3.12.3  Individual Income Tax Returns (Cont. 35)

3.12.3.79 
Error Codes 322-339

3.12.3.79.3  (01-01-2014)
Error Code 326/626 - Combined Schedule H Tax

  1. Error Code 326/626 instructions follow.

3.12.3.79.3.1  (01-01-2014)
Fields Displayed—Form 1040 (EC 326)

  1. This table shows the fields displayed.

    Error Code 326: Displayed fields
    1040 Field name
    01TXP Tax Period
    0459A Combined Household Employment Taxes
    >>>> Combined Household Employment Taxes
    4408 Total SS/Medicare/Federal Taxes
    44TOT> Schedule H Total SS/Med TaxSection 44 Computer
    44FTX FUTA Tax
    44FTX> FUTA Tax Section 44 Computer
    44HTX> Schedule H Household Employment Sec 44 Computer
    4508 Total SS/Medicare/Federal Taxes
    45TOT> Total SS/Medicare/Income Taxes Computer
    45FTX FUTA Tax
    45FTX> FUTA Tax Computer
    45HTX> Household Employment Taxes Computer
    44CR1> Section 44 Credit Reduction State–1 Computer
    44CR2> Section 44 Credit Reduction State–2 Computer
    44CR3> Section 44 Credit Reduction State–3 Computer
    44CR4> Section 44 Credit Reduction State–4 Computer
    44CR5> Section 44 Credit Reduction State–5 Computer
    45CR1> Section 45 Credit Reduction State–1 Computer
    45CR2> Section 45 Credit Reduction State–2 Computer
    45CR3> Section 45 Credit Reduction State–3 Computer
    45CR4> Section 45 Credit Reduction State–4 Computer
    45CR5> Section 45 Credit Reduction State–5 Computer
      Section XX Not Present

3.12.3.79.3.2  (01-01-2014)
Invalid Conditions (EC 326)

  1. Error Code 326 generates when both the following exist:

    1. Combined Household Employment Taxes (Field 0459A) is not equal to Combined Household Employment Taxes Computer.

    2. The difference is not attributable to Error Code 320, 322 or 324.

  2. Error Code 626 generates when both the following exist:

    1. A math error is not present.

    2. The return is a Non-Compute.

3.12.3.79.3.3  (01-01-2014)
Correction Procedures (EC 326)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

    Note:

    For the remainder of this text Schedule H will be referred to as Section 44; however, all instructions will apply equally to Sections 44 and 45.

  2. Use the following table to correct Schedule H:

    If... Then...
    A] Schedule H is present, but has not been transcribed, GTSEC 44/45 and enter all fields of data.
    B] An amount for Household Employment Taxes (Field 0459A) is claimed and Schedule H is not attached, SSPND 211.
    C] The taxpayer incorrectly transferred the amount on line 6 to line 23 (line 8 to line 25 -TY10, line 26 - TY09 and prior),
    See note.
    Assign TPNC 280.
    D] The taxpayer made an error adding lines 23 and 14/22 (lines 25 and 16/24 for TY10, lines 26 and 17/25 - TY09 and prior),
    See note.
    Assign TPNC 280.
    E] The taxpayer incorrectly transferred Schedule H, line 24 (line 26 - TY10, line 27-TY09 and prior) to Form 1040, line 59a (line 59 -TY10 and prior), Assign TPNC 280.

    Note:

    Field 44HTX> represents the computer's amount for Schedule H, line 24 (line 26 - TY10, line 27 - TY09 and prior).

3.12.3.79.3.4  (01-01-2014)
Correction Procedures (EC 626)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

  2. Refer to all instructions for EC 326 and IRM 3.12.3.5.9 for Non-Compute information.

  3. Enter C in the Clear Field if there are no corrections to be made.

3.12.3.79.3.5  (01-01-2014)
Allowable Taxpayer Notice Codes (Form 1040) (EC 326)

  1. This table shows the allowable Taxpayer Notice Codes for Error Code 326.

    Note:

    The following Taxpayer Notice Codes are shown in a condensed format. The complete version of each is listed in the Taxpayer Notice Codes, Exhibit 3.12.3–2, in the back of the IRM.

  2. If you are processing a conversion—a return converted to Form 1040—you must assign TPNC 111 in addition to other applicable notice codes.

    Note:

    Always assign TPNC 111 first.

    TPNC Description
    100  
    111 Your return has been converted to a Form 1040.
    218 We computed your tax for you.
    280 Computed or figured Total Schedule H Taxes incorrectly.
    558 You gave us information that changed the amount of tax you owe.
    *** Any previously assigned TPNC.

3.12.3.79.4  (01-01-2014)
Error Code 327 — (CE) Combined Schedule H Tax With No Income

  1. Error Code 327 instructions follow.

3.12.3.79.4.1  (01-01-2014)
Fields Displayed—Form 1040 (EC 327)

  1. This table shows the fields displayed.

    Error Code 327: Displayed fields
    1040 Field name
    01TXP Tax Period
    0459A Combined Household Employment Taxes
    >>>> Combined Household Employment Taxes Computer
    4401 Total Social Security Wages
    4403 Total Medicare Wages
    44TOT> Schedule H Total social Security Medicare Tax Computer
    44NFV Total Non-FUTA Tax Verified (ERS Input Only)
    44TFW Total FUTA Wages
    44FTV FUTA Tax Verified (ERS Input Only)
    4501 Total Social Security Wages
    4503 Total Medicare Wages
    45TOT> Schedule H Total SS Med Tax Section 45 Computer
    45NFV Total Non-FUTA Tax Verified (ERS Input Only)
    45TFW Total FUTA Wages
    45FTV FUTA Tax Verified (ERS Input Only)

3.12.3.79.4.2  (01-01-2014)
Invalid Conditions (EC 327)

  1. Error Code 327 generates when Combined Household Employment Taxes Computer (Field 0459A>) is present and neither of the following fields are present:

    1. Field 44TNT>, Tentative Social Security/Medicare/Federal Taxes Computer.

    2. Field 44TFW, Total FUTA Wages.

3.12.3.79.4.3  (01-01-2014)
Correction Procedures (EC 327)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

    Note:

    For the remainder of this text Schedule H will be referred to as Section 44; however, all instructions will apply equally to Sections 44 and 45.

  2. For TY2011 some taxpayers are allowed to compute line 14 using .008 for wages paid before JUly 1st and .006 for wages paid after June 30th. Determine if line 14 has been calculated using the .008 by mutyplying line 13 by .008.

    1. If the result is equal to the amount on line 14, then enter the line 14 amount into Field 44FTV or 45FTV.

    2. If the result is not equal to line 14, then SSPND 211 for clarification of wages and percentage used. Use the following correspondence literal:
      Please provide the amount of wages included on line 13 that were computed using the .008 percentage rate in the computation for the amount reported on line 14 of Schedule H.

    3. If the taxpayer replies with the break drown, then manually compute the amount for line 14 using the information provided and enter the result into Field 44FTV or 45FTV.

    4. If the taxpayer does not reply with the break drown, then asign TPNC 277.

  3. An entry must be present in Field 44TFW, Total FUTA Wages (Schedule H, line 13/18 (line 15/20 -TY10, line 16/21 - TY09 and prior)), in order for FUTA Tax to be computed. When the FUTA indicator (Field 44FIN) is blank, the computer will apply (for math purposes) Section A of Part II, Schedule H.

  4. Use the following table when Field 0459A> has an entry:

    If the taxpayer... And Schedule H... Then...
    A] Has claimed an amount for Household Employment Taxes (Field 0459A), Is attached, GTSEC 44/45 and enter all fields of data.
    Is not attached, SSPND 211.
    B]≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    C] Has an entry on line 6, Has no entries on lines 1, 3 or 5, 1. Manually compute by dividing the line 6 entry by .133 (13.3%) (.153 (15.3%) for TY10 and prior) (see note).
    2. Enter the result in Fields 4401 and 4403.
    Note: Consider all reported wages. It is not known how many employees are represented by the wages on line 6.
    D] Has wages on lines 1 and 3 that are less than $1,700 ,   1. Delete any entries of less than $1,700 in Fields 4401 and 4403.
    2. Assign TPNC 279 when EC 322 displays.
    Note: The computer will not compute SST and Medicare Tax when wages are less than $1,700 .
    E] Indicates an adjustment related to Social Security and/or Medicare Tax,   Enter line 6 (line 8 - TY10 and prior) amount in Field 44NFV.
    F] Has an entry on line 6 (line 8 - TY10 and prior), No entries on lines 1, 3 and 5, 1. Manually compute lines 1 and 3, by dividing the line 6 entry by .133 (13.3%) (line 8 entry by .153 (15.3%) for TY10 and prior).
    2. Enter the result in Fields 4401 and 4403.
    G] Has an entry for FUTA Tax on line 14/22 (line 16/24 for TY10, line 17/25 - TY09 and prior) with no intervening amounts,   1. Manually compute by dividing the Field 44FTX by .008 (0.8%).
    2. Enter result in Field 44FTW (entry must be present for computer to figure tax).
    H] Has entries present in both Sections A and B, All of the boxes on lines 8 - 10 (lines 10-12 for TY10 and prior) are answered yes, Blank Field 44FIN. (When Field 44FIN is blank, the computer will apply Section A.)
    At least one box on lines 8 - 10 (lines 10 - 12 for TY10 and prior) is answered no, Enter 1 in Field 44FIN.
    I] Indicates Form 940/940EZ has already been filed for household employees,

    Note:

    Indications that the taxpayer filed a Form 940/940EZ can usually be identified by "write-in" notations on Schedule H, in Other Taxes or Payment area.

      1. Delete the Part II information.
    2. Adjust the fields in Sections 04 and 05 to back out the FUTA tax amount.
    3. Do not assign a TPNC for this issue.

3.12.3.79.4.4  (01-01-2014)
Prior Year (EC 327)

  1. Refer to the following table for prior-year wage amounts:

    If...   Then...
    The taxpayer has wages on Schedule H, lines 1 and 3, that are less than $1,600 for TY08, $1,500 for TY07 and TY06; $1,400 for TY05 through TY03; $1,300 TY01 and TY02; $1,200 for TY00; $1,100 for TY99 and prior,   1. Delete any entries of less than $1,600 for TY08, $1,500 for TY07 and TY06; $1,400 for TY05 through TY03; $1,300 TY01 and TY02; $1,200 for TY00; $1,100 for TY99 and prior, in Fields 4401 and 4403.
    2. Assign TPNC 279 when EC 322 displays.

3.12.3.79.5  (01-01-2014)
Error Code 328, First Time Homebuyer Credit No, Payment on Return

  1. Error Code 328 instructions follow.

3.12.3.79.5.1  (01-01-2014)
Fields Displayed, Form 1040, Form 1040A, and Form 1040EZ (EC 328)

  1. The following fields are displayed.

    1040 1040A 1040EZ Field Name
    CL CL CL Clear Code
    02RI 02RI 02RI Revalidation Indicator
    01TXP 01TXP 01TXP Tax Period
    01FSC 01FSC 01FSC Filing Status Code
    01CCC 01CCC 01CCC Computer Condition Code
    01RPC 01RPC 01RPC Return Processing Code
    01SPC 01SPC 01SPC Special Processing Code
    01PS 01PS 01PS Primary TIN
    01PNC 01PNC 01PNC Primary Name Control
    >>>> >>>> >>>> NAP EIF Primary Name Control Underprint
    01SS 01SS 01SS Secondary TIN
    01SNC 01SNC 01SNC Secondary Name Control
    >>>> >>>> >>>> NAP EIF Secondary Name Control Underprint
    0459B     First Time Homebuyer Credit Repayment Amount
    >>>>     Combined First Time Homebuyer Credit Repayment Computer
    0461 0435 0410 Total Tax IMF
    >>>> >>>> >>>> Total Tax IMF Computer
    0461> 0435> 0410> Total Tax Liability Computer
    58SSN     Sect. 58 Social Security Number
    5803     Sect. 58 Disposition Code
    PNFH> PNFH> PNFH> Primary NAP First Time Homebuyer Credit Amount
    PNRI> PNRI> PNRI> Primary NAP FTHBC Repayment Installment
    5808     Sect. 58 Homebuyer Credit Repayment
    58FRC>     Sect. 58 Homebuyer Credit Repayment Computer
      PFRC> PFRC> F5405 Homebuyer Credit Repayment S58 Computer
    59SSN     Sect. 59 Social Security Number
    5903     Sect. 59 Disposition Code
    SNFH> SNFH> SNFH> Secondary NAP First Time Homebuyer Credit Amount
    SNRI> SNRI> SNRI> Secondary NAP FTHBC Repayment Installment
    5908     Sect. 59 Homebuyer Credit Repayment
    59FRC>     Sect. 59 Homebuyer Credit Repayment Computer
      SFRC> SFRC> F5405 Homebuyer Credit Repayment S59 Computer
          Section 58/59 Not Present

3.12.3.79.5.2  (01-01-2014)
Invalid Conditions (EC 328)

  1. If Tax Period is not 201012 or greater and

    1. either Primary/Secondary (PNRI>/SNRI>) NAP First Time Homebuyer Installment is significant, or

    2. Document Code is not 11, 12, 21 or 22, or

    3. First Time Homebuyer Installment (0459B) is not significant.

3.12.3.79.5.3  (01-01-2014)
Correction Procedures (EC 328)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

  2. Enter a "C" in the Clear Field.

3.12.3.79.6  (01-01-2014)
Error Code 329, Repayment of the First-Time Homebuyers Credit, Form 5405

  1. Error Code 329 instructions follow.

3.12.3.79.6.1  (01-01-2014)
Fields Displayed, Form 1040 (EC 329)

  1. The following fields are displayed.

    Error Code 329/629: Displayed fields
    1040 Field name
    01TXP Tax Period
    01RPC Return Processing Code
    01SPC Special Processing Code
    01FSC Filing Status Code
    01PS Primary SSN
    01SS Secondary SSN
    58SSN Section 58 Social Security Number
    5801 Date of Disposition of Home or Change in Status of Home
    5803 Section 58 Disposition Code
    5804 Credit Claimed in Prior Years
    5805 Repayment of Home Purchased in 2008
    5807 Section 58 Gain on Sale of Main Home
    PNFH> Primary NAP First-Time Homebuyer Credit
    PNRI> Primary NAP FTHBC Repayment Installment
    PNDH> Primary NAP Duplicate Homebuyer Credit Indicator
    5808 Section 58 Homebuyer Credit Repayment
    58FRC> Section 58 Homebuyer Credit Repayment Computer
    5808V Section 58 Homebuyer Credit Repayment Verified (ERS Input Only)
    59SSN Section 59 Social Security Number
    5901 Date of Disposition of Home or Change in Status of Home
    5903 Section 59 Disposition Code
    5904 Credit Claimed in Prior Years
    5905 Repayment of Home Purchased in 2008
    5907 Section 59 Gain on Sale of Main Home
    SNFH> Secondary NAP First-Time Homebuyer Credit
    SNRI> Secondary NAP FTHBC Repayment Installment
    SNDH> Secondary NAP Duplicate Homebuyer Credit Indicator
    5908 Section 59 Homebuyer Credit Repayment
    59FRC> Section 59 Homebuyer Credit Repayment Computer
    5908V Section 59 Homebuyer Credit Repayment Verified (ERS Input Only)
    0459B First-Time Homebuyer Credit Repayment
    0461 Total Tax IMF
    0461> Total Tax Taxpayer
    >>>> Total Tax Computer

3.12.3.79.6.2  (01-01-2014)
Invalid Conditions (EC 329)

  1. Error Code 329 generates when there is a math error and any of the following conditions is present:

    1. Tax period is 200912 and subsequent.

    2. Sections 58 and 59 are present and
      Sections 58 and 59 First-Time Homebuyer Credit Repayment do not equal Sections 58 and 59 First-Time Homebuyer Repayment Computer and
      Non-Compute Code 0 is present.

3.12.3.79.6.3  (01-01-2014)
Correction Procedures (EC 329)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

    Note:

    For the remainder of this text Form 5405 will be referred to as Section 58; however, all instructions will apply equally to Sections 58 and 59.

  2. Enter R in Field 02RI and transmit to revalidate the return against NAP and retrieve the proper NAP data.

  3. Taxpayers who died within the year of the return being filed that purchased a home in 2008 are not required to make a repayment installment. Ensure Computer Condition Code F (primary taxpayer), 9 (secondary taxpayer), or A (both taxpayers) is correct in Field 01CCC. See IRM 3.12.3.53.5.4 (4).

3.12.3.79.6.4  (01-01-2014)
Part III, Form 5405, Disposition or Change in Use of Main Home (EC 329)

  1. If there is no date on line 1 (line 11 for TY11 and TY10) of Form 5405 and the box at line 2 (line 12 for TY11 and TY10) or any of the boxes at line 3 (line 13 for TY11 and TY10) is marked, SSPND 211 for the date on line 1 (11 for TY11 and TY10).

  2. If the box at line 2 of Form 5405 is marked (line 11 for TY11 and TY10), enter

    1. Z in Field 01SPC if Form 5405 is for primary taxpayer.

    2. 7 in Field 01SPC if Form 5405 is for secondary taxpayer.

    Note:

    If the FSC is 2 and only one Form 5405 is present and a figure is in Field PNRI> and SNRI>, add the missing section 58 or 59 with GTSEC and enter the TIN appropriate for the section and transmit. Enter SPC Z and SPC 7 when EC 329 returns.

  3. If no box has been marked at line 3a through 3h and line 4, 7, or 8 of Form 5405 (13a through 13h and line 14, 17, or 18 of Form 5405 for TY11 and TY10) has an amount, SSPND 211 for the disposition of the house at line 3 (13 for TY11 and TY10).

    Note:

    If no amount is present on line 7 (17 for TY11 and TY10) and line 8 (18 for TY11 and TY10) is $267 ($534 for FSC 2) or less, do not correspond. Enter the letter I in Field 5803 or 5903 instead.

  4. If the box on line 3a or 3f (13a or 13f for TY11 and TY10) has been marked and no amount is present on line 7 (17 for TY11 and TY10), SSPND 211 for entry required.

  5. If any box on line 3 of Form 5405 (line 13 for TY11 and TY10) has been marked, ensure Field 5803 or 5903 contains the proper disposition code as follows:

    TY12
    If the taxpayer checks box Enter disposition code
    3a A
    3b B
    3c C
    3d D
    3e E
    3f F and refer to paragraph 6, below.
    3g G and refer to paragraph 7, below.
    3h H

    TY11 and TY10
    If the taxpayer checks box Enter disposition code
    13a A
    13b B
    13c C
    13d D
    13e E
    13f F and refer to paragraph 6, below.
    13g G and refer to paragraph 7, below.
    13h H

  6. If disposition code F is present—box 3f (13f for TY11 and TY10) is marked—follow the steps below.

    1. Compute line 4 through 8 (14 through 18 for TY11 and TY10) and enter the correct amount of the gain into Field 5807 (Form 5405 Primary) or 5907 (Form 5405 Secondary) and the correct amount for line 8 (18 for TY11 and TY10) 18 into Field 5808V (Form 5405 primary) or 5908V (Form 5405 Secondary).

      Note:

      Use Part V of Form 5405 to determine if the taxpayer has a gain and or loss.

    2. If the taxpayer has a loss then delete the amount in Field 5807 (Form 5405 primary) or 5907 (Form 5405 secondary) if present and enter disposition code B into Field 5803 or 5903.

  7. If dispostion code G is present—line 3g (13g for TY11 and TY10) is marked—delete the amount in Field 5807 (Form 5405 primary) or 5907 (Form 5405 secondary) if present and enter disposition code G into Field 5803 or 5903.

  8. Taxpayers may check box "a and g" , "b and g" , or "b, g, and f" on line 3 (13 for TY11 and TY10) of Form 5405. If multiple boxes are marked enter the proper disposition as follows:

    1. If box "a and g" are marked, enter A in Field 5803 or 5903.

    2. If box "b and g" are marked, enter B in Field 5803 or 5903.

    3. If box "b, g, and f" are marked and line 17 is blank, dash or zero, enter B in Field 5803 or 5903.

  9. If multiple boxes, other than those listed in (6), are marked on line 3 (line 13 for TY11 and TY10) of Form 5405, SSPND 211 with the following literal:
    TY12: "You checked more than one box on line 3 of Form 5405. Please tell us which one box best describes the disposition of your main home."
    TY11 and TY10: "You checked more than one box on line 13 of Form 5405. Please tell us which one box best describes the disposition of your main home."
    Exception: If the only multiple boxes marked are 13a and 13g, or 13b and 13g, or 13b, 13g, and 13f do not correspond.

  10. If FSC is 2 and only one Form 5405 is attached, do the following:

    1. If Disposition Code "B" , "E," or "H" is present in Field 5903, line 8 (18 for TY11 and TY10) of Form 5405 is zero, and an amount is present in field PNRI> and SNRI> both, GTSEC 59 and enter
      • the secondary TIN in Field 59SSN.
      • any data on line 1, 2, and 3 (11, 12 and 13 for TY11 and TY10) of Form 5405 in the corresponding field 5901, 5912 and 5903.
      • the amount on line 7 (17 for TY11 and TY10) of Form 5405 in field 5907.
      • the amount on line 8 (18 for TY11 and TY10) of Form 5405 in field 5908.

    2. If an amount is present in field PNFH> and SNFH> both and the sum of field PNFH> and SNFH> is equal to line 8 (18 for TY11 and TY10) of Form 5405, GTSEC 59 and enter
      • the secondary TIN in Field 59SSN.
      • any data on line 1, 2, and 3 (11, 12 and 13 for TY11 and TY10) of Form 5405 in the corresponding field 5901, 5912, and 5903.

      Note:

      If no entry is present on line 11, 12, or 13 see paragraph (3) above.


      • one-half of the amount on line 7 (17 for TY11 and TY10) of Form 5405 in field 5907.
      • one-half of the amount on line 8 (18 for TY11 and TY10) of Form 5405 in field 5908.
      • one-half of the amount on line 7 (17 for TY11 and TY10) of Form 5405 in field 5807.
      • one-half of the amount on line 8 (18 for TY11 and TY10) of Form 5405 in field 5808.

3.12.3.79.6.5  (01-01-2014)
Disposition Code I (EC 329)

  1. Follow the procedures in IRM 3.12.3.79.7.10 before applying the procedures here.

  2. Disposition Code "I" indicates that no disposition code at line 3 (13 for TY11 and TY10) applies to the payment or the payment by the taxpayer is equal to or greater than the required payment.

  3. If FSC is 2, one Form 5405 is filed and field PNRI> and SNRI> have an amount, do the following:

    1. If the amount on line 8 (18 for TY11 and TY10) of Form 5405 is greater than the combined amount of field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary SSN in Field 59SSN.
      • the letter I in field 5903.
      • one-half of the amount on line 8 (18 for TY11 and TY10) of Form 5405 in field 5908 .
      • one-half of the amount on line 8 (18 for TY11 and TY10) of Form 5405 in field 5808.

    2. If the amount on line 8 (18 for TY11 and TY10) of Form 5405 is equal to the combined amount of field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary TIN in field 59SSN.
      • the letter I in Field 5903.
      • the amount in field SNRI> in field 5908.
      • the amount in field PNRI> in field 5808.

    3. If the amount on line 8 (18 for TY11 and TY10) of Form 5405 is greater than Field PNRI>, but less than the combined amount of field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary TIN in field 59SSN.
      • the letter I in field 5903.
      • the difference between the amount on line 8 (18for TY11 and TY10) of Form 5405 and the amount in field PNRI> in Field 5908.
      • the amount in field PNRI> in field 5808.

  4. If no box is marked at line 3 (13 for TY11 and TY10) and an amount is present in field PNRI> (primary taxpayer) or SNRI> (secondary taxpayer)

    And Form 5405 is for the Then enter
    primary taxpayer the letter I in field 5803
    secondary taxpayer the letter I in field 5903.

  5. If the FSC is 1, 3, 4, 5, 6, or 7 and the amount on line 8 (18 for TY11 and TY10) of Form 5405 is greater than the amount in Field PNRI>, enter disposition code "I " is in field 5803 if it's not already there.

3.12.3.79.6.6  (01-01-2014)
Line 8, Field 58FRC> and 59FRC> (EC 329)

  1. Before grappling with instructions in this sub-section ensure that you have followed all previous relevant procedures.

  2. Confirm whether taxpayers took the First-Time Homebuyer credit.

    1. If FSC is 2 , and no amount is present in Field PNFH>, delete the entry in Field 5803.

    2. If FSC is 2 , and no amount is present in Field SNFH>, delete the entry in Field 5903.

    3. If FSC is not 2 and no amount is present in Field PNFH>, delete the entry in Field 5803.

    4. If the entry for Field 5803 or 5903 was deleted, assign TPNC 100 with the following literal:
      "We changed the amount of First-Time Homebuyer Credit Repayment included in the total for total tax on page 2 of your tax return. According to our records, you do not owe a repayment of the credit."

  3. If the amount in Field 0459B differs from its computer underprint, use the following table:

    If And Then
    A] disposition code A, C, D, F, or G is present in field 5803, field 5808 differs from Field 58FRC> assign TPNC 649.
    B] disposition code A, F, or G is present in Field 5903, field 5908 differs from Field 59FRC>, assign TPNC 649.
    C] disposition code C or D is present in Field 5903 field 5908 differs from Field 59FRC> enter the figure on line 8 of the secondary taxpayer's Form 5405 in field 5908V.
    D] Disposition code B or "E" is present in Field 5803, Field 5808 is greater than 0 (zero) and Field 58FRC> is blank, assign TPNC 649.
    E] Disposition code "B" or "E" is present in Field 5903 Field 5908 is greater than 0 (zero) and Field 59FRC> is blank,
    F] Disposition code "H" is present in Field 5803, or CCC "A" or "F" is present in Field 01CCC, Field 5808 is greater than 0 (zero) and Field 58FRC> is blank,
    1. Delete the entry in Field 5803.

    2. Assign TPNC 649.

    .
    G] Disposition code "H" is present in Field 5903, or CCC "A" or "9" is present in Field 01CCC, Field 5908 is greater than 0 (zero), and Field 59FRC> is blank,
    1. Delete the entry in Field 5903.

    2. Assign TPNC 649.

    H] Disposition Code A through H is not present in Field 5803 and the amount on line 18 of Form 5405 is not equal to Field 58FRC>, 1. An amount is present in Field PNRI>, Assign TPNC 649. .
    2. No amount is present in Field PNRI>, Assign TPNC 649.
    I] Disposition Code A through H is not present in Field 5903 and the amount on line 18, Form 5405, is not equal to Field 59FRC>, 1. An amount is present in Field SNRI>, Asign TPNC 649..
    2. No amount is present in Field SNRI>, Assign TPNC 649.
    J] Form 5405 is missing, Field PNRI> or SNRI> has an amount, Assign TPNC 648.

3.12.3.79.6.7  (01-01-2014)
Unpostable Payments, UPC 189 with RC 9

  1. A payment or non-payment of the First-Time Homebuyer Credit may come back to ERS with unpostable code 189, reason code 9. Procedures for processing these unpostable returns appear below. ERS has to renumber the 1040A and 1040EZ with UPC 189 and RC 9 to Form 1040 first. Instructions for renumbering appear in IRM 3.12.37. The common reasons for the unpostable payment or non-payment are that

    • the taxpayer forgot to make a repayment or

    • the repayment has to be divided between the primary and secondary taxpayers or

    • the taxpayer is reporting a disposition and it has to be applied to the secondary taxpayer too or

    • the taxpayer has died and is no longer required to pay back the credit, but the programming still requires a payment.

  2. Form 1040, absent payment or underpayment. The taxpayer didn’t pay at all or paid too little. The payment on line 59b of Form 1040 is less than the sum of the figure in field PNRI> and SNRI>.

    Note:

    The Form 1040 described in this subsection includes the Form 1040A and Form 1040EZ with the unpostable code 189–9 and renumbered to From 1040.

    1. Retrieve the return with GTREC.
      • Stop. Do not clear the return.
      • Enter R in field 02RI and transmit.
      • GTSEC 58 and enter 250.00 in Field 5808 and transmit.
      • Enter C in the clear field.
      • Delete the entry in field 05PC.

    2. Error code 329 appears.
      • Enter the primary taxpayer’s TIN in field 58SSN.
      • Enter the figure in field PNRI> in field 5808.
      • Enter the letter I in field 5803. Read the caution below before proceeding.
      • Follow the procedures in the preceding bullets for section 59 if field SNRI> is significant.
      • Transmit.

      Caution:

      If only one taxpayer in a joint return is required to repay the credit, the underprint for total tax may already include the payment. The letter I in field 5803 or 5903 may double the taxpayer’s payment of the credit in the underprint for total tax. If it does double the taxpayer’s payment, remove the letter I from field 5803 or 5903.

    3. Error code 330 appears.
      Send TPNC 648 or 649 according to the condition in the return.

  3. Form 1040, incorrect division of payment. The return cannot be posted because the repayment was not correctly divided between the primary and secondary taxpayer. The payment on line 59b is equal to or greater than the sum of PNRI> and SNRI>.

    1. Retrieve the return with GTREC.
      • Stop. Do not clear the return.
      • Enter R in field 02RI and transmit.
      • GTSEC 58 and enter 250.00 in Field 5808 and transmit.
      • Enter C in the clear field.
      • Delete the entry in field 05PC.

    2. Error Code 329 appears.
      • Enter the primary taxpayer’s TIN in Field 58SSN.
      • Enter the greater of the figure in field PNRI> or half the payment on line 59b in Field 5808.
      • Enter the letter I in Field 5803.
      • Follow the procedures in the preceding bullets for section 59 if Field SNRI> is significant.
      • Transmit.

  4. Form 1040, dead taxpayer

    1. Create a dummy Form 5405 for each taxpayer, Section 58 for the primary taxpayer and Section 59 for the secondary taxpayer.
      • Enter each taxpayer’s TIN in the appropriate field, 58SSN or 59SSN.
      • Enter disposition code H in Field 5803 or 5903 of the dead taxpayer’s dummy Form 5405.
      • Enter the payment on line 59b of Form 1040 in Field 5808 or 5908 of the Form 5405 for the surviving spouse.
      • Enter the sum of field PNRI> and SNRI> in Field 5808 or 5908 if line 59b of Form 1040 is blank.

  5. Form 1040, required payment less than $100

    1. If the taxpayer has included the payment in total tax and total tax is correct and total tax is correct, enter the taxpayer’s figure for total tax in field 0461V.

    2. If the taxpayer hasn’t included the payment in total tax, refigure total tax, making sure that it includes the required payment and taking any other corrections into account. Enter the correct total tax inFfield 0461V.

    3. Send TPNC 648 or 649, along with any other required TPNCs, at error code 360 according to the condition in the return.

3.12.3.79.6.8  (01-01-2014)
Allowable Taxpayer Notice Codes (Form 1040) (EC 329)

  1. This table shows the allowable Taxpayer Notice Codes for Error Code 329.

    Note:

    The following Taxpayer Notice Codes are shown in a condensed format. The complete version of each is listed in Exhibit 3.12.3-2, Taxpayer Notice Codes, in the back of the IRM.

  2. If you are processing a conversion—a return converted to Form 1040—you must assign TPNC 111 in addition to other applicable notice codes.

    Note:

    Always assign TPNC 111 first.

    TPNC Description
    100  
    111 Your return has been converted to a Form 1040.
    648 According to our records a repayment installment for the First-Time Homebuyer Credit received is due. We have calculated the repayment installment due and adjusted your total tax.
    (Form 1040)
    649 We changed or reduced the amount claimed as a repayment of First-Time Homebuyer Credit on page 2 of your tax return. The change or reduction was made because:
    • of an error in the computation of the amount on Form 5405, and/or
    • of an error in the transfer of the amount from Form 5405 to your Form 1040 and/or,
    • a repayment of the credit is not required from the taxpayer who died during or before the tax year being filed and/or
    • information on your return indicates you are not required to repay the credit due to a disposition or change in the use of your main home by checking box 13b or 13e of Form 5405, and/or

    according to our records you do not owe a repayment of the credit.
    *** Any previously assigned TPNC

3.12.3.79.7  (01-01-2014)
Error Code 331, Form 8959, Additional Medicare Tax

  1. Error Code 331 instructions follow.

3.12.3.79.7.1  (01-01-2014)
Fields Displayed, Form 1040 (EC 331)

  1. This table shows the fields displayed.

    1040 Fields Displayed
    CL Clear Field
    01TXP Tax Period
    01FSC Filing Status Code
    01PS Primary SSN
    01SS Secondary SSN
    0460A Additional Medicare Tax Taxpayer
    7118> Additional Medicare Tax Computer
    7118V Additional Medicare Tax Verified (ERS Input Only)
    0460 Other Taxes
    >>>> Other Taxes Computer
    0461 Total Tax IMF
    >>>> Total Tax IMF Computer
    0461> Total Tax Liability
    7101 Medicare Wages
    7102 Unreported Tips from Form 4137
    2406 Section 24 Unreported Tips
    2506 Section 25 Unreported Tips
    7103 Unreported Wages from Form 8919
    6106 Section 61 Total Wages
    6206 Section 62 Total Wages
    7107 Additional Medicare Tax on Wages
    7107> Additional Medicare Tax on Wages Computer
    17TNE> Section 17 Total Net Earnings Computer
    18TNE> Section 18 Total Net Earnings Computer
    7108 Section 71 Self Employment Income
    7113 Additional Medicare Tax on Self Employment Income
    7113> Additional Medicare Tax on Self Employment Income Computer
    7114 Railroad Retirement Compensation
    7117 Tier I Additional Medicare Tax
    7117> Tier I Additional Medicare Tax Computer
    7119 Medicare Tax Withheld
    7121> Medicare Tax Withholding Computer
    7122> Additional Medicare Tax Withholding on Medicare Wages Computer
    7123 Tier I Additional Medicare Tax Box 14 W-2
    7124 Total Additional Medicare Tax Withholding
    7124> Total Additional Medicare Tax Withholding Computer
      Section 71 Not Present

3.12.3.79.7.2  (01-01-2014)
Invalid Conditions (EC 331)

  1. Error Code 331 generates when there is a math error and any of the following conditions is present:

    1. Tax period is not 201312 or later, or

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.3.79.7.3  (01-01-2014)
Correction Procedures (EC 331)

  1. If Form 8959 is present on a paper return, Code and Edit is instructed to edit the taxpayer's amount form Line 18, Form 8959, to the right of Form 1040, line 60 and label it "60a" . This amount should be transcribed in Field 0460A. On MeF returns, the taxpayer's amount from line 18, form 8959 is populated into Field 0460A.

  2. Correct coding and transcription errors and misplaced entries in displayed fields.

  3. If Fields 7107, 7113 or 7117 differ from the computer underprint and line 18, Form 8959 and the Field 7118> are the same, SSPND 410 to Lead Examiner, The lead will initiate a Letter 2719C to the taxpayer.

  4. If Field 7124 and 7124> differ, follow the procedures below:

    1. Add all amounts from Box 5, Form W-2(s). If this total I less than taxpayer's figure on Form 8959, line 1 by more than $1 per W-2, SSPND 211 requesting support for Form 8959, line 1. If this total is greater than taxpayer's figure on Form 8959, line 1, by more than $1 per W-2, (either above or below taxpayer's figure), enter the computed sum in Field 7101.

    2. Add all amounts from Box 6 of Form W-2(s). If this total differs from Form 8959, line 19, by more than $1 per W-2 (either above or below the taxpayer's figure) enter the computed sum in Field 7119.

    3. Add all amounts Box 14 of Form W-2(s). If this total differs from Form 8959, line 23, by more than $1 per W-2 (either above or below taxpayer's figure) enter the computed sum in Field 7123.

    4. Follow the instructions in paragraph 4, below.

  5. If no further corrections are to be made, enter C in the Clear Field and take the actions described below if EC 333 displays.

    Note:

    If a previous math error is present, do not assign any previously assigned TPNC at EC 333. Send the appropriate TPNC(s) as described below.

    1. If the taxpayer made an error in computing Field 7107, assign TPNC 764.

    2. If the taxpayer made an error in computing Field 7113, assign TPNC 765.

    3. If the taxpayer made an error in computing Field 7117, assign TPNC 766.

    4. If the taxpayer made an error in computing Field 7124, assign TPNC 767.

    5. If the taxpayer's entry for Other Taxes in Field 0460 does match the computer's Other Taxes underprint, the taxpayer may have transferred line 18, Form 8959 incorrectly to line 60, Form 1040. Search the return for forms and attachments associated with Form 1040, line 60, including Form 8960, Net Investment Income Tax-Individuals, Estates, and Trusts; COBRA Premium Subsidy; Form 8611 Recapture of Low-Income Housing Credit; Recapture Tax; and Unpaid Tax Tips. If relevant amounts are found to reconcile the taxpayer's figure on Line 60, enter them in appropriate fields. Otherwise, assign TPNC 777.

3.12.3.79.8  (01-01-2014)
Error Code 332, Form 8960, Net Investment Income Tax — Individuals, Estates, and Trusts

  1. Error Code 332 instructions follow.

3.12.3.79.8.1  (01-01-2014)
Fields Displayed, Form 1040 (EC 332)

  1. This table shows the fields displayed.

    1040 Title
    CL Clear Code
    01TXP Tax Period
    01FSC Filing Status Code
    01PS Primary SSN
    01SS Secondary SSN
    0460B Form 8960 Net Investment Income Tax
    7217 Net Investment Income Tax
    7217> Net Investment Income Tax Computer
    7217V Net Investment Income Tax Verified (ERS Input Only)
    0460 Other Taxes
    >>>> Other Taxes Computer
    0461 Total Tax IMF
    >>>> Total Tax IMF Computer
    0461> Total Tax Liability Computer
    72CHK Investment Income Check Boxes
    7201 Section 72 Taxable Interest
    0308A Taxable Interest
    7202 Section 72 Ordinary Dividends
    0309A Ordinary Dividends
    7203 Annuities from Non Qualified Plans
    7204A Section 72 Rent Royalties Partnerships
    0317 Schedule E Profit/Loss
    >>>> Schedule E Profit/Loss Computer
    7204B Adjustment for Net Income or Loss
    7204C> Part I First Checkpoint Computer
    0313 Schedule D Profit/Loss
    >>>> Schedule D Profit/Loss Computer
    0314 Other Gains/Losses
    7205A Net Gains from Disposition of Property
    7205B Net Gain or Loss
    7205C Adjustment from Disposition of Partnership Interest S Corp
    7205D> Part I Second Checkpoint Computer
    7206 Changes for CFCs and PFICs
    7207 Other Modifications to Investment Income
    7208 Total Investment Income
    7208> Total Investment Income Computer
    7209A Investment Interest Expense
    7209B State Income Tax
    7209C Miscellaneous Investment Expenses
    7209D> Deductions Computer
    7210 Additional Modifications
    7211 Total Deductions and Modifications
    7211> Total Deductions and Modifications Computer
    7212> Net Investment Income Computer
    7213 Modified Adjusted Gross Income
    7214> Filing Status Threshold Computer
    7215> Part III Checkpoint Computer
    7216 Form 8960 Taxable Investment Income
    7216> Form 8960 Taxable Investment Income Computer
      Section 72 Not Present

3.12.3.79.8.2  (01-01-2014)
Invalid Conditions (EC 332)

  1. Error Code 332 generates when there is a math error and any of the following conditions is present:

    1. Tax period is not 201312 or later, or

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.3.79.8.3  (01-01-2014)
Correction Procedures (EC 332)

  1. If Form 8960 is present in a paper return, Code and Edit is instructed to edit the Taxpayers's amount from line 17, Form 8960 to the right of Form 1040, line 60, and label it as "60b" . This amount should be transcribed in Field 0460B. On MeF returns, the taxpayer's amount from line 17, Form 8960, is populated into field 0460B.

  2. Correct coding and transcription errors and misplaced entries displayed fields.

  3. If Fields 7208 or 7211 differ from the computer underprint and line 17, Form 8960 and the Field 7217> are the same, SSPND 410 to Lead Examiner, The lead will initiate a Letter 2719C to the taxpayer.

  4. If no further corrections are to be made, enter C in the Clear Field and take the actions described below if EC 333 displays.

    Note:

    If a previous math error is present, do not assign any previously assigned TPNC at EC 333. Send the appropriate TPNC(s) as described below.

    1. If the taxpayer made an error in computing Field 7208, assign TPNC 768.

    2. If the taxpayer made an error in computing Field 7211, assign TPNC 769.

    3. If the taxpayer made an error in computing Field 7216, assign TPNC 770.

    4. If the taxpayer made an error in computing Field 7217, assign TPNC 771.

    5. If the taxpayer's entry for Other Taxes in Field 0460 does match the computer's Other Taxes underprint, the taxpayer may have transferred line 17, Form 8960 incorrectly to line 60, Form 1040. Search the return for forms and attachments associated with Form 1040, line 60, including Form 8959, Additional Medicare Tax; COBRA Premium Subsidy; Form 8611 Recapture of Low-Income Housing Credit; Recapture Tax; and Unpaid Tax Tips. If relevant amounts are found to reconcile the taxpayer's figure on Line 60, enter them in appropriate fields. Otherwise, assign TPNC 776.

3.12.3.79.9  (01-01-2014)
Error Code 333, Other Taxes (Line 60, Form 1040)

  1. Error Code 333 instructions follow.

3.12.3.79.9.1  (01-01-2014)
Fields Displayed, Form 1040 (EC 333)

  1. This table shows the fields displayed for EC 333.

    1040 Title
    01TXP Tax Period
    0460A Additional Medicare Tax Taxpayer
    0460B Form 8960 Net Investment Income Tax
    04CBR COBRA Premium Subsidy Amount
    04LIR Form 8611 Recapture Amount
    04RTX Recapture Tax
    04USS Unpaid Tax on Tips SST
    0460 Other Taxes
    >>>> Other Taxes Computer
    0461 Total Tax IMF
    >>>> Total Tax IMF Computer
    0461> Total Tax Liability Computer
    7118> Additional Medicare Tax Computer
    7118V Additional Medicare Tax Verified
    7217 Net Investment Income Tax
    7217> Net Investment Income Tax Computer
    7217V Net Investment Income Tax Verified
    5221 HDHP Failure Additional Tax Amount Section 52
    >>>> Form 8889 Additional Tax Section 52 Computer
    5321 HDHP Failure Additional Tax Amount Section 53
    >>>> Form 8889 Additional Tax Section 53 Computer
      Section XX (52/53/71/72) Not Present

3.12.3.79.9.2  (01-01-2014)
Invalid Conditions (EC 333)

  1. Error Code 333 generates when Field 0460 (Other Taxes) and computer underprint (Other Taxes Computer) is not within tolerance.

3.12.3.79.9.3  (01-01-2014)
Correction Procedures (EC 333)

  1. Correct coding and transcription errors and misplaced entries displayed fields.

3.12.3.79.9.4  (01-01-2014)
Field 0460, Other Taxes (EC 333)

  1. Field 0460 is the computed by adding Fields 0460A, 0460B, 04LIR, 04RTX, and 04USS.

  2. If line 60, Form 1040 is computed incorrectly, assign TPNC 100.

3.12.3.79.9.5  (01-01-2014)
Form 8959, Additional Medicare Tax (Field 0460A)

  1. If the taxpayer made an error in computing line 7, Form 8959, assign TPNC 764.

  2. If the taxpayer made an error in computing line 13, Form 8959, assign TPNC 765.

  3. If the taxpayer made an error in computing line 17, Form 8959, assign TPNC 766.

  4. If the taxpayer made an error in computing line 24, Form 8959, assign TPNC 767.

  5. If the taxpayer's entry for Other Taxes in Field 0460 does match the computer's Other Taxes underprint, the taxpayer may have transferred line 18, Form 8959 incorrectly to line 60, Form 1040. Search the return for forms and attachments associated with Form 1040, line 60, including Form 8960, Net Investment Income Tax - Individuals; Estates and Trusts; COBRA Premium Subsidy; Form 8611 Recapture of Low-Income Housing Credit; Recapture Tax; and Unpaid Tax Tips. If relevant amounts are found to reconcile the taxpayer's figure on Line 60, enter them in appropriate fields. Otherwise, assign TPNC 777.

3.12.3.79.9.6  (01-01-2014)
Form 8960, Net Investment Income Tax — Individuals, Estates, and Trusts (Field 0460B)

  1. If the taxpayer made an error in computing line 8, Form 8960, assign TPNC 768.

  2. If the taxpayer made an error in computing line 11, Form 8960, assign TPNC 769.

  3. If the taxpayer made an error in computing line 16, Form 8960, assign TPNC 770.

  4. If the taxpayer made an error in computing line 17, Form 8960, assign TPNC 771.

  5. If the taxpayer's entry for Other Taxes in Field 0460 does match the computer's Other Taxes underprint, the taxpayer may have transferred line 17, Form 8960 incorrectly to line 60, Form 1040. Search the return for forms and attachments associated with Form 1040, line 60, including Form 8959, Additional Medicare Tax; COBRA Premium Subsidy; Form 8611 Recapture of Low-Income Housing Credit; Recapture Tax; and Unpaid Tax Tips. If relevant amounts are found to reconcile the taxpayer's figure on Line 60, enter them in appropriate fields. Otherwise, assign TPNC 776.

3.12.3.79.9.7  (01-01-2014)
Field 04USS, Unpaid Tax on Tips SST

  1. UT is included on line 60, Form 1040. The taxpayer will check box "c" and write UT on the line.

  2. The taxpayer will include UT on line 60, Form 1040 along with any other taxes that are claimed on this line.

3.12.3.79.9.8  (01-01-2014)
Field 04CBR, COBRA Premium Subsidy

  1. COBRA is included on line 60, Form 1040. The taxpayer will check box "c" and write COBRA on the line.

  2. The taxpayer will include COBRA on line 60, Form 1040 along with any other taxes that can be claimed on this line.

3.12.3.79.9.9  (01-01-2014)
Field 04LIR, Form 8611 Recapture of Low-Income House Credit Amount

  1. LIHCR is included on line 60, Form 1040. The taxpayer will check box "c" and write LIHCR on the line.

    If... And... Then...
    A]"LIHCR" is noted, Form 8611 is not attached, The ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ SSPND 211.
    The ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter amount in Field 04LIR.
    B]"LIHCR" is noted and Form 8611 is attached,   Enter amount in Field 04LIR.

  2. The taxpayer will include LIHCR on line 60, Form 1040 along with any other taxes that are claimed on this line.

3.12.3.79.9.10  (01-01-2014)
Field 04RTX, Recapture Tax

  1. Field 04RTX includes "Other Taxes" . Follow the instructions below:

    If... And... Then...
    A]"FMSR" is noted, Form 8828 is not attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ SSPND 211.
    The amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter amount in Field 04RTX.
    B]"FMSR" is noted and Form 8828 is attached,   Enter amount in Field 04RTX.
    C] Other Taxes box "c" line 60
    • "1040NR" , Form 1040NR, noneffectively connected income (NRA)

    • "1291" , Form 8621, line 16f

    • "453A(c)" , deferred tax on installment sales over $150,000

    • "453(l)(3)" , tax on installment income from sale of residential lost and timeshares

    • "457A" , Section 457A

    • "72(m)(5)" , Section 72, excess benefits tax

    • "8697" , Form 8697, Look-back interest

    • "8866" , Form 8866, Lock-back interest

    • "8936R" , Form 8936

    • "ADT" , Form 4970

    • "AMVCR" , Form 8910

    • "ARPCR" , Form 8911

    • "ECCFR" , Form 8882

    • "EPP" , Golden Parachute Tax

    • "FITPP" , Recapture of Charitable Contributions

    • "HCTC" , Form 8885, line 5

    • "HDHP" , From 8889, Part III

    • "HSA" , Form 8889, Part II

    • "ICR" , Form 4255

    • "IECR" , Form 8845

    • "ISC" , Section 4985, tax on insider stock compensation

    • "Med MSA" , Form 8853, medicare advantage MSA distributions

    • "MSA" , Form 8853, Archer MSA distributions

    • "NMCR" , Form 8874

    • "NQDC" , Section 409A

    The form is or is not attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. The taxpayer can include any of the "Other Taxes" shown in (1) above on line 60, Form 1040 along with any other taxes that are claimed on this line.

3.12.3.79.9.11  (01-01-2014)
Allowable Taxpayer Notice Codes (Form 1040) (EC 333)

  1. This table shows the allowable Taxpayer Notice Codes for Error Code 329.

    Note:

    The following Taxpayer Notice Codes are shown in a condensed format. The complete version of each is listed in Exhibit 3.12.3-2, Taxpayer Notice Codes, in the back of the IRM.

  2. If you are processing a conversion—a return converted to Form 1040—you must assign TPNC 111 in addition to other applicable notice codes.

    Note:

    Always assign TPNC 111 first.

    TPNC Description
    100  
    111 Your return has been converted to a Form 1040.
    281 We adjusted the total tax to exclude the refundable interest from Form 8697. (Form 1040/A)
    764 We changed the amount reported on line 7, Form 8959. (Form 1040)
    765 We changed the amount reported on line 13, Form 8959. (Form 1040)
    766 We changed the amount reported on line 17, Form 8959. (Form 1040)
    767 We changed the amount reported on line 24, Form 8959. (Form 1040)
    768 We changed the amount reported on line 8, Form 8960. (Form 1040)
    769 We changed the amount reported on line 11, Form 8960. (Form 1040)
    770 We changed the amount reported on line 16, Form 8960. (Form 1040)
    771 We changed the amount reported on line 17, Form 8960. (Form 1040)
    776 An error was made in transferring Form 8960 to 60, Form 1040. (Form 1040)
    777 An error was made in transferring Form 8959 to 59, Form 1040. (Form 1040)
    *** Any previously assigned TPNC

3.12.3.79.10  (01-01-2014)
Error Code 334,Total Tax

  1. Error Code 334 instructions follow.

3.12.3.79.10.1  (01-01-2014)
Fields Displayed, Form 1040, Form 1040A and Form 1040EZ (EC 334)

  1. This table shows the fields displayed.

    Error Code 334: Displayed fields
    1040 1040A 1040EZ Title
    01TXP 01TXP 01TXP Tax Period
    01FSC 01FSC 01FSC Filing Status Code
        01EXC Exemption Code Field
    0443   0406 Taxable Income Amount
    >>>>   >>>>> Taxable Income Amount Computer
        04TIV Taxable Income Verified
    0444 0428 04TNT Tentative Tax
    >>>> >>>> >>>> Tentative Tax Computer
      0428V 04TNV Tentative Tax Verified
    0445     Alternative Minimum Tax
    >>>>     Alternative Minimum Tax Computer
    0446>     Income Tax Before Credits Computer
    0454 0434   Total Statutory Credits
    >>>> 0434>   Total Statutory Credits Computer
      04SCV   Total Statutory Credits Verified
    04TAC> 04TAC>   Income Tax After Credits Computer
    0456     Combined SE Tax
    >>>>     Combined SE Tax Computer
    0457     Combined Unreported Tips SST (Form 4137 and Form 8919)
    >>>>     Combined Unreported Tips SST (Form 4137 and Form 8919) Computer
    0458     Combined Tax on Retirement Plans
    04IRA>     Combined Tax on IRA and Retirement Plans Computer
    29DX>     Tax on Early Distributions
    30DX>     Tax on Early Distributions
    0459A     Combined Household Employment Taxes
    >>>>>     Combined Household Employment Taxes Computer
    0459B     First-Time Homebuyer Credit Repayment
    >>>>>     Combined First-Time Homebuyer Credit Repayment Computer
    PNFH> PNFH> PNFH> Primary NAP First-Time Homebuyer Credit Computer
    PNRI> PNRI> PNRI> Primary NAP First-Time Homebuyer Installment
      PFRC> PFRC> Form 5405 Homebuyer Credit Repayment S58 Computer
    58FRC>     Section 58 Homebuyer Credit Repayment Computer
    SNFH> SNFH> SNFH> Secondary NAP First-Time Homebuyer Credit Computer
    SNRI> SNRI> SNRI> Secondary NAP First-Time Homebuyer Installment
      SFRC> SFRC> Form 5405 Homebuyer Credit Repayment S59 Credit
    59FRC>     Section 59 Homebuyer Credit Repayment Computer
    0460     Other Taxes
    >>>>     Other Taxes Computer
    0460A     Form 8959 Additional Medicare Tax
    7118>     Additional Medicare Tax Computer
    0460B     Form 8960 Net Investment Income Tax
    7217>     Net Investment Income Tax Computer
    04CBR     COBRA Premium Subsidy
    04RTX     Recapture Taxes
    04LIR     Form 8611 Recapture
    04USS     Uncollected Tax on Tips
    0461 0435 0410 Total Tax IMF
    >>>> >>>> >>>> Total Tax IMF Computer
    0461> 0435> 0410> Total Tax Liability Computer
    0461V 0435V 0410V Total Tax IMF Verified
    05BDR> 05BDR> 05BDR> Balance Due/Overpayment Taxpayer Computer
    >>>>> >>>>> >>>>> Balance Due/Overpayment Computer
          Section XX Not Present

3.12.3.79.10.2  (01-01-2014)
Invalid Conditions (EC 334)

  1. Error Code 334 generates when both of the following exist:

    1. A math Error is present in Total Tax or Balance Due/Refund.

    2. Total Tax Liability Computer differs from Total Tax IMF Computer.

3.12.3.79.10.3  (01-01-2014)
Correction Procedures, General (EC 334)

  1. Correct coding and transcription errors and misplaced entries in displayed fields.

  2. If the Retirement Savings Contribution Credit, Field 0450 (0432, Form 1040A) amount differs from its computer underprint, refer to EC 288 for correction procedures.

  3. If the taxpayer made an error adding Total Credits on line 54, Form 1040 (line 34, Form 1040A), assign TPNC 264.

  4. When the taxpayer indicates "MSA" , "MED+MSA" , "NQDC" , or "HSA" on the dotted portion line 60, Form 1040, enter the amount in Field 0460, Other Taxes.

  5. If the taxpayer includes an amount from line 22 of Form 8889, remove that amount from the taxpayer's figure for other taxes in Field 0460. Taxpayers are instructed to note the phrase HDPH to the left of the amount on line 60 when they include the amount from line 22 of Form 8889 in total tax.

  6. If taxpayers note an item beside the entry for total tax, see IRM 3.12.3.79.7.11 for instructions.

3.12.3.79.10.4  (01-01-2014)
Field 0446>, Income Tax Before Credits Computer (EC 334)

  1. Field 0446> is the computer's amount for line 46, Form 1040, and is not correctable. The computer adds the Tentative Tax amount computer, line 44, and Alternative Minimum Tax amount computer, line 45, to arrive at the amount for Field 0446>.

  2. Compare line 46, Form 1040 to Field 0446> when the computer's underprint for a personal credit is more than the amount claimed by the taxpayer. If the taxpayer made an error adding lines 44 and 45, assign TPNC 230.

3.12.3.79.10.5  (01-01-2014)
Field 04TAC>, Tax After Credits Computer (EC 334)

  1. Field 04TAC> is the computer's amount for line 55, Form 1040 (line 35, Form 1040A), and is not correctable. The computer subtracts the Total Credits Computer amount from the Tentative Tax Computer amount to arrive at the amount for Field 04TAC>. When the taxpayer claims an amount for Other Statutory Credits, refer to EC 310/610.

  2. If the taxpayer has made an error subtracting Total Credits from Tentative Tax on line 55, Form 1040 (line 35, Form 1040A), assign TPNC 265.

3.12.3.79.10.6  (01-01-2014)
Field 0458, Tax on Early Distributions (EC 334)

  1. Field 0458 is transcribed from line 58, Form 1040, and represents the taxpayer's amount for both the Tax on Early Distributions and Tax on Contributions, Form 5329.

  2. Two Forms 5329 can be processed for each return, one for the primary taxpayer and one for the secondary taxpayer. The first form is entered in Section 29, the second in Section 30. If more than one Form 5329 is attached for the same taxpayer, combine and enter in the appropriate section.

  3. Taxpayers with only a Tax on Early Distribution may not have to file Form 5329, but they are instructed to write " NO" to the left of line 58 indicating they are not required to attach Form 5329.

    Note:

    The amount entered on line 58 may be identified as a Tax on Early Distribution if it is equal to 10% of amounts reported on line 15b and/or 16b of Form 1040 or attached Form(s) 1099–R.

  4. Field 0458 should equal the sum of Fields 04IRA>, 29DX>, and 30DX>. These fields represent the amounts that the taxpayer has entered on the following lines:

    • Line 4, Form 5329 (Fields 29DX>/30DX>).

    • Line 8, Form 5329 (Fields 29DX>/30DX>).

    • Line 17, Form 5329 (Field 04IRA>).

    • Line 25, Form 5329 (Field 04IRA>).

    • Line 33, form 5329 (Field 04IRA>).

    • Line 41, Form 5329 (Field 04IRA>).

    • Line 49, Form 5329 (Field 04IRA>).

    • Line 53, Form 5329 (Field 04IRA>).

3.12.3.79.10.7  (01-01-2014)
Field 0459A, Household Employment Tax (EC 334)

  1. Field 0459A is transcribed from line 59a of Form 1040. It represents the Household Employment Tax.

  2. For prior years Code and Edit edits the line number 59a and the amount for box b or 59b and the amount for box c from the taxpayer's entry on line 59 of Form 1040.

    1. If the taxpayer checks box b, enter the amount in Field 0459A (Schedule H).

3.12.3.79.10.8  (01-01-2014)
Field 0459B, First-Time Homebuyer Credit Repayment (EC 334)

  1. Field 0459B is transcribed from line 59b of Form 1040. It represents the repayment of the First-Time Homebuyer Credit.

  2. Correction procedures appear in IRM 3.12.3.79.7.10.

3.12.3.79.10.9  (01-01-2014)
Fields PNFH> and SNFH>, FTHBC Primary and Secondary NAP First Time Homebuyer Credit Computer

  1. These fields represent the computer amounts for the remaining balance of the FTHBC.

3.12.3.79.10.10  (01-01-2014)
Field PNRI> and SNRI>, FTHBC Primary and Secondary NAP Repayment Indicator (EC 334)

  1. Taxpayers who received the First-Time Homebuyer Credit (FTHBC) in TY2008 for a home they bought in 2008 have to repay the credit over 15 years. Taxpayers enter the payment on line 59b of Form 1040 and include it in total tax (line 61/35/10 of Form 1040/A/EZ). For TY10, Form 1040 filers are also instructed to check box c on line 59.

    Note:

    Throughout these instructions the phrase FTHBC refers to the First-Time Homebuyer Credit.

  2. If the taxpayer has to repay the FTHBC, the amount due by the primary taxpayer appears in Field PNRI> and the amount due by the secondary taxpayer in Field SNRI>.

  3. If the taxpayer's figure on line 59 wasn't transcribed, enter it in Field 0459B.

    Note:

    For TY10 and before the amount for the FTHBC was included in the total for line 59. Ensure that the repayment of the FTHBC is present in Field 0459B.

  4. If the taxpayer has entered a payment on line 59b of Form 1040 and the FSC is

    • not 2 and Field PNRI> is blank enter R in Field 02RI and transmit or

    • 2 and Field PNRI> or SNRI> is blank, enter R in Field 02RI and transmit.

  5. If, after you complete the procedure in paragraph (4), Field PNRI> and SNRI> remain blank in response to revalidation, assume a disposition of the property and request Form 5405. SSPND 211.

  6. If the payment on line 59b of Form 1040 is greater than the sum of the amount in Field PNRI> and SNRI> and Form 5405 is not present or is incomplete, create the Form 5405 for the primary taxpayer with GTSEC 58 or for the secondary taxpayer with GTSEC 59. Enter the letter I in 5803 or 5903 and the amount on line 59b of Form 1040 in Field 5808 if only Field PNRI> shows an amount or in Field 5908 if only Field SNRI> shows an amount. If the FSC is 2 and Field PNRI> and SNRI> both show an amount, enter half the amount on line 59b in Field 5808 and the other half in Field 5908.

  7. FSC is 2 and primary or secondary taxpayer is deceased, the taxpayer who is deceased does not owe the repayment of FTHBC. The debt is forgiven. If the return is attempting to make the repayment for both taxpayers, assign TPNC 649.

  8. The FSC is 2. Only one Form 5405 is attached.

    1. If disposition code B, E, or H is present in Field 5903 and line 16 of Form 5405 is zero and an amount is present in Field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary SSN in Field 59SSN.
      • the figure on line 11 of Form 5405 in Field 5901
      • the figure on line 12 of Form 5405 in Field 5912
      • the figure on line 13 of Form 5405 in Field 5903.
      • the figure on line 15 of Form 5405 in Field 5915
      • the figure on line 16 of Form 5405 in Field 5916.

    Note:

    This procedure assumes that the taxpayers submitted Form 5405 for the primary taxpayer. You will have to adapt the procedure if the Form 5405 is for the secondary taxpayer.

  9. The FSC is 2 and only one Form 5405 is filed and an amount is present in Field PNRI> and SNRI>.

    1. If the amount on line 18 of Form 5405 is greater than the sum of Field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary SSN in Field 59SSN.
      •the letter I in Field 5903.
      • one-half of the amount on line 18 of Form 5405 in Field 5908.
      • one-half of the amount on line 18 of Form 5405 in Field 5808.

      Note:

      This procedure assumes that the taxpayers submitted Form 5405 for the primary taxpayer. You will have to adapt the procedure if the Form 5405 is for the secondary taxpayer.

    2. If the amount on line 18 of Form 5405 is equal to the sum of the amount in Field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary SSN in Field 59SSN.
      • the letter I in Field 5903.
      • the amount in Field SNRI> in Field 5908.
      • the amount in Field PNRI> in Field 5808.

      Note:

      This procedure assumes that the taxpayers submitted Form 5405 for the primary taxpayer. You will have to adapt the procedure if the Form 5405 is for the secondary taxpayer.

    3. If the amount on line 18 of Form 5405 is greater than the amount in Field PNRI> but less than the sum of the amount in Field PNRI> and SNRI>, GTSEC 59 and enter
      • the secondary SSN in Field 59SSN,
      • the letter I in Field 5903,
      • the difference between the amount on line 18 of Form 5405 and the amount in Field PNRI> in Field 5908, and
      • the amount in Field PNRI> in Field 5808.

      Note:

      This procedure assumes that the taxpayers submitted Form 5405 for the primary taxpayer. You will have to adapt the procedure if the Form 5405 is for the secondary taxpayer.

  10. If the FSC is 3 or 6 and a Form 5405 for each taxpayer is present and the taxpayer has disposed of the house and checked box a, c, d, f, or g in Part III of Form 5405, accept only the primary taxpayer's payment.

    • Assign TPNC 100 with this text to a return filed by a taxpayer who is not a non-resident or dual-status alien.
      We removed the payment of the First-Time Homebuyer Credit for your spouse from your return and adjusted total tax accordingly. If you file a return with the filing status married filing separately, you and your spouse must each submit the required payment with a separate return. You may, if you are eligible, amend your return to a joint return, or your spouse must file a separate return. See Publication 501, Exemptions, Standard Deduction, and Filing Information, for information about filing status.

    • Assign TPNC 100 with this text to a return filed by an non-resident or dual-status alien.
      We removed the payment of the First-Time Homebuyer Credit for your spouse from your return and adjusted total tax accordingly. If you file a return with the filing status married filing separately, you and your spouse must each submit the required payment with a separate return. You may, if you are eligible, amend your return to a joint return, or your spouse must file a separate return. See Publication 501, Exemptions, Standard Deduction, and Filing Information, or Publication 519, U.S. Tax Guide for Aliens, for information about filing status.

  11. If the taxpayer did not enter an obligatory payment of the homebuyer credit on line 59 or include any payment of the homebuyer credit in total tax, assign TPNC 648.

  12. If the taxpayer's payment is less than the obligatory payment or the taxpayer misfigured the payment,—the sum of Field PNRI> and SNRI>—, assign TPNC 649.

    Note:

    Total tax is a compound figure. The omission of the payment of the FTHBC may not be the sole cause of an error in total tax. Before assigning TPNC 648 or 649 find the difference between the taxpayer's figure for total tax on line 61 of Form 1040, line 35 of Form 1040A, or line 10 of Form 1040EZ and the underprint for Field 0461, 0435, or 0410. If the difference is equal to the sum of Field PNRI> and SNRI>, after you account for earlier errors and any write-ins that could affect total tax, treat the omission of the payment of the FTHBC as the cause of the error.

3.12.3.79.10.11  (01-01-2014)
Field 0460, Other Taxes (EC 334)

  1. Taxpayers are allowed to claim an amount in the total of line 60 for Tax on Accumulation Distribution of Trusts, Form 4970 (identified as ADT).

  2. If "Uncollected Tax" or "UT" is noted beside line 60, remove the amount of uncollected tax from the other taxes in Field 0460 and enter it in Field 04USS In MeF look in the tree for "OtherTaxStatement." "UT" appears in "OtherTaxLit."

    Note:

    Form 1040A and EZ. Make sure that the uncollected tax is included in total tax. Adjust total tax to that end if you have to. Then enter total tax in Field 0435V or 0410V. Do not convert the return to a Form 1040.

  3. If the taxpayer writes in an amount on line 60 of Form 1040 but does not identify it, look for code "A" , "B" , "M" , or "N" in box 12 of Form W-2. The amount associated with each code is another form of uncollected tax. If the amount on line 60 is equal to one or a combination of these amounts, enter the taxpayer's figure in Field 04USS and remove it from the figure in Field 0460.

  4. Taxpayers attempting to pay recapture taxes are instructed to note " ICR" (Form 4255), "LIHCR" (Form 8611), "FMSR" (Form 8828), "ARPCR" (Form 8911, Alternative Fuel Vehicle Refueling Property Credit ), "IECR" (Form 8845, Indian Employment Credit Recapture), NMCR (Form 8874, New Markets Credit), ECCFR (Form 8882, Credit for Employer-Provided Child Care Facilities and Services), or COBRA on the dotted portion of line 60. Use the following to table for instructions to enter these amounts in ERS input only Field 04RTX, 04LIR, or 04CBR.

    If... And... Then...
    A]"FMSR" is noted, Form 8828 is not attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ SSPND 211.
    The amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter amount in Field 04RTX.
    B]"FMSR" is noted and Form 8828 is attached,   Enter amount in Field 04RTX.
    C]"LIHCR" is noted, Form 8611 is not attached, The ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ SSPND 211.
    The ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter amount in Field 04LIR.
    D]"LIHCR" is noted and Form 8611 is attached,   Enter amount in Field 04LIR.
    E]"ICR" (Form 4255),
    "QEVCR" (Form 8834),-
    "IECR" (Form 8845),
    "ECCFR" (Form 8882),
    "NMCR" (Form 8874), is noted,
    The form is or is not attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    G]"COBRA" is noted,   Enter amount in Field 04CBR.

  5. Field 0460 can be used as a "catch all " for other taxes for which there are no specific lines on the return. Many of these taxes need no documentation. Adjust the entry in Field ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ enter the amount in Field 0460. Those taxes are:

    • Section 72 Penalty Tax

    • Golden Parachute Tax designated "EPP"

    • "QEF" (Qualified Electing Funds)

    • "Sect. 453A(c)"

    • "Sect 1291"

    • "Sect 1294"

    • "Capital Construction Fund" (CCF)

    • "Form 8621"

    • Form 4970 identify as "ADT"

  6. If the taxpayer reduces total tax by a negative amount written to the left of line 60/61 of Form 1040 do the following:

    Note:

    Taxpayers are not allowed to reduce total tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    If... And... Then...
    A] The taxpayer ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   Manually compute total tax by applying the reduction amount and enter the result in Field 0461V.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    B] The taxpayer ≡ ≡ ≡ ≡ "≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   Do not adjust total tax.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    C] An≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   Manually compute total tax by applying the reduction amount and enter the result in Field 0461V.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    D] The taxpayer indicates ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ to support the reduction to total tax,   SSPND 211.

  7. If the taxpayer notes "Form 8697" or "Look Back" on the dotted portion of line 60 and includes this amount in total tax, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and enter the amount in Field 04RTX. This amount should be the same as line 10, Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts. If the taxpayer has figured the ES Tax Penalty and entered an amount on line 77, GTSEC 01 and enter P in Field 01CCC. Do not accept a negative amount on the dotted portion of line 60 for this item. If the taxpayer has used the amount from line 9, Form 8697, delete the negative entry, detach the Form 8697 from the Form 1040, and route the Form 8697 to Accounts Management to process the interest to be refunded. Assign TPNC 281.

  8. If the write-in "Form 8693" is present on the dotted portion of line 60, Form 1040, take no action.

  9. If the phrase OVDP or Offshore Voluntary Disclosure Program or a variation thereof appears beside the taxpayer's entry for other taxes, refer the return to CI with SSPND 332. Write OVDP Quiet Disclosure on Form 4227.

3.12.3.79.10.12  (01-01-2014)
Field 0461, 0435, 0410, Total Tax IMF (EC 334)

  1. Total Tax IMF is transcribed from line 61, Form 1040 (line 35, Form 1040A; line 10, Form 1040EZ).

  2. Total Tax Liability Computer is computer generated and shows the taxpayer's amount for Total Tax. The underprint shows the computer's computation for this amount.

  3. Form 1040EZ - EC 330 will not generate on returns originally coming into ERS (EC 265 generates instead for an error in tax). Once the return is in ERS, if EC 330 displays, check for erroneous use of verified fields and adjust as necessary.

  4. Form 1040A - Follow the instructions below:

    1. When Tentative Tax (line 28) is blank, dash, or zero and there is an entry for Total Tax (line 35), with no intervening amounts, enter the same amount in Field 0428. If any credits are present on lines 29 through 33, then back into tentative tax by adding the amount in Fields 0434 and 0435 for the Field 0428 result. If a math error redisplays, assign the appropriate TPNC.

    2. When Total Tax (line 35) is blank, dash, or zero and there is an entry for Tentative Tax (line 28), with no intervening amounts, Code and Edit will arrow the amount to Total Tax.

    3. If the taxpayer reports Alternative Minimum Tax on line 28 by notating "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ enter the taxpayer's Total Tax in Field 0428V.

      Note:

      If the taxpayer's amount for total tax is less than the computer's amount refer to your Lead Tax Examiner.

    4. When the taxpayer has made an error on line 35 subtracting total credits from tentative tax, assign TPNC 265.

  5. Form 1040 - Follow the instructions below:

    1. When Tentative Tax (line 44) is blank, dash, or zero and there is an entry for Total Tax (line 61), with no intervening amounts, enter the same amount in Field 0444. If any credits are present on lines 47 through 53, then back into tentative tax by adding the amount in Fields 0454 and 0455 for the Field 0444 result. If a math error redisplays, assign the appropriate TPNC.

    2. When Total Tax (line 61) is blank, dash, or zero and there is an entry for Tentative Tax (line 44), with no intervening amounts, Code and Edit will arrow the amount to Total Tax.

    3. When the taxpayer has made an error on line 55 subtracting total credits from tentative tax, assign TPNC 265.

    4. When the taxpayer has made an error on line 61 adding the other taxes to arrive at Total Tax, assign TPNC 282.

  6. When the computer cannot arrive at the correct amount for Total Tax, manually compute and enter the correct amount in the field for Total Tax IMF Verified.

3.12.3.79.10.13  (01-01-2014)
Special Instructions Concerning Tolerance in Total Tax and/or Balance Due/Refund (EC 334)

  1. Use the following table when the computer underprints the Total Tax Liability because the taxpayer has not computed Balance Due/Refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    If the computer's amount… Then…
    A] Agrees with the taxpayers', Enter the Total Tax Liability Computer amount in the Total Tax Taxpayer Field.
    B] Does not agree with the taxpayers', Assign the appropriate TPNC.

3.12.3.79.10.14  (01-01-2014)
KITA, Killed in Terrorist Action (EC 334)

  1. If the taxpayer was Killed in Terrorist Action (KITA) they are exempt from income tax for the tax year in which he/she was killed. Code and Edit will attach a Form 4227 to the return after checking with the KITA coordinator at the campus to verify that the taxpayer is not eligible. The notation should say, "Not eligible for KITA" . Enter the computer's amount for tax and assign TPNC 650.

  2. If Code and Edit failed to identify a return as KITA/KIA, ERS should take the following action:

    1. Prepare Form 4227 stating KITA/KIA.

    2. Route the return to the KITA Coordinator, SSPND 360 (Other in house research).


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