3.11.23  Excise Tax Returns (Cont. 1)

3.11.23.10 
♦ Entity Perfection - General ♦

3.11.23.10.7  (01-01-2015)
Payment Processed To Incorrect Tax Period

  1. The payment received with Form 720, Form 11C, Form 730, Form 2290 or Form 2290SP processed by RPS, a Lockbox, or within a field office may be applied to an incorrect tax period.

    Reminder:

    PCOR payments for Form 720 PCOR tax should only be applied to second quarter tax periods. If the payment has been applied to a quarter other than the second quarter have the PCOR payment applied to the same second quarter that the Form 720 PCOR return was intended.

    IF THEN
    The payment was processed to an incorrect tax period,
    1. Edit Action Code 450 or CCC "U" as appropriate.

    2. Attach Form 4227 noting that the remittance was processed to an incorrect tax period.

    There are Electronic Federal Tax Payment System (EFTPS) receipts or other payment documents attached to the return indicating that the payment has been applied incorrectly,
    1. Edit Action Code 450 or CCC "U" as appropriate.

    2. Attach Form 4227 noting that the remittance was processed to an incorrect account.

3.11.23.11  (01-01-2015)
Received Date Editing

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

  2. A received date is required on all Form 720, Form 11-C, Form 730, and those within the Form 2290 series.

    Note:

    On early filed Form 11-C only: if the received date on Form 11-C is prior to the beginning of tax period, use the return due date as the received date.

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

    Figure 3.11.23-13
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. The received date will be stamped on the face of the return.

  6. 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), plus the city, location, or 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" .

  7. If the date stamp is not present or the date is illegible or invalid, edit the received date in MMDDYY format in the middle of page one of the return. Edit the Received Date according to the following priority:

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

      If... Then...
      An envelope has both a USPS, foreign, or PDS and private metered postmark, Always use the USPS, foreign, or PDS postmark.
      An envelope has two private meter postmarks, Always use the latest private postmark.
      An envelope has only one private meter postmark, Use the private metered postmark.
    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer's or other IRS official's signature date.

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

    5. DLN Julian control date minus 10 days.

    6. Current date minus 10 days.

  8. Edit the Received Date as follows:

    IF... AND... THEN...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,   The return is considered timely.
    The due date falls on a weekend or legal holiday,   The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp is after ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date, The postmark or shipment date is on or before the legal or extended due date, Edit the received date to agree with the postmark date.
    Two or more dates are stamped on the return,  
    1. Use the earliest IRS stamped Received Date.

    2. Circle out the incorrect received dates.

    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, Delivered to a State Agency, Use the postmark date as the received date.
    Federal return is addressed to a State Agency,   Use the IRS date stamp as the received date.
    Envelope is attached to the return, The return is timely, Check envelopes for remittance, if found hand carry to the manager. Discard the envelope.
    The only Received Date on the return is a TAS Received Date,   Edit the Received Date according to instructions.
  9. See the chart below for the due dates of Form 720, Form 2290, Form 11-C, and Form 730.

    FORM
    720
    TAX
    PERIOD
    PERIOD
    ENDING
    DUE
    DATE
    DELINQUENT ON OR AFTER
    *All IRS Numbers 201412 12/31/14 02/02/15 ≡ ≡ ≡ ≡ ≡ ≡
    201503 03/31/15 04/30/15 ≡ ≡ ≡ ≡ ≡
    201506 06/30/15 07/31/15 ≡ ≡ ≡ ≡ ≡
    201509 09/30/15 11/02/15 ≡ ≡ ≡ ≡ ≡ ≡
    201512 12/31/15 02/01/16 ≡ ≡ ≡ ≡ ≡
    Valid tax periods for IRS Number 20
    *IRS Number 20 201506 06/30/15 07/31/15 ≡ ≡ ≡ ≡ ≡
    *IRS No. 20 is valid for the 1st or 2nd quarter ONLY.
    Valid tax period for IRS Number 133
    **IRS Number 133 201506 06/30/15 07/31/15 ≡ ≡ ≡ ≡ ≡ ≡
    **IRS No. 133 is an annual tax and is valid for the 2nd quarter ONLY.
    FORM FILING FREQUENCY TAX PERIOD Due Date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    11-C Annual 201507 07/01/15 ≡ ≡ ≡ ≡ ≡
    2290 and 2290SP Annual 201507 08/31/15 ≡ ≡ ≡ ≡
    730 Monthly 201409 10/31/14 ≡ ≡ ≡ ≡ ≡ ≡ ≡
        201410 12/01/14 ≡ ≡ ≡ ≡
        201411 12/31/14 ≡ ≡ ≡ ≡
        201412 02/02/15 ≡ ≡ ≡ ≡
        201501 03/02/15 ≡ ≡ ≡ ≡ ≡ ≡
        201502 03/31/15 ≡ ≡ ≡ ≡
        201503 04/30/15 ≡ ≡ ≡ ≡ ≡ ≡
        201504 06/01/15 ≡ ≡ ≡ ≡
        201505 06/30/15 ≡ ≡ ≡ ≡
        201506 07/31/15 ≡ ≡ ≡ ≡ ≡ ≡
        201507 08/31/15 ≡ ≡ ≡ ≡ ≡ ≡
        201508 09/30/15 ≡ ≡ ≡ ≡
        201509 11/02/15 ≡ ≡ ≡ ≡ ≡
        201510 11/30/14 ≡ ≡ ≡ ≡ ≡ ≡
        201511 12/31/15 ≡ ≡ ≡ ≡ ≡ ≡
        201512 02/01/16 ≡ ≡ ≡ ≡ ≡ ≡

3.11.23.11.1  (01-01-2015)
Received Date Editing - Form 2290 and Form 2290SP

  1. For vehicles in use on public highways at the beginning of the tax period (July 1) or later in July, Form 2290 or Form 2290SP must be filed by August 31.

    Note:

    On July 20, 2011, the IRS issued temporary regulations (IR 41.60719(a)-1T; TD 9537: IR122813-11) that extend the Form 2290 due date to November 30, 2011 for taxable vehicles first used on public highways during the months of July, August, and September 2011. As of July 20, 2011, the tax was scheduled to end after September 30, 2011. The tax has since been extended through September 30, 2017.

  2. For vehicles whose first use is in a later month, Form 2290 must be filed by the last day of the month following the month of the vehicle's first use.

  3. An amended Form 2290 return is due, if the tax was suspended under the 5,000/7,500 mile exemption, when the vehicle later exceeds that mileage. The amended Form 2290 must be filed by the last day of the month following the month in which the vehicle's use exceeded the limit.

  4. Form 2290 is often received with multiple received dates indicated on Page 2 and Schedule 1. Circle out the erroneous received dates on Page 2 in such a manner that the tax data is still legible for the ISRP function.

3.11.23.12  (01-01-2015)
♦ Computer Condition Codes ♦

  1. Computer Condition Codes (CCC) are used to identify a special condition or computation to post to the Masterfile.

  2. Computer Condition Codes are edited to the right of the entity area.

3.11.23.12.1  (01-01-2015)
CCC "D" Reasonable Cause for Failing to Pay Timely

  1. "D" - Reasonable Cause for Failing to Pay Timely (All Excise Forms). CCC D will no longer be edited by Code and Edit examiners. If the taxpayer requests an abatement for Failing to Pay Timely when the return is submitted, send Letter 1382C, which will inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. In the cases of a disaster, Code and Edit examiners will be provided with the coding procedures to follow.

    Exception:

    Per IRM 3.11.23.22.1, IRC Section 6020(b) Prepared by Collections, CCC "D" may be required to be edited on IRC Section 6020(b) returns when notated to not assess failure to pay penalty.

3.11.23.12.2  (01-01-2015)
CCC "F" - Final Return

  1. "F" - Final Return (All Excise Forms) - Edit CCC F when the taxpayer checks the Final box and gives a positive indication that they are not liable for filing future returns. Notations such as (but not limited to):

    • Final

    • Deceased

    • Out of Business

    • Liquidation

    • Exempt under IRC Section 501(c)(3)

    • Dissolved

    • One time filer

  2. Form 720:

    • When the taxpayer indicates final, no entries on return and no signature attach a Form 4227 with a note and send to the Excise Operations area. If a form is received with this criteria but has a signature, CCC "F" and process as usual.

  3. Form 2290:

    1. Form 2290 received in Code and Edit with no tax and either signed or not signed stating that they are "under 55,000 pounds" , "out of business" , "no longer in business for several years" , checked the "Final Return" box, stated "NOT LIABLE" , "deceased" , etc. code with CCC F and process as usual.

    2. If the Form 2290 is received with this criteria, has a signature and a tax amount on line 2, edit CCC "F" , return the Schedule 1 as appropriate (i.e., tax paid, current year, etc.) and process as usual.

    Note:

    Taxpayers stating that they no longer own or have a particular vehicle would not constitute a final return.

3.11.23.12.3  (01-01-2015)
CCC "G" Amended Returns

  1. Refer to IRM 3.11.23.1.8, Amended Returns

3.11.23.12.4  (01-01-2015)
CCC "J" Reasonable Cause for Failing to Make Timely Deposits

  1. Edit CCC "J" when the return is late and Form 3198, Special Handling Notice for Examination Case Processing, or similar attachment indicating the return has been secured under IRC Section 4741-4784.2 is attached.

  2. Otherwise, do not edit CCC J if the taxpayer requests an abatement for Failing to make timely deposits when the return is submitted. Instead, send Letter 1382C, which will inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. In the cases of a disaster, Code and Edit examiners will be provided with the coding procedures to follow.

3.11.23.12.5  (01-01-2015)
CCC "L" - IRC Section 6114 Election

  1. Edit CCC L if:

    • If the taxpayer writes "Section 6114 Election" on the top of the return

    • Has Form 8833, or

    • Attaches a letter referring to IRC Section 6114 to the return.

    • If the taxpayer has notated at the top of the Form 720 in red print the following statement: "Election to participate in FET Voluntary Compliance Initiative pursuant to Announcement 2008-18."

3.11.23.12.6  (01-01-2015)
CCC "O" - Module Freeze

  1. CCC "O" is entered when a Pre-settlement Manual Refund will be made and a Form 3753, Form 5792 or Form 12857 is attached. Verify that the Name Control, EIN and Tax Period on the return is the same as the data on the Form. See Figure 3.11.23-14

    Figure 3.11.23-14

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

    Note:

    When issuing a CCC "O" research to determine if TC 840 (Manual Refund Transaction) has posted.

    IF: THEN:
    TC 840 has posted, Enter CCC "O" and continue processing.
    TC 840 has not posted, Enter Action Code 344 to issue Manual Refund and prepare Form 4227 and notate Manual Refund.

3.11.23.12.7  (01-01-2015)
CCC "R" - Reasonable Cause for Failing to Timely File Return

  1. If the taxpayer requests an abatement for Reasonable Cause for Failing to Timely File Return when the return is submitted, send Letter 1382C, which will inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. In the cases of a disaster, Code and Edit examiners will be provided with the coding procedures to follow.

  2. Edit CCC R with a Penalty and Interest Code "1" when precomputed delinquency penalty and/or interest is shown to the right of the Penalty and Interest box. See IRM 3.11.23.14, Precomputed Penalties Form 720.

3.11.23.12.8  (01-01-2015)
CCC "U" - Unprocessable Document

  1. Edit CCC "U" on any return that has an unprocessable condition.

    Note:

    CCC "U" is not valid for Form 720 and the Form 2290 series.

3.11.23.12.9  (01-01-2015)
CCC "W" - "Cleared by Statute" Stamped on Return

  1. Refer to IRM 3.11.23.1.7, Statute Returns.

3.11.23.12.10  (01-01-2015)
CCC "X" - Refund/Settlement Freeze

  1. Edit CCC "X" when the taxpayer requests any balance left over after paying tax and/or penalties to be applied to another tax module:

    1. Prepare Form 3465, Adjustment Request, and route to Excise Operations area with the request and a photocopy of page 1 of the return.

    2. Annotate on the return "3465 prepared" .

    3. On no reply cases for a signature, CCC X will be edited on overpaid returns.

      Note:

      Subtract the tax, penalties and interest amounts from the remittance amount if available.

3.11.23.12.11  (01-01-2015)
CCC "Z" - Missing Abstract Number (Form 720)

  1. When an Abstract Number is missing and the amount is over $100.00 CCC "Z" sends a transcript to the Excise Operations for the Reports Analyst to determine the correct Abstract Number. The Abstract Number determines the Government Agency that will receive the money from the trust fund, for example the Department of Transportation receives money for the Highway and Airport and Airway Trust Funds.

  2. Edit CCC "Z" when an amount of $100.00 or more is on Part I, Line 1, Part II Line 2 and/or Part III line 3, but no Abstract (IRS) Number is indicated. Exception: Returns that are prepared or secured by Examination and notated IRC Section 6020(b).

    Reminder:

    Prior to editing CCC "Z" or IRS number "80" , check the entity plus any attachments that might identify what Abstract Number should be used.

3.11.23.12.12  (01-01-2015)
CCC "1" - Wager's Authorized Under the Laws of the State in Which Accepted (Form 11-C)

  1. Edit CCC "1" when the "Renewal" box is checked and the $50.00 category is paid rather than the $500.00 category. The lower amount is used for those wagers authorized by their respective states.

3.11.23.12.13  (01-01-2015)
CCC "3" - No Reply to Correspondence

  1. Edit CCC "3" when the taxpayer either fails to respond to a correspondence or the correspondence is returned undeliverable.

3.11.23.12.14  (01-01-2015)
CCC "4" - 6020(b) Return

  1. Edit CCC "4" when the IRS's Compliance Branch has prepared a return and the Revenue Officer has entered IRC Section 6020(b).

    Note:

    CCC "4" cannot be used with CCC "R" and/or "Z" .

3.11.23.13  (01-01-2015)
Taxpayer Reports Precomputed Penalty Interest

  1. The Penalty/Interest (P/I) Code is used when the taxpayer has paid an amount for penalty or interest even though the return was received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . The P/I Code will allow the computer to compute penalty and/or interest when it normally would not.

  2. Enter Code "1" to the right of the Penalty and Interest box when precomputed delinquency penalty and/or interest is shown. If only precomputed interest is shown, edit CCC "R" as well as "1" (CCC R will override the P/I Code 1 where delinquency penalty is concerned.) See Figure 3.11.23-15

    Figure 3.11.23-15

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. If there is a taxpayer precomputed penalty and/or interest on the return, a received date must be present. See IRM 3.11.23.11, Received Date Editing.

  4. If the date in (3) above is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit the P/I Code.

3.11.23.14  (01-01-2015)
Precomputed Penalties (Form 720)

  1. The Internal Revenue Code provides for other penalties to be assessed against taxpayers, such as for "Fraud" . Provisions have not been made for assessing these other penalties on the original input of the return. Therefore, they should not be included in the penalty and interest box, if shown on the return.

  2. These other penalties can be identified as follows:

    • IRC Section 6663 - Fraud

    • IRC Section 6674 - Fraudulent statement

    • IRC Section 6721(a)(2)(B) - Failure to supply identifying number

  3. Precomputed penalties other than delinquency, Federal Tax Deposit (FTD) or Failure to Pay (FTP) should be handled as follows:

    1. Prepare Form 3465, Adjustment Request, to request an assessment of the penalty. If a remittance amount includes all or part of the penalty, indicate on Form 3465 that this portion of the remittance is available for application to the assessment.

    2. Annotate in the left margin of the return that "3465 Prep" . Route Form 3465 to the Excise Operations Branch.

    3. Edit CCC "R" on any return which shows an assessment of "fraud" penalty.

    4. Edit CCC "X" to freeze the refund until the assessment for penalty posts to the BMF.

3.11.23.15  (01-01-2015)
Penalty and Interest Box - Form 720

  1. If the FD line in the Penalty and Interest Box is blank, edit the Failure to Deposit (FTD) Penalty shown on Form 4364 or attachments, if present.

    1. If the FTD Penalty is present, make sure it is added to the balance due or subtracted from the overpayment.

    2. Subtract any penalties or interest (other than FTD Penalty) included in the balance due.

    3. For penalties other than the FTD Penalty, Delinquency or Failure to Pay, prepare Form 3465, Adjustment Request, and route to the Excise Operations Branch.

3.11.23.16  (01-01-2015)
Processing Form 720

  1. Form 720 is the return for reporting many of the federal excise taxes.

    Note:

    The Form 720 has and will be undergoing changes. The abstracts will not be in the same place the taxpayer is used to looking. Be on the lookout for possible misplaced entries and move to correct abstract number. For example, a large trucking company selects abstract 29 (Ship Passenger Tax). Move this tax to abstract 33. If there is any question, see your lead.

  2. The valid Computer Condition Codes on Form 720 are D, F, G, J, L, O, R, W, X, Z, 3, and 4.

  3. Follow normal procedures for:

    • Edit Marks - IRM 3.11.23.3, Edit Marks.

    • Unprocessable Returns - IRM 3.11.23.8, Unprocessable Returns.

    • Signature - IRM 3.11.23.9, Signature.

    • Third Party Designee - IRM 3.11.23.9.1, Third Party Designee.

    • Entity Perfection - IRM 3.11.23.10, Entity Perfection.

    • Entity Perfection of Domestic Addresses - IRM 3.11.23.10.4, Entity Perfection of Domestic Address.

    • Entity Perfection of Foreign Addresses - IRM 3.11.23.10.5, Entity Perfection of Foreign Address.

    • Entity Perfection of Tax Period - IRM 3.11.23.10.6.3, Entity Perfection of Tax Period.

    • Received Date Editing - IRM 3.11.23.11, Received Date Editing.

    • Computer Condition Codes - IRM 3.11.23.12, Computer Condition Codes.

    • Amended Returns - IRM 3.11.23.1.8, Amended Returns.

  4. Form 720 is required to be edited for dollars and cents.

  5. Form 720 has several pages and attachments that are required to be attached. Document Perfection is responsible for arranging Form 720 in the following order when transcription line entries are present:

    • Page 1

    • Page 2

    • Page 3 (Schedule A)

    • Pages 4, 5, and 6 (Schedule C)

    • All other forms and schedules may be in any order

  6. See Exhibit 3.11.23-1 for Form 720 transcription lines (T-Lines).

  7. Form 720 return processing volume and time is reported under the following Program Codes:

    Program Code Program
    11800 General Form 720 processing
    11801 Form 720 with Line 3 tax of $1 million or more
    11802 Form 720 refund returns
    11804 Form 720 reporting IRS Number 133, Patient Centered Outcomes Research Fee
    11809 Form 720 reporting IRS Number 136, Taxable Medical Devices
  8. After coding any Form 720 return showing one million dollars or more in tax, Code and Edit must photocopy the complete Form 720. Code and Edit should route the copies of the Form 720 on a Form 3210 transmittal to:

    Excise Operations
    Team 201, Stop 5701G


    The Form 720 return includes:

    • Form 720 including Schedule C.

      Note:

      If there is an amount on line 4, follow the line 4 procedures before photocopying the return for Excise.

    Note:

    When processing cannot determine the correct IRS Number and assigns IRS Number 80 with CCC Z, a report goes to the Reports Analysts to research for the correct IRS Number.

3.11.23.16.1  (01-01-2015)
Form 720 Part I and II

  1. If the taxpayer enters the number of gallons (Fuel and Floor Stock Taxes), number of persons (Ship Passenger Tax), number of tons (Manufacturers Taxes), number of doses (Vaccine Taxes), premiums paid (Other Excise Taxes), amount of obligations (Obligations not in Registered Form) and the "Tax" column is blank or zero, compute and edit the tax for the appropriate IRS number. Also, adjust line 3 accordingly.

  2. If the taxpayer has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for IRS Number(s) 18, 19, 20 (in Part II), 21 or 98 on Form 720, Form 6627, Environmental Taxes, must be attached.

    1. If attached, Form 6627 must be math verified. See IRM 3.11.23.16.2, Form 6627.

    2. Do not math verify if the entries that require math verification are on an attachment to Form 6627 rather than on Form 6627.

    3. If not attached, correspond to secure a completed Form 6627.

    4. If no reply, edit CCC 3.

    5. Continue processing.

  3. Public Law (P.L.) 111-152, Health Care and Education Reconciliation Act, created a new excise tax on Medical Devices. This new tax will be reported quarterly beginning with tax period ended March 31, 2013. The tax will be reported under IRS Number 136 in Part I of Form 720.

  4. P.L. 111-148, Affordable Care Act, created a new excise tax on certain health insurance policies and self-insured health plans. This new tax will be reported annually beginning with tax period ended June 30, 2013. The tax will be reported under IRS Number 133 in Part II of Form 720. The tax must be reported on the second quarter Form 720 only.

3.11.23.16.1.1  (01-01-2015)
IRS Numbers 108, 109, and 113 Perfection

  1. Perfect entries for IRS Numbers 108, 109, and/or 113 on Form 720 per the table below:

    If... And... Then...
    There is a tax amount reported on line(s) 108, 109, and/or 113, The number of tires is reported on the corresponding lines toward the middle of the form, Underline the IRS Number and underline the number of tires.
    There is a tax amount reported on line(s) 108, 109, and/or 113, The number of tires is not reported on the corresponding lines toward the middle of the form,
    1. Correspond for the missing information.

    2. Enter the taxpayers response on the appropriate line(s) for the number of tires.

    3. Underline the IRS Number and the number of tires.

    There is a number of tires reported on line(s) 108, 109, and/or 113 toward the middle of the form, The corresponding tax amount cannot be easily ascertained,

    Note:

    If the only tax being reported is tire tax under one IRS Number then the tax can easily be ascertained.

    1. Correspond for the missing information.

    2. Enter the amount of tax based on the taxpayers response on the appropriate line(s).

    3. Underline the IRS Number and the number of tires.

    A version of Form 720 prior to the January 2009 version has been used to file for quarter(s) ending March 31, 2009 or subsequent, The taxpayer is reporting tire tax on line(s) 108, 109, and/or 113 and the number of tires cannot be ascertained from the form or attachments,
    1. Correspond for the current revision of Form 720.

    2. When the response has been received underline the IRS Number and the number of tires.

    The taxpayer has provided the tire and tire tax information, It is not reported on a Jan. 2009 or subsequent revision,
    1. Prepare a complete new revision of page 2 of the Form 720 for the tax information.

    2. "X" out the tax information on the old version of page 2 of the Form 720.

      Note:

      If the taxpayer is also reporting tax for IRS numbers 29 and/or 31, then a complete overlay of the tax information on page 1 and 2 of a new revision of Form 720 should be prepared.


    Note:

    If no reply enter CCC "3" and continue processing. If the number of tires is still missing enter "1" as the number of tires.

3.11.23.16.1.2  (01-01-2015)
IRS Number 136, Medical Devices Tax Perfection

  1. Perfection of the Medical Devices Tax requires both Sales Price and Tax be present. Both amounts are to be perfected for dollars and cents.

    If... And... Then...
    The Sales Price is present, The tax amount is not present,
    1. Multiply the Sales Price by 2.3 percent (.023).

    2. Enter the result in the tax column for IRS Number 136.

    A tax amount is present for IRS Number 136, The Sales Prices is not present,
    1. Divide the tax amount by 2.3 percent (.023).

    2. Enter the result in the column for Sales Price.

3.11.23.16.1.3  (01-01-2015)
IRS Number 133, Patient Centered Outcomes Research (PCOR) Fee Perfection

  1. IRS Number 133 is used to report tax on specified health insurance policies and applicable self-insured health plans annually.

  2. IRS Number 133 must be reported on the second quarter Form 720 only with a return due date of July 31st each year.

  3. If IRS Number 133 is reported in any other tax period other than the second quarter, change the tax period to the second quarter if it is the only tax reported on Form 720.

  4. If IRS Number 133 is reported with other IRS Numbers present and the tax period is other than the second quarter then:

    IF: THEN:
    Numbered return,
    1. Edit AC 610 (renumber) or 611 (remittance-renumber).

    2. Prepare and attach Form 4227 notated "Multiple IRS numbers present with IRS Number 133. Prepare a dummy return for the IRS Number 133" .

    Unnumbered return, Prepare dummy return for IRS Number 133.

    Exception:

    In this instance, if the taxpayer has filed a Form 720 for quarters 1, 3, and/or 4 and the PCOR tax being reported is zero, N/A, none, - (dash), etc. do not prepare a dummy return for the second quarter just to post the zero amount for PCOR tax. "X" out the PCOR indication on quarters 1, 3, and 4 when only zero, N/A, none, - (dash) etc. has been entered so transcription does not pick it up.

    Note:

    When the tax period has not been clearly indicated on a Form 720 reporting IRS Number 133 use the IRS received date to help determine the tax period. If the return was received Dec. 31st or prior, process to the preceding 2nd quarter (i.e., Form 720 reporting IRS Number 133 received on Dec. 31, 2014 process as 201406). If the return was received after Dec. 31st, process to the subsequent 2nd quarter (i.e., Form 720 reporting IRS Number 133 received on Jan. 2, 2015 process as 201506).

  5. Perfection of the PCOR tax requires the Average Number of Lives Covered, Column (c) Fee, and the tax amount for both types of policies, Specified Health Insurance Policies and Applicable Self-Insured Health Plans, be present.

  6. The tax amount for IRS Number 133 will be the total tax reported for both column (c) for specified health insurance policies added to column (c) for applicable self-insured health plans.

    If... And... Then...
    The amount in column (c) is less than the number of lives in column (a), the amount in column (c) appears to be the rate for column (b) (normally $1 or $2), Calculate the fee by multiplying column (a) by the implied rate for column (b) and edit in column (c).

    Note:

    If the column (c) amount and IRS Number 133 tax should be the same, you may circle out the column (c) entry and use a double arrow to indicate such.

    There is a tax amount present for IRS No. 133, There are no entries in the average number of lives covered and/or the column (c) lines, Use the tax amount to try and back into the average number of lives covered and/or column (c) lines.
    There is a tax amount present for IRS No. 133, There is no manner in which to determine the average number of lives covered and/or the column (c) lines, Correspond for the correct breakdown of the number of lives and the column (c) lines.

    Note:

    Ensure Average Number of Lives for both Specified Health Insurance Policies and Applicable Self-Insurance Health Plans are numeric whole number entries. If the taxpayer has entered a partial life then apply traditional rounding. If .5 or greater round up and if less then .5 round down (e.g., if 100.5 lives are reported input 101 lives and conversely if 100.4 lives are reported input 100 for the number of lives).

3.11.23.16.2  (01-01-2015)
Form 6627

  1. Perfection of Form 6627, Environmental Taxes. See Exhibit 3.11.23-2.

    1. If the IRS Number(s) reported on Form 6627 and Form 720 do not agree, change Form 720 to agree with the IRS Number reported on Form 6627.

    2. Verify that the taxpayer is using the correct rates. See Exhibit 3.11.23-2.

    3. If the taxpayer has used the wrong rate and the discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit the correct amount on Form 720. Issue a non-suspense letter advising the taxpayer of the discrepancy.

    4. Verify that the correct name and EIN are present on Form 6627 and agree with the information on the Form 720. If the information is missing or incorrect, then enter the correct information.

3.11.23.16.2.1  (01-01-2015)
Part I, Form 6627

  1. The oil spill liability tax (IRS Numbers 18 and 21) was reinstated, effective beginning April 1, 2006. Taxpayers who claim an amount on Form 720, Part 1 for IRS Number(s) 18 and 21 should complete Form 6627.

  2. Verify Part I:

    1. Multiply column a (number of barrels) times column b (rate) and compare the amount to that shown in column c (tax).

    2. Add column c, lines 3 and 4, and compare the total to the line 5 amount.

    3. Verify that the amount on line 5 equals the amount for IRS Number 18 on Form 720, Part I.

    4. If an amount appears on line 6, repeat (2a) above to compute the amount that should show in column c.

    5. Verify that the amount on line 6 equals the amount for IRS Number 21 on Form 720, Part I.

    6. Correspond for any discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    7. If no reply, edit the larger amount.

3.11.23.16.2.2  (01-01-2015)
Part II, Form 6627

  1. Verify Part II

    1. Multiply column b (number of pounds) times column c (tax per pound) and compare the amount to that shown in column d (tax).

    2. Add column d, lines 1 through 3 and compare the total to the line 4 amount.

    3. Correspond for any discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    4. If no reply, edit the larger amount.

3.11.23.16.2.3  (01-01-2015)
Part III, Form 6627

  1. Verify Part III - There are two methods of computing the tax which follow.

  2. Method One:

    • Verify that column b times column c times column d equals column f.

  3. Method Two (if the entry value method is used):

    • Verify that column d times column e equals column f.

  4. Add the amounts in column f, lines 1 through 3 and compare the total to line 4.

  5. Correspond for any discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • If no reply, edit the larger amount.

  6. Verify the amount on line 4 equals the amount for IRS Number 19 on Form 720.

3.11.23.16.2.4  (01-01-2015)
Part IV, Form 6627

  1. Verify Part IV.

    1. Multiply column b (number of pounds) times column c (tax per pound).

    2. Compare the amount to that shown in column d (tax).

    3. Add column d, Lines 1 through 3.

    4. Compare the total to Line 4.

    5. Correspond for any discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ per chemical.

    6. If no reply, edit the larger amount.

  2. Verify that the amount on Line 4 equals the amount for IRS Number 20 on Form 720.

    Note:

    IRS Number 20 is valid only for the first and second (e.g., 201403, 201406, 201503 and 201506) quarters, if no other IRS Numbers are on the return.

    Note:

    The amount(s) present on Form 720 should agree with the amount(s) present on Form 6627 for applicable IRS Number(s). If there is a discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond with the taxpayer.

3.11.23.16.3  (01-01-2015)
Gas Guzzler Tax

  1. If an entry of less than $1,000.00 is present on IRS Number 40, it is in the wrong place. Review attached forms or explanations for correct IRS number.

    1. If unable to determine, correspond with the taxpayer for either a completed Form 6197 or the correct IRS Number.

    2. If no reply, enter CCC 3 and edit to IRS Number 80, and continue processing.

  2. If Form 6197 is not attached, correspond with the taxpayer for a completed form. If no reply, edit CCC 3 and continue processing.

  3. If Form 6197 is attached, it should be examined as follows:

    1. Verify that the correct name, TIN and tax period are present, and that they agree with the Form 720.

    2. Verify that the amount reported is in whole dollars.

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , an error has been made in calculating the amount. Correct the error by following (e) and (f) below.

    4. Math verify the form.

    5. Verify that column (d) multiplied by column (c) equals column (e).

    6. Verify that the total amounts in column (e), Lines 2 through 12, add up to the Total Tax Due amount on Line 13.

    7. Verify that the amount entered on line 13 has been correctly entered next to IRS Number 40 on Form 720.

    8. If there is a discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit the larger amount on Form 720.

    9. If there is a discrepancy ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    10. If no reply, edit the larger amount to Form 720.

    11. Verify that taxpayer has correctly identified all models.

    12. As errors are located, make all necessary corrections.

  4. Take the following actions on the conditions listed for Form 6197:

    IF: THEN:
    The name, TIN, or tax period cannot be located via Form 720 or research, or Correspond with the taxpayer for all missing information.
    The number of cars sold in column (d) cannot be determined, or
    The taxpayer does not correctly identify all models (e.g., model's name is missing),
  5. If no reply, edit CCC 3 and continue processing.

    Note:

    A taxpayer can list a single model on the form which would result in a single entry on Form 6197, column (d).

3.11.23.16.4  (01-01-2015)
Foreign Insurance Taxes - IRS Number 30

  1. IRS Number 30, Foreign Insurance Taxes - If the taxpayer files Form 720 with the notation "Section 6114 Election" on the top of the return, or has a Form 8833, Treaty-Based Return Position Disclosure, or a letter referring to IRC Section 6114 attached to the return:

    1. and the taxpayer does not attach a statement or Form 8833, correspond for missing information.

    2. and Form 8833 or a statement is attached, enter CCC L on the Form. Then, continue to process the return.

  2. If the taxpayer has notated at the top of the Form 720 in red print the following statement: "Election to participate in FET Voluntary Compliance Initiative pursuant to Announcement 2008-18" ,

    • Enter CCC "L" on the Form 720 and continue processing the return.

3.11.23.16.5  (01-01-2015)
Floor Stock Taxes

  1. IRS Number 20 is used for reporting Floor Stock tax on Ozone Depleting Chemicals (ODC) annually.

    Note:

    If the taxpayer has an entry of $500.00 or more for IRS Number 20 on Form 720, Form 6627 (Environmental Taxes) must be attached. See IRM 3.11.23.16.2, Form 6627.

    1. The floor stock on ODC (IRS Number 20) will continue annually with the return due by July 31.

    2. If IRS Number 20 is reported in any other tax period other than the first or second quarter, change the tax period to the second quarter if it is the ONLY tax reported on Form 720.

    3. If IRS Number 20 is reported with other IRS Numbers present and the tax period is other than the second quarter then:

      IF: THEN:
      Numbered return,
      1. Edit AC 610 (renumber) or 611 (remittance-renumber).

      2. Prepare and attach Form 4227 notated "Multiple IRS numbers present with IRS Number 20. Prepare a dummy return for IRS Number 20" .

      Unnumbered return, Prepare dummy return for IRS Number 20.
    4. When the tax period has not been clearly indicated on a Form 720 reporting IRS Number 20, use the IRS received date to help determine the tax period. If the return was received December 31st or prior, process to the preceding 2nd quarter (i.e., Form 720 reporting IRS Number 20 received on December 31, 2014 process as 201406). If the return was received after December 31st, process to the subsequent 2nd quarter (i.e., Form 720 reporting IRS Number 20 received on January 2, 2015 process as 201506).

3.11.23.16.6  (01-01-2015)
Repealed Excise Taxes

  1. If there is a clear indication that the taxpayer is trying to file a final return for a repealed excise tax (i.e., taxpayer writes, "Repealed Tax" and the return is for zero amount), edit CCC F and IRS Number 80.

3.11.23.16.7  (01-01-2015)
Perfection of The Abstract Area

  1. Underline every IRS Number with an amount present in Part I of Form 720 up to a maximum of 25 entries. Integrated Submission and Remittance Processing (ISRP) has the capability to enter a maximum of 25 dollar amounts and 25 IRS Numbers for Part I taxes. If there is an amount reported for IRS Number 136, Taxable Medical Devices, ensure this is included in the 25 edited IRS Numbers.

  2. Underline every IRS Number with an amount present in Part II of Form 720. IRSP has the capability to enter a maximum of 12 dollar amounts and 12 IRS Numbers for Part II taxes. If there is an amount reported for IRS Number 133 on a second quarter Form 720 for PCOR taxes, ensure it is included in the edited IRS Numbers.

    Note:

    If Form 720 is filed for the 1st, 3rd, and/or 4th quarter with zero, N/A, none, - (dash), etc. entered as the PCOR amount, delete the entry from the Form 720.

  3. For every IRS Number reported with zero or a significant amount underline the IRS Number following the limitations noted in (1) and (2) above. Be sure to edit IRS Numbers with taxable amounts first, then edit IRS Numbers where there are no tax amounts reported. This also includes "N/A" , "none" , or "not applicable." See Figure 3.11.23-16

    Exception:

    Do not underline abstract 31 or 20 unless there is an amount present. If there is a negative (-) amount in any IRS tax amount or abstract area see IRM 3.11.23.16.8.1, Part III, Line 4 Claims.

    Note:

    Each IRS Number reported on Form 720 stands alone in regards to statute processing. Therefore, it is necessary to perfect all IRS Numbers reporting "zero" , "N/A" , "none" , "-" (dash), etc. as well as those reporting significant tax amounts.

    Figure 3.11.23-16
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.23.16.8  (01-01-2015)
Part III Form 720, Line 3 - Total Tax

  1. Process line 3 as follows:

    IF: AND: THEN:
    Line 3 is zero, "none" , "not applicable" , or "N/A" is present on line 3 and the taxpayer does not indicate an IRS Number, The correct IRS Number can be determined from attachments,
    1. Edit zero to the correct IRS Number.

    2. Also underline that number.

    You are unable to determine the correct IRS Number Edit and underline IRS Number 80 to the right of line 3. See Figure 3.11.23-18.
     
    Line 3 contains an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the taxpayer does not indicate an IRS Number in the abstract area, The correct IRS Number can be determined from attachments,
    1. Edit the amount to the correct IRS Number.

    2. Underline the IRS Number.

     
    You are unable to determine the correct IRS Number,
    1. Edit IRS Number 80 to the right of line 3.

    2. Underline the IRS Number 80.

     
    Line 3 contains an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the taxpayer does not indicate an IRS Number in the abstract area, The correct IRS Number can be determined from attachments,
    1. Edit the amount to the correct IRS Number.

    2. Underline the IRS Number.

     
    You are unable to determine the correct IRS Number,
    1. Edit IRS Number 80 to the right of line 3.

    2. Underline IRS Number 80.

    3. Edit CCC "Z" . See Figure 3.11.23-18.

      Exception:

      Do not edit CCC "Z" on secured returns or IRC Section 6020(b).

     
    Line 3 is a "million dollars" or more,   The return must be batched under Program 11801 for expedited processing.  
    Line 3 is blank, Positive amounts are listed in the abstract area, Compute and edit the total of the Part I and Part II positive amounts on line 3.  
    Line 4 is also blank, Compute and edit the total of the amounts from Schedule C on line 4.

    Note:

    If line 4 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ a completed Schedule C or supporting documentation must be attached. See IRM 3.11.23.16.8.1, Part III, Line 4 Claims.

     
    The abstract area and line 4 are also blank but an entry is present on line 10, Edit the line 10 amount plus the line 9 amount, if present, on line 3.  
    The entry on line 4 has been misplaced, Delete the amount on line 4 and edit the amount to line 3. See Figure 3.11.23-19  
    The taxpayer inserts a cross (X) out or a check mark by only one IRS Number,  
    1. Edit the amount from line 3 to the left of that IRS Number.

    2. Underline the IRS Number. See Figure 3.11.23-20.

     

    Figure 3.11.23-17

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

    Figure 3.11.23-18

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

    Figure 3.11.23-19

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

    Figure 3.11.23-20

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

    ,

3.11.23.16.8.1  (01-01-2015)
Part III, Line 4 Claims

  1. Line 4 will be classified by the Excise Group classifier during processing.

  2. Secure any missing information such as signatures, schedules, etc. prior to the Excise Group classifier reviewing the return.

    If... Then...
    The return is numbered, Code the return and turn sideways in the batch.
    The return is unnumbered,
    1. Code the return.

    2. Pull the return out of the batch.

    3. Hold for Excise Operations classifier.

    The classifier will either accept, not consider, or partially disallow and will indicate with a cross (X) out to the left of the amount on line 4 and the correct amount. The classifier will also staple the appropriate explanation "TPNC 90" (Tax Payer Notice Code) for the ERS tax examiner to use on the notice.

  3. The Code and Edit manager or lead will contact the Centralized Excise Operation (CEO) every morning via e-mail stating how many returns are being held for review. This gives CEO an idea of how many agents are needed. The returns are held on a cart by received date order. The cart is identified with "720s for Excise Review" on top along with a sign in sheet for the CEO agents.

  4. When the taxpayer has erroneously entered a negative amount or credit amount in Part I, cross (X) out the amount in Part I and move the amount to line 4 and the appropriate Credit Reference Number (CRN) on Schedule C and have the classifier look at the return. For a complete list of CRNs. See Exhibit 3.11.23-9.

  5. If Form 720, Line 4 is blank and there are amounts present on Schedule C, then compute and edit the total of the Schedule C amounts to Form 720, Line 4.

3.11.23.16.8.2  (01-01-2015)
CRNs 396, 304, and 305

  1. Perfect CRNs 396, 304, and/or 305 on Form 720 Schedule C, tire tax credit(s), according to the table below:

    If... And... Then...
    There is a credit amount reported on Schedule C Line 15 for CRNs 396, 304, and/or 305, The number of tires is reported for the corresponding CRNs, Underline the CRN and the number of tires being reported.
    There is a credit amount reported on Schedule C Line 15 for CRNs 396, 304, and/or 305, The number of tires is not reported for the corresponding CRNs,
    1. Correspond for the missing information.

    2. Enter the taxpayers response for the number of tires to the left of the appropriate CRN.

    3. Underline the CRN and the number of tires.

    There is a number of tires reported on Schedule C Line 15 for CRNs 396, 304, and/or 305, The amount of credit cannot be easily ascertained,

    Note:

    If the only credit being reported is tire tax credit under one IRS Number then the credit can easily be ascertained.

    1. Correspond for the missing information.

    2. Enter the amount of credit based on the taxpayers response to the right of the appropriate CRN.

    3. Underline the CRN and the number of tires.

    A revision of Form 720 prior to the January 2009 version has been used to file for quarter(s) ending March 31, 2009 or subsequent, The taxpayer is reporting tire credit on Schedule C Line 15 for CRNs 396, 304, and/or 305 and the number of tires cannot be ascertained from the form or attachments,
    1. Correspond for the current revision of Form 720.

    2. When the response has been received underline the CRN and the number of tires.

    The taxpayer has provided the tire and tire credit information, It is not reported on a Jan. 2009 or subsequent revision,
    1. Write in the correct information on line 15.

    2. Write the number of tires to the left of the "amount of claim" .

    3. Underline the CRN and the number of tires.

      Note:

      In some instances it may be necessary to write the number of tires, amount of claim, and the CRN all on line 15 in order to perfect the return.

    Note:

    If no reply enter CCC "3" and continue processing. If the number of tires for the credit is till missing enter a "1" as the number of tires.

3.11.23.16.8.3  (01-01-2015)
Part III, Line 5 and 6

  1. Accept taxpayers entry.

3.11.23.16.8.4  (01-01-2015)
Part III, Line 7 - Amount from 720X

  1. When an amount is present on line 7:

    IF THEN
    Form 720X is attached to Form 720,
    1. Detach and edit the received date of Form 720 to the Form 720X. Notate the Form 720 to leave an action trail.

    2. Edit the Form 720 tax period to the left of the OMB number on the Form 720X.

    3. Using Schedule 1 date stamps, stamp the current date on the back of the Form 720X, route to:
      Excise,
      Attention: Team 102
      Stop 5701G

    4. Edit an action trail in the left margin of the Form 720 that the Form 720X has been detached and routed to Excise Operations using Form 3210. These are to be sent daily in a canvas pouch.

      Caution:

      If return is a million dollars or more also edit "Detached from Mil. $ Return" in the left margin of Form 720X.


      Note:

      If the Form 720 is for the same tax period that the Form 720X is amending and is unaltered, do not process the Form 720. Move and attach the Form 720 behind the Form 720X and route to Excise Operations.

    Form 720X is not attached to Form 720, Continue processing the Form 720.

3.11.23.16.8.5  (01-01-2015)
Part III, line 8 - Total of Lines 5 and 6

  1. If line 8 is blank, compute and edit the total of line 5 plus line 6.

    Caution:

    Ensure line 5 is not a misplaced entry before computing a blank line 8.

  2. If the taxpayer has entered the total of lines 5 and 6 on line 7. Arrow line 7 to line 8. See Figure 3.11.23-21 for an example correcting other common reporting errors in Part III.

    Figure 3.11.23-21
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.23.16.8.6  (01-01-2015)
Part III, Line 10 - Balance Due

  1. Line 10 - Balance Due -

    IF... AND... THEN...
    Line 10 is blank,   Subtract Line 9 from Line 3 and edit the result on line 10.
    Line 10 is blank or zero ("0" ), line 5, 6 and 7 are blank or zero, Line 8 has a dollar entry (other than zero),
    1. Cross (X) out the entry on line 8.

    2. Edit the dollar amount from line 8 to line 10.

    The same amount is on line 3 and line 9, Lines 4 through 8 are blank, Arrow line 9 to line 10.
    The balance due appears on any line other than line 10, Line 10 is blank, Edit the amount on line 10.
    The taxpayer included penalty (other than a FTD penalty) or interest, or both, on line 10,   Subtract the amount of penalty and/or interest from line 10. See Figure 3.11.23-22.
    Federal Tax Deposit (FTD) penalty is shown on the return, The taxpayer has included it on line 10 or 11 of the return, Make no changes.
    The FTD penalty is not included on line 10 or 11 of the return,  
    1. Add the amount to line 10, or subtract it from line 11.

    2. Also, edit the FTD penalty in the "FD" box in the upper right corner of the return.
      See Figure 3.11.23–30.

    An attachment, Schedule A or editing on the return shows FTD payments or a remittance being received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , There are no other tax data entries on the return,
    1. Correspond for all missing information.

    2. If no reply, edit the Schedule A total or remittance amount on line 3 with IRS Number 80.

    Attachment or editing on the return shows FTD deposits or a remittance being received of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , There are no tax entries on the return,
    1. Edit the total of the remittance and FTD deposits on line 3.

    2. Edit and underline abstract 80 next to line 3 or the abstract if it can be determined.

    3. Edit the amount of FTD deposits on line 8.

    4. Edit the remittance, if any, on line 10.
      See Figure 3.11.23-24.

    Figure 3.11.23-22

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

    Figure 3.11.23-23

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

    Figure 3.11.23-24

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

3.11.23.16.8.6.1  (01-01-2015)
Balance Due Amount Contains Penalty and/or Interest

  1. Balance due amount contains penalty and/or interest.

    IF THEN
    The Balance Due amount contains penalty and/or interest,
    1. X-out the money amount.

    2. Delete the penalty and interest from the total.

    3. Edit the Balance Due to the left of the original entry.

    4. Edit a Received date if one is not present.

3.11.23.16.8.7  (01-01-2015)
Line 11 - Overpayment

  1. Line 11 Overpayment -

    IF... AND... THEN...
    Line 10 and 11 are blank, Line 9 is larger than line 3,
    1. Subtract line 9 from line 3 and enter the result on line 11.

    2. Do not bracket line 11.

    3. Edit out "X" the Refunded Box if checked and there is no refund.

    Note:

    Refunds of $1 million or more and 45 Day Jeopardy returns require "Expedite" special handling and require a manual refund. See IRM 3.11.23.6, Refund Returns (45 Day Jeopardy and $10 Million Refunds), for instructions.

3.11.23.16.9  (01-01-2015)
Schedule A, Excise Tax Liability

  1. When Part I, line 1, of Form 720 has an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or total entries ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Schedule A must be attached unless the taxpayer has indicated he is a one time filer.

    1. If missing or blank, correspond.

    2. If no reply, continue processing.

  2. If Schedule A has entries but there are no entries in Part 1 of Form 720, correspond see IRM 3.11.23.16.8.6, Part III, Line 10 - Balance Due.

    Note:

    Schedule A is not required and can be X'd out if the only taxes being reported are in Part II of Form 720.

  3. Perfecting Schedule A - Due to deposit laws, the Schedule A has Section 1 (14 day rule taxes A-F) and Section 2 (alternative method taxes M-R). The taxpayer may have entries on any or all of Lines A through F and M through R.

    1. Verify that the taxpayer has entered only numeric amounts. If other than numeric amounts are entered, cross (X) out the entry.

    2. If multiple entries are on one line, combine and edit the correct amount. For example, if Line A contains entries of $10, $12, and $12 for the first period, (1st - 15th), then $34 should be edited for line A.

    3. If the entry is illegible or you are unable to perfect the entry, cross (X) out the entry.

3.11.23.16.10  (01-01-2015)
Consolidation of Form 720 - Monthly Filers

  1. Form 720 may be required monthly or semimonthly from persons who have been taken off quarterly filing of the regular Form 720 because of delinquency in making Federal Tax Deposits or other reasons.

    Note:

    If you find one in a batch of work, send to Excise Operations.

  2. The returns are secured and processed by the Excise Operations and held until three monthly returns are received. They are consolidated on one Form 720 and input to the BMF through the Document Perfection function. Any remittance received in payment of the liability has been deposited by Clearing and Deposit for Master File input by the preparation of Form 3244, Payment Posting Voucher. A copy of Form 3244 will be attached to the unnumbered Form 720 for monthly filers. If the Form 720 for monthly filers is received in Code and Edit, forward it to CEO.

  3. The entity on the consolidated return must be perfected to ensure that it has all the required data.

  4. The Excise Operations will precompute penalty and interest on late filed returns filed directly with them. If penalty is not shown or there is a "O" in the penalty box, return to the Excise Operations for a determination if reasonable cause has not been established.

  5. Contact the Excise Operations for any data found missing.

  6. These quarterly returns will be considered for Master File processing as non-remittance taxable returns.

    1. Remember, all transcription lines must be completed.

    2. Enter CCC F if the last monthly return is marked "Final" .

    3. Enter CCC J.

3.11.23.17  (01-01-2015)
Processing Form 2290 and Form 2290SP Heavy Highway Vehicle Use Tax Return

  1. All Form 2290 and Form 2290SP (Spanish) returns are centrally filed at the Cincinnati Submission Processing Campus (CSPC).

  2. Electronic filing for taxpayers reporting 25 or more vehicles is a mandatory requirement per the American Jobs Creation Act, HR 4520 beginning July 1, 2005. The Excise Tax E-filing and Compliance (ETEC) program became available to taxpayers for tax periods July 2007 and subsequent.

  3. The MFT code is 60 and the document code is 95. See Exhibit 3.11.23-5.

  4. The valid Computer Condition Codes on Form 2290 are D, F, G, O, R, W, X, 3, and 4.

  5. Form 2290 and Form 2290SP return processing volume and time is reported under Program code 12300.

  6. Follow normal procedures for:

    • Edit Marks - IRM 3.11.23.3, Edit Marks.

    • Unprocessable Returns - IRM 3.11.23.8, Unprocessable Returns.

    • Signature - IRM 3.11.23.9, Signature

    • Third Party Designee - IRM 3.11.23.9.1.4, Third Party Designee.

    • Entity Perfection - IRM 3.11.23.10, Entity Perfection.

    • Entity Perfection of Domestic Addresses - IRM 3.11.23.10.4, Entity Perfection of Domestic Addresses.

    • Entity Perfection of Foreign Addresses - IRM 3.11.23.10.5, Entity Perfection of Foreign Addresses.

    • Entity Perfection of Tax Period - IRM 3.11.23.10.6.4, Entity Perfection of Tax Period.

    • Received Date Editing - IRM 3.11.23.11, Received Date Editing.

    • Computer Condition Codes - IRM 3.11.23.12, Computer Condition Codes.

    • Amended Returns - IRM 3.11.23.1.8, Amended Returns.

  7. For specific Amended return procedures, refer to IRM 3.11.23.1.8, Amended Returns.

    Note:

    Form 2290 has two check boxes for "Amended Return" and "VIN Correction" added under the entity area. If either or both of these two boxes are checked process the return as an Amended Return.

  8. All Form 2290 are required to be edited in dollars and cents.

  9. The Form 2290 may have several pages and attachments that are required to be filed. The Form 2290 and attachments must be in the following order:

    • Page 1

    • Page 2

    • all other attachments, schedules, forms, etc. may be in any order

  10. Form 2290 with a remittance may be processed through the Lockboxes.

    1. The amount of remittance should be notated in the upper left hand portion of the different Form 2290 by the Lockbox function. See Figure 3.11.23-32. The Lockbox function will put a red "NP" in the top left corner of the Form 2290 to indicate non-payment. Research to see if payment was made to a Field Office or the Campus.

    2. The tax period will be notated under the remittance amount if the lockbox processed the remittance to a month other than 07.

      Note:

      Follow procedures in IRM 3.11.23.10.7, Payment Processed to Incorrect Tax Period, if the payment has been processed to an incorrect tax period.

    Figure 3.11.23-25

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

3.11.23.17.1  (01-01-2015)
Filing Status

  1. Taxpayers who are reporting tax on logging must list the number of vehicles they are reporting at the reduced rate in column 3b.

    IF AND THEN
    The taxpayer uses the reduced rate, You determine that they are not loggers,
    1. "X" the number in column 3b and put in column 3a.

    2. Send non-suspense Z-Letter to notify taxpayer of change.

    3. Do not return Schedule 1.

    No determination can be made that they are not loggers, Do not move the number in column 3b. See Figure 3.11.23-26.

    Figure 3.11.23-26

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

3.11.23.17.2  (01-01-2015)
Categories of Vehicles

  1. The categories of vehicles are printed on the left side of page 2 of the form and are designated by the letters A through W.

  2. The computer will math verify the tax computations for all categories.

  3. Category W - This is a non-taxable category. If a taxpayer suspends the tax on a vehicle because it will not be driven a total of 5,000 miles on U.S. highways (7,500 for agricultural vehicles) and later transfers the vehicle to another operator/owner.

    • A statement must be made on page 1, line 9 of Form 2290.

    Note:

    Always check page 1 for entries of non-taxable vehicles.

3.11.23.17.3  (01-01-2015)
Line 2 - Total Tax

  1. If line 2 is blank, compute if necessary to perfect line 4 and/or line 6. Check attachments or misplaced entries to perfect. Editing of line 2 is not required.

3.11.23.17.4  (01-01-2015)
Line 3 Additional Tax

  1. Accept taxpayers entry.

3.11.23.17.5  (01-01-2015)
Line 4 - Total Tax

  1. Edit Line 4 as follows:

    If: Then:
    Line 4 is blank,
    1. Add lines 2 and 3.

    2. Edit the result on line 4.

    Lines 2, 3 and 4 are blank, Edit the total amount of tax from page 2 to line 4.
    Unable to compute Line 4, Edit the remittance amount notated by the Lockbox function to line 4.

3.11.23.17.6  (01-01-2015)
Line 5 - Credits

  1. Documentation is required for line 5 credits.

    IF: THEN:
    There is no documentation attached Correspond for documentation
    There is documentation attached Continue processing

    Note:

    Make sure you check that the Line 5 amount the taxpayer has entered is not a misplaced entry before following the directions above.


    Caution:

    Ensure that the taxpayer is not taking a credit for his payment or a suspended vehicle.

  2. Treat this amount as any other credit, unless otherwise noted.

    IF: THEN:
    The amount on line 5 exceeds the tax on line 4. Allow enough of the adjustment to reduce the tax to zero. Cross (X) out line 6, and prepare Form 3465 for the remaining credit. Photocopy Form 2290 (Page 1 and 2) and route the copy and Form 3465 to the Excise Operations.
    The taxpayer is reporting only one suspended vehicle (i.e., entry only on line "W" ), and completes "Statement in Support of Suspension of Tax" and indicates the same amount on line 5. Delete the line 2 and line 5 amounts, do not send return to the Excise Operations. Continue to process the return and send Sch. 1 with the edited suspended VIN back to the taxpayer.

3.11.23.17.7  (01-01-2015)
Line 6 - Balance Due

  1. Line 6 - Balance Due.

    IF: THEN:
    Blank Subtract line 5 from line 4 and edit the results on line 6.
    Lines 3 through 5 are blank Edit the line 2 amount to lines 4 and 6.

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