Start-Up Processing (for both paper and electronically filed returns) should begin the third week of January, unless there are unforeseen issues (e.g., programming changes). If you experience a problem, please report the problem to the appropriate personnel (e.g., IRM Analyst, Programmer, Help Desk, Planning and Analysis (PA) Analyst).

End-of-Year Processing should begin in November. Cincinnati Submission Processing Campus (CSPC) will implement their End-of-Year procedures and prepare for the upcoming filing season.

The Restructuring and Reform Act of 1998 (RRA98), Section 3705(a) provides identification requirements for all IRS employees working tax-related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax-related matters.

All IRS employees in the field, Headquarters and area offices, who communicate by telephone, face to face, or correspondence with taxpayers or their personal authorized representatives, on tax-related matters, are required to provide (at a minimum) the following information:

Correspondence – All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually-generated and handwritten correspondence must include the following information:

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

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

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

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

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

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

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

When contacting taxpayers by telephone, you must be sure you are speaking with the taxpayer or authorized representative before disclosing tax information. See IRM 21.1.3.2.3, Required Taxpayer Authentication, and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving a message on a taxpayer's answering machine, see IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. See IRM 3.11.180.1.6, Use of Fax for Taxpayer Submissions, for additional information.

Prior to faxing confidential information to the taxpayer, review fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information. See IRM 3.11.180.1.6, Use of Fax for Taxpayer Submissions, for additional information.

During taxpayer contact, if the taxpayer asks to be referred to the Taxpayer Advocate Service (TAS) or you believe a referral to TAS may be appropriate, see IRM 3.11.180.1.5, Taxpayer Advocate Service (TAS).

Allocated Tips - An employer who operates a large food or beverage establishment must allocate tips among employees who receive tips if the total tips reported to the employer during any payroll period are less than 8% (or the lower rate approved by the IRS) of the establishment's gross receipts for that period. Generally, the amount allocated is the difference between the total tips reported by employees and 8% of the gross receipts, other than nonallocable receipts.

Determination Letter - A letter from the IRS authorizing an allocation rate of less than 8% but not lower than 2%. A copy of this letter must be attached to the paper Form 8027 if the allocation rate is less than 8%. If Form 8027 is filed electronically, a copy of the determination letter must be submitted separately. See Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, Electronically.

Employer - The entity listed on Form W-2 (Wage and Tax Statement) and Form 941 (Employer's QUARTERLY Federal Tax Return) reporting wages and taxes for employees. Each employer should have a unique Employer Identification Number (EIN) as assigned by IRS and established on the Business Master File (BMF).

Establishment - The name for each large food or beverage operation that meets the requirements for filing Form 8027.

Establishment Number (EN) - A unique 5 digit number for each establishment. The employer should assign a unique number for each establishment or we should assign a sequential number during processing, beginning with "1" .

Type of Establishment - Establishments are categorized as:

Good-Faith Agreement (GFA) - A written agreement between the employer and at least two-thirds of the employees of each occupational category of employees who receive tips (e.g., waiters and waitresses, busboys, maitre d's) working in the establishment when the agreement is adopted which provides for a tip allocation among tipped employees in a manner that, in combination with the tips reported by such employees, will reflect a good faith approximation of the actual distribution of tip income among such tipped employees. A copy of the Good-Faith Agreement (GFA) must be attached to the paper Form 8027. If Form 8027 is filed electronically, a copy of the Good-Faith Agreement must be submitted separately. See Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, Electronically.

Form 8027 may be received as a single submission for an establishment, or an employer may use Form 8027-T to submit multiple Forms 8027.

Keep multiple Forms 8027 in Establishment Number order (if present). Arrange from the lowest to highest number if the employer has not already done so. Breaks in the sequence numbers are allowed. Attach the Form 8027-T to the first Form 8027 in the set of multiples.

If a multiple Form 8027 submission has to be split during batching, photocopy the Form 8027-T and any attachments that are used for more than one establishment. Attach the copies to the next Form 8027 for that employer.

If two or more Forms 8027 appear to show the same employer, and no Form 8027-T is present, treat these as single submissions. Do not correspond.

Returns secured by Stakeholder Liaison may include an explanation for late filing. See IRM 3.11.180.2.1.3 (12) (c) for instructions on determining reasonable cause.

Verify the count shown in the Form 8027-T "Number of accompanying Forms 8027" box.

Original and corrected returns may be in the same batch.

See Exhibit 3.11.180-5, Attachment Guide, for guidelines on attachments.

If a Form 8027 has a list of establishments attached, or if more than one establishment's data is present on one Form 8027, correspond with the employer to request a proper submission.

If a Form 8027 contains a foreign address for the establishment address, route to National Tip Reporting Compliance for special handling. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14). Reporting is required only for establishments located in the United States and the District of Columbia.

Requests for forms. If the taxpayer states on the return or an attachment to the return that tax forms and/or schedules are requested, prepare Form 4190, Order Form for Tax Forms and Publications, for current year tax forms and/or Form 6112, Prior Year Tax Products Order Form, for prior year tax forms. Forward the request to the Forms Distribution Center.

Petitions to Reduce the Tip Rate and User Fee. If a petition to lower the tip rate is received:

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.

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

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

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

Code and Edit and ERS tax examiners will indicate the fax paragraph on the Form 3696, Correspondence Action Sheet, (or other approved Correspondence Action Sheet) to advise taxpayers of the option to fax their response.

The required coding and editing actions for each field and/or line item are described in the following sections.

After Coding and Editing of Form 8027, forward to final batching and numbering.

In compliance with a Chief Counsel opinion issued September 2, 2008, tax examiners will no longer send returns back to the taxpayer when corresponding for missing signature, missing information and supporting schedules and documentation on refund or zero balance returns (effective October 5, 2009).

Written communication to the employer and/or establishment is used to request additional or missing information in order to perfect the Form 8027. Correspondence is generally used after research and the needed information cannot be obtained.

In most cases, correspondence will be sent to the employer. If the employer information is not present, or the address is incomplete or illegible, send correspondence to the establishment.

Utilize the Letter 1858C, Information Return of Tip Income (Form 8027) Incomplete for Processing, via a Form 3696, Correspondence Action Sheet, (or other approved Correspondence Action Sheet).

Letter 1858C should address all correspondence issues identified during review and should contain:

Suspense a copy of the correspondence with the associated return for 45 days. Keep this file by date/EIN order or date/alpha order if the EIN is missing.

Purge the suspense file 15 days after the 30 day response period has expired.

If undeliverable or no response is received after 45 days, refer to the No Reply Chart below.

If working return that is not processable, and current date is after September 30, 2013:

The following No Reply Chart provides a road map to the specific field instructions in this IRM:

Treasury Regulations affecting all persons who may be subject to penalties for failure to comply with the information reporting requirements under the Internal Revenue Code (IRC) are:

The Revenue Reconciliation Act of 1989 changed the penalty provisions (Sections 6721-6724 of the Internal Revenue Code (IRC)) for any documents, including corrections, which are filed after the original filing date for the return. The penalty for failure to file correct information returns is "time sensitive", in that prompt correction of failures to file, or prompt correction of errors on returns that were filed, can lead to reduced penalties.

Penalties can be waived if failures were due to reasonable cause and not to willful neglect. The abatement criteria for all information returns is reasonable cause (Section 6724(a)).

Refer to IRM 20.1.7, Penalty Handbook - Information Return Penalties, for information regarding penalties and reasonable cause criteria.

See Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, Electronically for additional information on penalties and electronic filing.

See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for additional information on reasonable cause.