following Action Codes when a return cannot be perfected:

    Action Code Description
    211 (First Correspondence) or 215 (International Correspondence)
    • Return is illegible, incomplete or contradictory and therefore cannot be processed.

    • The (form specific) 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.

    225 (Missing Signature Correspondence)
    • Unsigned return (only issue for correspondence).

    226 (Missing Signature International Correspondence)
    • Unsigned foreign return (only issue for correspondence).

    480 (Early Filed Suspense)
    • Early filed return.

    610 (Renumbered non-remittance) or
    611 (Renumbered with remittance)
    • A return is mis-blocked (e.g. Form 1065 is found in an Form 1120 batch of work).

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

    650 (International)
    • An international return that must be forwarded to Ogden Submission Processing Center (OSPC).

  6. Continue perfecting the return after editing the Action Codes.

  7. Valid Action Codes are listed below:

    Action Code Description Workday Suspense Period
    211 First Taxpayer Correspondence 40
    212 Second Taxpayer Correspondence 25
    215 International Correspondence 45
    225 Taxpayer Correspondence (signature only) 40
    226 International Correspondence (signature only) 40
    310 Statute Control 10
    320 Entity Control 10
    331 Frivolous Review 3
    341 Manual Refund 10
    342 Credit Verification 10
    343 Black Liquor

    Reminder:

    See IRM 3.11.15.2.2(8) below.

    10
    352 Name Research 3
    360 Other-in-House Research 10
    420 Management Suspense A 5
    440 Management Suspense C
    (LB&I review of 1120-F in OSPC only)
    15
    480 Early Filed Suspense 150
    610 Renumber Non-remit 0
    611 Renumber Remit 0
    640 Void 0
    650 International 0
  8. IMPORTANT (regarding "Black Liquor" Claims on Form 1065 returns): This special processing only applies to Tax Years 200901 through 201011. DO NOT edit Action Code 343 (Other Accounting) on any Form 1065 for Tax Period 201012 or later.

3.11.15.3  (01-01-2015)
Perfecting Unprocessable Documents

  1. Perfect all documents if possible. Examine schedules and other attachments for the information necessary to make the document processable and edit the information on Form 1065.

  2. Form 4227, Intra-SC Reject or Routing Slip, must be attached on unprocessable documents when instructed in the IRM.

  3. When perfection is not possible on a numbered document:

    1. Edit to extent possible.

    2. Leave the document in the batch.

    3. Edit the appropriate action code on the bottom left hand corner of the return.

  4. When perfection is not possible on an unnumbered document:

    1. Discontinue editing.

    2. Withdraw the document from the batch.

    3. Use local procedures for review.

  5. If liability for two or more Form 1065 returns for the same tax class have been reported on one return and the information necessary for the preparation of the individual returns is present:

    1. Adjust line entries on the multiple period return to reflect liability for the earliest period and prepare additional period returns.

    2. Retain all the unnumbered returns in the batch.

    3. If the original return is a numbered document, edit Action Code "360" on the bottom left hand corner of the front of the return and leave it in the block.

  6. If the Name Control cannot be determined on:

    1. Unnumbered - Follow local research procedures to obtain a Name Control. (See IRM 3.13.2, BMF Account Number)

    2. Numbered - Edit Action Code "320" for later routing to Entity Control.

  7. Employer Identification Number (EIN) other than nine digits, EIN missing, or multiple EINs:

    1. Unnumbered - Follow local research procedures to obtain EIN.

    2. Numbered - Edit Action Code "320" for later routing to Entity Control. See Figure 3.11.15-1 below.

  8. Return is misbatched -

    1. Unnumbered - Follow local procedures.

    2. Numbered - Edit Action Code "610" and leave in block.

  9. For all other conditions, initiate correspondence action when the document cannot be perfected from attachments or schedules.

    Figure 3.11.15-1
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.3.1  (01-01-2015)
♦Correspondence♦

  1. There are two types of correspondence that Code and Edit may encounter:

    1. Correspondence received from taxpayers, and

    2. Issuing correspondence to taxpayers.

  2. Correspondence is all written communications from a taxpayer or his/her representative, excluding tax returns, whether solicited or unsolicited. This includes:

    1. Written communications in response to IRS requests for information or data.

    2. Written communications, including annotated notice responses, that provide additional information or dispute a notice.

    3. A telephone call that results in a written referral or research (Form e-4442, Inquiry Referral).

  3. The key to identifying taxpayer correspondence is to ask the following questions:

    1. Is taxpayer waiting for a response from us?

    2. Is taxpayer waiting for an action to be taken by us?

    3. Is taxpayer asking a question?

    Note:

    A Post-It-Note, Sticky Note, or some other type of note stuck on the return by another function does not constitute correspondence from the taxpayer. For instance the note may state something like the following: "Taxpayer (TP) requests penalties be waived" .

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

    Exception:

    Do not correspond on returns prepared by Collections, IRC §6020(b) or by Examination, "Substitute for Return" (SFR).

    Exception:

    Do not correspond with the partnership, for missing information or attachments, when there is an indication on the return that no transactions transpired during the tax year. All entries are zero (0).

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

    If... And... Then...
    Correspondence is needed, Requires a response,
    1. Complete approved Correspondence Action Sheet indicating the letter number (86C, 854C, 1355C, 3875C, etc.), MFT, and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required to enter, such as, tax period, form number, DLN, etc.


    2. Attach the Correspondence Action Sheet to the front of the return below the entity area.

    3. Edit Action Code 211 (First Correspondence) or 215 (International Correspondence) on the return.

    4. Finish editing the return and leave in the batch.

    Correspondence is needed, Does not require a response,
    1. Complete approved Correspondence Action Sheet indicating the letter number (86C, 854C, 1355C, 3733C, 3875C, etc.), MFT, and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required to enter such as tax period, form number, DLN, etc.

    2. Photocopy first page of the return and attach the Correspondence Action Sheet below the Entity areas on the front of the copy of the return. Be sure the name and address shows clearly above the approved Correspondence Action Sheet.

    3. Forward the copy to the Correspondence area.

    4. Edit an Action Trail (e.g., "3875C Sent" ) in the lower left corner, vertically up the side of the return.

    5. Finish editing the return and leave in batch.

    Note:

    There may be additional letters that are exclusive to the Tax Examiner's campus. These letters are for specific forms or conditions where it was deemed necessary for processing. The Tax Examiner should go to the Lead or Manager for copies of these letters to facilitate processing.

3.11.15.3.1.1  (01-01-2015)
♦Correspondence Imaging System (CIS) Returns♦

  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Account Management (AM) receipts into digital images and working the cases from those images.

  2. "CIS" returns are identified with "CIS Image-Do not correspond for Signature" stamped below the signature line or "CIS" annotated on the front of the return.

  3. Verify all edit marks on a "CIS" return.

    If... Then...
    The edit marks are black, Underline the edit mark if correct, or circle if incorrect.
    The edit marks are red or green, Circle if incorrect.
    The edit marks are missing or incorrect, Perfect as necessary.
  4. Follow the instructions below for processing "CIS" returns:

    If... And... Then...
    The "CIS" return has Form 13596 attached,

    Note:

    If there is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), do not route the return to Accounts Management. Continue processing the return,

    The return is not complete (e.g., missing signature, schedules or forms), Remove the return from the batch and route to Accounts Management.

    Note:

    If the return comes back from AM with the information still incomplete, send the return to AM again to secure all the missing information. Indicate "Additional information needed to process incomplete CIS return" on Form 4227 ( or other appropriate routing slip).


    Note:

    Do not correspond for missing information on "CIS" reprocessable or reinput returns.

    The "CIS" return does not have Form 13596 attached, The return is not complete (e.g., missing signature, schedules or forms), Follow normal correspondence procedures.

3.11.15.3.1.2  (01-01-2015)
♦Use of FAX for Taxpayer Submissions♦

  1. Tax return information can be received via fax as part of return perfection even if a taxpayer 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 and Edit 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 any tax information, you must be sure you are speaking with 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. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail 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.

3.11.15.3.2  (01-01-2015)
Foreign Address Returns (International)

  1. Ogden Campus Submission Processing (OSPC) will process all Foreign Address returns.

  2. A Foreign Address is any address other than the 50 states and the District of Columbia.

  3. An Army Post Office (APO), Diplomatic Post Office (DPO) or Fleet Post Office (FPO) is not considered a foreign address. The Postal Service established new address requirements for the APO/DPO/FPO addresses.

  4. If an address appears in the old APO/DPO/FPO format, convert to the new State Code abbreviation based on the ZIP Code: For example, if the old address appears as "APO New York, NY 091XX" , convert to read as "APO AE 091XX" .

    ZIP Code State Code
    340 AA
    090-098 AE
    962-966 AP
  5. Route returns with a foreign address to OSPC for processing. Prepare Letter 86C to inform the partnership that the return has been sent. See Figure 3.11.15-2 below.

  6. U.S. Possessions/Territories - The following U.S. Possessions/Territories are considered Foreign Addresses and must be sent to OSPC for processing:

    U.S. Possession/Territory Abbreviation
    American Samoa AS
    Federated States of Micronesia FM
    Guam GU
    Marshall Islands MH
    North Mariana Islands MP
    Palau PW
    Puerto Rico PR
    Virgin Islands (U.S.) VI
  7. A ZIP Code must be present for U.S. Possessions/Territories. Edit the appropriate ZIP code if one is not provided. Exhibit 3.11.15-1.

    Figure 3.11.15-2
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.3.3  (01-01-2015)
♦Frivolous Arguments♦

  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 (FRP), shown in Exhibit 3.11.15-4, Potential Frivolous Argument Criteria.

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

    If... Then...
    The return meets any of the conditions identified as a frivolous return, (See Exhibit 3.11.15-4, Potential Frivolous Argument Criteria),

    Exception:

    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.
    Examination has selected the return as frivolous, indicated by an Action Code 331 and a Form 4227 with the remarks "Refer to Exam FRP for audit after processing" but sends the return for processing, Continue processing the return using procedures in IRM 3.11.15. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

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

3.11.15.3.4  (01-01-2015)
♦Criminal Investigation (CI) "Funny Box" ♦

  1. Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC are willful and deliberate attempts to evade or defeat the income tax. Flagrant criminal activity includes, but is not limited to, the failure to pay over taxes due and/or taxes collected or withheld and claims of false refunds based on bogus return information and place in “CI Funny Box”.

  2. Pull any return identified as having any CI criteria found in paragraph (3) below.

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

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

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

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

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  4. If CI has stamped the return, no action is required.

3.11.15.3.5  (01-01-2015)
♦Examination (Exam) "Funny Box" ♦

  1. The primary objective in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination will provide support and assist Submission Processing (SP) with any questionable return identified during processing. Exam has a vast multitude of programs and tolerance criteria already identified in various IRM sections. Exam does not restrict SP with the flexibility to refer questionable returns other than what is currently identified in various IRMs.

3.11.15.3.6  (01-01-2015)
♦Protective Claims♦

  1. Returns marked as "Protective Claims" , "Protective Claim for Refund" , or similar statement will be removed from the batch and routed to Accounts Management. Notate "Protective Claim" in the remarks box of Form 4227.

    Exception:

    If the return is amended, do not remove from batch. Edit Computer Condition Code "G" and follow normal processing procedures.

3.11.15.3.7  (01-01-2015)
♦BMF Identification (ID) Theft♦

  1. BMF Identification Theft is increasing. If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the P&A staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must clearly state that they are a victim of "ID Theft" ; do not send cases that are subject to "Funny Box" or "Fraud" review.

3.11.15.4  (01-01-2015)
Examination of Attachments

  1. All attachments to the document being processed will be examined and action taken as required by the attachment.

  2. When an attachment has an effect on the document being processed, it will remain attached unless a specific instruction requires that it be detached.

    1. Notate any action taken on Form 1065 regarding attachments, photocopying, etc. (to leave an action/working trail).

    2. Refer to the Campus Mail Routing Guide for proper disposition of attachments not found in these instructions.

  3. If the document to be detached contains any information that is pertinent to the return being processed, photocopy or transfer the data to a blank piece of paper and attach it to the return.

  4. Forward any attachment requesting an adjustment or correspondence to Accounts Management Branch via Form 4227.

  5. Ensure the attachment contains the partnership name, address, EIN and received date.

3.11.15.4.1  (01-01-2015)
♦Routing Guide for Attachments♦

  1. All attachments to the return must be reviewed before the return can be considered processable.

    1. Attachments should only be detached when specifically instructed.

    2. Edit Action Trail(s) (e.g., "2848 DETACHED" ) in the lower left corner going vertically up the side of the return.

  2. Follow the general guidelines below written for each attachment:

    DOCUMENT DETACH ACTION
    CP 504/504B NO
    1. Pull CP 504 to the front.

    2. Route notice and return to Accounts Management.

    CP 259, 515-518: Incomplete action noted for routing NO Route notice and return to Collections.

    Exception:

    Do not route to Collections (or to the Collections department on campus) if "599" is notated.

    CP 2030 No Attach CP in front of return and route both to BMF Automated Underreporter (AUR) in compliance.
    CP 2531 No Attach CP in front of return and route both to BMF Automated Underreporter (AUR) in compliance.
    Request for Account Adjustment YES Route to appropriate function. Attachment must contain Name, Address, EIN, and IRS Received Date. Edit if missing.
    Includes tax liability for Multiple Tax Periods or Types of Tax NO
    • Numbered returns route to Rejects.

    • Unnumbered returns, prepare a dummy return if possible: otherwise correspond.

    Other Tax Returns (original signature) YES
    1. Edit received date to the detached return.

    2. Route to appropriate function unless specifically directed otherwise.

      Exception:

      Returns attached to a consolidated return will NOT be detached.

    Petitions in opposition of tax law provisions Yes

    Note:

    No Action Trail needs to be edited when detaching a petition.

    Route to:
    IRS
    ≡ ≡ ≡ ≡ ≡
    1111 Constitution Avenue, NW
    Washington, DC 20224
    State Tax Returns YES/NO YES - If original or copy, with an original signature, route to Receipt and Control.

    NO - If photocopy, facsimile or no signature, leave attached.
    Statement establishing Reasonable Cause for delinquent filing NO
    1. Issue Letter 1382C.

      Exception:

      If the taxpayer is disputing or requesting an abatement or waiver of already assessed penalties and/or interest, do not issue Letter 1382C. See Routing Guide for "Request for Account Adjustment"

    2. Continue editing the return.

    Remittance found NO Immediately hand-carry return and remittance to supervisor.
    Request for Acknowledgement NO No action required.
    Request for information or inquiries YES
    1. Photocopy any data necessary to process the return.

    2. Attach the photocopy to the return.

    3. Route original attachment to the proper office for necessary action.

    Requests for Installment Agreements YES Ogden - route to Collections. Cincinnati - route to Receipt and Control (R&C).
    Request for Adjustment to another document YES Route to appropriate function. Attachment must contain Name, Address, EIN and Received Date. Enter if missing.
    Request for money transfer NO/YES NO - Partnership notates transfer of money TO the return you are processing:
    1. Prepare Form 3465 and:

      1. Indicate "Rejects" in the Routing box.

      2. Notate "See attached money transfer request" in the Remarks box.

    2. Edit Action Code 450 to route the request to Rejects.



    YES - Partnership notates transfer of money FROM the return you are processing:
    1. Edit CCC "X" to freeze overpayment.

    2. Prepare Form 3465 and:

      1. Indicate "Adjustments" in the Routing box.

      2. Notate the requested action in the "Remarks box" .

    3. Attach Form 3465 to the request and route to Accounts Management.

    4. Continue editing the return.

    Request for Form 8109, Deposit Slips or Coupon Books NO No action required.
    Request for Forms or Schedules NO If requesting current year forms:
    1. Prepare Form 4190.

    2. Forward to National Distribution Center (NDC) for processing.


    If requesting prior year forms:
    1. Prepare Form 6112.

    2. Forward to National Distribution Center (NDC) for processing.

      Note:

      Form 4190 and Form 6112 are generally used for IMF requests. Therefore, enter all BMF requests for forms and/or schedules in the "WRITE-IN" portions of the forms.

    Form 433-B, Collection Information Statement for Businesses YES Ogden - route to Collections. Cincinnati - route to Receipt and Control (R&C).
    Form 433-D, Installment Agreement YES Ogden - route to Collections. Cincinnati - route to Receipt and Control (R&C).
    Form 9465, Installment Agreement Request YES Ogden - route to Collections. Cincinnati - route to Receipt and Control (R&C).
  3. The table below contains routing instructions for specific forms and/or documents attached to Form 1065 or Form 1065-B.

    FORM/DOCUMENT DETACH ACTION
    SS-4, Application for Employer Identification Number YES/NO YES (Original) Route to Entity Control.
    NO (Copy) No action required.
    Form T, Forest Activities Schedules NO No Action.
    W-2, Wage and Tax Statement YES Route to Receipt and Control.
    W-2G Certain Gambling Winnings NO No Action.
    Form 1042, Annual Withholding Tax Return for U.S. Sourced Income of Foreign Persons YES Edit received date on the detached form and route for processing:
    CSPC - Route to OSPC.
    OSPC - Route to Receipt and Control.
    Form 1065X Amended Return or Administrative Adjustment Request (AAR) NO See IRM 3.11.15.5.5 procedures for Amended Returns and IRM 3.11.15.7 for Signature.
    Form 1099, Information Return of Income and Payments (Copy A only) YES Route to Receipt and Control.
    Form 1125-A, Cost of Goods Sold NO See IRM 3.11.15.32 and IRM 3.11.15.65.
    Form 1128, Application to Adopt, Change or Retain a Tax Year NO See IRM 3.11.15.8.5 Change in Accounting Period.
    Form 2848, Power of Attorney and Declaration of Representative (POA) YES Ogden - Route to Mail Stop 6737
    Cincinnati - Route to;
    Internal Revenue Service
    PO Box 268, Stop 8423
    Memphis, TN 38101–0268
    For Private Delivery Carriers:
    Internal Revenue Service
    5333 Getwell Road Stop 8423
    Memphis, TN 38118

    Edit as follows:
    1. Edit partnership name and EIN on Form 2848 if missing.

    2. Edit received date on Form 2848.

    3. Route Form 2848 to CAF (Centralized Authorization File) function.

    4. Edit action trail on tax return.

    Form 3115, Application for Change in Accounting Method NO Edit Audit Code 6 in the left margin next to Line 9 in 1-6 format. IRM 3.11.15.19.1, Audit Codes.
    Form 3468, Computation of Investment Credit NO Edit Historic Structure Code "3" in the left margin next to Line 9 of Form 1065 if tax period ending is 8312 or later in 6-3 format and the conditions in IRM 3.11.15.19.5, Historic Structure Code, are met.
    Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts Yes/No Yes - If Form 3520 has an original signature forward to OSPC via Form 4227.
    No- Leave Form 3520 attached if the Form 3520 does not have an original signature.
    Form 3520-A, Annual Return of Foreign Trust With U.S. Beneficiaries YES
    1. Forward to OSPC via Form 4227.

    2. Issue Letter 86C and notate on Form 1065.

    Form 4255, Recapture of Investment Credit NO Edit Computer Condition Code "X" on partnership returns have this form attached to repay any unused Qualifying Therapeutic Discovery Credits (QTDP). These returns will have a notation "QTDP" and money amount in the margin near Line 22. See IRM 3.11.15.22.14.
    Form 4571, Explanation for Filing Return Late or Paying Tax Late NO This form is obsolete as of 1/20/2004.

    No action
    Form 4797, Sale of Business Property NO IRM 3.11.15.21.6 and IRM 3.11.15.55.10
    Form 4835, Farm Rental Income and Expenses NO Edit the Salary and Wage Code, (entry on Line 20) to the right of Line 9 on Form 1065, and/or the EPMF Code, (entry on Line 21) to the right of Line 18 on Form 1065.
    Form 5471, Information Return of U.S. Persons with Respect to a Foreign Corporation NO Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format. See IRM 3.11.15.23.13 for Schedule B, Question 19 editing procedures.
    Form 5472, Information Return of a Foreign Owned Corporation NO Edit Audit Code "2" in the left margin next to Line 9 in 1-2 format.
    Form 5713, International Boycott Report YES/NO YES - If Original
    1. Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format when both questions in 7(f) are answered "YES" .

    2. Edit Audit Code "7" in the left margin next to Line 9 in "1-7" format if either one or both questions in 7(f) are not answered "YES" .

    3. Detach and forward to OSPC SOI (Statistics of Income) at mailstop (MS) 6112.

      Note:

      If an original signature is present on a photocopy, treat it as an original, if there is no original Form 5713.



    NO - If Copy
    1. Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format when both questions in 7(f) are answered "YES" .

    2. Edit Audit Code "7" in the left margin next to Line 9 in "1-7" format if either one or both questions in 7(f) are not answered "YES" .

    Form 5884-A, Credits for Affected Midwestern Disaster Area Employers NO No Action.
    Form 5884-B, New Hire Retention Credit NO Place in sequence order. IRM 3.11.15.2
    Form 6252, Computation of Installment sale Income NO Edit Installment Sale Indicator Code in the left margin next to Line 9 in 3-1, 3-2, or 3-3 format based on the response to Form 6252 Question 3.
    See IRM 3.11.15.19.3.
    Form 6478, Alcohol and Cellulosic Biofuel Credit NO These instructions apply to 2009 tax year only, including fiscal year filers (200901 through 201011). Edit Action Code "343" if Form 6478 has a significant amount on *Line 5(c) or Line 8.
    *Line 5(c) or Line 7 on 2009 Form 6478.
    Line 7(c) or Line 9 on 2008 Form 6478.
    Not applicable for other prior year revisions.

    Reminder:

    Do not edit AC 343 for Tax Period 201012.

    Form 6765, Credit for Increasing Research Activities NO No Action.
    Form 6781, Gains and Losses From Section 1256 Contracts and Straddles NO Edit Computer Condition Code "I" (as in "Idaho" ).

    Note:

    Edit an upper case letter "I" , with a line drawn at the top and at the bottom, to facilitate ISRP transcription and to distinguish this letter from the number "1" (one).

    Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns YES/NO YES - If Form 7004 is for a tax return other than the one being edited, edit Received Date and route to Receipt and Control.

    NO - If Form 7004 is for the tax return being edited, no action.
    Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) NO Edit Audit Code "1" in the left margin next to Line 9 in "1-1" format.
    Form 8271, Investor Reporting of Tax Shelter Registration Number NO Edit Computer Condition Code "T" .

    Note:

    Valid for Tax Periods 200711 and prior only.

    Form 8275, Disclosure Statement NO Edit Audit Code "1" in the left margin next to Line 9 in "1-1" format.
    Form 8275-R, Regulation Disclosure Statement NO Edit Audit Code "1" in the left margin next to Line 9 in "1-1" format.
    Form 8283, Non-Cash Charitable Contributions NO Edit Audit Code 5 in the left margin next to Line 9 in "1-5" format when the following conditions exist:
    • 1993 and subsequent return, page 2, Part 1, Question 4, "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " , is checked.

    • 1993 and subsequent return, page 2, Part 1, Question 5, a-d, column (c) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Form 8308, Report on the Sale or Exchange of Certain Partnership Interest NO No Action.
    Form 8453-B, U.S. Electing Large Partnership Declaration for an IRS e-file Return YES (If signature present) Transship form to OSPC Electronic Filing Unit:
    Ogden IRS Campus
    ELF Processing Support Section
    OSC M/S 6052
    1160 W 12 Street
    Ogden, UT 84201
    Form 8453-P, U.S. Partnership Declaration and Signature for Electronic Filing YES (If signature present) Transship form to OSPC Electronic Filing Unit.
    Ogden IRS Campus
    ELF Processing Support Section
    OSC M/S 6052
    1160 W 12 Street
    Ogden, UT 84201

    Note:

    For Tax Periods 200711 and prior.

    Form 8453-PE, U.S. Partnership Declaration for an IRS e-file Return YES (If signature present) Transship form to OSPC Electronic Filing Unit.
    Ogden IRS Campus
    ELF Processing Support Section
    OSC M/S 6052
    1160 W 12 Street
    Ogden, UT 84201
    Form 8586, Low-Income Housing Credit NO See IRM 3.11.15.24.12 (Line 15a, Schedule K) and IRM 3.11.15.24.13 (Line 15b, Schedule K)
    Form 8594, Asset Acquisition Statement NO Edit Audit Code "5" in the left margin next to Line 9 in "1-5" format if the conditions in IRM 3.11.15.19.1 are met.
    Form 8609, Low-Income Housing Credit Allocation Certification NO SeeIRM 3.11.15.24.12 andIRM 3.11.15.24.13.
    Form 8609-A, Annual Statement for Low-Income Housing Credit NO See IRM 3.11.15.24.12 andIRM 3.11.15.24.13.
    Form 8611, Recapture of Low-Income Housing Credit NO No Action.
    Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund NO
    1. Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format if Part V, Lines 15a - 16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Edit Audit Code "7" in the left margin next to Line 9 in "1-7" format if Part V, Lines 15a -16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    If Form 8621 is a prior year revision (2011 or prior) check Part IV, Lines 10a - 11f for entries.

    Form 8693, Low-Income Housing Credit Disposition Bond NO No Action.
    Form 8697, Interest Computation Under the Look-Back Method for Completing Long-Term Contracts YES/NO YES - IF:
    1. Form 1065 has a $ amount (interest due) written by the taxpayer in the bottom margin (i.e. from Form 8697).

      • Edit CCC"X"

      • Photocopy page 1 of Form 1065

      • Detach Form 8697 and route with photocopy to Accounts Management

    2. Line 9 (Form 8697) indicates a "Refund" :

      • Edit Tax Period and EIN on Form 8697.

      • Detach and route to Accounts Management (AM).



    NO - If Line 9 (Form 8697) DOES NOT indicate a "Refund" , no action.
    Form 8716, Election to Have a Tax Year That is Not a Required Tax Year
    (original Form 8716)
    NO See IRM 3.11.15.8.5 Change in Accounting Period.
    Form 8752, Required Payment of Refund Under Section 7519 YES
    1. Make sure the Partnership Name, Received Date, Tax Period and EIN are included on the form.

    2. If any of these items are missing, edit the information from the Form 1065 return to the appropriate areas of the Form 8752.

    3. Route to Receipt & Control Unit.

    Form 8804, Annual Return for Partnership Withholding Tax (Section 1446) YES
    1. Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format.

    2. Forward to OSPC.

    Caution:

    Do not detach and forward if the form is clearly identified as a "copy" .

    Form 8805, Foreign Partners Information Statement of Section 1446 Withholding Tax YES, (if Form 8804 attached). Otherwise, NO
    1. Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format.

    2. Forward to OSPC.

    Caution:

    Do not detach and forward if the form is clearly identified as a "copy" .

    Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446) NO Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format.
    Form 8821, Tax Information Authority (TIA) YES Ogden - Route to Mail Stop 6737
    Cincinnati - Route to;
    Internal Revenue Service
    PO Box 268, Stop 8423
    Memphis, TN 38101–0268
    For Private Delivery Carriers:
    Internal Revenue Service
    5333 Getwell Road Stop 8423
    Memphis, TN 38118

    Edit as follows:
    1. Edit partnership name and EIN on Form 8821.

    2. Edit Received Date on Form 8821.

    3. Route Form 8821 to CAF function.

    4. Edit action trail on tax return.

    Form 8822, Change of Address, or Form 8822-B, Change of Address - Business: YES/NO YES - If attached to the Form 1065 AND the new address on the Form 8822/8822-B is DIFFERENT from the address on the Form 1065:
    1. Detach Form 8822/8822-B.

    2. Forward to Entity Control, using local procedures for expedited processing. See IRM 3.11.15.9.4, Entity Perfection - Domestic Addresses. See IRM 3.11.15.8.6, for Early-Filed Returns with Form 8822 attached.



    NO - If attached to the Form 1065 AND the address on the Form 8822/8822-B is the SAME as the address on the Form 1065, DO NOT DETACH.

    If the Form 8822/8822-B is NOT ATTACHED to a Form 1065, batch daily and forward to Entity Control, using local procedures for expedited processing.
    Form 8824, Like Kind Exchanges NO Edit Computer Condition Code "1" . See IRM 3.11.15.15.15 (CCC "1" ). See IRM 3.11.15.24.8.
    Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation NO See IRM 3.11.15.24.1 and IRM 3.11.15.55.5.
    Form 8832, Entity Classification Election NO Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format if box 6(d), (e) or (f) is checked.
    Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) NO
    1. Edit Computer Condition Code "L"

    2. Edit Audit Code 2 in the left margin next to Line 9 in "1-2" format.

    Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities NO Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format.
    Form 8865, Information Return of U.S. Persons With Respect to Certain Foreign Partnership's NO Edit Audit Code "2" in the left margin next to Line 9 in "1-2" format
    Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method YES/NO YES - IF:
    1. Form 1065 has a $ amount (interest due) written by the taxpayer in the bottom margin (i.e. from Form 8866).

      • Edit CCC "X"

      • Photocopy page 1 of Form 1065

      • Detach Form 8866 and route with photocopy to Accounts Management

    2. Line 9 (Form 8866) indicates a "Refund" :

      • Edit Tax Period and EIN on Form 8866.

      • Detach and route to Accounts Management (AM).



    NO - If Line 9 of the Form 8866 DOES NOT indicate a "Refund" , no action.
    Form 8873, Extraterritorial Income Exclusion NO No Action.
    Form 8879-B, IRS e-file Signature Authorization for Form 1065-B NO No Action.
    Form 8879-PE, IRS e-file Signature Authorization for Form 1065 NO No Action.
    Form 8883, Asset Allocation Statement Under Section 338 NO Edit Audit Code "5" in the left margin next to Line 9 in "1-5" format if Box 5a, Stock Price≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (See IRM 3.11.15.19.1).

    Edit a CCC "S" when Form 8883 is attached to Form 1065 (See IRM 3.11.15.15.10).
    Form 8886, Reportable Transaction Disclosure Statement NO Edit Audit Code "1" in the left margin next to Line 9 in "1-1" format.

    Edit a CCC "T" for Tax Period 201301 and subsequent.
    Form 8893, Election of Partnership Level Tax Treatment NO IRM 3.11.15.23.7
    Form 8894, Request to Revoke Partnership Level Tax Treatment Election YES Forward to:
    OIRSC
    TEFRA M/S 4510
    Form 8902, Alternative Tax on Qualifying Shipping Activities NO No Action.
    Form 8913, Credit for Federal Telephone Excise Tax Paid NO
    1. Edit Action Code "420" on original Form 1065/1065-B.

    2. Place in sequence order.


    (See IRM 3.11.15.2 and IRM 3.11.15.38)
    Form 8938, Statement of Foreign Financial Assets NO If attached to the return, no action is required.
    Form 8941, Credit for Small Employer Health Insurance Premiums NO (1) Place in sequence order. See IRM 3.11.15.2 and IRM 3.11.15.38.
    (2) Make sure the taxpayer entries contained on Lines 1, 2, 13, and/or 14 (Lines containing "enter the number of . . . " ) are whole numbers (i.e., 1, 2, 3, 4, etc.). If Lines 1, 2, 13, and/or 14 all contain whole numbers, do nothing.
    (3) If Lines 1, 2, 13, and/or 14 contain decimals (or were entered as other than whole numbers), do as follows:
    1. Mark an "X" to the left of the taxpayer's entry.

    2. Round the taxpayer's entry to the next lowest whole number.

    3. Edit the rounded result to the left of the "X" .

      Note:

      If the result is less than one (1), round up to "1" .

    4. IMPORTANT: Do this for each of those lines ONLY if the taxpayer's entry is shown as other than a whole number.

    Schedule D, Capital Gains and Losses NO See IRM 3.11.15.23 and IRM 3.11.15.30
    Schedule E, Supplemental Income and Loss NO Schedule E should not be filed with Form 1065. If attached, IRM 3.11.15.24.1
    Schedule F (Form 1040), Profit or Loss From Farming NO IRM 3.11.15.29
    Schedule M-3, Net Income (Loss) Reconciliation for Certain Partnership's NO All returns with a Schedule M-3 attached must be transshipped to Ogden for processing.
    1. Edit Computer Condition Code B. (IRM 3.11.15.15.2)

    2. Edit Audit Code "8" in the left margin next to Line 9 "1-8" format IRM 3.11.15.19.1.

3.11.15.5  (01-01-2015)
Special Conditions

  1. The following instructions reference special procedures.

3.11.15.5.1  (01-01-2015)
♦Statute Returns♦

  1. Any return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute control return.

  2. Statute returns must be routed to the Statute Control Unit daily or more often if needed.

    Exception:

    Do not route to the Statute Control Unit for clearance, edit CCC "W" , and continuing processing for any of the following returns:
    • Compliance IRC §6020(b) returns.
    • Secured by Examinations/Collections.
    • Returns with "TC 59X" or "ICS" notated on the face of the return.
    • Examination prepared return - Substitute for return or notated on Page 1.
    • Returns with a stamp indicating a previous clearance by Statute Control within the last ninety days.

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

    If... Then...
    The return is numbered,
    1. Edit Action Code 310 on the return.

    2. Leave the return in the batch and continue processing.

    The return is unnumbered,
    1. Do not continue processing.

    2. Pull the return from the batch.

    3. Attach Form 4227 and route to Statute Control Unit. (See Figure 3.11.15-3).

  4. If a Form 12412, Operations Assistance Request (OAR) is received from TAS and the return is a potential statute control return but is not stamped, "Cleared by Statute" , give the return to your lead. The lead will contact the TAS employee listed on the OAR for rejection of the return and send it back to TAS for clearance by the Statute Unit.

    Note:

    If the return is within 90 days of statute expiration date advise the TAS employee of such and that expedited handling is needed. If requested by the TAS employee route the return directly to Statute for clearance.

  5. Edit CCC "W" if the return has been cleared by Statute Control Unit. Statutes will stamp or indicate clearance on the front of the return. (Figure 3.11.15-4).

  6. IRC §6229 established a three year statute of limitation on partnerships covered under the Tax Equity Fiscal Responsibility Act (TEFRA).

  7. Statute may stamp a return as "No Statute Issue" , "Statute N/A" , or similar statement indicating there is not statute issue. Follow the chart below to determine if a CCC "W" is needed:

    If... And... Then...
    The return received date is 2 years and 9 months or more after the Return Due Date, The return is stamped, “No Statute issue”, "Statute N/A" , or similar statement indicating there is no statute issue, Edit a CCC W
    The return received date is less than 2 years and 9 months from the Return Due Date, The return is stamped, “No Statute issue”, "Statute N/A" , or similar statement indicating there is no statute issue, Do not edit a CCC W

    Figure 3.11.15-3
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Figure 3.11.15-4
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.5.2  (01-01-2015)
Reserved

  1. This Subsection is reserved for future use.

3.11.15.5.3  (01-01-2015)
♦Compliance Secured/Prepared Returns♦

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

    1. Prepared tax returns are notated with IRC "§6020(b)" or "SFR" (Substitute for return).

    2. Secured tax returns are notated with "TC 59X" or "ICS" (Integrated Collection System) or notated "Process as Original" with an attached Form 13133, Expedite Processing Cycle. The "Delinquent Return" box on Form 13133 should be checked.

      Note:

      If "RD" is notated on the front of the return and not circled, remove from the batch and route to Collections.

3.11.15.5.3.1  (01-01-2015)
♦IRC §6020(b) -
Prepared by Collection♦

  1. When the taxpayer fails to file a required return, IRC §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 IRC §6020(b) OF THE INTERNAL REVENUE CODE" , which is located in the center bottom of Page 1 of the return.

    1. Returns must have a IRS Received Date. If the IRS Received Date is missing, follow the normal procedures for editing the Received Date. (See IRM 3.11.15.6)

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

      Note:

      Starting July 1, 2013 we will accept the Revenue Officers (RO) electronic signature or typed signature as a valid signature on the return.

    3. Edit CCC "4" . SeeIRM 3.11.15.15.18 and Figure 3.11.15-5.

      Note:

      CCC "R" cannot be used with CCC "4" .

    4. Edit CCC "D" if the Compliance Function representative notates "DO NOT ASSESS FAILURE TO PAY PENALTY"

    5. Do Not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

    6. Edit CCC "W" if the IRS Received Date is more than 2 years 9 months after the Return Due Date. Do Not send the return to Statute Control. (SeeIRM 3.11.15.15.12 and (See Figure 3.11.15-5)

    7. Number of partners, Line I, must be 2 through 999,999.

      If... Then...
      Number of partners is blank, Edit "6" as the number of partners. (IRM 3.11.15.16)

    Figure 3.11.15-5

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

3.11.15.5.3.2  (01-01-2015)
♦Collection Secured♦

  1. These returns are identified by the notations: "TC 59X" or "ICS" . See Figure 3.11.15-6

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

    2. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

    3. Edit CCC "W" if the IRS Received Date is more than 2 years 9 months after the Return Due Date. Do Not send the return to Statute Control. (See IRM 3.11.15.15.12)

    4. Number of partners, Line I, must be 2 through 999,999.

      If... Then...
      Number of partners is blank, IRM 3.11.15.16
      Number of partners is greater than 100, Edit CCC "6" .

    Figure 3.11.15-6

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

3.11.15.5.3.3  (01-01-2015)
♦Examination Prepared Returns - Substitute for Return or SFR♦

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

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

    2. Do Not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

    3. If Form 13133 is attached, edit the Computer Condition Code(s) that are checked on the form.

      Note:

      CCC "R" cannot be used with a CCC "4" .

    4. Edit CCC "W" if the IRS Received Date is more than 2 years 9 months after the Return Due Date. Do Not send the return to Statute Control. (IRM 3.11.15.15.12)

    5. Number of partners, Line I, must be 2 through 999,999.

      If... Then...
      Number of partners is blank, Edit "2" as the number of partners.
      Number of partners is greater than 100, Edit CCC "6" . (IRM 3.11.15.15.20)

3.11.15.5.3.4  (01-01-2015)
♦Examination Secured♦

  1. These returns are identified by the notation "Process as Original" on Page 1 of the return and a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box checked.

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

    2. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

    3. Edit the Computer Condition Code(s) that are checked on Form 13133.

    4. Edit CCC "W" if the IRS Received Date is more than 2 years 9 months after the Return Due Date. Do Not send to Statute Control. (IRM 3.11.15.15.12)

    5. Number of partners, Line I, must be 2 through 999,999.

    If... Then...
    Number of partners is blank, IRM 3.11.15.16
    Number of partners is greater than 100, Edit CCC "6" . (See IRM 3.11.15.15.20)

3.11.15.5.4  (01-01-2015)
♦Re-Entry Document Procedures♦

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

  2. Some re-entry returns may have originally been filed 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.

    • Edit a CCC "6" if more than 100 partners.

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

    • Form 3893 is used to reinput documents that have not posted to an account or module

    • Form 13596 is used to reprocess documents that had previously posted to an incorrect account or module

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

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

    Caution:

    If the IRS 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 IRM 3.11.15.5.1.

  6. If Schedules K-1 are attached to a Reprocessable/Re-Entry current year parent return that has not been processed, detach Schedules K-1 and process as "Loose Schedules K-1" using IRM 3.0.101.

3.11.15.5.4.1  (01-01-2015)
♦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 no.), edit all returns using current processing instructions and keep all returns clipped together.

  3. Circle the CCC "G" if present.

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

  5. Do not send Letter 1382C if a request for reasonable cause is attached.

  6. 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.

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

    Form 3893 Action Taken
    Box 14 (Remarks) Ensure that the information is edited to the return.
    Box 15 (Process as)
    1. Circle any green rocker and edit marks that indicate a receipt of remittance.

    2. Do not change any tax due amounts.

  8. 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/green (per local procedure) to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  9. An IRS Received date must be present on all reinput returns:

    If... Then...
    IRS Received Date is not present, Edit a IRS Received Date to the middle of the return.
    Multiple IRS Received Dates are present, Circle all but the earliest date.
  10. When additional information is still needed to make the return processable, prepare approved Correspondence Action Sheet or Form 4227 for the appropriate action (e.g. correspondence, research, etc.).

    Reminder:

    Do Not correspond for missing Schedules K-1. (SeeIRM 3.11.15.16).

  11. When perfection is not possible edit Action Code 640 on the return and attach Form 4227 noting "PERFECTION NOT POSSIBLE" and leave in the batch.

3.11.15.5.4.2  (01-01-2015)
♦Form 13596 - Reprocessing Returns♦

  1. Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module that had previously posted to the incorrect account or module.

  2. Circle CCC "G" if present.

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

  4. Do not send Letter 1382C if a request for reasonable cause is attached.

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

    Form 13596 Action Taken
    TIN correction Edit correct TIN on return.
    Tax period correction Edit correct tax period ending on return.
    Reasonable cause Edit appropriate computer condition code:
    1. Edit CCC "R" if the "FTF" box is checked.

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

  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/green (per local procedure) to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  8. An IRS Received Date must be present on all reprocessed returns:

    If... Then...
    IRS Received Date is not present, Edit an IRS Received Date to the middle of the return.
    Multiple Received Dates are present, Circle all but the earliest date received by the IRS.
  9. Circle any green rocker and edit marks that may indicate a receipt of remittance.

  10. When additional information is still needed to make the return processable prepare an approved Correspondence Action Sheet or Form 4227 for the appropriate action (e.g. correspondence, research, etc.).

    Reminder:

    Do Not correspond for missing Schedules K-1. (See IRM 3.11.15.16).

3.11.15.5.5  (01-01-2015)
♦Amended Returns♦

  1. A return is considered Amended based on any of the following:

    • The Amended Box is checked

    • Words such as “Supplemental”, “Corrected”, or “Additional” are present

    • Any indication from the taxpayer that a previous return was filed

    • Form 1065X is attached for the Tax Period of the Form 1065 filed.

      Note:

      Words such as ‘Copy” or “Duplicate” are not sufficient indicators and must be accompanied by a statement from the taxpayer that a previous return was filed.

  2. Examine the return for attachments:

    • Do not separate any related attachments submitted to explain the reason for the Amended return (information may be useful to Accounts Management)

    • Detach any unrelated documents, route them to the appropriate function using Form 4227, and edit the Action Trail on the return

  3. There is an indication the return is amended and:

    If... Then...
    "59X" or "ICS" was entered on the return by Compliance Services, Do not edit CCC "G" .
    Process the return as an original.
    The return is stamped "Delinquent Original Cleared for Processing " by Statute, Do not edit CCC "G" .
    Process the return as an original.
    Form 3893 or Form 13596 is attached, Do not edit CCC "G" .
    See Form 3893 - Re-Entry Document Control, IRM 3.11.15.5.4.1, or
    Form 13596 - Reprocessing Returns, IRM 3.11.15.5.4.2.
    None of the above is present, Edit CCC "G" .

    Note:

    CCC "S", CCC "T", CCC "W" , CCC "3" , and/or Error Resolution System (ERS) Action Codes may be used with CCC "G" .

    Reminder:

    Do Not correspond for missing Schedules K-1. (IRM 3.11.15.16).

  4. The following data must be edited on all amended returns:

    1. Name control (See IRM 3.11.15.9.2)

    2. EIN (See IRM 3.11.15.19.1)

    3. Tax period (See IRM 3.11.15.8.1)

    4. CCC "G"

    5. IRS Received Date (See IRM 3.11.15.6)

    6. Signature (See IRM 3.11.15.7)

3.11.15.5.6  (01-01-2015)
Short Record Returns - General Instructions (for All Short Records)

  1. This section provides instructions for editing Short Record returns. Short Record returns include:

    • 761(a) Returns

    • Common Trust Returns

    • Nominee Returns

    • Inactive Returns

    Reminder:

    Always edit "SR" on the left top margin above the form number on a Short Record return.

  2. Short record returns must be edited correctly to prevent erroneous assessment of any penalties.

  3. Process as a Short Record unless any of the following conditions apply:

    1. An audit code (other than "1" for 761(a) returns) is present (See IRM 3.11.15.2.2).

    2. A nonrecourse loan code is edited (See IRM 3.11.15.19.4).

    3. The return is a "Publicly Traded Partnership" . (See IRM 3.11.15.1.4, IRM 3.11.15.22.14, and/or IRM 3.11.15.15.13)

      Reminder:

      On Short Record Returns, do not correspond for missing information or attachments (unless directed by Examination on 761(a) returns), and do not edit the "Date Business Started" or CCC "A" .

3.11.15.5.6.1  (01-01-2015)
Section 761(a) Returns

  1. IRC §761(a) permits certain arrangements treated as partnership to elect to be excluded from the partnership rules. Form 1065 must be filed only for the year of the election and a statement of the election should be attached to the return. if the return shows any tax data relating to an entity level computation of income, it cannot be treated as a Section 761(a) election.

  2. Form 1065 can be identified as a potential Section 761(a) election if the return contains all of the following:

    • Name or other identification, address, EIN, but no tax data for the organization

    • Names, addresses, and identification numbers of all the organization's members

    • Statement that the organization qualifies, and the members elect, to be excluded from Subchapter K

  3. Or, the partnership references any of the following:

    • IRC §761(a) or Treas. Reg. 1.761-2 annotated

    • Rev. Proc. 2002-68 (for tax years beginning before 01/01/2004)

    • Rev. Proc. 2003-84 (for tax years beginning after 01/01/2004)

    • Publication 541 (Partnership's)

    • Publication 550 (Investment Income and Expenses)

    • The joint purchase, retention, sale, or exchange of investment property

    • The joint production, extraction, or use of property

    • Exclusion filed under Subchapter K

  4. When a return is identified as a potential Section 761(a) election, suspend the editing of the return and hold for periodic review by Examination Classification. The frequency of the review will be determined by campus management.

  5. Examination will determine if the election is accepted, rejected, or selected for examination. After Examination has made its determination, process each group of returns as follows:

    If... Then...
    Election is "ACCEPTED" by Examination,
    1. Edit CCC "F."

    2. Edit as Short Record (SR).


    (See IRM 3.11.15.5.6)
    Return is "SELECTED FOR EXAMINATION" ,
    1. Edit Audit Code "1" .

    2. Continue editing the return.
      IRM 3.11.15.5.6 and IRM 3.11.15.19.1 for information regarding Short Record returns and Audit Codes, respectively.

    Election is "REJECTED" by Examination, Edit as Form 1065 long record.

    Note:

    For purposes of these instructions, long records must include all other information contained on the return (i.e., income, deductions, all schedules and attachments).

    Correspondence is required, Issue Letter 1355C requesting information as directed by the Examination representative.

    Note:

    Phone inquiries regarding technical questions should be directed to the Examination representative.

  6. Process "Accepted" and "Selected" Section 761(a) elections as a Short Record return:

  7. Edit when required:

    • Always edit "SR" in the top margin above the form number "1065"

    • Always edit "761(a)" in the upper left hand corner of Form 1065

    • Always edit Computer Condition Code "8" . (IRM 3.11.15.15.21)

    • Name Control (IRM 3.11.15.9.2)

    • EIN (IRM 3.11.15.9.1)

    • Tax Period Ending (IRM 3.11.15.8.1)

    • Tax Period Beginning if CCC "F" is edited - (See IRM 3.11.15.8.2)

    • Number of partners (IRM 3.11.15.16)

      Note:

      Edit number of partners as "2" if missing.

    • Received date (IRM 3.11.15.6)

    • Address change, if present IRM 3.11.15.9.4

  8. For elections "accepted" by Examination, edit Computer Condition Code "F" on the return. See Figure 3.11.15-7 below.

  9. For elections "selected" by Examination, edit Audit Code "1" on the return.

    Figure 3.11.15-7
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.5.6.2  (01-01-2015)
Common Trusts

  1. Identify IRC §6032, Common Trust Fund Filers, by any of the following entries:

    • Box A, Principal Business Activity - Partnership entered: "COMMON TRUST FUND" or "Common Trust"

    • Box C, Business Code Number - Partnership entered "525920" (North American Industry Classification System (NAICS) Code

    • Partnership notates on Form 1065 "IRC §6032 COMMON TRUST FUND" or similar notation

  2. Process as a Short Record return.

  3. Edit when required:

    • Always edit "SR" in the top margin above the form number "1065" (See Figure 3.11.15-8)

    • Name Control (IRM 3.11.15.9.2)

    • EIN (IRM 3.11.15.9.1)

    • Tax Period Ending, (IRM 3.11.15.8)

    • Tax Period Beginning. (IRM 3.11.15.8)

    • Received date (IRM 3.11.15.6)

    • Number of Partners - If blank or "1" , edit a "2"

    • Computer Condition Codes (CCC)

      Reminder:


      Always edit CCC "5 " IRM 3.11.15.15.19.
      ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Address change if present

  4. If the partnership submits a Common Trust return on a non-standard form (Common Trust Fund Return of Income, letter with Investment Trust Company letterhead, etc.) prepare a dummy Form 1065 with the following information:

    1. Name and address (IRM 3.11.15.9)

      Note:

      If the name and/or address cannot be determined, perform IDRS research using the EIN provided on the return/letter.

    2. EIN (IRM 3.11.15.9.1)

    3. Tax Period (IRM 3.11.15.8)

    4. Received Date (IRM 3.11.15.6)

    5. Computer Condition Codes (CCC)

    6. Number of partners (IRM 3.11.15.16)

    Figure 3.11.15-8
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.5.6.3  (01-01-2015)
Nominee Returns

  1. Partnership formed solely for the purpose of acting as a nominee or agent are not required to file a partnership return, but may file Form 1065 to establish that they are not required to file. (They are required to file Form 1099 showing the actual owner of the income.)

  2. Nominee returns usually contain only partnership entity information with a statement notating the partnership is a nominee and is not required to file.

  3. Process as a Final, Short Record return;

  4. Edit the following when required:

    • Always edit "SR" in the top margin above the form number "1065"

    • Received Date - Always edit a timely received date (the original return due date) regardless of when the return was received

    • Name Control - (See IRM 3.11.15.9.2)

    • EIN - (See IRM 3.11.15.9.1)

    • Tax Period Ending - (See IRM 3.11.15.8)

    • Always edit Tax Period Beginning if present - (See IRM 3.11.15.8)

    • Number of Partners - If blank or "1" , edit a "2"

    • Computer Condition Codes

      Reminder:


      Always edit Computer Condition Code "F" .
      Edit CCC "6" if return has more than 100 partners.

3.11.15.5.6.4  (01-01-2015)
Inactive Returns

  1. Identify an Inactive Return if there are no dollar amounts on any transcription lines on Form 1065, pages 1–5 (except Box "F" " Total Assets " ) and no dollar entries on transcription lines on any of the following forms:

    • Schedule F Form 1040, Profit or Loss From Farming.

    • Form 8825, Rental Real Estate Income and Expenses.

    • Schedule D, Capital Gains and Losses.

    • Form 1125-A, Cost of Goods Sold.

    • Form 8913, Credit for Federal Telephone Excise Tax Paid.

    • Form 8941, Credit for Small Employer Health Insurance Premiums.

    • Form 5884-B, New Hire Retention Credit.

    Note:

    A return with an entry in Box "F" (Amount of Assets), page 1 or a "Yes" answer to Question 6, Schedule B is inactive if it meets all the conditions in (1) above.

  2. Process as an Inactive Short Record Return.

    Note:

    Do not edit as a Short Record if form required Audit Code (Other than 1 for 761a) and/or Non-recourse Code or is a publicly traded partnership.

  3. Edit the following when required:

    • Always edit "SR" in the top margin above the form number "1065"

    • Name Control - (IRM 3.11.15.9.2)

    • EIN - (IRM 3.11.15.9.1)

    • Tax Period Ending - (IRM 3.11.15.8)

    • Tax Period Beginning - on Initial, Final, or Short Period Return (IRM 3.11.15.8)

    • Received Date - (IRM 3.11.15.6)

    • Number of Partners (Edit number of Schedules K-1 attached or "2" if none or "1" ) (IRM 3.11.15.16)

      Exception:


      If number of partners is "1" ,
      And the partnership entity indicates: LP, LLP, LLC, LLLT or UBO,
      Then edit CCC "F" , Circle out the number "1" , edit 2 on Line l, and send non-suspense Letter 3733C advising the partnership filing requirements are being deleted - IRM 3.11.15.16

    • Computer Condition Codes

      Reminder:


      ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      Edit CCC "6" if return has more than 100 partners.

    • Address change, if present

3.11.15.6  (01-01-2015)
♦Received Date♦

  1. The date a document is received in the Campus or IRS Office is the date stamped as the "IRS Received Date" .

  2. An IRS Received Date is required on all Forms 1065.

    If... Then...
    The return is received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , (See Due Date Chart, Exhibit 3.11.15-3) 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date, Edit the IRS Received Date to agree with the postmark or shipment date.

    Caution:

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


    Note:

    For certified mail only- If a postmark is not present, look for a "USPS.com Track & Confirm" 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. See Exhibit 3.11.5-7.

    If the "USPS.com Track & Confirm" record is not attached, no action is required.

  3. The IRS Received Date may or may not be stamped on the face of the return.

  4. A valid IRS Received Date Stamp may consists of the following:

    • The word "Received"

    • Month (alpha or numeric)

    • Day (for example "1" or "01" )

    • Year - four digits

    • "Area Office" , Campus, "Field Office" , "Taxpayer Assistance Center" (TAC) Site plus the City location or a functional area within one of these sites (e.g. CSCO, Exam, ICT, CIS, AM, etc.)

    Exception:

    Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return contains a received date stamp from an office that is not a proper place for filing, that date stamp is not the "IRS Received Date" , and you must circle out the invalid received date and edit the correct received date according to instructions below. For example, returns received by the Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office is not the "IRS Received Date" .

  5. If the IRS 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 IRS 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 (USPS) Postmark, or Foreign Postmark date, or Private Delivery Service are as follows:

      If... Then...
      An envelope is not attached to the return, Use the postmark date stamped on the face of the return.
      The postmark is missing and the envelope is certified, Look for the "USPS.com Track & Confirm" 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. See Exhibit 3.11.15-7.

      If the "USPS.com Track & Confirm" record is not attached, no action is required.
      An envelope has a USPS and private metered postmark, Always use the USPS postmark.
      An envelope has a foreign and private metered postmark, Always use the foreign postmark.
      An envelope has two private metered postmarks, Always use the latest private metered postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.
    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer's signature date.

    4. Signature Date. (Only if within current year)

    5. Julian Control Date minus 10 days.

    6. Current date minus 10 days.

  6. Edit the IRS Received Date as follows:

    If... Then...
    A timely IRS Received Date is the only received date stamped on the return, No editing is required.
    Two or more dates stamped on the return,
    1. Use the earliest IRS stamped received date.
      See Figure 3.11.15-9.

    2. Circle all other dates (handwritten or stamped) not needed for transcription.

    Note:

    Received dates that have been circled out by another function should be treated as if they are not present.

    A Federal return is addressed to the IRS but delivered to a State agency, Use the postmark date as the IRS Received Date.
    A Federal return is addressed to a State agency, Use the IRS Receive Date stamp as the IRS Received Date.
    The only Received Date on the return is a Taxpayer Advocate Service (TAS) Received Date, Edit the IRS Received Date according to instructions.

    Reminder:

    If an envelope is attached to the return, check the envelope for remittance. If found, hand carry remittance to manager.

  7. Form 1065 return is delinquent and the partnership explains that the return is late due to the rejection of a timely filed electronic return, edit as follows:

    If... And... Then...
    The postmark is within 10 calendar days of notification that the electronic return has been rejected or cannot be accepted for processing, A copy of the rejection notification is attached, Edit CCC "R" .
    The postmark is within 10 calendar days of notification that the electronic return has been rejected or cannot be accepted for processing, A copy of the rejection notification is attached and the number of partners is greater than 100,
    1. Edit CCC "R" .

    2. Fax a copy of Form 1065, Page 1 and copy of ELF rejection notification to Ogden IRS Campus E-File Team 203 at 801-620-7622.

    3. Indicate on the fax "REJECTION NOTIFICATION FROM ELF"

    The postmark is within 10 calendar days of notification that the electronic return has been rejected or cannot be accepted for processing, A copy of the rejection notification is not attached, No action.
    The postmark is not within 10 calendar days of notification that the electronic return has been rejected or cannot be accepted for processing, A copy of the rejection notification is attached, No action.

    Figure 3.11.15-9
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.7  (01-01-2015)
♦Signature♦

  1. A signature (general partner's or Limited Liability Company Member's signature) and jurat is required for all returns except the following:

    • Returns prepared under IRC §6020(b). These returns must be signed by a Compliance Function representatives (See IRM 3.11.15.5.3.1)

      Note:

      Starting July 1, 2013 we will accept the Revenue Officers (RO) electronic signature or typed signature as a valid signature on the return.

    • Returns prepared by Examination, for example "SFR" (Substitute for Return) or "SUBSTITUTE RETURN" (See IRM 3.11.15.5.3.3)

    • Dummy returns prepared by IRS

    • Returns filed under IRC §501(d) (Religious or Apostolic Organization)

    • Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter. See paragraph (5) below.

    • "CIS" returns that has Form 13596 attached (See IRM 3.11.15.3.1.1)

    • Returns filed as Common Trust IRM 3.11.15.5.6.2.)

    • Returns filed under §761(a) (See IRM 3.11.15.5.6.1)

    • Returns filed as Nominee Returns (See IRM 3.11.15.5.6.3)

    • Inactive Short Record Return (See IRM 3.11.15.5.6.4)

    • Form 8879-PE is attached with a valid signature and there is an indication of rejected electronic filing

    • Returns filed by an LP, LLC, LLP, LLLT or UBO claiming only one partner (IRM 3.11.15.16)

    • Returns originally filed electronically (E-File). These returns may be identified by the presence of Mod E-File printouts or "TRPRT Print Do Not Process" in lieu of an actual return.

      Note:

      If the TRPRT print states "TRPRT Print Do Not Process" in the top margin, circle the words "Do Not Process" .

    • Returns filed with a signed Form 1065X that is for the same tax period as the return.

  2. Do not correspond for a signature on "CIS" returns that have Form 13596 attached. IRM 3.11.15.3.1.1, Correspondence Imaging System (CIS) Returns, for processing instructions.

  3. If a signature is missing, correspond:

    If... Then...
    • The return is not signed on the line designated for the partner's signature, or

    • The jurat is not present on the line designated for the partner's signature (non-standard return), or

    • Only the Entity information is present and there are no attachments containing tax data,

    • Form 1065X with a signature is attached, then accept the return for processing as an amended return and do not correspond for missing signature when both Form 1065X and 1065 are for the same Tax Period,

    1. Edit Action Code 225 (Correspondence for Signature only) or 226 (International Correspondence for Signature only).

    2. Leave in batch and continue editing.

    Note:

    Paper returns sent in by the filer that states their return was rejected through the E-file system require a signature. Process as a paper return.

  4. If the jurat is altered or stricken (crossed-out), See IRM 3.11.15.3.3 for frivolous return instructions.

  5. Accept a "signature declaration" (a signature with jurat obtained through IRS correspondence) if attached to the return.

    1. If the "signature declaration" is altered or stricken (crossed-out), See IRM 3.11.15.3.3. for frivolous return instructions.

    2. If the partnership responds with a self-prepared "signature declaration" it must contain the same language as the jurat on the tax return: i.e., "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN, INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE."

  6. Since tax examiners are not expected to be handwriting experts, Section 301.6064-1 of Regulations allows the Service to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    A "✓" or "X" used to designate where the partner should sign the return is not considered a valid signature.

  7. If the general partner's or Limited Liability Company Member's signature is on the preparer's line, verify the partner's name with the Schedules K-1 and arrow the signature up to the general partner's or Limited Liability Company Member's signature line.

  8. Only one correspondence attempt is required for a signature.

3.11.15.7.1  (01-01-2015)
♦Paid Preparer Checkbox Indicator♦

  1. The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the partnership has elected to allow the Paid Preparer to answer questions about the return as it is processed.

  2. No action is required on amended or Short Record returns.

  3. Take the following actions when an entry is present in the Paid Preparer Checkbox:

    If... Then...
    Only the "YES" box is checked, Take no action.
    The "NO" box is checked,
    Neither box is checked, or,
    Both boxes are checked,
    Circle the Paid Preparer's Telephone Number, if present. See Figure 3.11.15-10

    Figure 3.11.15-10
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.7.2  (01-01-2015)
♦Paid Preparer Section♦

  1. The Paid Preparer section is located below the taxpayer signature area at the bottom of Form 1065.

3.11.15.7.2.1  (01-01-2015)
♦Preparer PTIN♦

  1. The Preparer's Social Security Number (SSN) (2009 and prior revisions) or Paid Preparer's Tax Identification Number (PTIN) is located to the right of the Preparer's Signature in the PTIN box (Preparer's SSN or PTIN box for 2009 and prior revisions) at the bottom-right corner of Form 1065 (Page 1).

  2. No action is required on amended returns.

  3. A Preparer Tax Identification Number (PTIN) begins with the alpha "P" followed by an eight digit number (e.g., PXXXXXXXX). Circle the PTIN if all zeroes, all nines, or any other repetitive number.

3.11.15.7.2.2  (01-01-2015)
♦ Preparer EIN♦

  1. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is located below the Preparer's PTIN box at the bottom right corner of Form 1065 (Page 1).

  2. No action is required on amended returns.

  3. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is a nine digit number. Circle the EIN if all zeroes, all nines, or any other repetitive number.

3.11.15.7.2.3  (01-01-2015)
♦Preparer Phone Number♦

  1. The Paid Preparer's Phone Number is located below the Firm's EIN at the bottom right corner of Form 1065 (page 1).

    If... Then...
    The return is amended, No action is required.
    The Preparer's Phone Number is more than 10 digits, No action is required.
    The Preparer's Phone Number is illegible or less than 10 digits, Circle the phone number. See Figure 3.11.15-11 below.

    Figure 3.11.15-11
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3.11.15.8  (01-01-2015)
Tax Period

  1. This section contains instructions for:

    • Tax Period Ending

    • Tax Period Beginning

    • Initial Short Period Return

    • Final Short Period Return

    • Change in Accounting Period

    • Early Filed Return

3.11.15.8.1  (01-01-2015)
Tax Period Ending

  1. All returns must have a Tax Period Ending.

  2. Edit the Tax Period Ending to the right of the form title in YYMM format.

    Exception:

    Do not edit the Tax Period Ending unless the Tax Period Ending is other than the current processing year (i.e., 2014).

    If... Then...
    The return is for the current processing year, No editing is necessary.
    The return is for a prior year, Edit the Tax Period Ending in YYMM format.
    The partnership has notated a Tax Period Ending other than the preprinted year on the return, Edit the Tax Period Ending in YYMM format based on the partnership indication. See Figure 3.11.15-12
    The Tax Period Ending is missing, incomplete or illegible,
    1. Review the return or attachments for the correct period.

    2. If found, edit the Tax Period Ending to the right of the form title in YYMM format.

    3. If unable to determine the Tax Period Ending after researching, process the return for the current processing year.

  3. Tax Periods reported under the 52/53-week are treated as:

    • Beginning on the first day of the calendar month beginning nearest to the first day of the 52/53-week tax year, and

    • Ending on the last day of the calendar month ending nearest to the last day of the 52/53-week tax year.

    If... Then...
    The Tax Period Ending is not more than 3 days after the beginning of the month, Edit the previous month.
    The Tax Period Ending is not more than 6 days before the end of the month, Edit the month shown on the return.
    The Tax Period Ending is more than 3 days after the beginning of the month or more than 6 days before the end of the month, Correspond to determine the correct tax period.
  4. If the resulting tax year is more than 12 months, correspond to obtain the correct period.

  5. On a Final return, if the tax period's month and/or year is later than the received date's month and year (future return), edit the tax period to be one month prior to the received date. See Figure 3.11.15-13

    Figure 3.11.15-12

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

    Figure 3.11.15-13

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

3.11.15.8.2  (01-01-2015)
Tax Period Beginning - Initial, Final, or Short Period Form 1065 Return

  1. Edit the Tax Period Beginning to the left of the Form 1065 title area in MMDDYY format on an Initial, Final, or Short Period return as follows: See Figure 3.11.15-14 below.

    If... Then...
    The Tax Period Beginning is present, Edit the Tax Period Beginning (MMDDYY).
    The Day is not present in the Tax Period Beginning, Edit "01" as the day (MM01YY).
    The Tax Period Beginning is not present, Editing is not required.

    Figure 3.11.15-14
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.15.8.3  (01-01-2015)
"Initial" Short Period Return

  1. Identify an "Initial" Short Period Return by any of the following:

    1. The "Initial return" box is checked.

    2. The return or attachments indicates "INITIAL" , "FIRST RETURN" , "FIRST TIME FILER" , etc.

    3. An entry in Box E, "Date Business Started" , is within 12 months of the Tax Period Ending Date.

  2. Edit the Tax Period in Beginning MMDDYY format per IRM 3.11.15.8.2.

  3. Edit initial Return Code "2" to the left of Line G. (SeeIRM 3.11.15.13). (See Figure 3.11.15-14).

3.11.15.8.4  (01-01-2015)
"Final" Short Period Return

  1. Identify a "Final" Short Period return by any of the following:

    1. The "Final return" box is checked.

    2. The return or attachments indicates "FINAL" , "OUT OF BUSINESS" , "NO LONGER LIABLE" , etc.

    3. Partnership cites IRC §708(b)(1)(B).

  2. Edit the Tax Period Beginning in MMDDYY format on a "Final" Form 1065 Return per IRM 3.11.15.8.2.

  3. A "Final" Short Period return ends on the date the partnership went out of business. Use the numeric designation of the calendar month in which it ended. If the partnership does not indicate the month the business ended, edit the Tax Period ending as one month prior to the return Received Date.

  4. Edit CCC "F" on the dotted line to the center of Line 1a (Form 1065).

  5. If the partnership files both a "Final" and "Initial" Short Period return using one EIN, which together cover no more than one 12 month or 52-53 week period and both returns are received together for editing, do the following:

    • Combine both returns into one return.

    • Combine money amounts from transcription lines.

    • If conflicting information is present (i.e., Number of Partners, Business Code etc.) use the information from the Final or latest return.

    • Process the combined return.

3.11.15.8.5  (01-01-2015)
Change in Accounting Period

  1. If the tax period on the return is for a Short Period other than an "Initial" return (Form 1065, page 1, Line G, Box (1)) or a "Final" return (Form 1065, page 1, Line G, Box (2)), review Form 1065 for an indication that the partnership is changing their accounting period.

    If... And... Then...
    A statement the Partnership is changing its tax year:
    • National Office "Grant Letter " or,

    • Revenue Procedure 2006-46 or,

    • a copy of Form 1128 is attached.

    1. Command Code BMFOLE shows a Transaction Code (TC) 053 or (TC) 054, (This is an indication that the Form 1128 or National Office "grant Letter" has been approved.) Continue Processing.

    Note:

    Do not edit CCC "Y"

      2. Command Code BMFOLE shows a Transaction Code (TC) 059, (This is an indication that the Form 1128 or National Office "grant Letter" has not been approved.) The return is unprocessable.
    • Edit Action Code "211" or "215" and correspond.

    • In the correspondence instruct the taxpayer to file a return for the next full period due.

      Command Code BMFOLE does not show a TC 053, TC 054, or TC 059 Edit Action Code "211" or "215" and correspond with the taxpayer using Letter 319C.
    Original Form 1128 is attached Command Code BMFOLE shows a Transaction Code (TC) 053 or (TC) 054, (This is an indication that the Form 1128 has been approved.) Continue Processing.

    Note:

    Do not edit CCC "Y"

      Command Code BMFOLE shows a Transaction Code (TC) 059, (This is an indication that the Form 1128 has not been approved.) The return is unprocessable.
    • Edit Action Code "211" or "215" and correspond.

      • In the correspondence instruct the taxpayer to file a return for the next full period due.

      Command Code BMFOLE does not show Transaction Codes (TC) 053, (TC) 054, or (TC) 059. Route the Form 1065 and Form 1128 to Entity.
    • Initial return with letter ruling or,

    • Termination of Section 444 is notated or,

    • A copy of Form 8716 is attached.

    1. Command Code BMFOLE shows a Transaction Code (TC) 054 or (TC) 055, (This is an indication that the Form 8716 or National Office "grant Letter" has been approved.) Continue Processing.

    Note:

    Do not edit CCC "Y" .

      2. Command Code BMFOLE shows a Transaction Code (TC) 058, (This is an indication that the Form 8716 or National Office "grant Letter" has not been approved.) The return is unprocessable.
    • Edit Action Code "211" or "215" and correspond.

    • In the correspondence instruct the taxpayer to file a return for the next full period due.

      Command Code BMFOLE does not show a (TC) 054, (TC) 055, or (TC) 058. Edit Action Code "211" or "215" and correspond with the taxpayer using Letter 319C.
    Original Form 8716 is attached. Command Code BMFOLE shows a Transaction Code (TC) 054 or (TC) 055, (This is an indication that the Form 8716 has been approved.) Continue Processing.

    Note:

    Do not edit CCC "Y" .

      Command Code BMFOLE shows a Transaction Code (TC) 058, (This is an indication that the Form 8716 has not been approved.) The return is unprocessable.
    • Edit Action Code "211" or "215" and correspond.

    • In the correspondence instruct the taxpayer to file a return for the next full period due.

      Command Code BMFOLE does not show Transaction Codes (TC) 054, (TC) 055, or (TC) 058. Route the Form 1065 and Form 8716 to Entity.
    No explanation for the Short Period can be found   The return is unprocessable.
    • Edit Action Code "211" or "215" and correspond.

    • In the correspondence instruct the taxpayer to file a return for the next full period due.

3.11.15.8.6  (01-01-2015)
Early Filed Return

  1. An Early Filed Return is defined as a return whose Received Date is prior to its Tax Period Ending Date.

  2. Never send back an Early-Filed return to the partnership. Correspond for any missing information before suspending the return:

    If... And... Then...
    The return is early-filed, Is not a "Final" return, Edit Action Code "480" .
    1. Note:

      When correspondence issues are present on an early-filed return, edit Action Code "211" to the return and edit Action Code "480" to Form 4227.


    Caution:

    If Form 8822 (Change of Address) is attached, See (3) below.

    The return is early-filed, A "Final" return,
    1. Edit CCC "F" .

    2. Edit the Tax Period ending to be one month prior to the Received Date.

      Example:

      If the Received Date is April 2015 and the Tax Period Ending Date is June 2015, change the Tax Period Ending Date to March 2015 (1503).

      (See Figure 3.11.15-13).

  3. If Form 8822/8822–B (Change of address) is attached to the return, compare the name and address information on the Form 8822/8822–B to the return.

    If... Then...
    The information is the same, Take no action and continue editing the return.
    The information is different,
    1. Edit the address from Form 8822/8822-B to the Entity section of the return.

    2. Notate "8822/8822–B Detached" on the tax return.

    3. Detach Form 8822/8822–B and route to Entity Control using Form 4227 or follow local procedures.


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