3.11.249  Processing Form 8752

Manual Transmittal

October 29, 2014

Purpose

(1) This transmits revised IRM 3.11.249, Returns and Documents Analysis, Processing Form 8752.

Material Changes

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

(2) IRM 3.11.249.1.2(3) - First bullet - Removed IRM 3.0.273, Administrative Reference Guide, because the IRM is obsolete and not replaced. (IPU 14U0347 issued 02-19-2014)

(3) IRM 3.11.249.1.8(2) - CI Criteria Table - Updated Code and Edit information and removed ERS procedures. (IPU 14U1074 issued 06-30-2014)

(4) IRM 3.11.249.1.10 - New - Added information pertaining to BMF Identification (ID) Theft.

(5) IRM 3.11.249.2.1(4) k. - Added Form 10886, Reject Routing Slip.

(6) IRM 3.11.249.2.2.1(3) - Added "Document Locator Number Illustration" after "Refer to Figure 3.11.249-1." (IPU 14U0347 issued 02-19-2014)

(7) IRM 3.11.249.2.2.1(3) - Seven Parts of the Document Locator Number (DLN) Table - Part 4 Example - Updated date information. Part 7 Example - Updated date information. (IPU 14U1074 issued 06-30-2014)

(8) IRM 3.11.249.3.1(1) - Removed duplicate information: "Never obliterate the original entry on a document when deleting or correcting an entry. Care should be exercised to ensure that the original entry remains legible."

(9) IRM 3.11.249.3.1(2) - Removed duplicate information: "The only items to be edited on the return are those to be transcribed, except where the instructions require editing of a non-transcribed item."

(10) IRM 3.11.249.3.2(4) - Edit Mark Table - Edit Marks Made By Other IRS Functions - Description Column - Entity was added to the other areas listed and added the statement that reads: "Do not edit (or write) over another area's edit marks" . (IPU 14U0596 issued 04-01-2014)

(11) IRM 3.11.249.4.2(1) - Added Form 10886, Reject Routing Slip.

(12) IRM 3.11.249.4.2(2) - Removed acknowledgements and added instruction to edit an action/audit trail.

(13) IRM 3.11.249.4.4(5) - Moved paragraph (6) to a Note under paragraph (5).

(14) IRM 3.11.249.4.4(6) - Added new paragraph (6) penalty information to be consistent with other Code and Edit IRMs.

(15) IRM 3.11.249.5.3(4) - If/And/Then Table - First If box - Removed "(e.g., Computer Condition Code (CCC) "3" is edited on the return)" since this does not apply.

(16) IRM 3.11.249.5.3(4) - If/And/Then Table - First Then box - Added Caution that reads: "If the return comes back from AM with the information still incomplete, send the return to AM again to secure all the missing information." This change is per SERP Feedback 201304627 for IRM 3.11.13 (September 25, 2013). (IPU 14U0347 issued 02-19-2014)

(17) IRM 3.11.249.9.8(1) - Updated tax year information.

(18) IRM 3.11.249.9.8(3) - Example - Updated tax year information.

(19) IRM 3.11.249.9.8(4) - Updated prior year tax information.

(20) IRM 3.11.249.10(2) - If/And/Then Table - Third Then box - Added a Caution about private metered postmark. (IPU 14U1074 issued 06-30-2014)

(21) IRM 3.11.249.10(4) - Reworded Received Date Stamp per BMF Consistency. (IPU 14U0347 issued 02-19-2014)

(22) IRM 3.11.249.10(5) - Removed the Note about the private metered postmark. (IPU 14U1074 issued 06-30-2014)

(23) IRM 3.11.249.11.1(1) - Added a Reminder that reads: "See IRM 3.11.249.14.3(9) for additional information" .

(24) IRM 3.11.249.11.4(1) - Removed "(numbered returns only)" per feedback from IRM Review and Clearance.

(25) IRM 3.11.249.13(1) b. - Removed Command Code MFTRA and added "using the appropriate Command Code" .

(26) Exhibit 3.11.249-2, Potential Frivolous Arguments Criteria - IRC 861 Business Employment Tax - Descriptive box - Added "Code of Federal Regulations" to define CFR.

(27) IRM references updated throughout the IRM.

(28) Figures revised throughout the IRM.

(29) Exhibits revised throughout the IRM.

Effect on Other Documents

IRM 3.11.249, Returns and Documents Analysis, Processing Form 8752, dated November 12, 2013 (effective January 01, 2014), is superseded. The following IRM Procedural Updates (IPUs), issued from January 02, 2014, through June 30, 2014, have been incorporated into this IRM: 14U0347 14U0596, and 14U1074.

Audience

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

Effective Date

(01-01-2015)

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

3.11.249.1  (01-01-2015)
General Instructions

  1. This section provides general background information about the scope, the forms processed, and the nature of the work which Document Perfection personnel are expected to perform on those returns and documents.

  2. 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.

3.11.249.1.1  (01-01-2015)
Purpose of Code and Edit

  1. The purpose of Code and Edit is to perfect returns and other documents to ready them for transcription into the Automatic Data Processing (ADP) system.

  2. Another purpose for coding and editing is to ensure that necessary action is taken on all attachments to the return, including preparation of other documents and initiating taxpayer correspondence, when necessary.

3.11.249.1.2  (01-01-2015)
Purpose of this Section

  1. The instructions in this section pertain to the coding and editing of Form 8752, Required Payment or Refund under Section 7519, that will be input to the Business Master File (BMF).

  2. General instructions are provided to eliminate the repetition of the same instructions for the specific return. If there is a conflict between the general instructions and the specific instructions, the specific instructions will prevail.

  3. This manual is your main source of information. You can also find procedures in the following IRMs:

    • IRM 1.15.29, Records Control Schedule for Submissions Processing Campus Records

    • IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates

    • IRM 3.10.72, Extracting, Sorting, and Numbering

  4. IRM 3.11.249 is exempt from the BMF Consistency Guidelines (e.g., indicating diamonds) as shown in other sections of IRM 3.11, Returns and Documents Analysis.

3.11.249.1.3  (01-01-2015)
Purpose of the Form 8752

  1. The instructions in this section pertain to the coding and editing of Form 8752, Required Payment or Refund under Section 7519. Form 8752 will be filed by partnerships and S Corporations who have elected to file their income tax returns on a tax year other than the required year. The Form 8752 is used to remit the required payment. It will be posted to the BMF as Master File Tax (MFT) Code 15, Document Code 23 and Tax Class 2. Time will be charged to Program 19000 (Other BMF Returns) and Program 19001 (Refunds).

  2. Form 1065, U.S. Return of Partnership Income, and Form 1120S, U.S. Income Tax Return for an S Corporation, use Form 8752 to figure and report the payment required under Section 7519 or to obtain a refund of net prior year payment(s). A partnership (Form 1065) or S Corporation (Form 1120S) must file Form 8752 if it made an Internal Revenue Code (IRC) Section 444 election by filing Form 8716, Election To Have A Tax Year Other Than a Required Tax Year, and its election is still in effect for the tax year. Any tax year that IRC Section 444 election is in effect, is an "applicable election year." Prior to 1990, the IRC Section 444 payment made by these taxpayers was reported on Form 720, Quarterly Federal Excise Tax Return, under IRS Number 11.

  3. For applicable election years beginning in 1990, Form 8752 must be filed and the required payment made on or before May 15 of the year following the calendar year in which the applicable election year begins. The required payment is intended to represent the value of the tax deferral by the owners of those entities through the use of a taxable year other than the required year. Generally, the tax year resulting from a IRC Section 444 election is a Fiscal Year (FY) ending in September, October, or November. The required payment is considered a deposit.

3.11.249.1.4  (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.

  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 3.11.249.5.4, 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 3.11.249.5.4, 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 3.11.249.1.5, Taxpayer Advocate Service (TAS).

3.11.249.1.5  (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.

3.11.249.1.5.1  (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 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.

3.11.249.1.6  (01-01-2015)
Frivolous Arguments

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to improperly avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 4.10.12, Examination of Returns - Frivolous Return Program (FRP). Also, see Exhibit 3.11.249-2, Potential Frivolous Arguments Criteria.

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

    If Then
    The return meets any of the conditions identified as a frivolous return.

    Caution:

    If the return shows Computer Condition Code (CCC) "U" (or Action Code 331) and has a Form 4227 attached with the remarks, "Refer to Exam FRP for audit after processing," continue to next procedure.

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.
    Examination has selected the return as frivolous (e.g., indicated by CCC "U" or Action Code 331) and a Form 4227 with the remarks, "Refer to Exam FRP for audit after processing," but sends the return for processing, Continue processing the return using procedures in IRM 3.11.249. However, do not circle or void the CCC "U" (or Action Code) indicating a frivolous return.

    Note:

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3.11.249.1.7  (01-01-2015)
Foreign Currency

  1. For returns completed in other than U.S. currency, process as filed. However, if corresponding for missing/incomplete item(s), include in the letter (e.g., 3463C, 3064C) to resubmit return in U.S. currency.

3.11.249.1.8  (01-01-2015)
Criminal Investigation (CI) "Funny Box"

  1. Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC include willful and deliberate attempts to evade or defeat the income tax. Criminal tax violations also include the willful failure to collect or pay over tax and claims of false refunds based on bogus return information.

  2. Pull any return identified as having any CI criteria found in the table below and place in "CI Funny Box" .

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3.11.249.1.9  (01-01-2015)
Examination (Exam) "Funny Box"

  1. The primary objective in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination will provide support and assist Submission Processing (SP) with any questionable return identified during processing. Exam has a vast multitude of programs and tolerance criteria already identified in various IRM sections. Exam allows SP to refer questionable returns unless restricted by another IRM section.

3.11.249.1.10  (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.

3.11.249.2  (01-01-2015)
Controls

  1. This section contains information regarding the descriptions and functions of the forms and documents used to establish and maintain controls in campus pipeline operations.

3.11.249.2.1  (01-01-2015)
Block Control Documents

  1. Each block of documents processed under the Automatic Data Processing (ADP) system is required to have a Block Control Document attached for control and identification purposes. If blocks, or unblocked documents which should have been blocked, are received without a Block Control Document, return the block to the originating area for correction. The Block Control Documents are listed as follows:

  2. Form 813, Document Register, is used with remittance (W/R) documents.

  3. Form 1332, Block and Selection Record, is used for non-remittance (N/R) documents. The Form 1332, Block and Selection Record, is also used for returns processed through the Residual Remittance Processing System (RRPS). These returns are considered non-remittance returns since the payments have been posted to the Business Master File (BMF) to provide a fact of filing.

    1. If a numbered remittance document is in a numbered non-remittance block controlled by Form 1332, the document must be "U" coded. It will have to be re-blocked for account maintenance.

    2. If every document in a non-remittance block has a remittance attached, return the block for re-blocking.

  4. Form 3893, Re-Entry Document Control, is used to reinput a return that has not posted to an account or module.

    1. If a single return is being reinput, the Form 3893 will be attached to the face of the document.

    2. If more than one return from the same original block is being reinput, the Form 3893 will be attached to the first return in the reinput block.

    3. If more than one return is in the block and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control no.), edit all returns using current processing instructions and keep all returns clipped together.

    4. Circle the Computer Condition Code (CCC) "G" if present.

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

    6. If the return was not edited according to current processing instructions, circle out any Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

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

      Form 3893 Action Taken
      Box 14 (Remarks) Ensure that the information is edited to the return.
      Box 15 (Process as) 1. Circle any green rocker and edit marks that may indicate a receipt of remittance.
      2. Do not change any tax due amounts.
    8. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

      If Then
      Improper perfection, Edit the same correction in red/green (per local procedure) to the appropriate area.
      Taxpayer error, Leave the entries as shown on the document.
    9. A received date must be present on all reinput returns.

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

    11. When perfection is not possible, edit CCC "U" on the return and attach Form 4227, Form 10886, Reject Routing Slip, (or other appropriate routing slip) notating, "PERFECTION NOT POSSIBLE" and leave in batch.

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

    1. Circle CCC "G" if present.

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

    3. If the return was not edited according to current processing instructions, circle out Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

    4. If the return was edited according to current processing instructions, ensure that the information from Form 13596 is edited on the return.

      Form 13596 Action Taken
      TIN correction Edit correct TIN on return.
      Tax period correction Edit correct Tax period ending on return
      Reasonable cause Edit appropriate computer condition code:
      a. Edit CCC "R" if the "FTF" box is checked.
      b. Edit CCC "D" if the "FTP" box is checked.
    5. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

      If Then
      Improper perfection, Edit the same correction in red/green (per local procedure) to the appropriate area.
      Taxpayer error, Leave the entries as shown on the document.
    6. A received date must be present on all reprocessed returns.

      If Then
      Received date is not present, Edit a received date to the middle of the return.
      Multiple received dates are present, Circle all but the earliest date.
    7. Circle the green rocker and edit marks that may indicate a receipt of remittance.

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

3.11.249.2.2  (01-01-2015)
Document Control

  1. This section provides descriptions and functions of the Document Locator Number (DLN), blocking returns and documents, and document count.

3.11.249.2.2.1  (01-01-2015)
Document Locator Number (DLN)

  1. The DLN is a controlled number assigned to every return or document input through the Automatic Data Processing (ADP) system. This number is assigned when the document is blocked and brought under Accounting Control.

  2. The DLN is used to control, identify, and locate documents processed in the ADP system. It will be used to locate the document as long as it (or a substitute document) remains in the files, unless it becomes the subject of subsequent action. See Figure 3.11.249-1, Document Locator Number Illustration.

    Figure 3.11.249-1

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. The parts of the DLN are explained in the following table. Refer to Figure 3.11.249-1, Document Locator Number Illustration.

    Note:

    For additional information, see Document 6209, IRS Processing Codes and Information.

    Seven Parts of the Document Locator Number (DLN)
    Part 1 File Location Code (FLC) - Identifies the campus or area office processing the document.
    Example: File Location Code is 00.

    Note:

    Cincinnati Campus FLC: (17) and Ogden Campus FLC: (29). For additional Filing Location Codes, see Document 6209, IRS Processing Codes and Information.

    Part 2 Tax Class - Identifies the type of return or document that was filed.
    Example: Business Master File (BMF) Tax Class 2 represents Form 8752.
    Part 3 Document (Doc) Code - Identifies the type of document within a tax class.
    Example: Doc Code 23 is for Form 8752.
    Part 4 Julian Date - Identifies the day of the year the tax return or document is numbered (001 through 365).
    Example: Julian Date 051 represents Calendar Date 02-20-2015.
    Part 5 Block Number - Identifies the different categories of document control for input to the Master File.
    Example: Block Number 012.
    Part 6 Sequence Number - Identifies the sequence of a document within a block. The maximum number will be 100 and the documents are numbered 00 to 99.
    Example: Sequence Number 03 indicates it is the fourth document.
    Part 7 Year - The year the document is being processed. This digit is assigned later on in the processing cycle.
    Example: A return filed in 2015 will have processing year digit 5.
  4. On numbered blocks, compare the first return in the block to the Form 813, Document Register, or Form 1332, Block and Selection Record. If the documents have not been blocked, all documents in a block (or a batch) should be of the same type. The type of document is determined by a specific Tax Class and Document Code.

  5. The first eleven digits of the DLN of each document in a block should be the same as the corresponding digits stamped on the face of the Form 813 or Form 1332. If there is a difference, give the block to the manager for re-association of the documents with the correct block control document. It is necessary to check only the DLN of the first document in a block to make the above comparisons of DLNs.

  6. A document may have two different DLNs stamped on it because of re-blocking. If this happens, circle the incorrect DLN. The correct DLN can be determined from the Form 813, Document Register, or Form 1332, Block and Selection Record.

3.11.249.2.2.2  (01-01-2015)
Blocking Returns and Documents

  1. All returns and documents to be input to the Automatic Data Processing system are assembled into blocks of 100 documents or less before being numbered. A separate control is put on each block. A document must not be taken out of a numbered block during the Code and Edit process. However, a document can be withdrawn from a block before it is numbered. Two reasons a document may be taken out of a block are:

    1. The return is for a period prior to December 31, 1990.

    2. The return is unprocessable. See IRM 3.11.249.8, Unprocessable Procedures, for additional information.

3.11.249.2.2.3  (01-01-2015)
Document Count

  1. The total number of returns in a numbered block is usually shown on the Form 813, Document Register, or Form 1332, Block and Selection Record, by a circled number for a partial block or blank for a full block of 100. If the block is a partial and the number is not shown:

    1. Form 813 - Circle one number higher than the last sequence number on the form.

    2. Form 1332 - Circle one number higher than the last DLN in the block.

    Note:

    Do not circle the total number of documents for an unnumbered block.

3.11.249.3  (01-01-2015)
General Editing Guidelines

  1. This section provides general editing information, descriptions and various editing marks used by Document Perfection.

3.11.249.3.1  (01-01-2015)
General Editing Information

  1. Enter all edit marks on a document being input to the ADP system with brown, orange, red, green, or purple pen unless a specified instruction requires another type of marking.

    Note:

    Each center can decide the color to be used. Any reference to the color "red" means the color used by your campus.

    1. Code and Edit will correct Residual Remittance Processing System (RRPS) editing errors regarding the Name Control, Employer Identification Number (EIN), and the tax period. The edit corrections will take precedence over the RRPS editing.

      Note:

      Corrections on RRPS documents made in "red" should not be changed.

    2. Code and Edit will reject any documents that reflect an incorrect RRPS money amount, MFT, or tax class if incorrectly entered by RRPS. An incorrect RRPS money amount will usually be the result of "mixed data" for two or more returns.

  2. Edit any misplaced or illegible transcription entry to the proper transcription line. An arrow may be used if it will leave no room for doubt as to where the entry belongs.

  3. Form 8752 is required to be edited for dollars and cents.

3.11.249.3.2  (01-01-2015)
Edit Marks

  1. Edit marks are edited on the return for transcription to the ADP system through Integrated Submission and Remittance Processing (ISRP). The editing can be entered in brown, red, orange, purple or green pencil/pen.

  2. The only items edited on a return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

  3. The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "action/audit trail" for anyone who may work with the return later.

  4. For a description of specific edit marks, see the table below:

    Edit Mark Description
    "X" The "X" is used to delete tax data or to indicate that an item is not to be transcribed.
    "/" The "/" can be used when deleting a form or schedule that is not being transcribed.
    Circle Indicates that an entry is not to be transcribed. Also used to delete entity data or a received date.
    Note: If the taxpayer circles an entry, edit the entry.
    Underline Indicates that an entry is to be transcribed (e.g., Name Control, tax period, etc.).
    Arrow Indicates the correct placement of a misplaced entry. An arrow may be used if the misplaced item is close to the correct line and there is no question where the entry belongs.
    Note: A double arrow may be used if the same figure is to be transcribed in two different places (along with any required transcription data between the two arrows).
    Check Mark Indicates that an entry has been manually math verified and is correct.
    Bracket/Parenthesis Indicates a negative numerical amount.

    Note:

    Code and Edit is not required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets () or "-" sign. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry, etc.).

    Vertical Line or Decimal Point Indicates the separation of dollars and cents if no distinction was made by the taxpayer.
    Zero, Dash, None, or N/A "Zero," "Dash," "None," or "N/A" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions Edit marks entered by another area;, such as, Entity, Collections or Accounts Management (AM), are not to be re-edited except to place the marks in the correct area. Do not edit (or write) over another area's edit marks.
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.249.4  (01-01-2015)
Attachments to Documents

  1. This section describes the forms and documents filed with Form 8752 and provides information regarding what to do with each.

3.11.249.4.1  (01-01-2015)
Examination of Attachments

  1. All attachments to the return must be reviewed before the return can be considered processable. Take action as required by the attachment.

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

    2. If detached, annotate the return (edit an action/audit trail in the lower left corner going vertically up the side of the return) with the type of detachment, where it was sent, and the action date.

3.11.249.4.2  (01-01-2015)
Unrelated Attachments

  1. Request for adjustment of another document - Remove an attachment requesting an adjustment (ADP or Non-ADP) and route to Accounts Management (AM) using a Form 4227, Intra-SC Reject or Routing Slip, Form 10886, Reject Routing Slip, (or other appropriate routing slip) for subsequent action. If the attachment does not have the taxpayer’s name, address, EIN, received date, and tax period, edit this information on the attachment.

  2. Other Unrelated Attachments - Remove other unrelated attachments from the document being processed, route using a Form 4227 (or other appropriate routing slip) to the appropriate function for the necessary action, and edit an action/audit trail on the return. On the Form 4227, include the following identifying information:

    1. Name and address of the taxpayer

    2. Employer Identification Number (EIN)

    3. Received date

    4. Tax period and type of document from which attached

    5. Action required to be taken

  3. If the taxpayer writes the information on the return, photocopy the data and route to the appropriate function using a Form 4227 (or other appropriate routing slip).

  4. If an attachment should be removed because the majority of the information is unrelated to the document being processed, photocopy the applicable data needed to process the document under examination and attach to the document being processed.

3.11.249.4.3  (01-01-2015)
Related Attachments and Required Action

  1. Form 8716, Election to Have a Tax Year Other Than a Required Tax Year - This form is an election form used by partnerships (Form 1065) and S Corporations (Form 1120S) to request fiscal year filing. If Form 8752 is received with an original Form 8716 attached, follow instructions below:

    If Then
    Numbered Return,
    1. Edit Computer Condition Code (CCC) "U" on the return.

    2. Route to Entity Control following local procedures.

    3. Notate return is to be held for 2 cycles so the Form 8716 can be input.

    Unnumbered Return,
    1. Route the Form 8716 to Entity Control following local procedures.

    2. Suspend the Form 8752 processing for 2 cycles so the Form 8716 can be input.

    3. Edit an action/audit trail on the Form 8752 that Form 8716 was detached and routed to Entity Control.

  2. Form 8302, Electronic Deposit of Tax Refund of $1 Million or More - Do not detach. See IRM 3.11.249.14.13, Line 12 - Refund Payments.

3.11.249.4.4  (01-01-2015)
Other Related Attachments and Required Action

  1. Remittance Attached - Immediately give to your manager. The manager should follow the instructions in IRM 3.8.46, Discovered Remittance.

  2. If an attachment indicates that the taxpayer has included a tax payment for more than one tax period, take the following action:

    1. Numbered Return - Prepare a dummy return(s) if possible; otherwise, initiate correspondence using Form 3696, Correspondence Action Sheet, (or other approved Correspondence Action Sheet) to secure the needed data. Edit CCC "U" on the return.

    2. Unnumbered Return - Prepare a dummy return(s) if possible; otherwise, pull the return and prepare Form 3696, Correspondence Action Sheet, (or other approved Correspondence Action Sheet) to initiate correspondence to the taxpayer to secure the additional return(s) and information. If the taxpayer does not reply, enter CCC "X" .

  3. If the taxpayer files a return for the purpose of submitting a subsequent payment, or did not include the payment with the original return, enter CCC "U" . Prepare Form 4227 (or other appropriate routing slip) and notate on Form 4227, "Research - Missed or Subsequent Payment." Rejects will research to determine if the original return posted and if the payment was subsequent or missed.

  4. Ensure that any document that must remain with the return is securely stapled to prevent its loss.

  5. Detach Form 433-B, Collection Information Statement for Businesses, Form 433-D, Installment Agreement, Form 9465, Installment Agreement Request, and/or Requests for Installment Agreement and route as follows:

    If Then
    Form 8752 is processed at the Cincinnati Submission Processing Campus, Route Form 433-B, Form 433-D, Form 9465, and/or Requests for Installment Agreement to Receipt and Control.
    Form 8752 is processed at the Ogden Submission Processing Campus, Route Form 433-B, Form 433-D, Form 9465, and/or Requests for Installment Agreement to Collections.

    Note:

    When forwarding the installment agreement information, make sure the following is included as a working action/audit trail: name, EIN, type of return, tax period, received date, amount due and/or amount paid.

  6. If the taxpayer requests abatement of penalties, then send Letter 1382C to inform the taxpayer of the proper procedure to follow to request penalty abatement, if, and when a penalty is assessed.

3.11.249.4.5  (01-01-2015)
Form 720, Quarterly Federal Excise Tax Return

  1. If the taxpayer has attached a blank Form 720, Quarterly Federal Excise Tax Return, with the Form 8752, "X" Form 720 and leave attached.

  2. If the taxpayer has a completed Form 720 attached with the Form 8752:

    1. Detach and route the Form 720 to Receipt and Control at the Cincinnati Submission Processing Campus (CSPC) only if the data (entity, tax period, etc.) is NOT the same as on Form 8752. Form 720 is processed exclusively at CSPC.

    2. Do not detach if the data (entity, tax period, etc.) is the same. "X" the Form 720 and leave attached behind Form 8752.

3.11.249.5  (01-01-2015)
Correspondence

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

    1. Correspondence received from taxpayers, and

    2. Issuing correspondence to taxpayers.

  2. Error Resolution System (ERS) Action Codes or Computer Condition Code "3" (No Reply to Correspondence) do not apply to Form 8752 processing.

3.11.249.5.1  (01-01-2015)
Definition of Correspondence from Taxpayers

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

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

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

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

  2. The key to identifying taxpayers correspondence is to ask the following questions:

    1. Is the taxpayer waiting for a response from us?

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

    3. Is the taxpayer asking a question?

    Note:

    A Post-It-Note, Sticky Note, or some other type of note stuck on the return by another function; such as, "Taxpayer (TP) requests penalties be waived" , does not constitute correspondence from the taxpayer.

3.11.249.5.2  (01-01-2015)
Issuing Correspondence

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

    Exception:

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

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

    If And Then
    Correspondence is needed, Requires a response,
    1. Complete an approved Correspondence Action Sheet indicating the letter number (86C, 118C, 854C, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

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

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

    3. Edit Computer Condition Code (CCC) "U" on the return.

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

    Correspondence is needed, Does not require a response,
    1. Complete an approved Correspondence Action Sheet indicating the letter number (86C, 118C, 854C, etc.), MFT, and the appropriate paragraphs.

      Note:

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

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

    3. Forward the copy to the Correspondence area.

    4. Edit an Action Trail (e.g., "118C Sent" ) in the lower left corner going vertically up the side of the return.

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

    Note:

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

3.11.249.5.3  (01-01-2015)
Correspondence Imaging System (CIS) Returns

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

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

  3. Verify all edit marks and ensure placement is correct on a CIS return.

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

    If And Then
    The CIS return has a Form 13596, Reprocessing Returns, attached,

    Note:

    If there is an indication on the return that correspondence has been sent, do not route return to Accounts Management (AM). Continue processing the return.

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

    Caution:

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

    Note:

    Do not correspond for missing information on CIS reprocessable/reinput return.

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

3.11.249.5.4  (01-01-2015)
Use of Fax for Taxpayer Submissions

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

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

  3. Code and Edit 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.

3.11.249.6  (01-01-2015)
Signature

  1. A signature and jurat is required on every Form 8752 except on the following and/or unless the specific instructions direct otherwise:

    • Dummy returns prepared by IRS.

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

    • Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter or IRS notice.

    • Correspondence Imaging System (CIS) returns that have Form 13596 attached.

      Note:

      Do not correspond on CIS returns that have Form 13596 attached. See IRM 3.11.249.5.3, Correspondence Imaging System (CIS) Returns, for processing instructions.

  2. A "constructive signature," that is, a signature on an accompanying letter or other attachment, is not acceptable unless a perjury statement is given. In the absence of a perjury statement, the signature must be on the return.

    Note:

    Do not question any signature on the return.

    1. Internal Revenue Code (IRC) 6061 provides that any return, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with the forms or regulations prescribed by the Secretary.

    2. IRC 6064 and Treasury Regulation 301.6064-1 provides that the signature on the return, statement or other document is evidence for all purposes that the individual actually signed the document.

  3. If the jurat is altered or stricken (crossed-out), see IRM 3.11.249.1.6, Frivolous Arguments, for frivolous return instructions.

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

    1. If the "signature declaration" is altered or stricken (crossed-out), see IRM 3.11.249.1.6, Frivolous Arguments, for frivolous return instructions.

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

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

    Note:

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

  6. Process an unsigned Form 8752, see IRM 3.11.249.6.1, Unsigned Returns.

    Note:

    If the taxpayer wrote on the returned document and it appears that the taxpayer is unhappy at receiving another blank form, then perform additional research to determine if a "final" return was already received. If a final return was already received, then this form is not needed. If a final return was not received, forward the current document to the manager. The manager will make a determination whether or not to pursue securing a signature from the taxpayer.

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

3.11.249.6.1  (01-01-2015)
Unsigned Returns

  1. If a signature is missing, correspond:

    If Then
    The return is not signed on the line designated for the Form 8752 signature, or 1. Edit CCC "U" on the return.
    2. Attach Form 4227 or Form 3696 (or other approved Correspondence Action Sheet) to the return.
    3. Continue editing.
    The jurat is not present on the line designated for the Form 8752 signature (non-standard return), or
    Only the Entity information is present and there are no attachments containing tax data,

3.11.249.7  (01-01-2015)
Paid Preparer Section

  1. The Paid Preparer section is located below the Signature area at the bottom of Form 8752.

3.11.249.7.1  (01-01-2015)
Preparer Tax Identification Number (PTIN)

  1. The Preparer Tax Identification Number (PTIN) is located to the right of the Preparer's Signature in the PTIN box (Preparer's SSN or PTIN box for 2009 and prior) at the bottom right corner of Form 8752.

  2. No action is required on amended returns.

  3. The Preparer's Social Security Number (SSN) is a nine-digit number. Circle the SSN if all zeros or nines.

  4. The PTIN begins with the alpha "P" followed by an eight-digit number (e.g., PXXXXXXXX). Circle the PTIN if all zeros or all nines.

3.11.249.7.2  (01-01-2015)
Firm's Employer Identification Number (EIN)

  1. The Firm's EIN (Preparer’s EIN for 2009 and prior) is located below the Preparer’s PTIN box (Preparer's SSN or PTIN box for 2009 and prior) at the bottom right corner of Form 8752.

  2. No action is required on amended returns.

  3. The Firm's EIN (Preparer’s EIN for 2009 and prior) is a nine-digit number. Circle the EIN if all zeroes or all nines.

3.11.249.7.3  (01-01-2015)
Preparer Phone Number

  1. The Preparer’s Phone Number is located below the Firm's EIN (EIN for 2009 and prior) at the bottom right corner of Form 8752.

    If Then
    The return is amended, No action required.
    The Preparer’s Phone Number is more than 10 digits, No action required.
    The Preparer’s Phone Number is illegible or less than 10 digits, Circle the Phone Number.

3.11.249.8  (01-01-2015)
Unprocessable Procedures

  1. This section describes what constitutes unprocessable conditions, as well as the criteria required and variety of options available for making Form 8752 processable.

3.11.249.8.1  (01-01-2015)
Unprocessable Conditions

  1. Even though a return may be considered valid for filing and timeliness purposes, it may not be processable. It is unprocessable if:

    • The name is illegible or incomplete so the Name Control cannot be determined

    • The Employer Identification Number (EIN) is other than nine numeric digits (XX-XXXXXXX), and cannot be perfected from information on the return or attachment

    • The address is illegible

    • The taxpayer has combined liability for more than one type of tax

    • The tax data entries on the document are so incomplete, illegible or contradictory that the tax liability cannot be determined

    • The document has been misblocked. (e.g., Form 720 in a Form 8752 block)

    • Form 8752 has a tax period prior to December 31, 1990 (9012)

    • The return is unsigned

    • The return has only entity data and no other statements, attachments or signature by the taxpayer

    • Any condition set forth as unprocessable in the specific instructions

3.11.249.8.2  (01-01-2015)
Processing of Unprocessable Documents

  1. A return must contain specific items before it is considered processable. Examine schedules and other attachments for the information necessary to make the document processable and enter on the applicable return. The specific items needed are:

    1. A Taxpayer Identification Number (TIN);

    2. A legible name (for Name Control);

    3. A legible address;

    4. A valid tax period;

    5. Legible tax data, if tax liability is indicated; and,

    6. Signature.

  2. Returns with unresolved entity problems should be routed to Entity Control for research.

  3. If the return has multiple EINs, an EIN that is missing, "Applied for," "Pending," etc., see IRM 3.11.249.9.2, Entity Perfection - Employer Identification Number (EIN).

  4. If the name is illegible on the return, see IRM 3.11.249.9.3, Entity Perfection - Name Control.

  5. For other unprocessable conditions, initiate correspondence if you have a name and address and research cannot resolve the issue.

    1. Attach Form 3696, Form 3696-A, or other approved Correspondence Action Sheet to the front of the return.

    2. Edit CCC "U" on the return and leave it in the block (or batch).

  6. Route unprocessable returns to the Correspondence Unit using a Form 4227 (or other appropriate routing slip) for the HOLD FILE for the following reasons:

    1. The return is being reinput after correspondence and/or research, but the document is still unprocessable.

    2. The return contains a signature (regardless of whose signature it is), but no entity data. In this instance, research may not produce the entity name because the signature is of a bookkeeper, secretary, etc.

    3. The return contains an illegible signature; however, the first alpha letter of the last name can be determined, but there is no entity data. Research, in this instance, is not necessary and it should be forwarded to the HOLD FILE for filing under the alpha letter of the last name.

      Note:

      For your information, the HOLD FILE will be searched when there is a taxpayer inquiry and it is possible the return may be in this file. The returns held in this file are retired to the Federal Records Center (FRC) in accordance with IRM 1.15.29, Records Control Schedule for Submissions Processing Campus Records.

  7. Do not send the following unprocessable returns to the HOLD FILE:

    1. Overpaid returns on which the taxpayer replied but it is still unprocessable or on which no reply has been received. Edit Computer Condition Code "X" .

    2. Returns which contain no entity data or signature. If the only entries on the return are figures, give the return to your manager for administrative determination. Likewise, give your manager returns with illegible signatures where the alpha letter of the last name cannot be determined.

    3. Returns falling into the category of undeliverable. This includes returns with incomplete entity that cannot be identified by a signature. These returns should be held for one year and disposed of in accordance with IRM Section 1.10.1, The IRS Correspondence Manual. Do not send to the Federal Records Center.

3.11.249.8.3  (01-01-2015)
Processing Unprocessable Returns with Replies

  1. When a signed perjury (declaration) is received, attach it to the return.

  2. Complete the return based on the information submitted by the taxpayer.

  3. If an IRS letter is attached which bears an IRS received date stamp, but there is no date stamp on the return, edit the date (as stamped on the attachment) on the return.

  4. If two received dates are on the return, circle the original (earliest) received date, if it was not previously circled.

3.11.249.8.4  (01-01-2015)
Processing No Reply Cases

  1. Only one correspondence attempt is required. If a reply is not received after the prescribed suspense period, input the return.

  2. Edit CCC "X" on an overpaid return. Do not change the received date.


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