3.12.13  Employment Tax Returns

Manual Transmittal

October 16, 2014

Purpose

(1) This transmits revised IRM 3.12.13, Error Resolution - Employment Tax Returns for Processing Year 2015

Scope

The instructions contained in this text are used by Error Resolution System (ERS) examiners to correct errors made by taxpayers, their representatives, or Business Master File (BMF) Submission Processing (SP) Campus Operations.

Material Changes

(1) This IRM was revised to reflect the following changes:

Subsection Changes
IRM 3.12.13 Editorial changes have been made through out the IRM. All Exhibits have been updated with current form revisions. All cross references have been corrected and verified. Forms 943 and 944 will no longer have lines for reporting COBRA credits after 2014.
IRM 3.12.13.10(8) Added information on the OnLine Notice Review Taxpayer Notice Code (TPNC) 90 programming change.
IRM 3.12.13.12(3) Updated table with MeF filing location codes and document codes.
IRM 3.12.13.21(1) IPU 14U1141 dated 07/15/2014 changed the routing address for unsigned Section 6020(b) returns.
IRM 3.12.13.24.4 IPU 14U0485 dated 03/13/2014 added instructions for field errors for Field 01RCD and the return is processed prior to the quarter ending.
IRM 3.12.13.29.1(3) IPU 14U1036 dated 06/23/2014 added information on which returns are not routed to Statute.
IRM 3.12.13.29.13(3) IPU 14U0322 dated 02/13/2014 corrected If/Then table with information previously removed in error.
IPU 14U0472 dated 03/11/2014 added additional instructions to the If/Then table per Serp Feedback #201401057
IRM 3.12.13.29.13(3) 1) IPU 14U0091 dated 01/10/2014 corrected If/And/Then table- 9th box that was accidentally cut off the original IRM.
IRM 3.12.13.29.16(3) IPU 14U0891 dated 05/21/2014 moved boxes 12 and 14 to boxes 1 and 2 in If/Then table.
IRM 3.12.13.29.21(3) IPU 14U0531 dated 03/20/2014 changed Field 07c> to 07D> per SERP Feedback #201401367.
IRM 3.12.13.29.21(3) 1) Updated If/Then table with information to research for posted return before dummying a page 1, Form 941.
IRM 3.12.13.29.24(3) IPU 14U0726 dated 04/18/2014 added example of transposition error made by the taxpayer.
IRM 3.12.13.29.24(3) 2) IPU 14U0891 dated 05/21/2014 corrected reference to line 5d, to line 5e in third Then box. IPU 14U1141 dated 07/15/2014 made editorial change to second last Then box.
IRM 3.12.13.29.30(3) IPU 14U0091 dated 04/18/2014 Added information under Note explaining how to correct Forms 941 SS and 941 PR if filed by a domestic company.
IRM 3.12.13.29.30(3)10) IPU 14U0243 dated 01/31/2014 corrected Field Designators in If/Then table.
IRM 3.12.13.29.32(3) 1) IPU 14U0891 dated 05/21/2014 corrected third and fourth If/Then table to include Field 02STL valid periods.
IRM 3.12.13.36.14(3) a) IPU 14U0531 dated 03/20/2014 changed line numbers in second Then box.
IRM 3.12.13.36.15(3) a) IPU 14U0531 dated 03/20/2014 removed last three rows in If/Then table. the instructions were not applicable to EC 050.
IRM 3.12.13.36.18(3) a) IPU 14U0531 dated 03/20/2014 added Field 03M> to the last Then box in table.
IRM 3.12.13.36.25(3) a) IPU 14U0531 dated 03/20/2014 corrected Form 943 line numbers to agree with 2013 form ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
IRM 3.12.13.36.27(3) a) IPU 14U0531 dated 03/20/2014 Corrected line numbers in If/Then chart to agree with current Form 943 and added (2010 and prior) to eighth Then box in table. IPU 14U0891 dated 05/21/2014 added valid periods for Field 02STL.
IRM 3.12.13.36.30(3) a) IPU 14U0531 dated 03/20/2014 corrected second Then box and corrected line numbers in instructions.
IRM 3.12.13.38.1 IPU 14U0243 dated 01/31/2014 updated Fields for Form 944 through out the section. Due to programming errors all Fields 02TSM were changed to Fields 02TBA and all Fields 02TBA were changed to Fields 025D.
IRM 3.12.13.53.29(3) IPU 14U0293 dated 02/10/2014 added Caution paragraph in correction procedures for EC 100.
IRM 3.12.13.53.31(3) IPU 14U0891 dated 05/21/2014 added valid periods for Field 02STL.
IRM 3.12.13.71.16(3) IPU 14U0726 dated 04/18/2014 added new If/Then box at end of If/Then table.
IRM 3.12.13.76.13(1) IPU 14U0472 dated 03/11/2014 removed Fields 0212 and 02TT from screen chart and corrected invalid conditions in (2).
IRM 3.12.13.76.13(3) IPU 14U0485 dated 03/13/2014 added additional If/Then instructions to table.
IRM 3.12.13.78 Added new subsection on BMF Identity Theft.
Exhibit 3.12.13-10 Added information on the OnLine Notice Review Taxpayer Notice Code (TPNC) 90 programming change.

Effect on Other Documents

IRM 3.12.13, dated November 7, 2013 (effective January 1, 2014) is superseded. The following IRM Procedural Updates (IPUs), issued from January 10, 2014 through August 28, 2013 have been incorporated in this IRM: IPU 14U0091 (dated 01/10/2014), IPU 14U0243 (dated 01/31/2014), IPU 14U0293 (dated 02/10/2014), IPU 14U0322 (dated 02/13/2014), IPU 14U0472 (dated 03/11/2014), IPU 14U0485 (dated 03/13/2014), IPU 14U0531 (dated 03/20/2014), IPU 14U0555 (dated 03/25/2014), IPU 14U0667 (dated 04/09/2014), IPU 14U0726 (dated 04/18/2014), IPU 14U0891 (dated 05/21/2014), IPU 14U1036 (dated 06/23/2014) and IPU 14U1141 (dated 07/15/2014).

Audience

Wage and Investment Error Resolution System (ERS) Tax Examiners

Effective Date

(01-01-2015)


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

3.12.13.1  (01-01-2015)
Purpose and Scope

  1. The returns covered in this IRM are:

    • Form 941 – Employer's Quarterly Federal Tax Return

      Note:

      All references to Forms 941, 941-PR, or 941-SS, unless otherwise stated, refer to those forms with Revision Year(s) 2005 through 2010. Also, any Form 941, 941-PR, or 941-SS return with a Revision Year prior to year 2009 should have their lines re-numbered to the 2010 return format per IRM 3.11.13, Employment Tax Returns (Document Perfection).

    • Form 941-PR - Employer's Quarterly Federal Tax Return-Puerto Rico Ogden Submission Processing Campus (OSPC) only.

    • Form 941-SS - Employer's Quarterly Federal Tax Return - American Samoa, Guam, the Commonwealth of the Northern Mariana Islands and, the U.S. Virgin Islands (OSPC only)

    • Form 943–Employer's Annual Tax Return for Agricultural Employees

    • Form 943-PR - Employer's Annual Tax Return for Agricultural Employees (OSPC only)

    • Form 944 (including Form 944 (SP))– Employer's ANNUAL Federal Tax Return, for Spanish filers with U.S. addresses. Form 944-PR and Form 944-SS will no longer be provided to taxpayers. Beginning in 2013 they will have to file Form 944–SP or Form 944. Instructions remain in this IRM because we will still see them for the next few years.

    • Form 945– Annual Return of Withheld Federal Income Tax

    • Form CT-1– Employer's Annual Railroad Retirement Tax Return Cincinnati Submission Processing Campus (CSPC) only.

  2. Employees are reminded to consider any ethical issues while following these instructions.

3.12.13.1.1  (01-01-2015)
Background

  1. Records will be placed into the Error Inventory or the Workable Suspense Inventory for correction.

  2. Once you access a record and it displays on the screen, you must resolve the error by either:

    1. Fully correcting the record

    2. Placing the record in suspense until additional information is received

    3. Rejecting the record from pipeline processing

  3. Corrections will include correcting errors in editing or transcribing, or in the case of a taxpayer error, notifying the taxpayer of the error on the return.

  4. This IRM is your main source of information for correcting the record on the screen and the related return. However, you may also find some procedures in IRM 3.12.38, Error Resolution-BMF General Instructions, which contains procedures for correcting records on the screen, document control, inventories and management reports within ERS and Rejects.

3.12.13.1.2  (01-01-2015)
♦BMF Consistency Items♦

  1. The purpose of this initiative is to achieve consistency in the BMF ERS processing IRMs.

  2. Topics for the Business Master File (BMF) Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and the Paper Processing Branch BMF Code and Edit/ERS Section.

  3. BMF Consistency subsections are identified by a diamond (♦) before and after the title.

  4. Text in normal print is in common processes for BMF returns. The text in bold print is form specific and applies to this IRM only.

3.12.13.2  (01-01-2015)
Error Inventory Report

  1. The Error Inventory Report is generated at the beginning of each day to show the blocks by the block control number and block document locator number (DLN) in numerical order. Each batch will be on separate pages. Blocks received from Block Out of Balance (BOB) Correction will be listed separately.

  2. A copy of the Error Inventory Report can be placed on the carts of documents and used as a charge-out. This will help to determine when a cart is completed.

  3. The first line of the Error Inventory Report will show the number of working days the records on that page have been in the Error Inventory. This will enable work left from a previous day to have priority.

3.12.13.3  (01-01-2015)
Workable Suspense Inventory Report

  1. Each day the Workable Suspense Inventory Report will be furnished showing the records by Program in Document Locator Number (DLN) order for various statuses. Separate pages with totals for each program will be provided.

  2. The report will show the number of working days the records have been in the Workable Suspense Inventory. This is on the first line of the report and will allow priority to be given to the older work.

3.12.13.4  (01-01-2015)
Employment Return Editing--General

  1. Edit the applicable code(s) in the designated area(s) on each of the following returns:

    • Form 941/ 941-PR/941-SS (Rev 2005 and subsequent)

    • Form 943/943-PR

    • Form 944/944(SP)/944-PR/944-SS (PR and SS 2011 or prior only)

    • Form 945

    • Form CT-1

  2. Any changes to the name control, employer identification number (EIN), or address (including the city, State or ZIP Code) on all employment returns are edited above the printed location. See chart below for editing all Forms 941, 943, 944, 945 and CT-1:

    Fields Field Location
    Computer Condition Code Form 941, Form 941-PR, Form 941-SS.

    (Rev 2005–2015) Directly beneath the last line in the center of the bottom margin of the return on page 1.


    Form 943, or Form 943–PR (all revisions). Directly beneath the signature line in the center of the bottom margin.

    Form 944, Form 944(SP), Form 944-PR, Form 944-SS 944-SS (all revisions). Beneath line 14 in the center of the bottom margin

    Form 945 (all revisions) Directly beneath the signature line in the center of the bottom margin

    Form CT-1 (all revisions). Directly beneath the signature line in the center of the bottom margin
    Correspondence Received Date (CRD)
    All returns - Upper left corner of the return in the top margin.

    Note:


    Code and Edit is no longer editing CRD.

    Received Date
    All returns - Body of the return
    Schedule Indicator Code (SIC)
    Forms 941, 941-PR, 941-SS
    (Rev 2005 and subsequent) On the right margin, opposite the dark Part I line.

    Forms 943, or 943-PR (all revisions). On the right margin opposite line 1.

    Forms 944, 944(SP), 944-PR, or 944-SS (all revisions). On the right margin opposite line 1.

    Form 945 (all revisions). On the right margin opposite line "A" .

    Form CT-1 (all revisions) SIC is not edited on the form.
    ERS Action Code
    All returns - On the bottom margin in the left corner.
    Tax Period
    Forms 941, 941-PR, 941-SS
    (Rev 2005 and subsequent) Above the "Report for this Quarter." box located to the right of the entity.

    Forms 943, or 943-PR (all revisions). Located in the entity portion of the return on the upper right side.

    Forms 944, 944(SP), 944-PR, or 944-SS (all revisions). Above the "Who Must File Form 944" box located to the right of the entity

    Form 945 (all revisions) Located in the entity portion of the return on the upper right side.

    Form CT-1 (all revisions) Located in the entity portion of the return on the lower right side.
    Third Party Designee (when the "YES" box is checked) No editing is needed.
    Paid Preparer's Tax Identification Number (PTIN) All returns - As needed, in the designated box located at the bottom of the return beneath the taxpayer's signature
    Paid Preparer's EIN All returns - As needed, in the designated box located at the bottom of the return beneath the taxpayer's signature
    Paid Preparer's Telephone Number All returns - As needed, in the designated box located at the bottom of the return beneath the taxpayer's signature.
  3. All returns must be in the current processing years acceptable line format, for Service Center Recognition/Image Processing System (SCRIPS) or Integrated Submission and Remittance Processing (ISRP) processing, as a Rev 2009 and subsequent.

  4. All lines with amount entries should be edited in dollars and cents.

  5. ERS tax examiners will leave a working trail on BMF returns for the following:

    1. Corrections to the name control or EIN on the front page of the return

    2. Taxpayer Notice Code (TPNC) 90,

    3. The tax period, or any changes to the tax period

    4. Corrections to the tax computations

    5. Any non-suspense correspondence letters (3875C, 086C, etc.)

  6. To indicate to data capture (SCRIPS or ISRP) a correction change or deletion of a line entry, Code and Edit shows next to the line the assigned edit mark for the action they are trying to perform.

    1. ISRP processes Form 941 returns with attachments (other than Form 941, Schedule B), delinquent Form 941 returns, all Form 941-PR or 941-SS returns (through OSPC only), 943, 943-PR, 944 or 944(SP), 944-PR, 944-SS, 945, or CT-1 returns.

    2. SCRIPS processes Form 941 returns for the current year (including prior Revision 2005 through 2014).

  7. Error Resolution examiners must be able to comprehend any edited changes shown on a return. The tables below show the current acceptable edit marks on employment returns, and their meaning.

    Note:

    CODE and EDIT ----- EDIT MARK DESCRIPTION
    For Form 941 (Rev 2005 and subsequent) processed through SCRIPS

    If return shows a foreign address, use the ISRP edit marks as shown below:


    Edit Mark Description
    Asterisk
    Inside the Entity Area Only : Used to show a change to the Employee Identification Number (EIN)
    Outside the Entity Only: Used to delete tax data or to indicate that an item is not to be transcribed
    Note: The asterisk must be placed to the left of the entry, and as close as possible to the entry.
    Circle Used to delete a received date only.
    Line-through Inside the Entity Area only: Use to delete data

    Note:

    Unless otherwise specified, a line-through should always be a horizontal line.

    Underline Used to identify a name control, or to indicate that a received date, (other than an IRS stamped date), is to be transcribed
    Decimal Point Used to indicate the separation of dollars and cents if no distinction has been made by the taxpayer.
    Zero, Dash, or None Zero, "Dash" , or "None" 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, e.g. such as Compliance or Accounts Management (Adjustments), are not to be re-edited except to place the marks in the correct area.
    Rocker Used to indicate that the amount was paid with the return.

    Note:

    A return with remittance are now processed separately. Examiners should circle (or indicate an asterisk to the left of the rocker, if SCRIPS), any rocker on a return.

    Percent Sign (%) Used to indicate the presence of a "Care of Name" or address
    "X" Used to delete tax data or to indicate that an item is not to be transcribed.
    "/" Used when deleting a form or schedule not being transcribed.
    Arrow Used to indicate the correct placement of a misplaced entry or 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.
    Vertical line or decimal point Used to indicate the separation of dollars and cents if no distinction has been made by the taxpayer.
    "c/o" Used to indicates the presence of a "Care of Name" or Care of address.
  8. When a Code and Edit examiner initiates correspondence, they are required to show Action Code 211 (or the applicable code) in the lower left hand corner of the return. If Letter 21C is used, (Form 13195) C and E examiners are also required to notate the paragraph, and if appropriate, the fill in number(s) followed by the inserted fill-in information. For example: "211–P(19)$100.00 (20)$50.00"

  9. For Form 941 returns, documents processed through SCRIPS will be received in ERS "unstapled" and sorted into "Perfect" (documents without attachments) and "Imperfect" (documents with attachments and/or envelopes) batches.

    1. When pulling documents from a "Perfect" truck or batch, ensure that all pages are pulled (page 1, 2 and/or Schedule B).

    2. When pulling documents from an "Imperfect" truck or batch, check the upper right corner for a seven digit sequence number. Then, go to colored folder at the back of the gusset and pull the corresponding attachments. Staple any attachments to the return before routing.

3.12.13.5  (01-01-2015)
Types of Errors

  1. ERS will identify errors according to type and priority. The record heading will show the type of error.

  2. This IRM will furnish the procedures to be used for resolving the displayed errors. However, there may be records where the tax examiner finds that programming has not furnished a section or Field needed to resolve an error. This should be reported to the Headquarters for correction.

  3. The tax examiner will enter the section using Command Code (CC) GTSEC, and enter the missing data.

    1. Priority I (Action Code Errors) -When an Action Code is assigned to a return, it displays as a Priority I error.

    2. Priority II (Section Errors) -An error detected by SCRIPS or ISRP displays as a Section Error, or

    3. An alpha transcribed in a numeric Field or vice versa and a section with variable length Fields containing an erroneous size Field displays as a terminus section error.

    4. Priority III (Field Validity Errors) -Any Field failing to meet the requirements for that Field displays as a Priority III error.

    5. Priority IV (Error Code–Math and Consistency Errors) —When a record is assigned an error code because of a math error or an inconsistency between Fields, it displays as a Priority IV error.

  4. There are instances when a tax examiner may correct a higher numbered priority error causing a lower numbered priority error to display.

3.12.13.5.1  (01-01-2015)
Action Code Errors (Priority I)

  1. All records that are assigned an Action Code by the Code and Edit function will be displayed as a Priority I error. These errors and the correction procedures are explained in this section.

  2. If the Action Code is valid, it will be placed in the Suspense Inventory.

  3. If the Action Code is invalid, it will be placed in the Error Inventory.

3.12.13.5.1.1  (01-01-2015)
Error Inventory Correction Procedures

  1. The Error Screen display will show:

    • Document Locator Number (DLN)

    • Taxpayer Identification Number

    • Name Control

    • Processing Date

    • ERS Status Code

    • Command Code

  2. The items listed above are displayed in the header portion of each error record. Previously assigned TPNC are also displayed in the header information.

  3. Before making corrections to the screen display make sure:

    1. The DLN of the screen display matches the DLN of the document.

    2. The taxpayer's entries are on the correct lines of the tax return.

    3. All coding and transcription for errors in each section are reviewed and corrected as needed.

    4. All sections and fields have been transcribed.

  4. When you make a correction to the screen display, also correct (edit) the tax return to maintain an audit trail. For others who may work with the return in the future, the editing may provide insight to the document's processing history. For each correction made to the taxpayer's figure on the return:

    1. You will place an "X" beside the incorrect data on the return and write the correct data to the left or above it.

    2. If the taxpayer does not have the required entry on the return completed, place an "X" beside the missing entry. Enter the correction to the left of the "X" .

  5. If the missing information is found elsewhere on the return, edit (as required) it to the correct line.

  6. Money Amounts: When you correct a screen display, review the screen before transmitting to ensure that money amounts are being transcribed in dollars and cents.

  7. Check the displayed Action Code for validity. Also check the return to verify that the code assigned is appropriate, and whether it has been transcribed properly. Remember to use CC GTSEC prior to clearing the data from the terminal (Action Code 001).

  8. When the BOB Resolution function has added a document to a block by entering only the name control and taxpayer identification number (TIN), Action Code 001 will be computer generated. The remainder of the record must be entered by ERS.

  9. Enter CC GTSEC for each record section that should contain data. Add the required data.

  10. When all of the sections have been entered, clear the Action Code by entering "C" in the Clear Code Field.

  11. If suspense action is required, overlay the Command Code with CC SSPND and enter the correct Action Code.

  12. If no suspense action is needed, enter "000" in the Clear Field and transmit.

3.12.13.5.1.2  (01-01-2015)
Suspense Inventory Correction Procedures (Reject Procedures)

  1. Determine if the record can now be resolved with the information available. If so:

    1. Make the corrections to the record using CC DLSEC or GTSEC.

    2. After all corrections are made and transmitted, enter a "C" in the Clear Field and transmit.

    3. If there are other errors in the record, they will be displayed.

    4. If the error is resolved, release the document to files.

  2. In IRM 3.12.13, general "No Reply" procedures are shown below under "Priority I Error, Action Code 21X, Correspondence" . Any correspondence procedures for a specific Field or error condition are shown in the table under "Correction Procedures" or under a special subsection, "Rejects/Suspense procedures" for the specific Field error or error code condition.

  3. If the error cannot be resolved without additional information or cleared:

    1. Re-suspend with the appropriate Action Code, using CC SSPND.

    2. Enter the new Action Code and date on both copies of the Charge-Out (Form 8161 or Form 4251).

      Note:

      A new Charge-Out is not issued for the re-suspended record.

    3. Give the return with attached Charge-Outs to the Suspense Documents Unit.

  4. A record may also require rejecting from ERS for reinput or voiding.

    1. A record being reinput may use the same DLN or a new DLN. Notate the current Charge-Out and a new Charge-Out will be issued for the rejected document. Give the return to the Suspense Document Unit. On the screen, use the appropriate CC RJECT or NWDLN and enter the appropriate "Rejects" Action Code.

  5. Priority I Error, Action Code 21X, Correspondence

    Note:

    If correspondence is being generated to secure only the signature, use Action Code 225, or for International returns, Action Code 226.

    • Status 321: If a reply is available, follow the instructions within the taxpayer's reply before clearing the Priority I Error. If the correspondence results in No Reply, or the correspondence is undeliverable and returned, initiate the following general procedures before clearing the Priority I Error:

      IF THEN
      The return is claiming a refund, Edit Computer Condition Code (CCC) 3 and CCC X. Then, continue to process.
      The return is not claiming a refund, Edit CCC 3 and continue to process.
    • Status 421: Follow instructions in the reply before clearing the Priority I Error.

  6. Priority I Error, Action Code 310, Statute Control

    • Status 331 or 431: Document will be furnished to the tax examiner with instructions from Statute Control Unit. If the Statute Control Unit requests that the record be voided to them for non-remittance documents, use "RJECT 640" ; and for remittance (including Remittance Processing System (RPS)) documents use "NWDLN 640" and the DLN of the Payment Posting Voucher (Form 3244) applying the remittance to the year and Master File Tax (MFT) of the voided Statute document.

    • If the Statute Control Unit indicates clearance, use CC GTSEC for Section 01 and verify the tax period in Field 01TXP. Then, enter CCC "W" in Field 01CCC for the applicable employment return. Transmit and clear the Priority I Error with the "C" Clear Code.

  7. Priority I Error, Action Code 320, Entity Control

    • Status 332 or 432: Document will be furnished to the tax examiner with instructions from Entity Control. Follow instructions from Entity Control before clearing the Priority 1 Error.

    • Enter the correct Fields using CC GTSEC for Section 01 if the return was referred to Entity for the name control or EIN.

  8. Priority I Error, Action Code 33X, Review/Routing to Criminal Investigation Division (CID)

    • Status 333 or 433: Document will have been referred to CID before distribution to a tax examiner.

    • If instructed to void the record to refer a Form 941, 943, 944, 945, or CT-1 to CID, use CC RJECT or NWDLN, Action Code 640, and follow CID instructions. NWDLN 640 is for voiding a return with a remittance. The new DLN is the Form 3244 DLN posting the remittance to the year and MFT of the voided document sent to CID or Unidentified Remittance File (URF) if CID instructs that the money is to be applied to the URF. Follow CID instructions before clearing a Priority I Error or continuing to process the return.

  9. Priority I Error, Action Code 34X, Routing-Accounting

    • Forms 94X should be returned by Accounting when given to the tax examiner to work.

    • Tax examiner should follow instructions furnished by Accounting before clearing the Action Code.

  10. Priority I Error, Action Codes 35X, KIF/MFTR_/BMFOL Research

    • Action Code 351, Status 435 indicates the Key Index File (KIF) was not available when the record was on the Error Inventory.

      IF THEN
      Through research an EIN is located, Enter in Field 01EIN after using CC GTSEC for Section 01.
      Through research an EIN is not located, Follow instructions in IRM 3.12.13 for referral of the document to Entity for an EIN.
    • Action Codes 352, 354, or 355, Status 335 or 435: If after researching you are unable to resolve, re-suspend to Entity, Action Code 320.

    • Action Code 353 will not be used on Form 941, unless correspondence is necessary and there is no address.

  11. Priority I Error, Action Code 360— Other In-House Research

    • Status 336 or 436: Document and instructions from other area will be furnished to the tax examiner. Follow instructions furnished by other areas of the Submission Processing (SP) Campus using CC DLSEC or GTSEC before clearing Priority I Error.

  12. Priority I Error, Action Code 410— Assistance Needed

    • Clear the Priority I Error with the "C" Clear Code, so that other errors in the record might display.

  13. Priority I Error, Action Codes 420 through 460— Management Suspense

    • Management may direct that you work or re-suspend the record. If re-suspending, use CC SSPND and the Action Code as directed.

    • When instructed to work the record, clear the Priority I Error with the "C" Clear Code, so if other errors exist in the record they can be displayed.

  14. Priority I Error, Action Code 490— System Problem

    • Instructions are needed from the Computer Branch through your supervisor for working. If instructions are not furnished for Status 349, you may be advised to re-suspend, using CC SSPND 490.

      Caution:

      Once you clear Action Code 490, if no other error exists in the record, the record will go to "Good tape" . It is imperative to await instructions from the Computer Branch.

  15. Priority I Error, Action Code 51X - Status 451 or 351

    • Suspend record with Action Code 51X to initiate a special search. The Charge-Out issued for missing document may be used for the initial search. It may also be used for subsequent searches by marking "Second Request" , "Third Request" , etc. on the Charge-Out returned from files.

    • Special search is continued as indicated in IRM 3.12.38, BMF General Instructions, until document is located or record is rejected from ERS with Action Code 670.

      IF THEN
      The missing document is a non-remittance document, Use RJECT 670.
      The missing document is a remittance document, Use NWDLN 670 and the DLN of Form 3244, Payment Posting Voucher, for the payment.
      You are unable to designate where the remittance should be applied, Use NWDLN 670 URF. See IRM 3.12.38, BMF General Instructions.
  16. Priority I Error, Action Code 6XX - Rejects

    • If suspended to Workable Suspense with Action Code 6XX, review the document to see if you agree with the recommended reject action. If so, delete with CC RJECT or NWDLN and the appropriate Action Code. If you determine not to delete the record, clear the Priority I Error with the Clear Code "C" deleting the Action Code so that any other errors that might exist can display.

  17. Priority I Error, Action Code 700 - Duplicate Block DLN

    • Clear the Priority I Error with the "C" Clear Code so that other errors in the record might display.

  18. Priority I Error, Action Code 900 - Unpostable Records

    • The literal for the Action Code 900 will include the Unpostable Code. For Action Code 900 returns, determine if the record can be resolved. If so, use CC GTSEC for the desired section(s) and make the correction(s). After all corrections are made and transmitted, enter a "C" in the Clear Field. Once the Action Code 900 is cleared, all other errors on the record will be displayed for correction. If no other errors exist, the record will clear the screen. The record has never posted to Master File.

    • Fields displayed will be as processed prior to being an Unpostable. The record may contain editing and transcription errors. All Clear Codes and TPNCs assigned when previously processed will have been deleted from the record and will need to be assigned again, if still applicable.

    • If the error on the Unpostable Record (Action Code 900) cannot be resolved, re-suspend the record using CC SSPND with the appropriate Action Code. Notate the Action Code and date on the Charge-Out with explanation and send the return and Charge-Out to the Suspense Documents File.

  19. For Action Codes 3XX —Status 33X: If circumstances should warrant re-suspending the document, (e.g., requested information is not available), the tax examiner will need to be advised to re-suspend the record, Action Code 3XX. If this situation occurs often, the suspense period should be reviewed with Headquarters.

    • Should the document not be available for a record on the Workable Suspense Inventory, Action Code other than 510, the Suspense Document Unit will contact the Supervisor who will conduct a special search within ERS and, if unsuccessful, indicate document missing.

    • The tax examiner working the record will re-suspend the record with Action Code 511 initiating a search for the document. It will be necessary to use CC ESTAB to initiate a Form 4251, Return Charge-Out, to obtain the document from Files.

    • If the Form 4251 comes back without the document, wait until the suspense period for Action Code 511 expires. Then, re-submit the original Form 4251, Return Charge-Out, indicating on it "SPECIAL SEARCH" and re-suspend the record with Action Code 512.

3.12.13.5.2  (01-01-2015)
Section Errors (Priority II)

  1. There are two types of Priority II errors:

    • ISRP

    • TERMINUS

    .

3.12.13.5.2.1  (01-01-2015)
Integrated Submission and Remittance Processing Errors (ISRP)

  1. ISRP may detect specific types of errors upon validation. The display of an ISRP error includes a one character code to identify the type of error. The errors are as follows:

    • "1" –Split screen transmission: The Key verifier attempted to change check digit, or

    • "2" –is not used at this time.

    • "3" –Invalid Section ending point.

    • "4" –Invalid Field length.

  2. When displayed, all of the input Fields show for the section in error except for the Remittance amount in Section 01. Transcribed data will be present. Computer generated data will not be present.

3.12.13.5.2.1.1  (01-01-2015)
Correction Procedures

  1. Check all Fields of the section and verify that the Fields are entered as coded.

    IF THEN
    No correction is needed, or once the section is correct, Transmit.
    The section needs to be deleted, Enter CC DLSEC with the section number.

3.12.13.5.2.2  (01-01-2015)
Terminus Errors (Priority ll)

  1. This error is caused by a section with variable length input fields containing an erroneous size field.

  2. When displayed, this type of error will show all input fields of the terminus section. Transcribed data will be present. Computer generated fields or the remittance field for Section 01 will not be present.

3.12.13.5.2.2.1  (01-01-2015)
Correction Procedures

  1. All fields present for the section must be examined and the necessary correction(s) made to all the fields.

    IF THEN
    The section needs to be deleted, Use CC DLSEC to delete the section.
    No corrections are needed, The display can be transmitted which indicates the section is correct as displayed.

3.12.13.5.3  (01-01-2015)
Field Errors (Priority III)

  1. Any field that does not meet its requirement(s) will be shown as a Priority III error. Some reasons for this type of error are:

    1. Non-alphabetical character in an alpha field,

    2. Dollar amount exceed maximum field length allowable,

    3. Blank space in a numeric field,

    4. Blank in the first position of an alpha field,

    5. Non-numeric character in a numeric field, or

    6. A required field is blank.

  2. All fields with a Priority III error will be displayed in the order encountered in the record. The Action Code and TPNC will never be displayed as a Priority III error.

  3. When a dollar amount exceeds maximum Field length allowable, process the return as follows:

    IF THEN
    A money amount on a return exceeds the maximum Field length allowable,
    1. Enter the maximum amount allowable on the original return.

    2. Recompute the tax data and enter the corrected amount(s) on the screen display and the return. DO NOT SEND A TAXPAYER NOTICE CODE.

    3. Annotate on the original return, "Dummy Return-Prepared Due to Overflow Document."

    4. Prepare a "Dummy Return" by computing and entering the remaining overflow money amount(s) for the appropriate Fields. Enter Entity information from the original return.

    5. On the top of the return, write "Prepared from Overflow Return" . Copy the DLN from the original return. Enter CCC "G" in Field 01CCC. In the signature area write, "Signature on Original Return"

    6. Route to Receipt and Control to have the "Dummy Return" numbered and processed.

3.12.13.5.4  (01-01-2015)
Consistency/Math Errors (Priority IV)

  1. These errors will be displayed with an Error Code assigned to them for the specific error in ascending numerical order. The screen display will show the Error Code assigned and the Fields needed to make the necessary correction.

  2. The blank "NC" will be displayed for the entry of a TPNC for all Math Error displays. Multiple TPNCs may be entered if you have multiple lines labeled "NC" .

  3. The blank Field "CL" will be displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed.

  4. The "C" Clear Code does not permit any other corrections to the record after it is transmitted to clear the screen. All errors must be resolved by eliminating the error, or entering the Clear Code or a TPNC.

  5. If an unworkable situation exists, suspend or reject the document with the appropriate Action Code.

3.12.13.6  (01-01-2015)
Action Codes

  1. The ERS Action Code indicates that specific information is missing, suspended or that the record is to be rejected from processing.

  2. The code will have sufficient detail to indicate if:

    1. Correspondence is to be sent to the taxpayer, or

    2. Specific in-house research or action is required.

  3. Action Code 001 will be computer generated when the BOB Resolution function has added a missing document by inputting only the TIN and the name control. Follow corrective procedures in IRM 3.12.13.5.1, for Priority l Errors.

  4. Code and Edit tax examiners assign Action Codes to numbered returns if they determine the document is unprocessable. Unprocessable documents require additional information or manual intervention for correction.

  5. An Action Code is entered in the lower left margin of the return.

    Note:

    When a Code and Edit examiner initiates a Letter 21C (Form 13195) for a Form 941 which will be going through SCRIPS, (or Form 941-PR or 941-SS going through ISRP), they are also required to notate the paragraph, and if appropriate, the fill in number(s) followed by the inserted fill-in information after the Action Code 211.

  6. The presence of a valid Action Code other than AC 001 will place the record in the applicable Suspense Inventory, "Workable" or "Unworkable" .

  7. If an Action Code assigned by Code and Edit is invalid, incomplete, or "001" , the record will be assigned to the Error Inventory for correction or deletion of the code.

  8. Only one Action Code may be assigned at a time to a record. The priority of the Action Codes will be 310, 320, 4xx, 6xx, 3xx, 2xx.

  9. An ERS tax examiner may enter an Action Code on a record, delete or correct an invalid code, or may overlay the present Action Code with another to re-suspend or reject the record from ERS. This is done by entering a valid Action Code with CC SSPND, RJECT or NWDLN. IRM 3.12.38, BMF General Instructions, also explains these codes.

  10. An ERS tax examiner entering a valid Action Code with the CC SSPND will be clearing the record from the screen and placing the record in the Workable Suspense or Unworkable Suspense inventory.

  11. A tax examiner entering a valid Action Code with the CC RJECT will be rejecting the record from ERS. Generally, Service Center Control File (SCCF) will be automatically updated for the rejected records.

  12. A tax examiner entering an Action Code with the CC NWDLN will be rejecting the record from ERS and establishing the new DLN under which the record is to be reinput.

  13. See Exhibit 3.12.13-2 for a list of all valid Action Codes.

3.12.13.7  (01-01-2015)
Error Codes

  1. An Error Code (EC) is computer generated to a record and assigned in numerical order.

  2. Error Codes display by priority with the lowest number error codes first.

  3. An Error Code requires that one of the following actions be taken:

    • Correct the invalid Field/math condition.

    • Assign a TPNC in the appropriate Field.

    • Suspend the document with the appropriate action code.

    • Verify and clear the error with a "C" code in the appropriate Clear Field.

3.12.13.8  (01-01-2015)
Command Codes (CC)

  1. The CC needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below.

  2. Any CC permitted by the Employees Security File will be available.

  3. CCs are used to tell the system what function to perform.

  4. CCs must be entered in a valid format, otherwise an error message will display.

  5. Correct the data entered with the command code and transmit.

    Command Codes

    1. BMFOL - Used to review return filings, freeze codes, return information, transactions etc. posted to the Master File.

    2. CRECT - Will be displayed with all error displays.

    3. DLSEC - Used to delete a section of a record.

    4. ENMOD - Used to research for a name control.

    5. ERINV - Used to research a DLN or TIN on ERS.

    6. ERVOL - Used with a Status Code to display the number of ERS records in the current Workable Inventory.

    7. GTREC - Used to access the first error in a block in the Error Inventory or a specific record in the Workable Suspense Inventory. It can also be used to redisplay any uncorrected error.

    8. GTRECQ - Used to retrieve and correct a record selected for quality review.

    9. GTRECW - Used to retrieve and correct an error record which has been erroneously worked. Can be used just after a record has been worked as well as after a block has been completed.
      REMEMBER: GTRECW can only be used on the day that the record or block was worked.

    10. GTSEC - Used to obtain the display of any section of a record in process.

    11. INOLE - Used to research for a name control, filing requirement, employment code, or address.

    12. NAMEE/NAMEB - Used to perform a search to match the data entered to information on the National Accounts Index (NAI), and returns EINs of possible matches.

    13. NWDLN - Used to change (renumber) the DLN and MFT of the record and reject the record.

    14. RJECT - Used to reject a record from ERS.

    15. RTVUE/BRTVU - Used with definers to provide access to data that was either computer generated or for individual line items transcribed for most BMF returns.

    16. SSPND - Used to enter an Action Code and place a record in suspense.

    17. TRDBV - Used with IDRS for read only access to Individual Master File (IMF) and BMF filed tax return data received through the Electronic Filing System (ELF), Modernized E-File (MeF) and paper.

    18. TRERS - Used as an extension of CC TRDBV and was developed for ERS processing. CC TRERS functions the same as CC TRDBV with the added ability to select a return based on the DLN of the latest CC GTREC command executed by the IDRS user without entering perimeters for the CC TRDBV command.

    19. TRPRT - Used to generate a graphic (form image) print of an electronically filed IMF or BMF return and schedules. The print will contain original taxpayer submitted data only. No corrections or processing codes will appear on the print.

3.12.13.9  (01-01-2015)
Computer Condition Codes (CCC)

  1. CCCs are used to identify a special condition or computation for the computer. CCCs post to the BMF Master File.

  2. These codes are entered on Form 941, Form 941-PR, Form 941-SS, Form 943, Form 943-PR, Form 944, Form 944-PR, Form 944-SS, Form 944(SP), Form 945 and Form CT–1.

  3. The chart below shows the applicable CCCs, their definitions and the related checks.

    Codes Definition Validity Consistency Checks Remarks Returns Valid For:
    B Total Compensation present, and the Social Security and/or Medicare wages are exempt. Total compensation Field more than ≡ ≡ ≡
    (ERROR CODE 046)
    CCC B is entered or generated if there is an indication that the reported wages are exempt from either Social Security or Medicare tax. Usually the taxpayer indicates an exemption by checking the box on line 4 (e.g. Form 941, Rev 2005 and subsequent), or line 3 (e.g. Form 944, Rev 2006 and subsequent.). For example, when specific Employment Codes ("C" , "F" , or "G" ) are present on the entity, a declaration of law (e.g. a child under 18 years of age), or a declaration based on religious grounds, a non-profit or charity group, etc. Forms 941, 941-PR, 941-SS, 943, 943-PR 944, 944-PR, 944-SS, 944 (SP) only
    D Reasonable Cause for Failure to Pay Timely Must have Received Date
    (ERROR CODE 028)
    CCC D is no longer edited by Code and Edit (see exception below) when a reason is given for the delay in filing a return timely. Issue Letter 1382C (if Code and Edit has not done so) and continue processing the return.

    Exception:

    Secured internally prepared returns: For Secured returns (e.g., returns notated with "Process as Original" with an attached Form 13133) or Prepared returns (e.g., returns notated "6020(b)" or "SFR" (Substitute for Return)), enter the applicable CCC as indicated on the return and/or attached form.

    All
    E Credit Election Cannot be used with CCC F or S Computer Generated

    Indicates the taxpayer checked the "Apply To Next Return" box on the return
    All
    F Final Return Cannot be used with CCC G or E Form 941, 941-PR, or 941–SS
    • Line 15 2014 and 2015

    • Line 17 2012 and 2013.

    • Line 18, Rev 2009 through 2011

    • Line 16, Rev 2005 through 2008.


    Forms 943, 943-PR Check box beneath the entity on the right hand side.
    Forms 944, 944(SP), 944-PR, or 944-SS
    • Part 3, Page 2


    Form 945– Check box beneath the entity on line A.
    Form CT-1 Check box under form tax year.
    All
    G Amended Return

    Note:

    All Forms 941, 941-PR, 941-SS, 943, 943-PR, 944, 944-PR, 944-SS, 944(SP), 945 or CT-1 returns marked (or indicating) amended, superseding, supplemental, etc., should be routed directly to Accounts Management for manual processing.

    1— No other CCCs allowed, except CCC W or 3
    (Field ERROR)
    2— Must have received date
    (ERROR CODE 028)
    3— All Fields must be blank except 01EIN, 01TXP, 01NC, 01RCD, and 01CRD.
    If a return has a TC 59X on the return by Compliance, process as original. All
    J Reasonable Cause for Failure to Make Timely Deposits Cannot have precomputed Failure to Deposit (FTD) penalty
    (ERROR CODE 038)
    CCC J will no longer be edited, if the taxpayer requests abatement for Failing to Make Timely Deposits when the return is submitted. For these returns, send the 1382C letter which will inform the taxpayer of the proper procedure to follow to request abatement, if and when a penalty is assessed. Forms 941, 941-PR, 941-SS, 943, 943-PR, 944, 944-PR, 944-SS, 944(SP), 945 only
    M Misclassified Employees Interest Free Returns   Indicates interest free adjustments for "Misclassified Employees" at top of the return. Forms 941, 941-PR, 941-SS, 943, 943-PR, 944, 944-PR, 944-SS, 944(SP), CT-1
    O Module Freeze   Pre-Settlement Manual Refund Issued, (Form(s) 3753, Manual Refund Posting Voucher, 5792, Request for IDRS Generated Refund, or 12857, Refund Transfer Posting Voucher) All
    R A Reasonable Cause for Failure to Timely File Must have Received Date
    (Field ERROR)
    - CCC "R" is no longer edited by Code and Edit (see exception below) when a reason is given for the delay in filing a return timely. Issue Letter 1382C (if Code and Edit has not done so) and continue processing the return. Exception: For Secured returns, and Prepared returns.

    For Secured returns (e.g., returns notated with "Process as Original" with an attached Form 13133) or, Prepared returns (e.g., returns notated "6020(b)" or "SFR" (Substitute for Return)), enter the applicable CCC indicated on the return and/or on the attached Form 13133.
    All
    S Overpaid return–Application to Subsequent Quarter Not Specified Cannot be used if CCC E is present
    (Field ERROR)
    Computer Generated: Indicates that the taxpayer:
    • Checked the "Refunded" box on the return, or

    • Did not check either the "Refunded" box or the "Apply To Next Return" box on the return.

    All
    T Seasonal Intermittent Filer Seasonal filer box in Part 3, Page 2.   Form 941, 941-PR, 941-SS.
    W Cleared by Statute Control Must be present on Statute cases
    (ERROR CODE 001)
    Statute clearance must be within 90 days of the Expiration Statute date. All
    X Return Settlement Generates TC 570 Freeze to hold credit If present, Credit Elect analysis will be bypassed for Form 941. All
    3 No Reply Received—Suppress Credit Interest Must not contain Correspondence Received Date (ERROR CODE 073) Used to suppress credit interest when no reply is received from the taxpayer or their representative to correspondence All
    4 Return prepared by IRS under Internal Revenue Code (IRC) Section 6020(b). Cannot contain CCC R Return will have "Prepared under 6020(b)" All
    7 Reasonable Cause Claimed-Relief Denied 1– Received date required (Field ERROR)
    2— Cannot be used if CCC D or R,
    (ERROR CODE 028)
    No longer edited by Code and Edit function. All

3.12.13.10  (01-01-2015)
Taxpayer Notice Codes (TPNC)

  1. When a math error involves a tax liability or balance/overpayment Field, a Taxpayer Notice Code (TPNC) is used. See Exhibit 3.12.13-10 or Exhibit 3.12.13-11 for valid TPNCs for all employment returns.

  2. The ERS examiner enters a 2 digit code on their terminal screen after the literal "NC" . This code generates an assigned explanation of the taxpayer's error or the ERS correction on the math error notice.

  3. After determining that no other corrections to the record are needed, the TPNC is entered. The presence of a TPNC indicates to the computer that no other corrections will be made to the screen display. Therefore, all corrections must be entered and transmitted for each error condition prior to TPNC assignment.

  4. Whenever a TPNC is assigned, a written history showing the changes made must be entered on the return at the point of change.

  5. Each Math Error has been assigned certain TPNCs which allow the examiner to clear the error. The TPNCs entered in the "NC" Field must be valid for that error or the same as one previously assigned. If a code that is not valid is assigned, the Error Code will redisplay.

  6. Each Math Error display will require a correction to a Field or the entry of a TPNC. The transmission of a TPNC must not be accompanied by any other correction. A TPNC assigned to a Math Error will be displayed with subsequent displays for the record. The Field is used for display purposes only and is not correctable.

  7. A return can have a total of three TPNCs. If more than three codes need to be assigned, use TPNC 90 and list the errors for Notice Review to type and send to the taxpayer.

  8. TPNC 90 is actually a "fill-in" and should be used if more than three codes are to be assigned, or when no other TPNC fully explains the correction(s) made. Beginning in 2014 changes were made to the TPNC 90 Math Error Codes. TPNC 90 literals have been programmed into OnLine Notice Review (OLNR) Retype applications for Notice Review (NR). This addition eliminates the need for the NR tax examiner to manually type the notice literal and reduce potential copying/typing incorrect paragraphs in the notices. For a full listing of the programmed TPNC 90 Math Error Codes and information on how to use the Math Error Codes see TPNC 90 Math Error Code Job Aid.

  9. To delete a TPNC, blank the Total Tax-Taxpayer Field and then re-enter.

  10. Once a code is transmitted to the record, it may be changed in the following manner:

    1. Records not cleared from the terminal: If errors remain after transmitting the TPNC, you can create an error with a higher priority. This causes all "C" ; clear codes and any notice code already assigned on a lower priority error to be deleted from the record. TPNCs will be deleted from the header display. Beginning with the higher Priority IV error created, all subsequent Error Codes will be displayed for resolution, even though they may have been displayed previously.

    2. A correction you make erases an Error Code which you previously cleared with a Taxpayer Notice Code or "C" Clear Code. In this case, the "C" ; or TPNC on this error and all subsequent Error Codes will be deleted. All subsequent Error Codes will be displayed for resolution whether or not they were previously displayed. The TPNC(s) for this error and subsequent Error Codes will be deleted from the header display.

    3. Records which have been worked may be reworked using CC GTRECW.

    4. All TPNCs are erased when a record is suspended with CC SSPND.

    5. Unfinished records from the previous day will contain none of the TPNCs that were assigned to the records that were not completely worked.

3.12.13.11  (01-01-2015)
Clear Code "C" and "000"

  1. The letter "C" is used as a "Clear Code" for the Error Codes (consistency errors) where the error condition is such that the resolution does not require a change to the record as displayed.

  2. The ERS screen display will include a clear Field, labeled "CL" to indicate the possible need of a Clear Code. The Clear Field will always be located to the right of CRECT on the screen display.

  3. Error Codes indicating the possible need of a Clear Code are cleared by either correcting the condition or entering a "C" to indicate no correction is needed. If corrections are required, they must be entered and transmitted prior to entry of the Clear Code "C" . Assure that all corrective procedures have been input as shown under each individual Error Code before entering a "C" in the Clear Code Field.

  4. Clear Code "C" is also used for clearing the Action Code from the screen after corrections for the Action Code have been completed, or as with Action Codes 410 and 700, the Action Code must be cleared initially so other errors in the record can be resolved. The presence of the "C" with a Priority I Error indicates you have made the corrections to the Action Code and now wish to have any other errors on the record displayed.

  5. The "000" is also used as a Clear Code when deleting an Action Code. It will only be used for invalid or erroneous Action Codes and when you have determined there is no reason to suspend the record. The "000" cannot be used in Suspense Correction.

  6. Programming erases all "C" Clear Codes for Error Codes:

    1. When a record is suspended with the CC SSPND.

    2. With Action Codes for the new day's Error Inventory and Workable Suspense Inventory. Unfinished records from the previous day will contain none of the "C" Clear Codes that were assigned to a record that was not completely worked.

  7. Error Codes (including the ones which may require a "C" Clear Code) are numbered and displayed consecutively for correcting. There may be instances when you will create an Error Code with a higher priority than the one(s) you have cleared with a TPNC or "C" Clear Code. When this occurs:

    1. Programming will erase all "C" Clear Codes and TPNCs for Error Codes with a lower priority than the one created.

    2. Beginning with the higher priority Error Code you created, programming will continuously display any Error Code(s) for the record. Displays using the corrected data are apt to be different from those previously displayed.

  8. There may be instances when you will make a correction erasing an Error Code which you previously cleared with a "C" and now the error condition no longer exists. When this occurs:

    1. The "C" Clear Code for this error and all "C" and TPNCs for all subsequent errors in the record will be deleted.

    2. After deleting the "C" and TPNCs, if there are errors remaining on the record, they will continue to be displayed for resolution whether or not they were previously displayed.

  9. The "C" Clear Code will prevent any other corrections to the record to accompany the "C" Clear Code. If a correction must be entered, but you have already transmitted the "C" Clear Code, and the error is no longer displayed, use CC GTRECW to make any corrections.

3.12.13.12  (01-01-2015)
Electronic (ELF or On-Line) and Modernized e-File (MeF) Filers

  1. Form 941 and Form 944 may be filed electronically by ELF or On-Line.

  2. Beginning with processing year 2014, Form 941, Form 943, Form 944 and 945 can be filed using the Modernized e-File (MeF) program. Form CT-1 is the only employment tax return that continues to be filed on paper only.

  3. When forms are filed electronically, it is corrected in ERS using the same procedures as a transcribed (paper) document. Each of these returns when filed electronically have the following characteristics:

    Form Type File Location Code (FLC) Document Code Address Type Which Campus
    941 E-File 35 35 Domestic, Foreign and US Possessions CSPC
    941 On-Line 38 39 Domestic, Foreign and US Possessions CSPC
    941 MeF 26/27 35/39 Domestic CSPC
    941 MeF 60 35 Foreign OSPC
    941 MeF 78 35 US Possession OSPC
    941-PR/941-SS MeF 78 35 US Possession OSPC
    943 MeF 26/27 43 Domestic CSPC
    943 MeF 60 43 Foreign Address OSPC
    943/943-PR MeF 78 43 US Possession OSPC
    944 MeF 26/27 49 Domestic CSPC
    944 E-File 35 49 Domestic CSPC
    944 On-Line 38 49 Domestic CSPC
    944 MeF 60 49 Foreign OSPC
    944 MeF 78 49 US Possession OSPC
    945 MeF 26/27 44 Domestic CSPC
    945 MeF 60 44 Foreign OSPC
    945 MeF 78 44 US Possession OSPC

3.12.13.13  (01-01-2015)
Refund Returns- 45 Day Jeopardy and $10 Million Dollar Refunds

  1. Document Perfection and ERS are responsible for identifying refunds and initiating requests for manual refunds.

    Note:

    Expeditious processing of refund returns is critical if the 45 day period is about to expire.

  2. Action Code 341 should be input by Code and Edit to show that a manual refund is needed. If these conditions are not identified by C and E, ERS must follow the following criteria:

    IF THEN
    The processing date is more than 20 days after received date or, the return due date (whichever is later) and the 45 day interest free period is in jeopardy and the refund amount is $25,000 or more

    Note:

    Refund in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other tax periods.

    Edit Action Code 341 and route to ERS/Rejects for manual refund.
    The refund is $10,000,000 or more. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.13.14  (01-01-2015)
♦Customer Account Data Engine (CADE) 2♦

  1. The Customer Account Data Engine (CADE) 2 Program Office in Headquarters, is charged with the primary goal to implement a single, modernized programming solution which provides daily processing of taxpayer accounts.

  2. The CADE 2 solution is comprised of several components, to modernize the IRS to a daily processing environment with several transition states.

  3. With CADE 2 there will be changes to campus cycles which began with cycle 201201. The new BMF campus cycles are:

    1. Campus Cycle: Thursday - Wednesday

    2. Master File Processing: Friday - Thursday

    3. Notice Review Saturday: Monday (8+ days)

    4. Unpostables: New available Tuesday; Closing Tuesday

  4. BMF transaction posting time frames are outlined as follows:

    1. Transactions will be viewable using CFOL command codes on Saturday following the weekly Master Files processing run on Thursday.

    2. Transactions will be viewable as posted transactions using IDRS command codes on Monday, following the weekly Master File processing run on Thursday.

      Note:

      With the acceleration of the IDRS weekly analysis being performed the weekend directly after the Master File processing on Thursday, transactions will be posted instead of in pending status on Monday.

  5. Cycle posting dates will reflect a format of YYYYCCDD. YYYY will indicate the year. CC will indicate the posting cycle. For IMF transactions, the following values for DD are defined:

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

    Note:

    BMF cycle posting dates on BMFOL will continue to reflect YYYYCC. YYYY will indicate the year. CC will indicate the posting cycle. BMF posting cycles in TXMOD will reflect a format of YYYYCCDD. The DD value will be 08.

3.12.13.15  (01-01-2015)
Statute Returns

  1. Any Form 941, Form 941-PR, Form 941-SS, Form 943, Form 943-PR, Form 944, Form 944-PR, Form 944-SS, Form 944(SP) or Form 945 with a current processing date equal to or more than two years and nine months after April 15 of the year following the year of the tax period without regard to extensions) or the received date, whichever is later, is a Statute Control document.

    1. Error Code 001 will appear on the screen, unless CCC "W" is present. The CCC "W" indicates the record has been cleared by the Statute Unit.

  2. Any Form CT–1 with a current processing date equal to or more than two years and nine months after March 1st of the year following the year of the tax period or the original received date, whichever is later, (without regard to any extension) is a Statute Control document.

  3. Timely filed returns for tax year 2011 or earlier must be treated as statute returns in year 2015.

  4. If the return has an attachment or stamp indicating a previous clearance by the Statute Control Unit within 90 days of the processing date, then enter CCC "W" in Field 01CCC.

  5. If the return does not have an attachment or stamp as indicated in (4), then take the following action:

    1. Treat the record as unprocessable; Suspend the record with Action Code 310 for statutory clearance.

    2. If working the Error Inventory, return document to the block.

    3. If working the Workable Suspense Inventory, notate the 2nd and 3rd copies of the Charge-Out with Action Code 310, and the current date. Handle the document as instructed for statutory clearance.

  6. The due dates for quarterly Forms 941, 941-PR, 941-SS returns and annual Forms 943, 943-PR, 944, 944-PR, 944-SS, 944(SP), 945 and CT–1 returns are as follows:

    Return Tax Period Due Date
    941/941-PR/941-SS Quarterly April 30th
    July 31st
    October 31st
    January 31st (of the following year)
    943/943-PR Annual January 31st (of the following year)
    944/944-PR/944-SS/944(SP) Annual January 31st (of the following year)
    945 Annual January 31st (of the following year)
    CT–1 Annual Last day of the second month following the calendar year for which the return is intended

    Note:

    A return may be filed on or before the 10th day of the 2nd calendar month following the period if timely deposits were made in full payment of the taxes for the period. This is not applicable to Form CT-1.

3.12.13.16  (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. Small Business/Self Employed (SB/SE) Exam will provide support and assist 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 does not restrict SP with the flexibility to refer questionable returns other than what is currently identified in various IRMs.

3.12.13.16.1  (01-01-2015)
♦Criminal Investigation (CI)"Funny Box" ♦

  1. CI investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC are willful and deliberate attempts to evade or defeat the income tax. Flagrant criminal activities includes, but is not limited to, the failure to pay taxes due and/or taxes collected or withheld and claims of false refunds based on bogus return information.

  2. Pull any return identified as having any CI criteria found in paragraph (3) below and place in the "CI Funny Box" .

  3. "CI Funny Box" Criteria:

    "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  4. IF CI has stamped the return, no further CI action is required, but if the return fits other criteria (e.g., Frivolous Argument) take appropriate action.

3.12.13.16.2  (01-01-2015)
♦ Frivolous Returns and Claims♦

  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 illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in Exhibit 3.12.13-1.

  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. See Exhibit 3.12.13-1.

    Caution:

    If the return shows Action Code 331, and has a Form 4227 attached with the remarks, Refer to Exam FRP for audit after process, 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 an Action Code 331, and a Form 4227 with the remarks, Refer to Exam FRP for audit after processing, Continue processing the return using procedures in IRM 3.12.13. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.13.17  (01-01-2015)
Returns With A Pre-Computed Penalty

  1. If a penalty other than a delinquency, late payment or FTD penalty is indicated on a return, (e.g., fraud, Form W–2), and the notation, "3465 Prepared" does not appear on the return:

    1. Prepare a Form 3465, Adjustment Request, to request an assessment of the penalty.

    2. If you are able to determine that a return remittance includes an amount applicable to all or part of the penalty referred to above, then indicate on Form 3465 the portion of the remittance available for application to the assessment.

    3. Enter CCC "X" to freeze the refund until the assessment for penalty posts to BMF.

    4. Note on the return, "3465 Prepared" and route Form 3465 to the Accounts Management (Adjustment) function.

3.12.13.18  (01-01-2015)
Related Forms

  1. The following internal forms are referred to in this section. The chart below shows the form number, form title, and use.

    Form Title Use
    941(X), 943(X), 944(X), 945(X), or CT-1(X) Adjusted Employment Return or Claim for Refund To request an adjustment of previously reported wages, tips, or withholding, .i.e., Federal Income Tax Withholding or Backup Withholding)
    3244 Payment Posting Voucher To apply money
    3465 Adjustment Request To request transfer of credits and money received as remittances
    3696 IDRS Correspondence Action Sheet To initiate correspondence to the taxpayer through the Typing Unit or IDRS
    3893 Re Entry Document Control To identify a block or a partial block of documents which require reprocessing
    4227 Intra -SC Reject or Routing Slip To identify the reason for using the Action Code
    8161 ERS Return Charge-Out To charge out returns on the Suspense List, Rejected Records List and Duplicate Document DLN Register. Input Perfection Branch will also use as a routing slip and history item.
    13195 Form 941, 943, 944, 945 Correspondence Sheet To initiate Letter 21C correspondence to the taxpayer through IDRS
    13596 Reprocessing Return Form is used by Accounts Management resubmitting incorrectly processed returns

3.12.13.19  (01-01-2015)
Perfection of Attachments

  1. If the taxpayer writes a question or requests assistance on the return itself, make a photocopy of the question/request and the taxpayer's EIN, name and address. Route this information to the appropriate function.

  2. If unrelated, unanswered taxpayer correspondence is attached to any return, and there is no action indicated on the return for the taxpayer correspondence whether it is an ERS document or not, then detach the correspondence and forward to Accounts Management. Be sure any attachment or photocopy of an attachment, except Schedule B, that is routed contains the taxpayer's name, address, EIN, and received date. Enter the required information, if missing.

3.12.13.20  (01-01-2015)
Correspondence

  1. Correspondence records with Action Code 21X will be automatically suspended for a predetermined number of days or until the taxpayer replies, whichever is earlier.

    Note:

    Do not correspond for information on any return "secured by Examination" . If unprocessable, treat as a no reply case and follow "no reply" procedures.

  2. Most correspondence is a computer based notice, or a computer generated letter, or a pre-printed letter. All correspondence now reflects a response period within 30 days and the consequences for no reply.

  3. As an ERS tax examiner initiating correspondence, you may:

    1. Use the IDRS Correspondence feature CC LETER which will be available, or

    2. Initiate correspondence by using a Correspondence Action Sheet (Form 13195) as is currently done for the IDRS operator or typist in issuing the actual correspondence.

  4. Review document prior to issuing correspondence to ensure all needed information is requested the first time. Check CC BMFOLI to ensure the return is not a duplicate return prior to corresponding.

    • If the return is posted use CC BRTVU or BMFOLR to see if the return is a duplicate. If it is SSPND 640 to have the return deleted.

    • If it does not match the posted return, enter CCC "G" and continue processing the return as an amended return.

  5. When taxpayer errors are discovered in processing which have caused or will cause processing delays and no other notification is to be sent to the taxpayer, advise the taxpayer of the reasons for the delay.

  6. If the call for action has not been completed in 30 days, an interim reply will be made telling the taxpayer when we expect to complete the required action.

3.12.13.20.1  (01-01-2015)
♦Correspondence Imaging System (CIS) Returns♦

  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Account Management (AM) receipts (including Forms 941c or 941-X 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. Follow the instructions below for processing "CIS" returns:

    IF AND THEN
    The "CIS" document has a Form 13596 or Form 3893 attached,

    Note:

    If there is an indication on the return that correspondence has been sent (e.g. CCC "3" is edited on the return) do not route return to Accounts Management (AM). Continue to process return.

    The return is not complete (i.e., missing signature, schedules or forms) 1- Remove the return from the batch,

    2- Void the DLN.

    3- Attach Form 4227 to the return and route to Accounts Management to secure missing information.

    Note:

    Do not correspond for missing information or signatures on "CIS" reprocessable/reinput returns.

    The "CIS" return does not have a Form 13596 attached, The return is not complete, (i.e., missing signature, schedules or forms), Research for prior posting (TC 150 posted)
    1. If TC 150 present and the information is the same, cancel the DLN and treat as classified waste.

    2. If TC 150 is not present, follow normal correspondence procedures

      Note:

      If there is an indication on the return that correspondence has been sent (e.g., CCC “3” is edited on the return), do not route return to AM. Continue processing return

    .

3.12.13.21  (01-01-2015)
Signature Area

  1. A signature and jurat is required on all returns except:

    • Returns prepared under Internal Revenue Code IRC 6020(b). These returns must be signed by a Compliance function representative. If not signed, route the return to Rejects to have the DLN extracted. Then, send the return to:
      Internal Revenue Service
      2970 Market St.
      Mail Stop 5- EO4.114
      Philadelphia, PA 19104

    • Returns prepared by Examination, for example "SFR" (Substitute For Return) or "Substitute Return"

      Reminder:

      Returns secured by Examination do require a signature and jurat.

    • Dummy returns prepared by IRS.

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

    • A blank return with a CP139 attached (e.g. notification that Form 941 or Form 940 may no longer be required because four consecutive Form 941 tax years were received with "NO LIABILITY" )

    • Correspondence is attached showing that the taxpayer is responding to an IRS letter.

    • Taxpayer indicates he/she has filed another type of return.

    • It appears that the taxpayer is "IRATE" because he/she has received another blank return after filing a "FINAL" return in the previous year.

    • Tentative returns.

    • Other Federal Agencies.

    • Computer generated returns with computer generated signatures.

    • Electronically filed (e File and MeF) returns may be identified by the presence of printouts in lieu of an actual return.

    • Returns identified with "CIS Image-Do not correspond for Signature" stamped below the signature line or "CIS" ("Correspondence Imaging System" ) annotated on the front of the return.

  2. Since tax examiners are not expected to be handwriting experts, Regulations allow us 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 check mark or "X" for the purpose to designate where the taxpayer should sign the return is not considered a valid signature.

  3. Accept a signature declaration (i.e., a signature with a jurat obtained through correspondence) if attached to the return.

  4. A signature of an individual, officer, partner, duly authorized agent, etc. affixed by rubber stamp, mechanical device, or computer generated software to a return is acceptable on Form(s) 941, 941-PR, 941-SS, 943, 943-PR, 944, 944-PR, 944-SS, 945, or CT-1.

3.12.13.22  (01-01-2015)
♦Use of Fax for Taxpayer Submissions♦

  1. Tax returns 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. ERS examiners will indicate the fax paragraph on the 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 any messages on a taxpayer’s answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines or 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.

3.12.13.23  (01-01-2015)
Forms 941, 941-PR, 941-SS Introduction

  1. This section provides procedures for correcting Field errors (Priority III) for Form 941, Form 941-PR, and Form 941-SS.

  2. Forms 941, 941-PR, and 941-SS contain Sections 01, 02, 03, 04, 05, 06 and 07 under ERS. Within the introduction for each ERS Section is a table showing the Fields within that section by the Field designator, the maximum Field length, the title of the Field and the location of the Field on the Forms 941, 941-PR, or 941-SS, (if applicable).

  3. Each of the Fields 05A01 through 05A31 represents a day within January. The entry within the Field is the tax liability for that day.

  4. If a dollar amount exceeds the maximum length allowable within a Form 941/941-PR/941-SS Field, see IRM 3.12.13.5.3, for processing procedures.

  5. See Exhibit 3.12.13-4, for a current Form 941 with Field Designators indicated.

3.12.13.23.1  (01-01-2015)
Forms 941-PR and 941-SS Procedures (OSPC Only)

  1. Form 941–PR, Planilla Para La Declaracion Trimestral del Patrono, and Form 941-SS, Employer's Quarterly Federal Tax Return– Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, U.S. Virgin Islands are filed to report Social Security and Medicare taxes only. These forms are filed by employers whose principal place of business is in Puerto Rico, and Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, and U.S. Virgin Islands, respectively.

  2. Any Form 941, 941-PR, or 941-SS return with an address of any U.S. Possession below should be forwarded to OSPC for processing:

    U.S. Possession U.S. Possession
    American Samoa Virgin Islands (U.S.)
    The Commonwealth of the Northern Mariana Islands Guam
    Puerto Rico Palau
    Federated States of Micronesia Marshall Islands
  3. Apply the Form 941 line processing procedures contained in IRM 3.12.13 when processing Form(s) 941-PR and 941-SS.

  4. For Forms 941-PR or 941-SS, money amounts are not allowable in Fields 0202 (Total Compensation), 0203 (Amount of Income Tax Withheld), 02QW (Adjustment to Withholding on Revisions prior to 2010), and 02EC (Earned Income Credit) (revisions prior to 2011). If an amount is shown in one of these Fields, it must be deleted.

3.12.13.23.2  (01-01-2015)
Processing Form 941 Returns Filed by Federal, State, or Municipal Governments

  1. Certain government agencies are empowered to collect from employers wages erroneously not paid to employees (or former employees). The agencies are authorized to disburse these wages to the employees concerned, and withhold the income taxes and the employee's share of the Social Security or Medicare taxes. The agencies allowed to take this action are:

    • Department of Labor

    • General Accounting Office

    • Housing and Urban Development

    • National Labor Relations Board

  2. The agencies prepare a Form 941 each quarter for the total wages collected from employers during that quarter. If no wages are collected, "No Liability" returns are to be filed. These returns may be processed as follows:

    1. The agency will show the full wages on Form 941, line 5a (Rev 2005 and subsequent) and compute the full amount of tax.

    2. For errors discovered on or after January 1, 2009, a Form 941-X should be prepared for any adjustment to the taxable Social Security and/or Medicare wages previously reported on Form 941. Repeat the same steps for the Federal Income Tax Withholding amount. The explanation on Form 941-X, should indicate the name of the agency and the Act which authorized them to collect and pay back wages. The Form 941-X will be stamped, "Do Not Transmit to SSA" .

    3. The agency also creates two copies of Form 941-X for each employer involved showing the employer's address and EIN. These Form 941-Xs are sent to the Accounts Management (AM) function servicing the area in which the employer is located. These forms are used to notify the employers of their liability and to make necessary adjustments. If the employer copies of the Form 941-Xs are attached to Form 941, detach and send the Form 941-X to the AM for processing.

3.12.13.24  (01-01-2015)
Section 01 (Forms 941, 941-PR, 941-SS)

  1. The following sections provide information concerning Form 941, 941-PR and 941-SS, Section 01.

    Note:

    All editing on Forms 941 (Rev 2005 and subsequent) will be shown in the same location on the return unless otherwise noted below:

    Field
    Designator
    Field
    Length
    Title of Field Location on Return
    01NC 4 Name Control Entity Portion

    Note:

    For procedures regarding a "Care of Name" , see Field 04CON.

    01EIN 9 Employment Identification Number Entity Portion
    01TXP 6 Tax Period Entity Portion

    Above the "Report for this Quarter" box, to the right of the entity in YYMM format.

    Note:

    The Field is "YYYYMM" , but the first two digits for the century appear/generate on ISRP or SCRIPS. Thus, only the last 4 characters, e.g. "YYMM" , are edited.

    01RCD 8 Received Date Face of the return
    01CCC 10 Computer Condition Codes Directly beneath the statement "You Must complete both pages of Form 941"
    01SIC 1 Schedule Indicator Code On the right margin opposite the end of line, Part I.
    0101 7 Number of Employees Line 1
    01SRI 1 Form 941, Schedule R Indicator An indicator "R" on the right margin opposite line 7, Forms 941-SS only.
    01CRD 8 Correspondence Received Date Code and Edit previously edited in the upper left corner of the return on the left margin. However, the Field is no longer edited by Code and Edit

    If CRD is needed by ERS, the examiner should enter the Field on the display screen, and edit it on the return margin in the upper left hand corner
    01ARN 1 Applied Refund Indicator Boxes to the right of the overpayment line.
    01CBI 1 Designee Checkbox Indicator Only when "Yes" box is checked
    01CBP 5 Designee Checkbox PIN Page 2, Part 4– Beneath the "Designee's name and phone number" near the right hand margin
    01PSN 9, (a "P" and 8 numerical characters) Paid Preparer's Tax Identification Number (PTIN) Page 2, Part 5, Along side the "Preparer's name" near the right hand margin.
    01PEN 9 Paid Preparer's EIN Page 2, part 5– Along side the "Firm's name" near the right hand margin
    01PTN 10 Paid Preparer's Telephone Number Page 2, Part 5 — Along side the "Firm's name" near the right hand margin

3.12.13.24.1  (01-01-2015)
Field 01NC – Name Control- 4 Positions

  1. Name Control This Field is located in the entity section of the return. Each of the four positions must have a letter of the alphabet, a numeric, a hyphen, an ampersand or a blank. The method for determining the name control is found in Document 7071A, Name Control Job Aid.

    Note:

    For procedures regarding a "Care of Name" , see Field 04CON.

  2. Invalid Conditions The name control Field is invalid if:

    1. The first position is not alpha or numeric.

    2. The 2nd, 3rd or 4th is not an alpha, numeric, hyphen, ampersand or blank.

    3. There are any intervening blanks between characters.

  3. Correction Procedures: Check the screen display against the return

    If ... Then ...
    Transcribed incorrectly,
    Enter the correct name control from the return.
    The name control is not available, 1– Initiate research to secure the name control.

    2– If data is not available, or you are unable to determine the name control, suspend with Action Code 351.

    3– A Rejects Unit examiner will initiate research to secure a name control.

3.12.13.24.2  (01-01-2015)
Field 01EIN – Employer Identification Number (EIN) -9 Positions

  1. The EIN is a number assigned by IRS for identification of a business tax account. This Field is located beneath the title of the return, or in the Entity Section of the return.

  2. Invalid Conditions: The EIN is invalid if:

    1. It is not numeric.

    2. It is less than nine characters.

    3. The first two digits are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, 80, or 89.

    4. It is all zeros or all nines.

  3. Correction Procedures: Check the Field with the return.

    If ... Then ...
    Transcribed incorrectly, Enter the correct EIN from the return.
    The EIN transcribed was incorrect, 1– Search the return or attachments for a valid EIN.

    2– If found, enter the correct number.

    3– Issue Letter 3875C as a non-suspense letter to the address on the return.

    Note:

    Do not send Letter 3875C if three or less digits of the EIN are transposed, different, or missing, or when CC INOLES indicates the account has been "merged to" or "merged from" or when the taxpayer uses an SSN number on a BMF return, and your research has determined there is no entity on Master File with that number sequentially entered in EIN format.

    A correct number cannot be determined from the return, 1– Research IDRS for the correct number.

    2– If found, enter the correct number.

    3– Issue Letter 3875C as a non-suspense letter to the address on the return.

    Note:

    Do not send Letter 3875C if three or less digits of the EIN are transposed, different, or missing, or when CC INOLES indicates the account has been "merged to" or "merged from" or when the taxpayer uses an SSN number on a BMF return, and your research has determined there is no entity on Master File with that number sequentially entered in EIN format.

    The data is not available through research, Use CC SSPND with Action Code 351 to allow for additional research.
    More than one number is found, or if unable to determine a valid EIN, 1– Suspend with Action Code 320 for referral to Entity Control.

    2– If an EIN is assigned by Entity Control, it should be notated in the left margin with an assignment date in MMDDYYYY format, and the employee's number or IDRS number.

3.12.13.24.3  (01-01-2015)
Field 01TXP - Tax Period- 6 Positions

  1. This Field is shown in the entity section or upper portion of the return. For example, on Form 941, Rev 2005 and subsequent, the tax period is edited above the "Report for this Quarter" box positioned to the right of the entity. It is always shown in "YYYYMM" order (i.e., September 2009= 200909).

  2. Invalid Conditions: This Field is invalid if:

    1. It is not all numeric,

    2. It is less than the Automated Data Processing (ADP) date of 196203 or greater than the process date,

    3. It is all blank.

  3. Correction Procedures: Check the return and/or attachments for the correct tax period.

    If ... Then ...
    Transcribed incorrectly, Enter the correct tax period from the return.
    The return is for a Non-ADP tax period, Reject (RJECT) or suspend (SSPND) the record with Action Code 620. Refer to IRM 3.12.13.79, Non-ADP Returns.
    The return is for a tax period greater than the process date, (e.g. early filed return) Suspend (SSPND) the record with Action Code 480. Note: Form 941 returns may be processed during any month in a quarter for which the return is intended.
    There are multiple tax periods, 1– Treat as unprocessable and initiate correspondence for clarification of the tax period (or tax periods). Suspend with the appropriate Action Code (21X).
    2– If you receive a reply, process to the applicable tax period (or tax periods).

    Note:

    If the return or the taxpayer's reply indicates it should be treated as a final return, delete the received date and enter CCC "F" in Field 01CCC and in the center of the bottom margin of the return.


    3– If you do not receive a reply and:
    • the multiple tax periods are future tax periods, process the return to the earliest tax period.

    • the multiple tax periods are prior tax periods, process the return to the latest tax period.

    The tax period cannot be determined, or is not shown on the return, Enter the current quarter being processed as the tax period.

3.12.13.24.4  (01-01-2015)
Field 01RCD–Received Date- 8 Positions

  1. This Field is date stamped or edited on the face of the return. It is required if the return is delinquent, amended, or has a CCC "D" , "G" , "R" or "7" . If all the positions in the Field are blank, it would not cause an invalid condition.

  2. Form 941 (Rev 2005 and subsequent) returns processed through SCRIPS will be assigned a received date consisting of one zero and 7 twos (02222222), if the entry is missing, or illegible.

  3. Invalid Conditions: This Field is invalid if:

    1. Not in "YYYYMMDD" format.

    2. Prior to 19620101.

    3. Later than the current processing date, or

    4. Not within the valid month, day range of the table below.

    5. If processed prior to the ending date of the current quarter.

      Example:

      Form 941 is received on March 4, 2015 for the first quarter 2015.

    Month Day
    01 01–31
    02 01–28 (29 in leap year)
    03 01–31
    04 01–30
    05 01–31
    06 01–30
    07 01–31
    08 01–31
    09 01–30
    10 01–31
    11 01–30
    12 01–31
  4. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    Transcribed incorrectly, Enter the correct received date from the return to Field 01RCD.
    The received date is not needed because the return due date is later than current processing date. Delete the entry from Field 01RCD.
    The received date is required, but not present, or not stamped on the return, or a valid handwritten received date is not present. 1- Determine the received date using the following priority when one is needed but is not stamped on the return or a valid handwritten received date is not present.
    1. Earliest legible U.S. Post Office, Private Delivery Service, or foreign postmark

      Note:

      If an envelope is not attached, use the postmark date stamped on the face of the return.

      Note:

      A private metered postmark is to be considered timely if received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Service Center Automated Processing System (SCAMPS) digital dates

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

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

    5. DLN Julian Date less 10 days



    2– Enter the correct received date in 01RCD.
    The received date is invalid and it appears that the incorrect year was used (i.e., 20090115 instead of 20100115), and other information (Julian date, postmark date, and/or signature date) indicates the received date should be a current year, Change the received date year to the current year.
    Multiple dates are on the return, Use the earliest date. Circle out all other received dates.

3.12.13.24.5  (01-01-2015)
Field 01CCC - Computer Condition Codes (CCC)— 10 Positions

  1. This Field is located on Forms 941, 941-PR, or 941-SS below last line of page 1 in the center of the bottom margin of the return. Computer Condition Codes (CCC) are used to identify a special condition or computation for the computer. See IRM 3.12.13.9 for a description of each of the codes and their use.

  2. Invalid Conditions—This Field is invalid if:

    1. The entry is other than CCC "B" , "C" , "D" , "E" , "F" , "G" , "J" , "M" , "O" ," R" , "S" , "T" , "W" , "X" , "3" , "4" or "7" .

    2. CCC "G" is present and any other CCC except "W" or "3" is present.

    3. CCC "E" and "F" are used together.

    4. CCC "E" and "S" are used together.

    5. CCC "7" is present and CCC "D" and "R" are present.

    6. CCC "4" is present and CCC "R" is present.

  3. Correction Procedures: Check the screen display with the return.

    If ... Then ...
    Other CCCs are present with the "W" , "3" , and "G" Code, 1– Delete the other codes, if the CCC "G" is needed.

    2– If the CCC "G" is not needed, delete it and leave the other codes. Review all sections and input data where necessary.
    CCC "E" is present with CCC "F" , 1– Review the return for an indication by the taxpayer that the return was final.
    2– Determine which is correct and delete the incorrect CCC.
    CCC "D" and "R" are present with CCC "7" , Determine which is correct and delete the incorrect CCC.
    Both CCC "4" and "R" are present, Determine which is correct and delete the other.
    The taxpayer has checked the "Seasonal Filer" box in Part 3, Form 941 Enter the CCC "T" .
    The taxpayer has checked the "Final Return" box and the "Seasonal Filer" box in Part 3, Form 941. Enter CCC "T" only.
    None of the conditions above apply, Delete the code(s).

3.12.13.24.6  (01-01-2015)
01SIC–Schedule Indicator Code (SIC)- 1 Position

  1. This Field is located on Forms 941, 941-PR, or 941–SS (Rev 2005 and subsequent) in the right margin opposite the end of the line for Part 1.

  2. The Schedule Indicator Code (SIC) is used to notify the computer that the Record of Federal Tax Liability (ROFTL) is blank, incomplete, unnecessary, outside the tolerance or that a penalty should not be assessed.

  3. Invalid Conditions—This Field will be invalid if it is other than blank, 1, 2, or 3.

  4. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    Transcribed incorrectly, Enter the correct SIC from the return.
    The code is not present, or should not be present on the return, Delete the entry.

3.12.13.24.7  (01-01-2015)
Field 0101– Number of Employees- 7 Positions

  1. This Field is entered on line 1, Form 941, 941-PR or 941-SS (Rev 2005 and subsequent) returns. This Field is now required for each quarter a return is filed.

  2. Invalid Condition: The Field is invalid if it is not all numeric.

  3. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    Transcribed incorrectly, Enter the correct entry from the return.
    Blank and nothing indicated on an attachment, Enter a "1" in Field 0101 if any tax is reported on the form.

3.12.13.24.8  (01-01-2015)
Field 01SRI- Form 941, Schedule R Indicator- 1 Position

  1. This Field is used to indicate that a Form 941, Schedule R, "Allocation Schedule for Aggregate Form 941 Filers" was attached to the Form 941 when filed.

  2. The Schedule R is filed by an individual or entity who has previously filed Form 2678, and is filing one Form 941 return under his own EIN for two or more unrelated parties under IRC 3504.

  3. Valid entries are "R" (active) or blank (inactive).

  4. When the Form 941-SS is filed with a Schedule R attached, Code and Edit will edit an "R" opposite line 7 on the right hand margin.

  5. Invalid Conditions: This Field is invalid if any character other than "R" is present.

  6. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    A character other than "R" is present, Delete the entry.

3.12.13.24.9  (01-01-2015)
Field 01CRD- Correspondence Received Date— 8 Positions

  1. The Correspondence Received Date (CRD) should be present when returns have been held in Suspense and the reply is received after the Return Due Date.

  2. If a Field error generates due to a previously edited CRD, follow the correction procedures below.

  3. Invalid Conditions:

    • Not numeric.

    • Less than 8 numerics.

    • Not in "YYYYMMDD" format.

    • Not in the valid month or day range.

    • The same as, or prior to, the return due date.

    • Greater than the current date.

  4. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    Transcribed incorrectly, Enter the correct CRD from the correspondence.
    The taxpayer reply is by Fax, Use the following priority to determine the CRD:
    • Correspondence Received Date

    • Date the reply was faxed,

    • Date entered on the fax cover sheet by taxpayer

    • Current date

    The taxpayer replies, (i.e., other than fax) Use the following priority order to determine the CRD:
    • Correspondence Received Date

    • Postmark date on the reply envelope

    • Current date.

    The date is illegible, Check the attached correspondence which bears a received date stamp
    More than one CRD is stamped or written. Use the CRD that made the return processable. Line out all other CRDs.
    A date cannot be determined, Use current date minus 10 days.
    There was no reply from the taxpayer. Enter a "3" in the CCC Field and transcribe.
    Error Code 034 generates after input of 01CRD, Then see instructions below for correcting or IRM 3.12.38.5.1.6, Correspondence Received Date (CRD), for instructions.

3.12.13.24.10  (01-01-2015)
Field 01ARN–Applied Refund Indicator- 1 Position

  1. This Field is located on Forms 941, 941-PR, and 941-SS, under the overpayment line.

  2. This Field is used to indicate whether the taxpayer has elected to treat an overpayment as a credit elect to the next tax period or as a refund. ISRP enters a "2" if the "Refund" box contains an entry on a Form 941, 941-PR, or 941-SS.

  3. Invalid Condition: This Field is invalid if it is:

    1. Not blank, or

    2. An entry other than "2" .

  4. Correction Procedures: Compare the screen display and the return.

    If ... Then ...
    Transcribed incorrectly, or an invalid code is present, Correct the entry from the return. The appropriate codes are:
    •"2" –"Refund" box is checked.

    •"blank" –Neither box is checked, or both the "Applied to next return" and "Refund" boxes are checked, or the "Applied to next return" box is checked.

3.12.13.24.11  (01-01-2015)
Field 01CBI - Designee Checkbox Indicator- 1 Position

  1. The Designee check box Field on Forms 941, 941-PR, and 941–SS is on page 2, Part 4 along the left hand margin. The Field consists of 2 boxes, "YES" and "NO" .

  2. If the taxpayer checks the "Yes" box, ISRP or SCRIPS will enter a "1" . An entry to both boxes or only the "NO" box is not transcribed.

  3. There are validity checks on the Field, but the Field is not correctable.

  4. Invalid Conditions: If the value is other than "1" or blank.

  5. Correction Procedures: Compare the screen display and the return.

    If ... Then ...
    The value is other than "1" or blank, Delete the Field 01CBI and continue processing.

3.12.13.24.12  (01-01-2015)
Field 01CBP - Designee Checkbox PIN (Personal Identification Number) - 5 Positions

  1. The Field is located on Form 941, 941-PR, or 941-SS on page 2 in Part 4 on the right side below the Designee name and phone number (Rev 2008 and subsequent).

  2. The Third Party Designee Identifying Number is comprised of any 5 alpha (i.e., "A" to "Z" ), numeric (e.g. "0" to "9" ), or any combination of, characters chosen at random by the taxpayer or the taxpayer's representative.

  3. The Third Party Designee Identifying Number is only for the tax period of the return on which it appears. On all future filings, the taxpayer can keep the same PIN number or change the PIN number.

3.12.13.24.13  (01-01-2015)
Field 01PSN — Paid Preparer's Tax Identification Number (PTIN) – 9 Positions

  1. The Paid Preparer's Tax Identification Number (PTIN) is located at the bottom of page 2 of Form 941 along the right hand margin.

  2. Data may or may not be present in Field 01PSN.

  3. Valid characters are all blank, all numeric or with the alpha "P" in the first character position followed by eight numerics.

    Note:

    The first character in a PTIN as a Tax Identification Number (TIN) must be with the alpha "P" . The range for a valid PTIN (as a TIN) is P00000001 through P99999998. A "P" followed by all zeroes or all nines is not valid.

    Note:

    If the Paid Preparer information is present, either Field 01PSN or 01PEN should have an entry. Only one of these Fields is required.

  4. Invalid Conditions: The Field is invalid if:

    1. The nine characters are all zeroes or nines.

    2. The nine characters are not a "P" followed by 8 numerics.

  5. Correction Procedures: If the PTIN on the return is invalid, do not attempt to correct the return information. Blank Field 01PSN.

3.12.13.24.14  (01-01-2015)
Field 01PEN - Paid Preparer's EIN– 9 Positions

  1. The Preparer's EIN is located at the bottom of Page 2, lower right hand side, above the Preparer's phone number on Forms 941, 941-PR or 941-SS (all Rev 2008 and subsequent).

  2. Invalid Conditions: The Preparer's EIN must be a nine-digit number. This Field is invalid if:

    1. The EIN is all zeroes or all nines.

    2. The first two digits are invalid for Field 01EIN, See IRM 3.12.13.24.2.

  3. Correction Procedures: If the Preparer EIN on the return is invalid, do not attempt to correct the information. Delete Field 01PEN.

3.12.13.24.15  (01-01-2015)
Field 01PTN — Paid Preparer's Telephone Number – 10 Positions

  1. The Preparer's Telephone Number is located on page 2, below Part 5 of Forms 941, 941-PR, or 941-SS, (Rev 2008 and subsequent).

  2. The Paid Preparer's Telephone Number should be shown as 10 characters. Only numerical characters (e.g. 0 through 9) are valid for this Field.

    1. If the Paid Preparer's Telephone Number is incomplete, illegible, or less than 10 digits review the return and attachments. If unable to determine a complete or legible Paid Preparer's Telephone Number, blank the Field from the display screen.

    2. If the Paid Preparer's Telephone Number has more than 10 digits, only the first 10 digits will be captured.

  3. Correction Procedures: Compare the screen display with the return.

    If ... Then ...
    The Paid Preparer's Telephone Number is incomplete, illegible, or less than 10 digits, 1- Review the return and attachments for a complete telephone number.

    2- If a number cannot be located, delete the Field on the screen display.
    —If a number is located, enter the complete telephone number on the screen display.
    The return is for a tax period prior to 200512, Blank the Field. The tax period precedes the addition of the preparer telephone number to the Forms 941, 941-PR, or 941-SS.

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