3.11.180  Allocated Tips

Manual Transmittal

November 14, 2014

Purpose

(1) This transmits revised IRM 3.11.180, Returns and Documents Analysis, Allocated Tips.

Material Changes

(1) Minor editorial changes have been made throughout this Internal Revenue Manual (IRM) (e.g., spelling, punctuation, links, etc.). Other significant changes to this IRM are shown below.

(2) For processing year 2015, Form 8027 for tax year 2014 and tax year 2013 will be processed.

(3) Information Returns Branch was changed to Technical Support Operation throughout IRM.

(4) IRM 3.11.180.1(2) - Added a Note to clarify the due date for paper returns.

(5) IRM 3.11.180.1(4) - Delete current information and replace with language provided by Chief Counsel.

(6) IRM 3.11.180.1(8) - Note - Updated the title of Publication 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

(7) IRM 3.11.180.1(16) - Reworded BMF Consistency language per feedback from IMD Coordinator on other IRMs. (IPU 14U0344 issued 02-19-2014)

(8) IRM 3.11.180.1(10) - Updated tax year information.

(9) IRM 3.11.180.1(11) - Updated tax year information.

(10) IRM 3.11.180.1(13) - Updated tax year information.

(11) IRM 3.11.180.1.1(2) a. - Updated tax year information.

(12) IRM 3.11.180.1.1(2) c. - Updated tax year information.

(13) IRM 3.11.180.1.3(1) - Delete current information and replace with language provided by Chief Counsel.

(14) IRM 3.11.180.1.3(2) - Replaced "authorizing" with "granting a request for" per feedback from Chief Counsel. Updated the title of Publication 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

(15) IRM 3.11.180.1.3(2) - Note - Added Note that reads: "Determination letters (e.g., Letter 8027-B) issued after December 1995, have an effective date for the tax period the lower rate is allowed."

(16) IRM 3.11.180.1.3(3) - Reworded with language provided by Chief Counsel.

(17) IRM 3.11.180.1.3(5) - Corrected the Establishment Number example (e.g., 00001) per Regulations: §31.6053-3 Reporting by certain large food or beverage establishments with respect to tips. (5) Large food or beverage establishment identification number. Each large food or beverage establishment shall have a unique identification number to be included on Form 8027 and any employer's application pursuant to paragraph (h) of this section. (iii) The last five digits are to differentiate between multiple establishments reporting under the same EIN number. For this purpose, the employer shall assign each establishment reporting under such employer's EIN number a unique five digit number. For example, each establishment could be assigned a unique number by beginning with 00001 and progressing in numerical sequence (e.g., 00002, 00003, 00004, 00005) until each establishment has been assigned a number.

(18) IRM 3.11.180.1.3(7) - Deleted "must" and added "is no longer required to" in regards to Good-Faith Agreements. Deleted Publication 1239 information.

(19) IRM 3.11.180.1.7 - New - Added information pertaining to BMF Identification (ID) Theft.

(20) IRM 3.11.180.2.1.2(1) - Updated tax year information.

(21) IRM 3.11.180.2.1.2(2) - Updated tax year information.

(22) IRM 3.11.180.2.1.2(5) - Updated tax year information.

(23) IRM 3.11.180.2.1.2(6) - Updated tax year information.

(24) IRM 3.11.180.2.1.3(2) b. - Added a Caution about private metered postmark. (IPU 14U1076 issued 06-30-2014)

(25) IRM 3.11.180.2.1.3(2) - Added a Received Date Table in place of the alpha list information.

(26) IRM 3.11.180.2.1.3(2) - Removed Letter 2519 (CG) because the Service will no longer send extension approval letters (e.g., 2519 (CG)).

(27) IRM 3.11.180.2.1.3(8) - Reworded Received Date Stamp per BMF Consistency. (IPU 14U0344 issued 02-19-2014)

(28) IRM 3.11.180.2.1.3(10) a. - Removed the Note about the private metered postmark. (IPU 14U1076 issued 06-30-2014)

(29) IRM 3.11.180.2.1.3(12) a. - Updated tax year information.

(30) IRM 3.11.180.2.1.3.1(1) c. - Updated tax year information.

(31) IRM 3.11.180.2.1.3.1(4) - Reworded because the Service will no longer send extension approval letters (e.g., 2519 (CG)), so there is nothing for the taxpayer to attach to the Form 8027.

(32) IRM 3.11.180.2.1.3.1(5) - Reworded because the Service will no longer send extension approval letters (e.g., 2519 (CG)), so there is nothing for the taxpayer to attach to the Form 8027.

(33) IRM 3.11.180.2.1.3.1(6) - Reworded because the Service will no longer send extension approval letters (e.g., 2519 (CG)), so there is nothing for the taxpayer to attach to the Form 8027.

(34) IRM 3.11.180.2.1.3.2 - Removed paragraph 6 information.

(35) IRM 3.11.180.2.1.12(1) - Corrected the Establishment Number example (e.g., 00001) per Regulations: §31.6053-3 Reporting by certain large food or beverage establishments with respect to tips. (5) Large food or beverage establishment identification number. Each large food or beverage establishment shall have a unique identification number to be included on Form 8027 and any employer's application pursuant to paragraph (h) of this section. (iii) The last five digits are to differentiate between multiple establishments reporting under the same EIN number. For this purpose, the employer shall assign each establishment reporting under such employer's EIN number a unique five digit number. For example, each establishment could be assigned a unique number by beginning with 00001 and progressing in numerical sequence (e.g., 00002, 00003, 00004, 00005) until each establishment has been assigned a number.

(36) IRM 3.11.180.2.1.12(3) - Example - Updated the example.

(37) IRM 3.11.180.2.1.14(9) - Added Exception that reads: "If Line 4c contains a zero (0), do not correspond." (IPU 14U0913 issued 05-23-2014)

(38) IRM 3.11.180.2.1.14(10) - Added the word "blank" . (IPU 14U0913 issued 05-23-2014)

(39) IRM 3.11.180.2.1.14(11) - Note - Added "and do not correspond" at the end of the note.

(40) IRM 3.11.180.2.1.15(8) - Removed "both" and "and the establishment" to be consistent in corresponding procedures throughout the IRM.

(41) IRM 3.11.180.2.1.15(1) b. - Added Note that reads: "Determination letters (e.g., Letter 8027-B) issued after December 1995, have an effective date for the tax period the lower rate is allowed."

(42) IRM 3.11.180.2.1.15(4) - Added Note that reads: "A determination letter is different from a Tip Rate Determination Agreement (TRDA)."

(43) IRM 3.11.180.2.1.15(9) - New - Added correspondence procedure when a lower rate is entered but an IRS determination letter has an expired effective date. Determination letters (e.g., Letter 8027-B) issued to taxpayers as of January 1996, now have an effective date for period the lower rate is allowed. After December 1995, the IRS changed procedures as allowed under IRC Regulations 31.6053-3(h)(3) to determine the term for which the reduced percentage is to be effective.

(44) IRM 3.11.180.2.1.19(2) - Changed "must" to "may."

(45) IRM 3.11.180.2.1.19(2) a. - Reworded to "edit a Condition Code 4" .

(46) IRM 3.11.180.2.1.19(2) b. - Deleted - No longer required to correspond.

(47) IRM 3.11.180.2.3(2) - Deleted "and/or establishment" per feedback from Chief Counsel.

(48) IRM 3.11.180.2.3(5) - Correspondence Guide Table - Updated paragraphs to match the Letter 1858C. Deleted Good-Faith Agreement paragraphs since no longer required.

(49) IRM 3.11.180.2.3(9) - Updated tax year information.

(50) IRM 3.11.180.2.3(10) - No Reply Chart - Seventh Then box - Deleted correspondence procedure since no longer required.

(51) IRM 3.11.180.2.3.1(1) - Deleted "or establishment" per feedback from Chief Counsel.

(52) IRM 3.11.180.2.3.1(2) - Deleted "or establishment" per feedback from Chief Counsel.

(53) IRM 3.11.180.2.3.1(3) - Deleted "or establishment" per feedback from Chief Counsel.

(54) IRM 3.11.180.2.4(5) - Updated the title of Publication 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

(55) IRM 3.11.180.2.4.2(12) - Updated the title of Publication 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

(56) IRM 3.11.180.2.4.3(1) - Replaced "extension approval letter" with "copy of Form 8809" because the Service will no longer send extension approval letters (e.g., 2519 (CG)).

(57) IRM 3.11.180.2.4.3(11) - Updated tax year information.

(58) IRM 3.11.180.2.4.4(1) - Deleted "or establishment" per feedback from Chief Counsel.

(59) IRM 3.11.180.2.4.4(2) - Deleted "or establishment" per feedback from Chief Counsel.

(60) IRM 3.11.180.3.1(5) - New - Added "See Exhibit 3.11.180-3, Form 8027 Error Register" .

(61) IRM 3.11.180.3.2.11(8) - Added "No Reply" procedures for correspondence per SERP Feedback 201401442. (IPU 14U0796 issued 05-01-2014)

(62) IRM 3.11.180.3.2.11(9) - Added "No Reply" procedures for correspondence per SERP Feedback 201401442. (IPU 14U0796 issued 05-01-2014)

(63) IRM 3.11.180.3.2.11(9) - Added Exception that reads: "If Line 4c contains a zero (0), do not correspond." (IPU 14U0913 issued 05-23-2014)

(64) IRM 3.11.180.3.2.11(10) - Added the word "blank" . (IPU 14U0913 issued 05-23-2014)

(65) IRM 3.11.180.3.2.12(6) - Note - Updated tax year information.

(66) IRM 3.11.180.3.2.12(6) a. - Added Note that reads: "Determination letters (e.g., Letter 8027-B) issued after December 1995, have an effective date for the tax period the lower rate is allowed."

(67) IRM 3.11.180.3.2.12(6) b. - Added IRM reference "See IRM 3.11.180.2.3, Correspondence Preparation."

(68) IRM 3.11.180.3.2.12(6) c. - New - Moved the undeliverable information from IRM 3.11.18.3.2.12(6) b. to c.

(69) IRM 3.11.180.3.2.12(7) - New - Added correspondence procedure when a lower rate is entered but an IRS determination letter has an expired effective date. Determination letters (e.g., Letter 8027-B) issued to taxpayers as of January 1996, now have an effective date for period the lower rate is allowed. After December 1995, the IRS changed procedures as allowed under IRC Regulations 31.6053-3(h)(3) to determine the term for which the reduced percentage is to be effective.

(70) IRM 3.11.180.3.2.12(13) - Added Note that reads: "If you make a correction to Line 4c, Line 5, or Line 6, also make any necessary correction to Line 7. Correspond using Letter 1858C to notify the employer of any adjustment. See IRM 3.11.180.2.3, Correspondence Preparation."

(71) IRM 3.11.180.3.2.12(15) - Added IRM reference "See IRM 3.11.180.2.3, Correspondence Preparation."

(72) IRM 3.11.180.3.2.13(4) a. - Reworded to "enter a Condition Code 4" .

(73) IRM 3.11.180.3.2.13(4) b. - Deleted - No longer required to correspond.

(74) IRM 3.11.180.3.2.15(1) - Updated tax year information.

(75) IRM 3.11.180.3.2.15(2) - Updated tax year information.

(76) IRM 3.11.180.3.2.15(3) - Updated tax year information.

(77) Exhibit 3.11.180-3, Form 8027 Error Register - Added new exhibit with Error Register example. Renumbered subsequent Exhibits accordingly.

(78) Exhibit 3.11.180-6, Attachment Guide - If/And/Then Table - Form 8027 Single Establishment - Removed "or filing extension approval Letter 2519 (CG)" because the Service will no longer send extension approval letters.

(79) Exhibit 3.11.180-6, Attachment Guide - If/And/Then Table - Form 8027 Multiple Establishments - Removed "or filing extension approval Letter 2519 (CG)" because beginning fiscal year 2015, the Service will no longer send extension approval letters.

(80) Exhibit 3.11.180-6, Attachment Guide - Added Letter 8027-B, Determination Letter Approving Specified Lower Rate.

(81) Exhibit 3.11.180-6, Attachment Guide - Added Letter 5380 (Extension Approved).

(82) Exhibit 3.11.180-6, Attachment Guide -Letter 2519 (CG) - Added Note "Beginning fiscal year 2015, the Service will no longer send extension approval letters (e.g., Letter 2519 (CG))."

(83) Exhibit 3.11.180-6, Attachment Guide - Added "Petitions in oppositions of tax low provisions" to the Attachment Guide. This was a result of guidance titled "Demonstration, Photo and Petition Guidance for FA Managers" .

(84) IRM references updated throughout the IRM.

(85) Exhibits updated in the IRM.

Effect on Other Documents

IRM 3.11.180, Returns and Documents Analysis, Allocated Tips, dated November 12, 2013 (effective January 01, 2014), is superseded. The following IPUs, issued from January 02, 2014, through June 30, 2014, have been incorporated into this IRM: 14U0344, 14U0796, 14U0913, and 14U1076.

Audience

Wage and Investment (W&I) Submission Processing Code and Edit and Error Resolution personnel are the intended audience for this IRM.

Effective Date

(01-01-2015)

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

3.11.180.1  (01-01-2015)
General Information

  1. An employer who operates a large food or beverage establishment is required to file Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, to report information concerning receipts from food and beverages and tips reported by employees. See Exhibit 3.11.180-1, Form 8027, Transcription Lines, for an example of Form 8027. This is an annual return.

    Exception:

    Employers participating in a Gaming Industry Tip Compliance Agreement (GITCA) and who comply with the terms of this Agreement may provide the Form 8027 information in an alternate form deemed acceptable by the Service. The GITCA program is administered under Revenue Procedure 2007-32, published in Internal Revenue Bulletin 2007-22.

  2. Paper Forms 8027 must be filed by the last day of February of the year following the calendar year for which the return is filed. If the due date of the return falls on a Saturday, Sunday or legal holiday, the return is considered timely if filed by the next business day.

    Note:

    February 28, 2015, is a Saturday; therefore, Form 8027 is timely if filed by March 2, 2015, under Internal Revenue Code (IRC) 7503.

  3. Electronically filed Form 8027 is due by March 31 of the year following the calendar year for which the return is filed.

  4. Employers must file Form 8027 for each of their large food or beverage establishments. A large food or beverage establishment is a food or beverage operation:

    • That is located in the 50 states or the District of Columbia,

    • Where tipping of food or beverage employees by customers is customary and,

    • Whose employer normally employed more than 10 employees on a typical business day during the preceding calendar year.

  5. An employer must also complete and file Form 8027-T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, if it is required to file a Form 8027 for more than one establishment. See Exhibit 3.11.180-2 for an example of Form 8027-T.

  6. All paper Forms 8027 (along with transmittal Forms 8027-T if more than one Form 8027 is filed) are filed and processed at the Cincinnati Submission Processing Campus (CSPC).

  7. Form 8027 secured by Stakeholder Liaison is submitted via Form 3210, Document Transmittal.

  8. IRS/Technical Support Operation is responsible for processing electronic submissions.

    Note:

    For more information, see Publication 1239, Specifications for Electronic Filing of Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

  9. The Program Code 80310 is used by Code and Edit and Error Resolution System (ERS) for processing Form 8027.

  10. For processing year 2015, only tax year 2014 Form 8027 and tax year 2013 Form 8027 will be processed.

  11. All 2012 and prior Forms 8027 should be sent to the following address; unless the form meets the criteria in IRM 3.11.180.1 (13), General Information.
    Internal Revenue Service
    Attn. NTRCP - Mail Stop 5702A
    201 West Rivercenter Blvd.
    Covington, KY 41011
    .

  12. Use Letter 1858C, Information Return of Tip Income (Form 8027) Incomplete for Processing, to correspond for missing or inconsistent information. The current version of this letter is available on Servicewide Electronic Research Program (SERP).

  13. If the Form 8027 has any of the following notations (including 2012 and prior):

    • Under Tip Rate Determination Agreement (TRDA)

    • Under Gaming Industry Tip Compliance Agreement (GITCA)

    • Under Tip Reporting Alternative Commitment (TRAC)

    • Under Revenue Procedure (Rev. Proc.) 2007-32

    • Under Revenue Procedure (Rev. Proc.) 2003-35
      Mail to:
      Internal Revenue Service
      Attn. NTRCP/TW
      110 City Parkway
      Las Vegas, NV 89106

    Note:

    Following receipt of Forms 8027, the National Tip Reporting Compliance Analyst will separate out all Forms 8027 that were submitted by Indian tribal government entities and mail them to the Indian Tribal Government (ITG) Tip Coordinator at the following address:
    Internal Revenue Service
    MS 7200 PHX: ITG Tip Coordinator
    4041 N Central Ave Ste 112
    Phoenix, AZ 85012.

  14. Route documents that cannot be perfected and processed to the National Tip Reporting Compliance Program (NTRCP) for special handling:
    Internal Revenue Service
    Attn. NTRCP - Mail Stop 5702A
    201 West Rivercenter Blvd.
    Covington, KY 41011

  15. Form 8027 does not post to Master File, so Form 8027 will not be on the Cycle Proof List (CPL) or Automated Cycle Proof List (ACPL).

  16. IRM 3.11.180 is exempt from the Business Master File (BMF) Consistency Guidelines (e.g., indicating diamonds) as shown in other sections of IRM 3.11, Returns and Documents Analysis.

  17. This IRM cannot address every possibility that may arise while coding and editing returns or documents. Taxpayer intent must be taken into consideration. In some cases, it may be necessary to refer the issue to your Subject Matter Expert (SME), lead and/or manager to determine the proper action.

3.11.180.1.1  (01-01-2015)
Start-Up and End-of-Year Processing Information

  1. 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 (P&A) Analyst).

  2. 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.

    1. If you receive a Form 8027 (tax years 2014 and prior) in November 2015, route the form to National Tip Reporting Compliance Program (NTRCP) for special handling. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14).

    2. If you receive an early filed (future tax year) Form 8027, hold the return until the next processing year.

      Note:

      See IRM 3.11.180.2.1.2, Tax Year, for additional information on tax year.

    3. All penalty cases should be input on Integrated Data Retrieval System (IDRS) by November 2015.

3.11.180.1.2  (01-01-2015)
IRS Employee Contacts - RRA98, Section 3705(a)

  1. 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.

  2. 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:

    • Their title (e.g., Mr., Mrs., Ms., Miss)

    • Their last name and

    • Their Identification (ID) card (badge) number

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

    • Their title (e.g., Mr., Mrs., Ms., Miss)

    • Their last name and

    • Their Integrated Data Retrieval System (IDRS) number or ID card (badge) number

  4. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the 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.

    Caution:

    Email cannot be used to transmit taxpayer account information to taxpayers or representatives.

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

  6. 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.

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

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

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

  10. 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.

  11. 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.

  12. 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.

  13. 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).

3.11.180.1.3  (01-01-2015)
Definitions

  1. Allocated Tips - Amounts employers that operate large food or beverage establishments must assign to employees if the employees at the establishment do not report a minimum amount of tips. The minimum amount is 8% (or the lower rate granted by the IRS) of the establishment’s gross receipts. The amount allocated to an individual employee generally depends on the amount of tips reported to the employer.

  2. Determination Letter - A letter from the IRS granting a request for an allocation rate of less than 8 percent (%) 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 Electronic Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.

    Reminder:

    National Tip Reporting Compliance Program (NTRCP) is requesting a copy of any Determination Letter (DL) received in Submission Processing. Make a copy of the DL, notate the EIN (if not already indicated) and send it to the following address:
    Internal Revenue Service
    Attn. NTRCP/TW
    110 City Parkway
    Las Vegas, NV 89106

    Note:

    As of January 1996, on tip rate reduction requests where the IRS has approved a lower rate, Letter 8027-B, Determination Letter Approving Specified Lower Rate, is used. This letter provides the taxpayer with the lower rate to be entered on Line 6 of the Form 8027. After December 1995, the IRS changed procedures as allowed under IRC Regulations 31.6053-3(h)(3), to determine the term for which the reduced percentage is to be effective.

  3. Employer - The name and EIN of the employer listed on Form 8027 must be the same as those 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).

  4. Establishment - A food or beverage operation that meets the requirements for filing Form 8027.

  5. 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" (e.g., 00001).

  6. Type of Establishment - Establishments are categorized as:

    • An establishment that serves evening meals only (with or without alcoholic beverages).

    • An establishment that serves evening meals and other meals (with or without alcoholic beverages).

    • An establishment that serves only meals other than evening meals (with or without alcoholic beverages).

    • An establishment that serves food, if at all, only as an incidental part of the business of serving alcoholic beverages.

  7. 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) is no longer required to be attached to the Form 8027.

3.11.180.1.4  (01-01-2015)
Document Review

  1. 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.

  2. 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.

  3. 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.

    Note:

    After photocopying and attaching the Form 8027-T to Form 8027, never detach.

  4. 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.

  5. Returns secured by Stakeholder Liaison may include an explanation for late filing. See IRM 3.11.180.2.1.3 (12)(c), Penalty Assessment Consideration - Failure to File, for instructions on determining reasonable cause.

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

    1. If there are fewer Forms 8027 than the number shown on Form 8027–T, correspond with the employer using Letter 1858C. Include the paragraph that mentions the "Number of accompanying Forms 8027" . See IRM 3.11.180.2.3, Correspondence Preparation, for additional instructions.

    2. Make sure there are no duplicate Forms 8027. Any duplicates (exact copies) should be destroyed using the guidelines for classified waste.

    3. Correct the count based on the number of original Forms 8027 received and continue processing the forms.

  7. Original and amended returns may be in the same batch.

  8. See Exhibit 3.11.180-6, Attachment Guide, for guidelines on attachments.

  9. 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.

    1. Correspond using Letter 1858C and include the paragraph that requests a separate Form 8027 for each establishment. Without a separate form, the submission is considered to be unfiled and a Failure to File penalty may apply. See IRM 3.11.180.2.3, Correspondence Preparation, for additional instructions.

    2. Place the Form 8027 in a suspense file and allow 45 days for a response.

    3. If undeliverable or no response is received after 45 days, write "No Response - Separate Forms 8027 Needed" in the upper left margin/side of the return. Penalty Assessment consideration - Incomplete Filing. The penalty for Failure to File must be assessed. See IRM 3.11.180.2.4, Background of Penalty Assessments. Continue processing.

  10. 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 50 states and the District of Columbia.

    Caution:

    If a foreign address is shown only for the employer address, the Form 8027 is processable.

  11. 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.

    Note:

    Form 4190 and Form 6112 are generally used in the Code and Edit function for IMF requests. Therefore, all BMF requests for forms and/or schedules should be entered in the "write-ins" portion of the forms. This will shorten the time frame when the taxpayer's requests for forms/schedules are identified.

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

    1. Immediately hand carry any remittance to your manager.

    2. Send the petition package and copies of Forms 8027 (if included) to:
      Internal Revenue Service
      National Tip Reporting Compliance
      3251 North Evergreen Drive NE
      Grand Rapids, MI 49525

      Note:

      Include a statement that indicates the payment amount, method of payment (check or money order), and the date submitted to your manager.

3.11.180.1.5  (01-01-2015)
Taxpayer Advocate Service (TAS)

  1. 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.

  2. 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.

3.11.180.1.5.1  (01-01-2015)
Taxpayer Advocate Service (TAS) - Service Level Agreements (SLAs)

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

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

3.11.180.1.6  (01-01-2015)
Use of Fax for Taxpayer Submissions

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

    Caution:

    If the employee does not have the delegated authority to accept a tax return, the employee cannot accept a return by fax.

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

  3. Code and Edit 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.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3, Required Taxpayer Authentication, and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving a message on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voicemail. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

3.11.180.1.7  (01-01-2015)
BMF Identification (ID) Theft

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

3.11.180.2  (01-01-2015)
Code and Edit Instructions

  1. Complete Code and Edit procedures on the entire return to identify all items needing correspondence. The exception is "Not Liable" returns. See IRM 3.11.180.2.1.1, Special Return Code.

    1. A Form 8027 that is annotated as being not liable to file will be processed in abbreviated format. Lines 1 through 7 (money fields) and Line 8 (number of directly tipped employees) will not be edited. Correspondence will not be initiated, and penalties will not apply.

    2. A Form 8027 that appears to be both "Final" and "Not Liable" , should be treated as "Not Liable" . See IRM 3.11.180.2.1.1, Special Return Code.

3.11.180.2.1  (01-01-2015)
Coding and Editing - Specific Field Action

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

3.11.180.2.1.1  (01-01-2015)
Special Return Code

  1. Edit an alpha "F" or "N" to the immediate left of the "Final Return" check box (as close to that area as possible), per the following:

    1. "F" - Final return (e.g., "Final Return" check box checked) with money amounts.

    2. "N" - Final return with no money amounts or "Not Liable" return with no money amounts.

      Note:

      A Form 8027 that appears to be both "Final" and "Not Liable" , should be treated as "Not Liable" .

    3. If more than one condition above is reported, enter one code using this priority: F (1st), N (2nd). The "Note" above is the exception to this priority.

  2. Leave blank, if none of the above applies.

3.11.180.2.1.2  (01-01-2015)
Tax Year

  1. For processing year 2015, only tax year 2014 Forms 8027 and tax year 2013 Forms 8027 will be processed.

  2. All 2012 and prior Forms 8027 should be sent to the following address; unless the form meets the criteria in IRM 3.11.180.1 (13).
    Internal Revenue Service
    Attn. NTRCP - Mail Stop 5702A
    201 West Rivercenter Blvd.
    Covington, KY 41011

  3. Form 8027 is for a calendar year.

    Note:

    If there is clear indication that the establishment operated for less than a month in a calendar year, route the form to National Tip Reporting Compliance for special handling. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14).

  4. There is no need to edit the current tax year, since it is computer generated.

  5. If a Form 8027 is filed with an indication that the information is not for the year printed on the form, determine the tax year. If the information is for tax year 2013, circle the printed year and edit the two digit year (13).

    Note:

    A tax year may be edited in a four digit format (YYYY) which defines the year in which the period ends. The Integrated Submission and Remittance Processing (ISRP) input screen is programmed to establish "20" as the century in the tax period field. Therefore, only the last two digits are required in the Code and Edit function.

  6. If a Form 8027 is filed for tax year 2013 and the information is on the correct form, underline the tax year.

  7. If a Form 8027 is an early (future tax year) filed return, check the return and attachments for the correct tax period. Correct any coding or transcription errors.

    1. For non-final returns, if the tax period is more than three months but less than one year from the current date, correspond for confirmation of the tax year.

    2. If the return is a "Final" , hold the return until the next processing year.

3.11.180.2.1.3  (01-01-2015)
Received Date

  1. The legal due date for paper Form 8027 is the last day of February of the year following the calendar year for which the return is filed. Electronically filed Form 8027 is due the last day of March of the year following the calendar year for which the return is filed.

  2. A return is considered timely:

    If And Then
    The return is received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   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.
    If the IRS Received Date stamp is after ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the legal or extended due date, The postmark date or shipment date is on or before the legal due date, Edit the received date to agree with the postmark date or shipment date.

    Caution:

    A private metered postmark is to be considered timely if the meter date is timely and if the document is received within the time ordinarily required for delivery (usually 14 days). For example, if the private metered postmark is the return due date (last day of February), but the return is received on March 31st, we would not change the received date.

    An extension of time to file has been granted,

    Note:

    As of January 2015, filers of paper Form 8027 are no longer instructed to attach a copy of their approved extension to the Form 8027 when filed. The Service will no longer send an approval letter (e.g., Letter 2519 (CG) for the automatic 30 day extension. Requests for an additional extension of time to file information returns are not automatically granted. Generally, requests for additional time are granted only where it is shown that extenuating circumstances prevented filing by the date granted by the first request. An approval letter (e.g., Letter 5380) will be issued for an additional extension request.

    The return is filed by the extended due date, The return is considered timely.
    The return is received with an explanation that the return is late due to a failed attempt to file electronically, The return is received within 10 days of the denial of the electronic filing, The return is considered timely.
  3. Determine timeliness as follows:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 1. Do not edit the received date.

    2. Do not make a copy of the return.

    3. Do not assess the penalty for Failure to File timely.
    An extension of time to file has been granted and the return is received by the extended due date.

    Note:

    See IRM 3.11.180.2.1.3.1, Form 8809, Request for Extension of Time to File.

    The filer explains that the return is late due to a failed attempt to file electronically and the paper return is received within 10 days of the denial of the electronic filing.
  4. The date a document is received in the Campus or appropriate IRS Office is the date stamped as the "IRS Received Date" .

  5. A received date is required on all delinquent Form 8027 returns.

  6. Returns that do not meet the requirements for timely filing, as indicated in (2) above, are considered delinquent. Edit the received date to agree with the postmark date if the IRS Received Date stamp is after ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the legal or extended due date and the postmark date or shipment date is on or before the legal due date

  7. The IRS received date may or may not be stamped on the face of the return.

    Reminder:

    If a received date is present on a timely filed return, circle out the received date.

  8. A valid IRS Received Date Stamp may consist of the following:

    • The word "Received"

    • Month (alpha or numeric)

    • Day (e.g., "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.).

      Note:

      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" .

  9. 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 the return.

    Note:

    Per the programming for the received date format, Integrated Submission and Remittance Processing (ISRP) transcribers enter six (6) numerics (MMDDYY) at initial input. When the ISRP transcriber hits the field release, it displays as eight (8) numerics (MMDDYYYY). For ERS, the tax examiner must enter eight numerics. If a received date issue continues to loop, ERS should delete the register and re-input the return.

  10. Edit the received date in MMDDYY format according to the following priority:

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

      If Then
      An envelope is not attached, Use the postmark date stamped on the face of the return.

      Note:

      When there are multiple returns in one envelope, the envelope is attached to one return and the postmark date is stamped on the other returns.

      An envelope has both a USPS and private metered postmark, Use the USPS postmark.
      An envelope has two private metered postmarks, Use the latest private postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.
    2. Service Center Automated Mail Processing System (SCAMPS) Digital Date.

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

    4. Signature date, if within current year (unless other information indicates signature date is invalid).

    5. Document Locator Number (DLN) Julian date minus 10 days.

    6. Current date minus 10 days.

  11. Edit the received date as follows:

    If And Then
    A timely received date is the only received date stamped on the return,   Circle out the received date.
    Two or more dates stamped on the return,   1. Use the earliest IRS stamped received date.
    2. Circle out all other dates.
    A Federal return is addressed to the IRS Delivered to a State agency, Use the postmark date as the received date.
    Federal return is addressed to a State agency,   Use the IRS date stamp as the received date.
    The only received date on the return is a Taxpayer Advocate Service (TAS) or Chief Counsel received date,   Circle out the TAS or Chief Counsel received date and edit the received date according to instructions.

    Reminder:

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

  12. Penalty Assessment Consideration - Failure to File. Prior to assessing the penalty for Failure to File:

    1. Check for an approved extension of time to file. See IRM 3.11.180.2.1.3.1, Form 8809, Request for Extension of Time to File. If applicable, write "Filing Extension Granted" in the upper left margin/side of the return. Continue processing the return and do not make a copy of the return.

      Note:

      By June 2015, Technical Support Operation personnel will send CSPC an approved Extension Listing for paper filers and electronic filers. Check the listing for an approved extension before assessing a penalty for Failure to File.

    2. Check for a statement that explains the delinquent filing, and

    3. If the taxpayer gives reasonable cause, write "Reasonable Cause Accepted" in the upper left margin/side of the return. Continue processing the return and do not make a copy of the return.

      Note:

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

    4. If a return is delinquent and (a) or (c) above does not apply, assess the penalty for Failure to File. See IRM 3.11.180.2.4, Background of Penalty Assessments.

    5. Write "Late" in the upper left margin/side of the return when assessing the penalty for Failure to File. Make a copy of the return (and the envelope, if attached) and place the copy in the appropriate area for penalty assessment. Continue processing the original return.

3.11.180.2.1.3.1  (01-01-2015)
Form 8809, Request for Extension of Time to File

  1. Form 8809, Application for Extension of Time To File Information Returns, may be submitted on paper or electronically to request an extension of time to file Form 8027.

    1. The fill-in Form 8809 may be completed online via the Filing Information Returns Electronically (FIRE) System at https:\\fire.irs.gov. Requesting an extension of time for multiple payers should be done by completing the online fill-in form via the FIRE System or by transmitting a request for extension of time file via the FIRE system. Specifications for the electronic file are found in Publication 1239, Part D.

      Note:

      A separate Form 8809 must be completed online for each payer.

    2. A paper Form 8809 may be submitted to IRS/Technical Support Operation at the address listed below. This form may be used to request an extension of time to file information returns submitted on paper. Note: IRS encourages the payer/transmitter community to utilize the online fill-in form in lieu of the paper Form 8809. No Transmitter Control Code required.

    3. By June 15, Technical Support Operation personnel will send CSPC an approved Extension Listing for paper and electronic filers.

      Note:

      Check the listing for an approved extension before assessing a penalty for Failure to File.

  2. Form 8809 must be submitted on paper or electronically by the due date of the return in order for the automatic 30 day extension to be granted.

  3. A second 30 day extension may be requested but will be approved only in cases of extreme hardship or catastrophic events. These requests can only be submitted using the paper Form 8809 or by an electronic extension of time file. Additional requests cannot be completed online.

  4. As of January 2015, filers of paper Form 8027 are no longer instructed to attach a copy of their approved extension to the Form 8027 when filed. The Service will no longer send an approval letter (e.g., Letter 2519 (CG) for the automatic 30 day extension. Requests for an additional extension of time to file information returns are not automatically granted. Generally, requests for additional time are granted only where it is shown that extenuating circumstances prevented filing by the date granted by the first request. An approval letter (e.g., Letter 5380, Extension Approved) will be issued for an additional extension request.

  5. Requests for an additional extension of time to file information returns are not automatically granted. Generally, requests for additional time are granted only where it is shown that extenuating circumstances prevented filing by the date granted by the first request.

  6. The filer is instructed to send a copy of the timely filed Form 8809.

  7. Approved requests for extension of time to file:

    If And Then
    The taxpayer (EIN, Employer Name, etc.) is indicated on the approved Extension Listing The return is filed by the extended due date Write "Filing Extension Granted" in the upper left margin/side of the return.

    Note:

    Do not assess a penalty for Failure to File.

    A copy of Form 8809 is attached There's an indication the extension request was submitted timely
  8. All requests for an extension of time filed on the paper Form 8809 must be sent using the following address:
    Internal Revenue Service
    Attn. Extension of Time Coordinator
    240 Murall Drive, Mail Stop 4360
    Kearneysville, WV 25430.

3.11.180.2.1.3.2  (01-01-2015)
Form 8508, Request for Waiver From Filing Information Returns Electronically

  1. Form 8508 is a Request for Waiver From Filing Information Returns Electronically.

  2. If employers are required to file original or corrected returns electronically, but such filing would create a hardship, they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information Returns Electronically, to IRS/Technical Support Operation.

  3. All information requested on the Form 8508 must be provided to IRS for the request to be processed. Filers are encouraged to submit Form 8508 to IRS/Technical Support Operation at least 45 days before the due date of the returns.

  4. The waiver, if approved, will provide exemption from electronic filing for the current tax year only. Employers may not apply for a waiver for more than one tax year at a time.

  5. An approved waiver from filing Form 8027 electronically does not provide exemption from all filing. The employer must timely file Form 8027 on acceptable paper forms with the Cincinnati Submission Processing Campus (CSPC).

3.11.180.2.1.4  (01-01-2015)
Establishment Name

  1. Establishment Name (or Name of Establishment) is located at the top of the Form 8027 (above the Employer's Name area).

  2. Edit to 40 characters. Only alpha (A-Z) and numeric (0-9) characters are allowed.

  3. If name is missing, research IDRS to perfect the name based on the EIN and address.

  4. If this field is blank and the Employer's Name is complete, enter "SAME" . Also, edit arrows to show the reversal.

  5. If Establishment and Employer names are reversed, arrow to correct position.

3.11.180.2.1.5  (01-01-2015)
Employer Identification Number (EIN)

  1. EIN may be present in the entity area or preprinted to the right of entity area in the EIN box.

  2. If the EIN is blank, research the attachments for the EIN of the employer. If not present or is "Applied For" , research IDRS for the EIN.

  3. If the EIN is written in another area on the form, arrow/edit to the EIN area.

    Caution:

    If the EIN is missing from the EIN area and is in the Establishment Number box, arrow the EIN to the EIN area. See IRM 3.11.180.2.1.12, Establishment Number (EN), for additional instructions.

  4. If research is unsuccessful, correspond using Letter 1858C to secure an EIN from the employer. See IRM 3.11.180.2.3, Correspondence Preparation.

  5. If undeliverable or no response is received after 45 days:

    1. Write "Failure to Provide TIN" in the upper left margin/side of the return.

    2. The penalty for Failure to Provide a Taxpayer Identification Number (TIN) must be assessed. See IRM 3.11.180.2.4, Background of Penalty Assessments.

    3. See Exhibit 3.11.180-4, State Code / ZIP Code Range / EIN Prefix, to determine the first 2 digits of the EIN (EIN prefix). Edit the two-digit EIN prefix plus seven (7) periods in the EIN area. Continue processing.

3.11.180.2.1.6  (01-01-2015)
Type of Establishment

  1. One box should be checked to describe the type of service the establishment provides.

  2. Use the following chart to determine the correct code:

    Box(es) checked Code
    1 1
    2 2
    3 3
    4 4
    None 2
    1 and 4 1
    3 and 4 3
    1, 2, and 3 2
    1 and 2 2
    1 and 3 2
    2 and 3 2
    2 and 4 2
  3. Edit the code in the right margin next to the Type of Establishment box.

3.11.180.2.1.7  (01-01-2015)
Establishment's Address

  1. Determine the Establishment Address as follows:

    If Then
    Establishment Address field is blank, Enter employer's address in Establishment Address field.
    No address is present, 1. Research IDRS using Employer EIN.
    2. Enter Employer's address in Establishment Address field.
    A valid address is not found but there are entries on Lines 1 through 8, Complete edit procedures and process the return.
    A valid address is not found and there are no entries on Lines 1 through 8, 1. Route to National Tip Reporting Compliance for special handling.
    2. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14).

3.11.180.2.1.8  (01-01-2015)
Establishment's City, State, and ZIP Code

  1. The City must be all alphas and a maximum of 25 characters. Edit out hyphens as blanks (spaces). Spaces are allowed.

  2. Enter the two character code for the State. See Exhibit 3.11.180-4, State Code / ZIP Code Range / EIN Prefix, to determine valid state code and ZIP code range.

  3. ZIP code must be either 5 or 9 numerics. See Exhibit 3.11.180-5, State Codes and ZIP Codes Perfection Chart, to perfect any incomplete or missing ZIP codes.

3.11.180.2.1.9  (01-01-2015)
Employer's Name

  1. Employer's Name is located under the Name of Establishment area (which is located at the top of the Form 8027). The Employer' Name should be what is shown on the Form 941, Employer's QUARTERLY Federal Tax Return.

  2. Edit to 40 characters. Only alpha (A-Z) and numeric (0-9) characters are allowed.

  3. Underline the first name line if more than one name line appears.

  4. If the Employer's Name is blank, check for the Employer's Name on Form 8027-T (if present). Write "SAME" in the Employer's Name line on Form 8027 if the Employer's Name on Form 8027-T is identical to the establishment name on Form 8027.

    Reminder:

    Research Integrated Data Retrieval System (IDRS) to obtain the Employer's Name.

  5. If no Employer Name can be determined from the Form 8027-T or IDRS research, write "SAME" in employer entity area.

3.11.180.2.1.10  (01-01-2015)
Employer's Address

  1. If blank, check Form 8027-T or research IDRS using the Employer's EIN.

  2. If this cannot be perfected through research, then use the establishment address.

3.11.180.2.1.11  (01-01-2015)
Employer's City, State and ZIP Code

  1. The City must be all alphas and a maximum of 25 characters. Edit out hyphens as blanks (spaces). Spaces are allowed.

  2. Enter the two character code for the State. See Exhibit 3.11.180-4, State Code / ZIP Code Range / EIN Prefix, to determine valid state code and ZIP code range.

  3. ZIP code must be either 5 or 9 numerics. See Exhibit 3.11.180-5, State Codes and ZIP Codes Perfection Chart, to perfect any incomplete or missing ZIP codes.

  4. If blank, check Form 8027-T or research IDRS using the Employer's EIN. If unable to determine through research, this information may remain blank.

3.11.180.2.1.12  (01-01-2015)
Establishment Number (EN)

  1. If blank, sequentially number each Form 8027 for the employer beginning with "1" until each establishment is numbered. Do not code leading zeros.

  2. If the sequence numbers are not consecutive, accept the employer's numbers. Numbers must be arranged from low order to high order.

  3. Sequentially renumber establishments that have the same number. If the Establishment Number is greater than 5 digits, circle all but the last 5 digits of the number.

    Example:

    Establishment Number 2015-13579, Code and Edit should circle out 2015. There is no need to circle out the dash/hyphen (-) since this is a numerics only field and ISRP should enter 13579.

    Caution:

    If the Establishment Number (EN) matches the Employer Identification Number (EIN), circle it out. The EIN should not be in the Establishment Number box. If the EIN is missing from the EIN area and is in the Establishment Number box, arrow the EIN to the EIN area. Continue processing. See procedures above for additional instructions.

    Caution:

    If the EIN is missing from the EIN area and is in the Establishment Number box, arrow the EIN to the EIN area. Continue processing. See procedures above for additional Establishment Number instructions. See IRM 3.11.180.2.1.5, Employer Identification Number (EIN), for additional instructions.

3.11.180.2.1.13  (01-01-2015)
Charge Receipts Indicator Box

  1. A filer may check the "Yes" or "No" box in response to the question "Does this establishment accept credit cards or other charges?"

  2. The questions and "Yes/No" boxes are located below the entity area. Do not edit.

    If Then
    The filer checks the "Yes" box. Lines 1 and 2 must be completed.
    The filer checks the "Yes" box but does not complete Lines 1 and 2. Correspond using Letter 1858C to request the missing information from the employer. See IRM 3.11.180.2.3, Correspondence Preparation.
    The filer checks the "No" box or neither box is checked. Lines 1 and 2 may be blank. Do not correspond.

3.11.180.2.1.14  (01-01-2015)
Money Amounts Lines 1 through 5

  1. Establishments report amounts on Lines 1 through 5.

  2. Lines 1 and 2 must be completed if the Charge Receipts Indicator "Yes" box is checked.

    1. If Lines 1 and 2 are zero (or show a dash "None" , "Not Applicable (N/A)" , "Not Available" , or "Unknown" ), accept and continue processing.

    2. If Lines 1 and 2 are not completed (blank), correspond using Letter 1858C to request the missing information from the employer. See IRM 3.11.180.2.3, Correspondence Preparation.

    3. If undeliverable or no response is received after 45 days, leave blank, and continue processing. Penalty Assessment consideration - Incomplete Return. Write "No Response - Incomplete Return" in the upper left margin/side of the return. Assess the penalty for Failure to File. See IRM 3.11.180.2.4, Background of Penalty Assessments.

  3. If the Charge Receipts Indicator "No" box is checked, or if neither box is checked, Lines 1 and 2 may be blank.

  4. The amount on Line 2 must be greater than the amount on Line 1.

    1. If this condition does not exist, correspond with the employer using Letter 1858C. See IRM 3.11.180.2.3, Correspondence Preparation.

    2. If undeliverable or no response is received after 45 days, edit a "1" on Line 2 if there is no amount present. Do not edit if there is an amount present on Line 2. Continue processing. Penalty Assessment consideration - Inconsistent Return. Write "No Response - Inconsistent Return" in the upper left margin/side of the return. Assess the Failure to File penalty. See IRM 3.11.180.2.4, Background of Penalty Assessments.

  5. Line 3 may be zero or blank.

  6. Lines 4a, 4b, and 4c may all be zero.

  7. If amounts are present for Line 4a or Line 4b and Line 4c is blank, edit as follows:

    1. Add Line 4a and Line 4b.

    2. Correspond using Letter 1858C to inform the employer of any change that is made to Line 4c. See IRM 3.11.180.2.3, Correspondence Preparation.

  8. If an amount is present on Line 4a only or Line 4b only and Line 4c is greater than (or less than) Line 4a or Line 4b (whichever is applicable), correct as follows:

    If there is an amount on And Then
    Line 4a only A greater amount on Line 4c, Enter the difference between the two lines on Line 4b.
    Line 4b only A greater amount on Line 4c, Use Letter 1858C to correspond with the employer. See IRM 3.11.180.2.3, Correspondence Preparation.
    Line 4a only A lesser amount on Line 4c, Use Letter 1858C to correspond with the employer. See IRM 3.11.180.2.3, Correspondence Preparation.
    Line 4b only A lesser amount on Line 4c, Use Letter 1858C to correspond with the employer. See IRM 3.11.180.2.3, Correspondence Preparation.
  9. If an amount is present on Line 4c only (Line 4a and Line 4b are blank), use Letter 1858C to correspond with the employer. See IRM 3.11.180.2.3, Correspondence Preparation

    Exception:

    If Line 4c contains a zero (0), do not correspond. Line 4a + Line 4b = Line 4c (0 + 0 = 0).

    1. If undeliverable or no response is received after 45 days, continue processing.

  10. If an amount is present for Line 1 but no amounts are present (blank) on Lines 4a, 4b or 4c, correspond with the employer using Letter 1858C. See IRM 3.11.180.2.3, Correspondence Preparation.

    Note:

    Zero (0) is an amount.

    1. If undeliverable or no response is received after 45 days, continue processing. Lines 4a, 4b and 4c may all be zero.

  11. An amount is required for Line 5. Line 5 may not be less than Line 2, and Line 5 must be greater than each of Lines 1, 3, 4a, 4b and 4c.

    1. If the amount for Line 5 is missing or is inconsistent with an amount on Lines 1 through 4c, use Letter 1858C to correspond to request the information from the employer.

    2. If undeliverable or no response is received after 45 days, continue processing. Penalty Assessment consideration - Inconsistent Return. Write "No Response - Inconsistent Return" in the upper left margin/side of the return. Assess the Failure to File penalty. See IRM 3.11.180.2.4, Background of Penalty Assessments.

    Note:

    If all receipts including tips are charged, and Lines 2 and 5 are equal, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and do not correspond.

  12. If two amounts are shown on one line, "X" the amounts, combine for a total and enter the amount to the left of the "X'd" amounts.

3.11.180.2.1.15  (01-01-2015)
Allocation Rate - Center of Line 6

  1. Generally, the allocation rate is 8 percent (%). However, the establishment may be granted a lower allocation rate.

    1. The center of Line 6 may be blank. Do not correspond.

    2. If the establishment has been granted a lower allocation rate, the lower rate may be entered on the form. An IRS determination letter granting the lower rate must be attached.

      Reminder:

      National Tip Reporting Compliance Program (NTRCP) is requesting a copy of any Determination Letter (DL) received in Submission Processing. Make a copy of the DL, notate the EIN (if not already indicated) and send it to following address:
      Internal Revenue Service
      Attn. NTRCP/TW
      110 City Parkway
      Las Vegas, NV 89106

    Note:

    Determination letters (e.g., Letter 8027-B) issued after December 1995, have an effective date for the tax period the lower rate is allowed.

  2. Be careful when checking for the determination letter in the employer's submission. The letter may be attached to one Form 8027 but apply to more than one of the employer's establishments. Verify the rate for each establishment if the determination letter is used for more than one Form 8027.

    Caution:

    Enter the rate based on the determination letter.

  3. There may also be multiple determination letters.

  4. If the letter shows percentages higher than 8 percent (%), the employer should not have attached the letter to Form 8027. Disregard the higher rate. The letter was issued by Examination to advise the employer that the percentages in the "Tip Rate Determination Agreement" were recalculated. These percentages are used to determine the minimum amount of tips that should appear on Form 941. Do not math verify. Continue processing the return.

    Note:

    A determination letter is different from a Tip Rate Determination Agreement (TRDA). An employer under a TRDA does not get a determination letter but rather gets a separate document listing tip rates for the various worker categories. If a taxpayer has attached a copy of either a TRDA Attachment B or Gaming Industry Tip Compliance Agreement (GITCA) Appendix A showing tip rates for various worker categories, this is not a determination letter. A determination letter issued under the provisions of IRC 6053(c)(3)(A), petition for a lower tip allocation rate, will merely state one tip rate to use for when a large food and beverage employer must make tip allocations.

  5. The percentage cannot be below 2% or greater than 8%. Circle out any rate that is lower than 2% or higher than 8%. The computer will use the standard rate of 8%.

  6. If the determination letter is for a different percentage (2% or more, but less than 8%), edit the percentage as granted in the letter. If the establishment has two allocation rates approved, check for the most current date on the letter and use that rate for the entire year.

  7. Convert a percentage to a four digit field (e.g., "6.5%" would be entered as "0650" or 7.75% would be "0775" ). Do not enter the decimal point. See Rate and Conversion table below.

    Rate (Percent (%)) Conversion
    2.00% 0200
    2.25% 0225
    2.50% 0250
    2.75% 0275
    3.00% 0300
    3.25% 0325
    3.50% 0350
    3.75% 0375
    4.00% 0400
    4.25% 0425
    4.50% 0450
    4.75% 0475
    5.00% 0500
    5.25% 0525
    5.50% 0550
    5.75% 0575
    6.00% 0600
    6.25% 0625
    6.50% 0650
    6.75% 0675
    7.00% 0700
    7.25% 0725
    7.50% 0750
    7.75% 0775
    8.00% 0800
  8. If a lower rate is entered (2% or more, but less than 8%), but no determination letter (e.g., Letter 8027-B) is attached,

    1. Use Letter 1858C to correspond with the employer. See IRM 3.11.180.2.3, Correspondence Preparation.

    2. If undeliverable, no response is received after 45 days, or correspondence is unsuccessful, edit the percentage in the center of Line 6 (or in that area) as "0800" and initiate a non-suspense Letter 1858C to the employer to inform them of the allocation rate change.

  9. If a lower rate is entered (2% or more, but less than 8%), but the determination letter (e.g., Letter 8027-B) shows an expired effective date,

    1. Edit the percentage in the center of Line 6 (or in that area) as "0800" .

    2. Use Letter 1858C and initiate a non-suspense letter to the employer. See IRM 3.11.180.2.3, Correspondence Preparation.

3.11.180.2.1.16  (01-01-2015)
Allocation Amount Line 6

  1. The amount on Line 6 should equal Line 5 times 8 percent (%), or Line 5 times the lower rate granted by the IRS. This line may contain an alpha "X" if the employer allocates tips using other than the calendar year.

    If And Then
    Line 6 is blank, Line 7 is blank, Complete Line 6 using 8% or the *lower rate, whichever applies.

    Note:

    If the establishment has a determination letter approving two allocation rates, apply the lower rate for the entire year. *If the determination letter is for a different percentage (2% or more, but less than 8%), edit the percentage as granted in the letter. If the establishment has two allocation rates approved, check for the most current date on the letter and use that rate for the entire year.

    Line 7 has a positive entry, Enter an alpha "X" on Line 6.
  2. If you change an amount on Line 6, make the necessary change to Line 7. Correspond using Letter 1858C to notify the employer of any changes. See IRM 3.11.180.2.3, Correspondence Preparation.

3.11.180.2.1.17  (01-01-2015)
Allocation of Tips Amount Line 7

  1. Procedures for computing Line 7.

    If And Then
    Line 6 is more than Line 4c Line 7 is blank, Enter the difference on Line 7.
    Line 4c equals or is more than Line 6 Line 7 has a negative amount, Circle the amount and enter zero to the right of the amount.
    Line 7 is blank, Enter a zero on Line 7.

    Note:

    If you change an amount on Line 7, correspond using Letter 1858C to notify the employer. See IRM 3.11.180.2.3, Correspondence Preparation. In addition, if you change a hyphen (-) to a zero (0), correspondence is not needed for this situation.

3.11.180.2.1.18  (01-01-2015)
Condition Codes 4 and U

  1. There are two codes that may be edited:

    1. Code "4" is edited to the right of Line 7a, Line 7b or Line 7c, as instructed in IRM 3.11.180.2.1.19, Method of Allocation Boxes Lines 7a through 7c.

    2. Code "U" is edited to the right of Line 8, as instructed in IRM 3.11.180.2.1.20, Number of Directly Tipped Employees Line 8.

3.11.180.2.1.19  (01-01-2015)
Method of Allocation Boxes Lines 7a through 7c

  1. If Line 7 is more than zero (must be a positive amount), an entry must be made in either Line 7a, Line 7b or Line 7c. Enter one of the following codes to the left of the box checked:

    1. Line 7a - enter "1" ,

    2. Line 7b - enter "2" , or

    3. Line 7c - enter "3" , if a Good-Faith Agreement (GFA) is attached. See (2) below for additional information.

    If Then
    No boxes are checked and Line 7 is greater than zero, Edit a Condition Code 4 to the right of Line 7a, 7b or 7c.
    No allocation was made (Line 7 is zero or no money), 1. The method of allocation should be blank.
    2. Circle out any entry.

    Caution:

    Make sure to circle out any check mark and/or "X" by Line 7a, Line 7b, and/or Line 7c.

    More than one box is checked, 1. Use the following priority to determine code:
    1. Line 7c, with a Good-Faith Agreement (Code 3),

    2. Line 7a (Code 1),

    3. Line 7b (Code 2).


    2. Circle out the remaining boxes.
  2. If Line 7c is checked, a copy of the "Good-Faith Agreement" may be attached.

    Note:

    The Good-Faith Agreement may be applicable for more than one return. Write "GFA" for "Good-Faith Agreement" in the upper left margin/side of each applicable return.

    1. If the Good-Faith Agreement cannot be found, edit a Condition Code "4" to the right of Line 7a, 7b or 7c to force the document to good tape.

3.11.180.2.1.20  (01-01-2015)
Number of Directly Tipped Employees Line 8

  1. A number greater than zero should be present on Line 8.

  2. If Line 8 is zero or blank, edit a "U" to the right of the line.

3.11.180.2.1.21  (01-01-2015)
Signature

  1. The IRS has issued rules that allow corporate officers or duly authorized agents to sign employment tax forms by facsimile. This includes alternative signature methods such as computer software programs or mechanical devices.

  2. A signature and jurat are required for all returns. A signature should be entered on each Form 8027 (under the jurat).

  3. If a signature is missing, correspond using Letter 1858C, Information Return of Tip Income (Form 8027) Incomplete for Processing, to request a signature.

    1. When the reply is received, attach the taxpayer's response to the return and continue processing.

    2. If no reply is received, contact National Tip Reporting Compliance for follow-up action and/or special handling. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14).

3.11.180.2.1.22  (01-01-2015)
Amended Documents

  1. Employers may send "Amended" Form 8027 to the Service to be processed.

    If Then
    The "Amended Return" box is marked Continue processing.
    If the "Amended Return" box is not marked, and
    • The word "Amended" , "Supplemental" , "Corrected" , or "Additional" is written on the return or an attachment, or

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

    Note:

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

    Mark the "Amended Return" check box.
  2. There is no special numbering or blocking for amended Form 8027.

  3. If the "Amended" return is delinquent, edit a received date. See IRM 3.11.180.2.1.3, Received Date, for additional information.

  4. When reviewing an amended return, make sure the information is not in response to an IRS letter before processing as "Amended" .

3.11.180.2.2  (01-01-2015)
Disposition

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

3.11.180.2.3  (01-01-2015)
Correspondence Preparation

  1. 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 (Chief Counsel Opinion PMTA-2008-01947, effective October 5, 2009).

  2. Written communication to the employer 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.

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

  4. 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).

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

    • The current date

    • The name and address of the employer or establishment

    • The return number or title and tax year

    • All "select" paragraphs that pertain to the missing information or the information in question

    • The period of time the taxpayer has to respond (e.g., 30 days from the date of the letter), when applicable

    • Instructions for faxing information, when applicable

    • The name, phone number and duty hours of either the IRS tax examiner or supervisor the taxpayer may call if there are additional questions. See IRM 3.11.180.1.2, IRS Employee Contacts - Section 3705(a).

    • Appropriate select paragraphs, based on the following Correspondence Guide:

      Correspondence Guide

      Condition Letter 1858C Paragraph Suspend IRM Reference
      Number of Forms 8027 fewer than the count indicated on Form 8027-T. Sel. Para. V No IRM 3.11.180.1.4(6)
      Separate Forms 8027 are needed. Sel. Para. W Yes IRM 3.11.180.1.4(9)
      EIN is incomplete or missing. Sel. Para. H Yes IRM 3.11.180.2.1.5(4)
      IRM 3.11.180.3.2.8(3)
      Charge Receipts Indicator "Yes" box is checked. Lines 1 and 2 are blank. Sel. Para. I Yes IRM 3.11.180.2.1.13(2)
      IRM 3.11.180.2.1.14(2)
      The amount on Line 2 is not greater than the amount on Line 1. Sel. Para. J Yes IRM 3.11.180.2.1.14(4)
      IRM 3.11.180.3.2.11(5)
      Line 4c is incorrect or blank and an amount is reported on Line 4a or Line 4b. Sel. Para. L No IRM 3.11.180.2.1.14(7)
      IRM 3.11.180.3.2.11(7)
      An amount is reported on Line 4a only or Line 4b only and Line 4c is greater than (or less than) Line 4a or Line 4b (whichever is applicable). Sel. Para. K Yes IRM 3.11.180.2.1.14(8)
      IRM 3.11.180.3.2.11(8)
      An amount is present on Line 4c only (Line 4a and Line 4b are blank). Sel. Para. K Yes IRM 3.11.180.2.1.14(9)
      IRM 3.11.180.3.2.11(9)
      An amount is reported on Line 1 but no amounts are present on Lines 4a, 4b or 4c. Sel. Para. K Yes IRM 3.11.180.2.1.14(10)
      IRM 3.11.180.3.2.11(10)
      No amount or an incorrect amount is shown on Line 5. Sel. Paras. M and O or N and O Yes IRM 3.11.180.2.1.14(11)
      IRM 3.11.180.3.2.11(11)
      Lower tip rate (center of Line 6) not supported by an IRS determination letter (e.g., Letter 8027-B). Sel. Para. P Yes IRM 3.11.180.2.1.15(8)
      IRM 3.11.180.3.2.12(6)
      Lower tip rate replaced with standard 8 percent (%) tip rate. Sel. Para. Q No IRM 3.11.180.2.1.15(8)
      IRM 3.11.180.3.2.12(6)
      Lower tip rate (center of Line 6) and the IRS determination letter (e.g., Letter 8027-B) has an expired effective date. Sel. Para. R No IRM 3.11.180.2.1.15(9)
      IRM 3.11.180.3.2.12(7)
      No amount or an incorrect amount is reported on Line 6. Sel. Para. S No IRM 3.11.180.2.1.16(2)
      IRM 3.11.180.3.2.12(13)
      The amount on Line 7 is changed due to a change to Line 6. Sel. Para. T No IRM 3.11.180.2.1.17(1)
      IRM 3.11.180.3.2.12(15)
      No amount or an incorrect amount is shown on Line 7. Sel. Para. U No IRM 3.11.180.2.1.17(1)
      IRM 3.11.180.3.2.12(15)
      Information appears to be split between establishments. Sel. Para. 0 (zero) Yes IRM 3.11.180.3.4(3)
      Signature is required on return(s) Sel. Para. G and Z Yes IRM 3.11.180.2.1.21(3)
      • Use Sel. A to identify a specific establishment if multiple forms were included in the employer's submission.

      • Use Sel. B, C or D as the opening paragraph.

      • Use Sel. E and F as appropriate.

      • Refer to the "Notes" at the end of Letter 1858C for additional information.

  6. 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.

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

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

  9. If working return that is not processable, and current date is after September 30, 2015:

    1. Do not correspond. Since the information is purged from the database in January, any correspondence sent after September 30 would not provide time for the return to post prior to the purge.

    2. Route the return to National Tip Reporting Compliance for special handling. See IRM 3.11.180.1 (13) and IRM 3.11.180.1 (14).

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

    If no reply or undeliverable and Then
    Separate Forms 8027 are needed. 1. Assess the penalty per IRM 3.11.180.1.4(9).

    2. Keep the establishment list attached.

    3. Process the Form(s) 8027 received.
    EIN is incomplete or missing.
    1. Determine the EIN prefix. See Exhibit 3.11.180-4, State Code / ZIP Code Range / EIN Prefix.

    2. Edit EIN prefix and seven (7) periods.

    3. Continue processing.
    Charge Receipts Indicator "Yes" box is checked. Lines 1 and 2 are blank. 1. Assess the penalty per IRM 3.11.180.2.1.14(2).

    2. Continue processing.
    The amount on Line 2 is not greater than the amount on Line 1. 1. See IRM 3.11.180.2.1.14(4) and IRM 3.11.180.3.2.11(4).

    2. Edit the form and assess the penalty per instructions.

    3. Continue processing.
    No amount or an incorrect amount is shown on Line 5. 1. See IRM 3.11.180.2.1.14(11) and IRM 3.11.180.3.2.11(10).

    2. Assess the penalty and edit Line 5 as instructed.

    3. Continue processing.
    Lower tip rate (center of Line 6) is not supported by an IRS determination letter. 1. See IRM 3.11.180.2.1.15(8) and IRM 3.11.180.3.2.12(6).

    2. Use standard 8 percent (0800) rate and correspond using Letter 1858C to inform the employer.

    3. Continue processing.
    Line 7c is checked, but the "Good-Faith Agreement" is not attached. 1. Edit Condition Code "4" . See IRM 3.11.180.2.1.19(2)(b) and IRM 3.11.180.3.2.13(3).

    2. Continue processing.
    Information appears to be split between establishments. 1. Assess the penalty per IRM 3.11.180.3.4(3).

    2. Process document as instructed.

3.11.180.2.3.1  (01-01-2015)
Faxing Information

  1. Filing of original returns via fax is permissible as part of the return perfection process where contact with the employer has been made and documented by the Service. In these circumstances, fax signatures are acceptable for the original returns.

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

  3. Tax examiners will indicate the fax paragraph on the Form 3696, Correspondence Action Sheet, (or other approved Correspondence Action Sheet), to advise employers/establishments of the option to fax their response. See IRM 3.11.180.1.6, Use of Fax for Taxpayer Submissions, for additional information.


More Internal Revenue Manual