3.11.16  Corporate Income Tax Returns (Cont. 2)

3.11.16.10 
Return Processing - Form 1120

3.11.16.10.4 
Form 1120, Total Income - Lines 1 through 11

3.11.16.10.4.9  (01-01-2009)
Line 10 – Other Income

  1. Other income or loss not shown on Lines 1a through 9 is reported on Line 10 of Form 1120.

  2. Edit Line 10 as follows:

    If... Then...
    "Other Income" items are included on Lines 1 through 9, Add all the "Other Income" items and include in Line 10.
    Bracket if negative.


3.11.16.10.4.10  (01-01-2013)
Line 11 – Total Income

  1. The total income or loss (sum of Lines 3 through 10) is reported on Line 11 of Form 1120.

  2. Edit Line 11 as follows:

    If... Then...
    Line 11 is blank or illegible, but there are entries on Lines 1a through 10, Compute and edit Line 11.
    Bracket if negative.
    Line 11 is the only entry in the income section, Examine attachments and edit the information to the appropriate transcription lines.
    Bracket if negative.

    See Schedule F - Transfer Lines, Exhibit 3.11.16-19.
    The income section is blank and there is an indication the income items are included on an attachment (e.g., "See attached" , "See Schedule F" , "Statement attached" , etc.),
    There is an amount present for "Total Income" on Line 11, but the amount is not identified on Lines 1a through 10 or from attachments, Edit the Line 11 amount to Line 10.
    Bracket if negative.


3.11.16.10.5  (01-01-2014)
Form 1120, Deduction Items - Lines 12 through 29

  1. Edit Lines 12 through 29 in dollars only.

  2. If Line 27 is the only entry in the deduction section or the deduction section is blank and there is an indication the deduction items are included on an attachment (e.g., "See attached" , "See Schedule F" , "Statement attached" , etc.), examine the return for more detailed schedules.

    If... And... Then...
    Additional deductions are found The deductions are not reflected elsewhere on the return, Edit the deductions to the appropriate transcription lines (Lines 12 through 26).

    See Schedule F - Transfer Lines, Figure 3.11.16-14.

    Figure 3.11.16-14

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

    Example of editing Lines 12 through 26 using the attached Schedule F.


3.11.16.10.5.1  (01-01-2009)
Line 12 – Compensation of Officers

  1. Accept taxpayer's entry.

3.11.16.10.5.2  (01-01-2009)
Line 13 – Salaries and Wages (less employment credits)

  1. Accept taxpayer's entry.

3.11.16.10.5.3  (01-01-2009)
Line 14 – Repairs and Maintenance

  1. Accept taxpayer's entry.

3.11.16.10.5.4  (01-01-2009)
Line 15 – Bad Debts

  1. Accept taxpayer's entry.

3.11.16.10.5.5  (01-01-2009)
Line 16 – Rents

  1. Accept taxpayer's entry.

3.11.16.10.5.6  (01-01-2009)
Line 17 – Taxes and Licenses

  1. Accept taxpayer's entry.

3.11.16.10.5.7  (01-01-2009)
Line 18 – Interest

  1. Accept taxpayer's entry.

3.11.16.10.5.8  (01-01-2009)
Line 19 – Charitable Contributions

  1. Accept taxpayer's entry.

3.11.16.10.5.9  (01-01-2009)
Line 20 – Depreciation

  1. Accept taxpayer's entry.

  2. Edit prior year returns as follows:

    • 2005:

    If... And... Then...
    An amount is present on Line 20c,   Change Line 20c to 20.
    Lines 20b and 20c are blank There is an amount on Line 20a,
    1. Edit Line 20a to 20c. Bracket if negative.

    2. Change Line 20c to 20.

    Line 20c is blank Both Lines 20a and 20b have entries,
    1. Subtract Line 20b from 20a and edit to Line 20c. Bracket if negative.

    2. Change Line 20c to 20.


    • 2004 and prior:

      If... And... Then...
      An amount is present on Line 21b,   Change Line 21b to 20.
      Lines 21a and 21b are blank There is an amount on Line 20,
      1. Edit Line 20 to 21b. Bracket if negative.

      2. Change Line 21b to 20.

      Line 21b is blank Both Lines 20 and 21a have entries,
      1. Subtract Line 21a from 20 and edit to Line 21b. Bracket if negative.

      2. Change Line 21b to 20.


3.11.16.10.5.10  (01-01-2009)
Line 21 – Depletion*

  1. Accept taxpayer's entry. *(Line 22 for 2004 and prior)

3.11.16.10.5.11  (01-01-2009)
Line 22 – Advertising*

  1. Accept taxpayer's entry. *(Line 23 for 2004 and prior.)

3.11.16.10.5.12  (01-01-2009)
Line 23 – Pension, Profit–sharing, etc. Plans*

  1. Accept taxpayer's entry. *(Line 24 for 2004 and prior.)

3.11.16.10.5.13  (01-01-2009)
Line 24 – Employee Benefit Programs*

  1. Accept taxpayer's entry. *(Line 25 for 2004 and prior.)

3.11.16.10.5.14  (01-01-2009)
Line 25 – Domestic Production Activities

  1. The Domestic production activities deduction is valid for tax periods beginning 01/01/2005 and later. If the tax period beginning date is prior to 01/01/2005, delete Line 25 if a significant entry is present.

3.11.16.10.5.15  (01-01-2009)
Line 26 – Other Deductions

  1. Other deductions not shown on Lines 12 through 25 are reported on Line 26 of Form 1120.

  2. Edit Line 26 as follows:

    If... Then...
    "Other Deductions" items are included on Lines 12 through 25,
    1. Add the "Other Deductions" entries and edit the total to Line 26. Bracket if negative.

    2. "X" the "Other Deductions" items from Lines 12 through 25.


3.11.16.10.5.16  (01-01-2009)
Line 27 – Total Deductions

  1. The total deductions (sum of Lines 12 through 26) is reported on Line 27 of Form 1120.

  2. Edit Line 27 as follows:

    If... Then...
    Line 27 is blank or illegible but there are entries on Lines 12 through 26, Add Lines 12 through 26 and enter the total on Line 27 of Form 1120. Bracket if negative.
    Line 27 is the only entry in the deduction section, Examine attachments and edit the information to the appropriate transcription lines. Bracket if negative.

    See Schedule F - Transfer Lines, Exhibit 3.11.16-19.
    The deduction section is blank and there is an indication the deduction items are included on an attachment (e.g., "See attached" , "See Schedule F" , "Statement attached" , etc.),
    There is an amount present for "Total Deductions" on Line 27, but the amount is not identified on Lines 12 through 26 or from attachments, Edit the Line 27 amount to Line 26 of Form 1120. Bracket if negative.


3.11.16.10.5.17  (01-01-2014)
Lines 29a and 29b – Net Operating Loss and Special Deductions

  1. Never bracket Line 29a or 29b amounts as they are negative fields. Do not "X" these lines if they are bracketed by taxpayer.

  2. If it is obvious from a notation on Line 29b that it includes patronage dividends, edit patronage dividends from Line 29b to Line 26, "Other Deductions" , and adjust Line 27, "Total Deductions" . See Figure 3.11.16-15.

  3. If Line 29c has an entry and Lines 29a and 29b are blank, look for an entry on Schedule C, Line 20. If present, enter the amount on Line 29b and edit any difference to Line 29a. If blank or zero, edit the entire Line 29c amount to Line 29a.

    Figure 3.11.16-15

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

    Example of editing patronage dividends from Line 29b to Line 26 and adjusting Line 27.

3.11.16.10.6  (01-01-2009)
Tax Computation and Settlement - Lines 31 through 36

  1. Following are instructions for Lines 31 through 36. Edit in dollars only.

3.11.16.10.6.1  (01-01-2012)
Line 31 – Total Tax

  1. If blank, enter amount from Page 3, Schedule J, Line 11* if present.
    *(Line 10 for 2006-2010, Line 11 for 2005–2000, Line 12 for 1999–1998, Line 10 for 1997 and prior.)

  2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 31.

    If... Then...
    The amount on Line 31 contains pre-computed interest or penalty or additional charge,
    1. "X" the Line 31 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct total tax to the left of the original entry.


3.11.16.10.6.2  (01-01-2012)
Line 32 - Total payments and refundable credits

  1. If blank, enter amount from Page 3, Schedule J, Line 21 if present.

3.11.16.10.6.3  (01-01-2013)
Line 32g - Credit for Federal Telephone Excise Tax Paid, Form 8913

  1. Form 8913, Credit for Federal Telephone Excise Tax Paid, is reported on a 2006 Form 1120, Line 32g. Delete Line 32g if an amount is present.

  2. Place Form 8913 in sequence order if Line 15, Column (d) or (e) contain a significant amount.

  3. Edit Action Code "420" .

3.11.16.10.6.4  (02-24-2011)
Backup Withholding

  1. "X" any entry identified by the taxpayer as "Backup Withholding" and edit it to Page 3, Schedule J, Line 17.

3.11.16.10.6.5  (01-01-2014)
FIRPTA, Form 1042-S, and Form 8288-A Credits

  1. If Foreign Investors in Real Property Tax Act (FIRPTA) credit or Form 8288-A credit is claimed, route to OSPC. OSPC will:

    1. Use Form 13698, International Credit(s) Verification Slip to request verification of credit from the Foreign Team.

    2. If the credits are verified by the Foreign Team, "X" the amount entered by the taxpayer and edit the verified FIRPTA/8288-A credit from Form 13698 to the bottom center of Form 1120, Page 1. See Figure 3.11.16-16.

    3. If FIRPTA/8288-A credits are not verified, disallow.

  2. If Form 1042-S credit is claimed on any other credit line, "X" the credit and add to Schedule J, Line 19a (Line 32f(1) for 2010 and prior). See Figure 3.11.16-17. If the taxpayer's name is not listed as the recipient in Box 13 of the Form 1042-S (Box 13 can not be a withholding rate pool) then "X" the amount.

    Figure 3.11.16-16

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

    Example of using the Form 13698 and editing verified amount to the bottom center of Form 1120.

    Figure 3.11.16-17

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

    Example of deleting Form 1042–S amount and editing it to the credit from Form 2439 line.

3.11.16.10.6.6  (01-01-2014)
Line 33 – Estimated Tax Penalty

  1. Estimated tax penalty must be edited when either:

    1. An additional penalty is precomputed on the return, or

    2. Form 2220, Underpayment of Estimated Income Tax by Corporations, is attached to the return, and shows liability for estimated tax penalty.

  2. To edit Line 33, do the following:

    1. Leave blank for Form 1120-H.

    2. If the taxpayer follows the instructions on Form 2220, the applicable amount must be shown on Form 2220, Page 2, Line 38*, and on Form 1120, Line 33 or equivalent lines on other forms. The taxpayer may also have increased Form 1120, Line 34 or decreased Line 35 accordingly. Do not adjust this amount.
      *(Line 34 for 2007–2005, Line 38 for 2004, Line 36 for 2003, Line 34 for 2002, Line 36 for 2001, Line 34 for 2000–1998, Line 32 for 1997.)

    3. If Line 33 is blank, edit the amount from Form 2220, Page 2, Line 38* to Form 1120, Line 33.
      *(Line 34 for 2007–2005 Line 34, Line 38 for 2004, Line 36 for 2003, Line 34 for 2002, Line 36 for 2001, Line 34 for 2000-1998, Line 32 for 1997.)

    4. If Form 2220, Page 2, Line 38* is blank and Form 1120, Line 33 is also blank, review the Form 2220 to determine the taxpayer's method of computation. If there are entries on Form 2220, Line 37, Columns (a) through (d)**, compute the total amount and enter on Form 1120, Line 33. See Figure 3.11.16-18.

      Note:

      If Form 2220 is attached some conditions may require CCC "8" and/or Reserve Code "4" .


    *(Line 34 for 2007–2005, Line 38 for 2004, Line 36 for 2003, Line 34 for 2002, Line 36 for 2001, Line 34 for 2000-1998, Line 32 for 1997.)
    **(See table below for prior year line numbers.)

    2007–2005 2004 2003 2002 2001 2000–1998
    Line 33
    Columns a-d
    Line 37
    Columns a-e
    Line 35
    Columns a-e
    Line 33
    Columns a-d
    Line 35
    Columns a-d
    Line 33
    Columns a-d

    Figure 3.11.16-18

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

    Example of computing estimated tax penalty.

3.11.16.10.6.7  (01-01-2012)
Lines 34 and 35 – Amount Owed/Overpayment

  1. Lines 34 and 35 are edited as positive only. If the taxpayer enters a negative amount, do not bracket.

  2. For Form 1120, edit the proper entry to Line 34 or 35 if both are blank. Do both of the following:

    1. Add Lines 31 and 33. Subtract Line 32*.
      *(Line 32h for 2010 – 2008, Line 32g for 2007, Line 32h for 2006, Line 32g for 2005, Line 32h for 2004 and prior.)

    2. Edit the positive result on Line 34 or the negative result (do not bracket) on Line 35.

  3. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 34 or reduced Line 35.

    If... Then...
    The amount on Line 34 contains pre-computed interest or penalty or additional charge,
    1. "X" Line 34 amount.

    2. Delete the interest, penalty or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 35 is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 35 amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.


3.11.16.10.6.8  (01-01-2009)
Line 36 – Credit To Estimated Tax

  1. Line 36 – (Center) Overpayment Credit to Estimated Tax.

3.11.16.10.7  (01-01-2011)
♦ Paid Preparer Checkbox Indicator ♦

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

  2. No action is required on amended 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 Phone Number if present.


3.11.16.10.8  (01-01-2009)
♦ Paid Preparer Section ♦

  1. The Paid Preparer section is located below the Signature area at the bottom of Form 1120.

3.11.16.10.8.1  (01-01-2011)
♦ Paid Preparer Social Security Number (SSN) or Preparer's Tax Identification Number (PTIN) ♦

  1. The Paid Preparer's Social Security Number (SSN) or 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) at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. The Preparer's SSN is a nine digit number. Circle the SSN if all zeroes or all nines.

  4. A PTIN begins with a "P" , followed by an eight digit number (e.g., PXXXXXXXX). Circle the PTIN if all zeroes or all nines.

3.11.16.10.8.2  (01-01-2011)
♦ Paid Preparer EIN ♦

  1. The Preparer's EIN is located below the PTIN box (Preparer's SSN or PTIN box for 2009 and prior) at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. The Preparer's EIN is a nine digit number. Circle the EIN if all zeroes or all nines.

3.11.16.10.8.3  (01-01-2011)
♦ Paid Preparer Phone Number ♦

  1. The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right hand corner of Form 1120.

  2. If the return is amended, no action is required.

  3. If the Preparer's Phone Number is more than 10 digits, no action is required.

  4. If the Preparer's Phone Number is illegible or less than 10 digits, circle the Phone Number.

3.11.16.10.9  (01-01-2012)
Schedule C, Page 2 - Dividends and Special Deductions

  1. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16, edit Audit Code "2" .

  2. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16, edit Audit Code "7" .

3.11.16.10.10  (01-01-2014)
Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation

  1. For returns that are subsequent to 8812, edit Personal Service Corporation Code "2" in the dotted line portion of Line 1, Page 3, Schedule J if the Qualified Personal Service Corporation box located on Page 3, Schedule J, Line 2* is checked.
    *(Line 3 for 2005 and prior.)

    Note:

    If the box on Schedule J, Line 2* is checked, edit ABLM Code "400" on Form 1120, Page 1. See ABLM Code and Schedule M-3 Checkbox, IRM 3.11.16.8.2.


    *(Line 3 for years 2005 and prior.)

  2. Personal Service Corporation Code "2" takes priority over Controlled Group Codes "4" and "1" (described below).

  3. If both the Schedule J, Line 2* box and the Schedule J, Line 1 box are checked, edit Personal Service Corporation Code "2" and delete Schedule O (Form 1120) if significant entries are present.
    *(Line 3 box for 2005 and prior.)

  4. Edit Controlled Group Code "4" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ at least one of the following is present:

    1. The box on Page 3, Schedule J, Line 1 is checked.

    2. There is an indication that the taxpayer is a member of an IRC 1561 Group or IRC 1563 Group.

    3. Schedule O (Form 1120), Box* 3a, 3b, 3d, or 5b is checked.
      *(Box 3a, 3b, 4b, 4c, or 4d for 2006 revision.)

    4. An allocation/apportionment schedule is attached. Some examples of the title of these schedules may be "apportionment plan" , "apportionment consent plan," "consent to apportionment" , "controlled group tax apportionment plan" , "surtax apportionment plan" , or "allocation schedule" . Any attachment labeled as "controlled group tax calculation statement" is NOT an apportionment plan and should not be used to edit tax bracket amounts on Schedule O. See Figure # 3.11.16-19 #.

      Note:

      If there is any doubt whether an attachment is a "Surtax Apportionment Plan," refer the document to the lead tax examiner.

  5. Edit Controlled Group Code "1" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ any of Code "4" conditions in paragraph (4)a through (4)d are present. See Figure # 3.11.16-20 #.

  6. If Controlled Group Code "4" or "1" is edited, process Schedule O (Form 1120). See Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group, IRM 3.11.16.10.26.

  7. If neither Controlled Group Code "4" or "1" is edited, delete Schedule O (Form 1120) if significant entries are present.

    Figure 3.11.16-19

    Figure 3.11.16-20

3.11.16.10.11  (01-01-2014)
Schedule J, Line 3 - Alternative Minimum Tax

  1. If Schedule J, Line 3* is blank and Form 4626 is attached with an amount on Line 14**, edit the amount from Line 14, Form 4626 to Schedule J, Line 3.
    *(Line 4 for 2005–2000, Line 9 for 1999–1996.)
    **(Line 15 for 2002 and prior.)

  2. If Schedule J, Line 3 has a significant entry and Form 4626 is not attached, edit MSC "34" .

3.11.16.10.12  (01-01-2013)
Schedule J, Lines 5a and 5b - Credits

  1. The following general instructions apply to Schedule J, Lines 5a and 5b* only:
    *(Lines 6a - 6c for 2005–2000, Lines 4a - 4c for 1999–1996.)

    1. If supporting documentation is missing for two or more credits ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    2. If supporting documentation is missing for only one credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit the applicable MSC.

3.11.16.10.12.1  (01-01-2013)
Schedule J, Line 5a - Form 1118, Foreign Tax Credit

  1. If Schedule J, Line 5a*, Foreign Tax Credit has an entry, check for Form 1118 or similar statement:
    *(Line 6a for 2002–2000, Line 4a for 1999–1996.)

    If... Then...
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1118 is missing, Edit MSC "29" .
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2" .
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "7" .


3.11.16.10.12.2  (01-01-2013)
Schedule J, Line 5b - Form 8834 Credit and Form 5735

  1. Schedule J, Line 5b*, includes credits from Form 8834 and a write-in credit from Form 5735. If the Line 5b entry or the write-in entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present, take the following action:
    *(Line 6c for 2005–2000, Line 4c for 1999 and prior.)

    If... And... Then...
    The entry is for Form 8834
    (Form 5735 is not indicated)
    Form 8834 is missing, Edit MSC "49" .
    The entry is for Form 5735
    (Form 5735 is indicated)
    Form 5735 is missing, Edit MSC "37" .


  2. For prior years 2007 and 2006 Form 1120 revisions, Form 5735 credit was also included on Line 5b:

    If... And... Then...
    The entry on Line 5b is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is no indication which form the credit is from and both Form 5735 and Form 8834 are missing, Edit MSC "37" .
    There is an indication the credit is from Form 5735 and Form 5735 is missing,
    There is an indication the credit is from Form 8834 and Form 8834 is missing, Edit MSC "49" .


  3. When Form 8834 is attached, check for invalid vehicle years and invalid in service dates:

    If... Then...
    Form 8834, *Part I, Line 1, Column (a), or (b) include a vehicle year of 2008 or earlier,
    *(Part I, Line 1, Column (a), (b), or (c) for 2010 revision and Part II, Line 8, Column (a), (b), or (c) for July 2009 revision.)
    Edit CCC "C" and circle the invalid vehicle year(s) and/or invalid in service date(s).
    Form 8834, *Part I, Line 3, Column (a), or (b) include an in service date of 02/16/2009 or earlier,
    *(Part I, Line 2, Column (a), (b) or (c) for 2010 revision and Part II, Line 9, Column (a), (b), or (c) for July 2009 revision.)

  4. If Nonconventional Source Fuel, Form 8907 credit, is included on a prior year return, Schedule J (Line 6c for 2005–2000, Line 4c for 1999–1996), see Form 8907 – Nonconventional Source Fuel Credit, IRM 3.11.16.10.13.26.

    Note:

    For tax periods 200612 and later, Form 8907 credit, is reported as a General Business Credit.

3.11.16.10.13  (01-01-2014)
Schedule J, Line 5c - General Business Credits

  1. If Form 3800 is required but missing, correspond. Form 3800 is required when a 2008 or subsequent tax return has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c. Form 3800 is required on a prior year tax return when the following conditions apply:

    Tax Return Year Is A... If... And Either of the Following Conditions Is Present...
    2007 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 5c,
    1. The Form 3800 box is checked, or

    2. A credit is indicated (other than Form 5884, 6478, 8835-Section B, 8844, or 8846).

    2006 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 5c,
    1. The Form 3800 box is checked, or

    2. A credit is indicated (other than Form 6478, 8835-Section B, or 8844).

    2005 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 6d,
    1. The Form 3800 box is checked, or

    2. More than one credit is indicated (other than Form 6478, 8835-Section B, or 8844).

    2004 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 6d,
    1. The Form 3800 box is checked, or

    2. More than one credit is indicated (other than Form 8844, 8835-Section B, or 8884).

    2003 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 6d,
    1. The Form 3800 box is checked, or

    2. More than one credit is indicated (other than Form 8844 or 8884).

    2002
    2001 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 6d,
    1. The Form 3800 box is checked, or

    2. More than one credit is indicated (other than Form 8844).

    2000
    1999 An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule J, Line 4d,
    1. The Form 3800 box is checked, or

    2. More than one credit is indicated (other than Form 8844).

    1998


  2. When a business credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is not supported by the applicable form, correspondence action may be required.

    • If supporting documentation is missing for only one credit, use the applicable MSC.

    • If supporting documentation is missing for two or more credits ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    • If supporting documentation is missing for an unidentified amount on Schedule J, Line 5c, correspond.

  3. Review the Schedule J, Line 5c for the following conditions:

    If... And... Then...
    Schedule J, Line 5c is blank, Form 3800 contains an entry on Line 38** Edit the Line 38 **amount to Schedule J, Line 5c
    Schedule J, Line 5c contains an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 3800 is not attached, Correspond.
    Schedule J, Line 5c and Form 3800, Line 38** do not match The difference is not supported by another credit, Edit the lesser of Schedule J, Line 5c and Line 38** to Schedule J, Line 5c.

    **(Line 32 for 2008 - 2010 (Line 19 for 2007 and prior)

3.11.16.10.13.1  (01-01-2014)
Investment Credit - Form 3468

  1. Form 3468, Investment Credit, is required to be filed with Corporate tax returns when claiming the Form 3468 credit.

  2. When an amount is present on Form 3800, Part III, Line 1a* or 4a*, or Form 1120, Schedule J, Line 5c** for Form 3468, take the following actions:
    *(Part I, Line 1a, Line 29a for 2010 – 2008.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 3468 is not attached, Edit MSC "31" (or correspond if 2 or more MSCs apply).
    Form 3468 has an entry on Line 8* and Form 3800 has an entry on Line 1a or 4a,
    *(Only applicable for 2010 tax years (including fiscal year filers ending in 2011).)
    Edit CCC "V" .

3.11.16.10.13.2  (01-01-2012)
Work Opportunity Credit - Form 5884

  1. Form 5884, Work Opportunity Credit, is required to be filed with Corporate tax returns when claiming the Form 5884 credit.

  2. When an amount is present on Form 3800, Part III, Line 4b* or Form 1120, Schedule J, Line 5c** for Form 5884, take the following actions:
    *(Line 29b for 2010 – 2009, Line 1b for 2006 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 5884 is not attached, Edit MSC "38" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.3  (01-01-2013)
Credits for Affected Midwestern Disaster Area Employers - Form 5884-A

  1. Form 5884-A, Credits for Affected Midwestern Disaster Area Employers*, is required to be filed with corporate tax returns when claiming the Form 5884-A credit.
    *(Employers Affected by Hurricane Katrina, Rita, or Wilma, for 2006 Revision.)

  2. When an amount is present on Form 3800, Line 1t* (2009-2008) for Form 5884-A, take the following actions:
    *(Not applicable for 2007 revision, Line 1aa for 2006, Line 1z for 2005.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 5884-A is not attached, Edit MSC "70" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.4  (01-01-2014)
New Hire Retention Credit - Form 5884-B

  1. Form 5884-B, New Hire Retention Credit, is required to be filed with Corporate tax returns when claiming the Form 5884-B credit.

  2. For tax years 2010 and 2011, when an amount is present on Form 3800, Part III, Line 1aa* for Form 5884-B,
    *(Part I, Line 1aa for 2010 and prior)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 5884-B is not attached, Edit MSC "75" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not correspond. The credit is from a pass-through entity and the form is not required.

    Form 5884-B is attached, Place in sequence order if a significant entry is present on Line 10 or 11.

  3. For tax years 201212 and subsequent, follow the chart below to edit a Form 5884–B with a significant entry on any line:

    If... And... Then...
    A significant amount is on the Form 5884-B Form 3800, Part III, Line aa has an amount,
    1. "X" the Form 5884-B

    2. "X" the amount on Form 3800, Part III, Line aa

    3. Subtract the amount of Form 3800, Part III, Line aa from Form 3800, Part II, Line 35.

    A significant amount is on the Form 5884-B Form 3800, Part III, Line aa does not contain and amount, "X" the Form 5884-B.

3.11.16.10.13.5  (01-01-2014)
Biofuel Producer Credit - Form 6478

  1. Form 6478, Biofuel Producer Credit (Alcohol and Cellulosic Biofuel Fuels Credit for 2007 - 2012), is required to be filed with Corporate tax returns if any of the following are present:

    1. The 2011 revision or later of Form 3800, Part III, Line 4c has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. The 2008-2010 revision of Form 3800, Line 29c has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    3. Schedule J, Line 5c* has an entry indicating Form 6478 is attached and a Form 6478 credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed.
      *(Line 6d for 2005-2000, Line 4d for 1999 and prior.)

    4. An amount is shown on Line 1d, of a 2004 or prior year Form 3800. The 2005 through 2007 revision of Form 3800 did not include the Alcohol and Cellulosic Biofuel Fuels Credit.

    5. An amount is shown on the Alcohol and Cellulosic Biofuel Fuels Credit line on a prior year return.

  2. When an amount is present on Form 3800, Part III, Line 4c (Line 29c for 2010 and prior) or Form 1120, Schedule J, Line 5c for Form 6478, take the following actions:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 6478 is not attached, Edit MSC "39" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

    These instructions apply to 2009 tax year only, including fiscal year (200901 through 201011).
    Form 6478 has a significant amount on Line 5*, Column (c) or Line 8*,
    *(Line 5(c) or Line 7 for 2009, Line 7(c) or Line 9 for 2008, not applicable for other prior year revisions.)
    Edit Action Code "343" for Form 1120, Form 1120-C, Form 1120-F, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.

    Reminder:

    Do not edit Action Code "343" for tax period 201012.

3.11.16.10.13.6  (01-01-2012)
Credit for Increasing Research Activities - Form 6765

  1. Form 6765, Credit for Increasing Research Activities, is required to be filed with Corporate tax returns when claiming Form 6765 credit.

  2. When an amount is present on Form 3800, Part III, Line 1c* or Form 1120, Schedule J, Line 5c** for Form 6765, take the following action:
    *(Part I, Line 1c for 2007 - 2010, Line 1d for 2006-2005, Line 1e for 2004 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 6765 is not attached, Edit MSC "40" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.


3.11.16.10.13.7  (01-01-2014)
Low-Income Housing Credit - Form 8586

  1. Form 8586, Low-Income Housing Credit, is required to be filed with Corporate tax returns when claiming Form 8586 credit.

  2. When an amount is present on Form 3800, Part III, Line 1d* or Line 4d** or Form 1120, Schedule J, Line 5c*** for Form 8586, take the following actions:
    *(Part I, Line 1d for 2007 - 2010, Line 1e for 2006-2005, Line 1f for 2004 and prior.) **(Line 29d for 2010 – 2008) ***(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8586 is not attached, Edit MSC "44" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not correspond. The credit is from a pass-through entity and the form is not required.

    Form 8586 is attached with an entry on any of Lines 1 or 3 (prior year Lines 1 through 4), or
    Form 8609 is attached or
    Form 8609-A (prior year Form 8609, Schedule A) is attached,
    Enter CCC "9" .

3.11.16.10.13.8  (01-01-2012)
Orphan Drug Credit - Form 8820

  1. The Orphan Drug Credit, is valid for tax periods 8301 through 9511, and 9607 and subsequent.

    Note:

    If this credit is claimed for an invalid tax period, "X" and disallow the credit.

  2. Form 8820, Orphan Drug Credit is required to be filed with Corporate tax returns when claiming Form 8820 credit.

  3. When an amount is present on Form 3800, Part III, Line 1h* or Form 1120, Schedule J, Line 5c** for Form 8820, take the following actions:
    *(Part I, Line 1h for 2007 - 2010, Line 1k for 2006-2005, Line 1l for 2004 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8820 is not attached, Edit MSC "42" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.9  (01-01-2012)
Disabled Access Credit - Form 8826

  1. Form 8826, Disabled Access Credit, is required to be filed with Corporate tax returns when claiming Form 8826 credit.

  2. When an amount is present on Form 3800, Part III, Line 1e* or Form 1120, Schedule J, Line 5c** for Form 8826, take the following actions:
    *(Part I, Line 1e for 2007 - 2010, Line 1g for 2006-2005, Line 1h for 2004 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8826 is not attached, Edit MSC "47" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.10  (01-01-2009)
Enhanced Oil Recovery Credit - Form 8830

  1. No editing is required for Form 8830.

3.11.16.10.13.11  (01-01-2012)
Qualified Plug-in Electric Vehicle Credit - Form 8834

  1. Form 8834, Qualified Plug-in Electric Vehicle Credit, is required to be filed with Corporate tax returns when claiming Form 8834 credit.

  2. When an amount is present on Form 3800, Part III, Line 1z* for Form 8834:
    *(Part I, Line 1z for 2010 and prior.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8834 is not attached, Edit MSC "49" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

    Form 8834, *Part I, Line 1, Column (a), or (b) include a vehicle year of 2008 or earlier,
    *(Part I, Line 1, Column (a), (b) or (c) for 2010 revision and Part II, Line 8, Column (a), (b), or (c) for July 2009 revision.)
    Edit CCC "C" and circle the invalid vehicle year(s) and/or invalid in service date(s).
    Form 8834, *Part I, Line 3, Column (a), or (b) include a in service date of 02/16/2009 or earlier,
    *(Part I, Line 2, Column (a), (b) or (c) for 2010 revision and Part II, Line 9, Column (a), (b), or (c) for July 2009 revision.)
    Edit CCC "C" and circle the invalid vehicle year(s) and/or invalid in service date(s).

3.11.16.10.13.12  (01-01-2012)
Renewable Electricity, Refined Coal, and Indian Coal Production Credit - Form 8835

  1. Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, is required to be filed with Corporate tax returns if any of the following are present:

    1. Schedule J, Line 6d (2005 to 2000) has an entry indicating Form 8835 is attached.

    2. Schedule J, Line 5c (2007-2006) has an entry indicating Form 8835 is attached.

    3. Form 3800, Part III, Line 1f* or 4e** has an entry for Form 8835.
      *(Part I, Line 1f for 2007 - 2010, Line 1h for 2006-2005, Line 1i for 2004 and prior.) **(Line 29e for 2010-2008.)

  2. When an amount is present on Form 3800, Part III, Line 1f* or Line 4e** or Form 1120, Schedule J, Line 5c*** for Form 8835, take the following actions:
    *(Part I, Line 1f for 2007 - 2010, Line 1h for 2006-2005, Line 1i for 2004 and prior.) **(Line 29e for 2010-2008) ***(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8835 is not attached, Edit MSC "50" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.13  (01-01-2013)
Empowerment Zone and Renewal Community Employment Credit - Form 8844

  1. Form 8844 is a high priority form.

  2. Form 8844 is required if:

    1. Form 3800, Part III, Line 3* has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
      *(Part II, Line 24 for 2010–2008 revision.)

    2. Form 1120, Schedule J, Line 5c* has an entry indicating Form 8844 is attached and Form 8844 credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed.
      *(Line 6d for 2005 to 2000, Line 4d for 1999–1995.)

  3. Edit "1 – 1" in the left margin of Form 1120, near Line 12* when the Form 8844 is indicated on:
    *(Line 2 for Form 1120-F.)

    1. Form 1120, Page 3, Schedule J, Line 5c (Line 6d for 2005–2000, Line 4d for 1999–1995).

    2. Form 1120-C, Page 4, Schedule J, Line 5c.

    3. Form 1120-F, Page 4, Schedule J, Line 5b (Line 5c for 2006, Line 6c for 2005–2000, Line 4c for 1999–1995).

    4. Form 1120-L, Page 6, Schedule K, Line 5c (Line 6c for 2005–2000, Line 4c for 1999–1994).

    5. Form 1120-PC, Page 1, Line 8c (Line 7c for 2000–1994).

    6. Form 1120-REIT, Page 3, Schedule J, Line 3c (Line 4c for 2005 and prior).

    7. Form 1120-RIC, Page 2, Schedule J, Line 3c (Line 4c for 2005 and prior).

    8. Form 3800, Part III, Line 3 has an entry (Part II, Line 24 for 2010–2008 revisions).

  4. Edit a "1 – 1" in the left margin of Form 1120, near Line 12* if Form 8844 is attached even if dollar amounts are not present.
    *(Line 2 for Form 1120-F.)

  5. When an amount is present on Form 3800, Part III, Line 3* or Form 1120, Schedule J, Line 5c for Form 8844, take the following actions:
    *(Part II, Line 24 for 2010 – 2008.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8844 is not attached, Edit MSC "54" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

    Note:

    Editing "1 – 1" in the left margin of Form 1120, Line 12* allows Statistics of Income (SOI) a means of monitoring this credit. (HIGH PRIORITY)
    *(Line 2 for Forms 1120-F.)

3.11.16.10.13.14  (01-01-2012)
Indian Employment Credit - Form 8845

  1. Form 8845, Indian Employment Credit, is required to be filed with Corporate tax returns when claiming Form 8845 credit.

  2. When an amount is present on Form 3800, Part III, Line 1g* or Form 1120, Schedule J, Line 5c** for Form 8845, take the following actions:
    *(Part I, Line 1g for 2007 - 2010, Line 1i for 2006–2005, Line 1j for 2004 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8845 is not attached, Edit MSC "51" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.15  (01-01-2012)
Credit for Employer Social Security Taxes Paid on Certain Employee Cash Tips - Form 8846

  1. Form 8846, Credit for Employer Social Security Taxes Paid on Certain Employee Cash Tips, is required to be filed with Corporate tax returns if any of the following are present:

    1. Schedule J, Line 6d (2005 and prior) has an entry indicating Form 8846 is attached.

    2. Schedule J, Line 5c (2007 revision) has an entry indicating Form 8846 is attached.

      Note:

      The 2007 revision of Form 3800 does not include the computation of the allowable Form 8846 credit.

    3. Form 3800, Part III, Line 4f* has an entry for Form 8846.
      *(Part II, Line 29f for 2010–2008, Line 1j for 2006-2005, Line 1k for 2004 and prior.)

  2. When an amount is present on Form 3800, Part III, Line 4f* or Form 1120, Schedule J, Line 5c** for Form 8846, take the following actions:
    *(Part II, Line 29f for 2010–2008, Line 1j for 2006-2005, Line 1k for 2004 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8846 is not attached, Edit MSC "52" (or correspond if 2 or more MSCs apply).

    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.

3.11.16.10.13.16  (01-01-2012)
Credit for Contributions to Selected Community Development Corporations - Form 8847

  1. Form 8847, Credit for Contributions to Selected Community Development Corporations, is required to be filed with Corporate tax returns when claiming Form 8847 credit.

  2. When an amount is present on Form 3800, Line 1y* (2008 revision) or Form 1120, Schedule J, Line 5c** for Form 8847, take the following actions:
    *(Line 1w for 2007, 1x for 2006, 1w for 2005, Line 1r for 2004, Line 1p for 2003–2002, Line 1n for 2001, Line 1m for 2000–1997.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8847 is not attached, Edit MSC "53" (or correspond if 2 or more MSCs apply).

3.11.16.10.13.17  (01-01-2012)
Welfare-to-Work Credit - Form 8861

  1. Form 8861, Welfare-to-Work Credit, is required to be filed with Corporate tax returns when claiming Form 8861 credit.

  2. When an amount is present on Form 3800, Line 1b* (2009–2007) or Form 1120, Schedule J, Line 5c** for Form 8861, take the following actions:
    *(Line 1c for 2006 and prior.) **(Line 6d for 2005 to 2000.)

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8861 is not attached, Edit MSC "55" (or correspond if 2 or more MSCs apply).


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