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Part 3. Submission Processing

Chapter 12. Error Resolution

Section 14. Income Tax Returns for Estates and Trusts (Forms 1041, 1041-QFT, and 1041-N) (Cont. 3)

3.12.14  Income Tax Returns for Estates and Trusts (Forms 1041, 1041-QFT, and 1041-N) (Cont. 3)

3.12.14.19 
Sections 23 through 25 - Form 3800,

3.12.14.19.3 
Error Record Format - Section 25

3.12.14.19.3.1  (01-01-2012)
Field 2501X - Carbon Dioxide Sequestration Credit (Form 8933)

  1. Description:

    • Field 2501X is transcribed from Part III, Line 1x on Form 3800.

    • The credit is valid from 200810 to present.

3.12.14.19.3.2  (01-01-2012)
Field 2501Y - Qualified Plug-in Electric Drive Motor Vehicle Credit (Form 8936)

  1. Description:

    • Field 2501Y is transcribed from Part III, Line 1y on Form 3800.

    • The credit is valid from 200901 to present.

    Note:

    Valid in service dates must be after 1/01/2009 and vehicle year 2009.

3.12.14.19.3.3  (01-01-2012)
Field 2501Z - Qualified Plug-in Electric Vehicle Credit (Form 8834, Part I only)

  1. Description:

    • Field 2501Z is transcribed from Part III, Line 1z on Form 3800, General Business Credit.

    • Must have valid in service date after 2/17/2009 and vehicle year 2009.

3.12.14.19.3.4  (01-01-2012)
Field 2504G - Qualified Railroad Track Maintenance Credit (Form 8900)

  1. Description:

    • Field 2504G is transcribed from Part III, Line 4g of Form 3800.

    • The credit is valid from 200501 to present.

3.12.14.20  (01-01-2012)
Priority IV Errors – Error Codes 001 Through 999

  1. IRM 3.12.14.18 provides detailed error correction procedures for Error Codes 001 through 999.

3.12.14.20.1  (01-01-2012)
♦Error Code 001 – Tax Year - Invalid Entry♦

  1. Error Code 001 will display as follows:

    Field
    Designator     		Field Name Field Length
    01TXP Tax Period 6
    01CCC Computer Condition Code 10
    01RCD Received Date 8
    01RDD> Return Due Date - Computer 8

  2. Invalid Condition - Error Code 001 will generate when any of the following conditions are present:

    • Computer Condition Code "G" is Not Present - The processing date is equal to or more than 2 years and 10 months after the Return Due Date or the Received Date (whichever is later) and Computer Condition Code "W" is not present.

    • Computer Condition Code "G" is Present - The processing date is equal to or more than 2 years and 10 months after the Return Due Date and Computer Condition Code "W" is not present.

    • "G" Coded and Non-"G" Coded Returns – The processing date is less than 2 years after the Return Due Date and Computer Condition Code "W" is present.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Do not send the following returns to Statute Control. Instead, enter W in Field 01CCC and on the return and continue processing:

      • any return secured by Compliance (i.e., 6020(b))
      • any return with a TC 59X (Transaction Code)
      • Any return that is a Substitute for Return prepared by Examination (SFR in the margin) with Document 13133 Expedite Processing Cycle attached.

    3. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

      If... Then...
      Field 01RCD is blank

      1. Enter the Received Date in Field 01RCD. Use the earliest date, if multiple Received Dates are present,

      2. IRM 3.12.14.9.9. to determine the Received Date.

      CCC W was entered incorrectly Delete CCC W from Field 01CCC.
      The return has a stamp that indicates a previous clearance by Statute Control within the last 90 days Enter CCC W in Field 01CCC and on the return.

      Note:

      Do not send the return to Statute Control.
      The return is not stamped by Statute Control within the last 90 days

      1. SSPND 310,

      2. Prepare Form 4227 to route to Statute Control.

  4. Suspense Correction:

    1. When Statute Control returns the cleared document, enter W in Field 01CCC and on the return. Continue processing.

    2. If Statute Control requests the record to be voided to them, SSPND 640.

3.12.14.20.2  (01-01-2012)
♦Error Code 002 – Name Control Mismatch♦

  1. Fields Displayed – Error Code 002 will display as follows:

    Field Designator on Form 1041 Field Name Length
    CL Clear Code 1
    01NC Name Control/Check Digit 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    01RDD> Return Due Date-Computer 8
    01CCC Computer Condition Code 10
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

    Note:

    The literal SECTION 02 NOT PRESENT will display if no entries are present.

  2. Invalid Condition – Error Code 002 will generate when the Name Control mismatched against the National Account Profile (NAP) or Entity Index File (EIF).

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 002, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Name Control have posted to the NAP. If Error Code reappears, continue with the remainder of the correction procedures.

    2. When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the On-Line Entity (OLE) indicators as appropriate upon transmitting the ERS screen.

    3. Correct all misplaced entries, coding and transcription errors.

    4. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

    5. Refer to all the following research instructions in this error code before taking any action.

    6. If Field 01NC and the Name on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name.

      If... Then...
      The Name on the return or attachment matches the Name Control on INOLES, Bring up underprint.
      The Name Control on INOLES is different from the Name on the return or attachment, Research NAMEB/NAMEE for a new EIN.

    7. If a new EIN is located, verify the Name Control using CC INOLES.

      If... Then...
      The Name Control on INOLES matches the Name on the return or attachment,

      1. Ensure that the entity information matches the return.

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C when: •Three or less digits of the EIN are transposed, different, missing,
      •INOLES indicates the account has been merged to or merged from, or
      •The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN.

      Multiple EINs are located,

      1. SSPND 320 to Entity Control.

      2. Prepare Form 4227 with the notation MULTIPLE EINS.

      INOLES indicates a Merge To (MT) EIN, Research the MT EIN on INOLES.
      The MT EIN matches the entity on the return or attachments, Enter the MT EIN in Field 01EIN.

      Note:

      Do not send Letter 3875C of MT EIN cases.
      The MT EIN does not match the entity on the return or attachment, SSPND 320 to Entity Control.

    8. If the Name on the return or attachment does not agree with the Name Control on INOLES or there is an indication of a name change on Form 1041 ( Box F), research ENMOD for a new name.

      If... Then...
      The Name Control on ENMOD matches the Name on the return or attachments, Enter C in the Clear Code field.
      The Name Control on ENMOD or INOLES does not match the Name on the return or attachments,

      1. SSPND 320 to route the return to Entity.

      2. Attach Form 4227 with the notation NO RECORD.

    9. If the Name change has not been made, research ENMOD for a pending TC 013.

      If... Then...
      A pending TC 013 is present, Enter C in the Clear Code field.
      A pending TC 013 is not present,

      1. SSPND 320 to route to Entity.

      2. Attach Form 4227 with the notation REQUEST NAME CHANGE (TC 013).

  4. The name control for EINS with the following prefixes:

    • 20-xxxxxxx

    • 26-xxxxxxx

    • 27-xxxxxxx

    • 45-xxxxxxx

    • 46-xxxxxxx

    • 47-xxxxxxx

    will be the first four characters of the first name on the Primary Name Line, for trusts, ignoring any leading terms such as "Trust for" . For estates, the name control should be the first four characters of the last name (surname). These EINs were assigned by the Modernized Internet EIN (MOD IEIN) application and can be used for any BMF entity.

    Example:

    MOD IEIN assigned for a trust named Jane Doe Trust - the name control would be JANE.
    MOD IEIN assigned for an estate named Jane Doe Estate - the name control would be DOE.

  5. Suspense Correction -

    1. If there is an indication that Entity Control has assigned an EIN to the return, determine the Entity Assignment Date:

      If... Then...
      The Entity Assignment Date is past the Return Due Date or Received Date,

      1. GTSEC 01.

      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.

    2. Research IDRS using CC BMFOL to determine if payments posted incorrectly.

      If... Then...
      The payment posted to the wrong EIN,

      1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

      2. Notate on Form 3465, MOVE PAYMENT TO CORRECT MODULE, UPON COMPLETION AND RELEASE FREEZE.

      3. Write FORM 3465 PREPARED on the return, to the left of the Entity section.

      4. Enter CCC X in Field 01CCC.
      The payment posted correctly,

      1. Enter the correct EIN in Field 01EIN and on the return.

      2. Enter C in the Clear Code field.
      Payment cannot be located, Enter C in the Clear Code field.

3.12.14.20.3  (01-01-2012)
♦Error Code 003 – Check Digit Invalid♦

  1. Fields Displayed – Error Code 003 will display as follows:

    Field Designator Field Name Length
    01NC Name Control 4
    01EIN Employer Identification Number 9
    01RDD> Return Due Date 8
    01CCC Computer Condition Code 10

  2. Invalid Condition – Error Code 003 will generate when any of the following conditions are present:

    • A check digit is present but is not valid for the EIN.

    • The letters E, G, or M are present in Field 01NC.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

      If... Then...
      The check digit in Field 01NC does not match the return or is not legible , Enter the Name Control from the return in Field 01NC.
      The EIN on the return is not legible, Research NAMEB/NAMEE for correct EIN.

    3. Compare the EIN from NAMEB/NAMEE to the EIN on the return.

    If ... Then ...
    The EIN on Form 1041 matches the EIN on NAMEB/NAMEE, Enter Name Control from NAMEB/NAMEE in Field 01NC.
    Research indicates a different EIN, Verify the EIN and name on INOLES.
    Name Control on INOLES matches the name on the return or attachments,

    1. Overlay Field 01EIN with the EIN from INOLES.

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

      Note:

      Do not send Letter 3875C when: •Three or less digits of the EIN are transposed, different, missing,
      •INOLES indicates the account has been merged to or merged from, or
      •The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN.

    Unable to locate an EIN or more than one EIN is located,

    1. SSPND 320 to Entity Control.

    2. Prepare Form 4227 with the notation NO RECORD OF EIN


    .

  4. Suspense Corrections:

    • Research IDRS using CC BMFOL to determine if payments posted incorrectly.

    If... Then...
    The payment posted to the wrong EIN,

    1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

    2. Notate on Form 3465, MOVE PAYMENT TO CORRECT MODULE, UPON COMPLETION AND RELEASE FREEZE.

    3. Write FORM 3465 PREPARED on the return, to the left of the Entity section.

    4. Enter CCC X in Field 01CCC.
    The payment posted correctly,

    1. Enter the correct EIN in Field 01EIN and on the return.

    2. Enter C in the Clear Code field.

    .
    Payment cannot be located, Enter C in the Clear Code field.

3.12.14.20.4  (01-01-2012)
♦Error Code 004 – Name Control/EIN Validation♦

  1. Fields Displayed – Error Code 004 will display as follows:

    Field Designator Field Name Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
    01RDD> Return Due Date-Computer 8
    01CCC Computer Condition Code 10

  2. Invalid Condition – Error Code 004 will generate when any of the following conditions are present:

    • The EIN is not present at Master File (MF)

    • The Entity Index File (EIF) and the National Account Profile (NAP) were not accessed or were not operational causing a blank underprint in Field 01NC

    Note:

    An underprint of XXXX indicates that there is no account on the Master File, while a blank underprint indicates that the NAP has not been accessed or was not operational.

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 004, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Name Control/EIN have posted to the NAP. If Error Code 004 reappears, continue with the remainder of the correction procedures.

    2. When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the ERS screen.

    3. Correct all misplaced entries, coding and transcription errors.

    4. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

    5. Refer to all the following research instructions in this error code before taking any action.

    6. If Field 01NC and the Name on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name Control:

      If... Then...
      The Name on the return or attachments matches the Name Control on INOLES, Bring up underprint.
      The Name Control on INOLES is different from the Name on the return or attachments, Research NAMEB/NAMEE for a new EIN.

    7. If a new EIN is located, verify the Name Control using CC INOLES.

      If... Then...
      The Name Control on INOLES matches the Name on the return or attachments,

      1. Ensure that the entity information matches the return.

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

      .

      Note:

      Do not send Letter 3875C when: •Three or less digits of the EIN are transposed, different, missing,
      •INOLES indicates the account has been merged to or merged from, or
      •The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN.

      Multiple EINS are located,

      1. SSPND 320 to Entity Control.

      2. Prepare Form 4227 with the notation MULTIPLE EINS.

      INOLES indicates a "Merge To" (MT) EIN, Research the MT EIN on INOLES.
      The MT EIN matches the entity on the return or attachments, Enter the MT EIN in Field 01EIN.
      The MT EIN does not match the entity on the return or attachments, SSPND 320 to Entity Control.

    8. If the Name on the return or attachments does not agree with the Name Control on INOLES or there is an indication of a name change on Form 1041( Box F), research ENMOD for a new name.

      If... Then...
      The Name Control on ENMOD matches with the Name on the return or attachments, Enter a C in the Clear Code field.
      The Name Control on ENMOD or INOLES does not agree with the Name on the return or attachments,

      1. SSPND 320 to route the return to Entity Control.

      2. Attach Form 4227 with the notation NO RECORD.

    9. If the Name change has not been made, research ENMOD for a pending TC 013.

      If... Then...
      A pending TC 013 is present, Enter C in the Clear Code field.
      A pending TC 013 is not present,

      1. SSPND 320 to route to Entity Control.

      2. Attach Form 4227 with the notation REQUEST NAME CHANGE TC 013.

  4. Suspense Correction:

    1. If there is an indication that Entity Control has assigned an EIN to the return, determine the Entity Assignment Date.

      If... Then...
      The Entity Assignment Date is past the Return Due Date or Received Date,

      1. GTSEC 01.

      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.

  5. Research IDRS using CC BMFOL to determine if payments posted incorrectly.

    If... Then...
    The payment posted to the wrong EIN,

    1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

    2. Notate on Form 3465, MOVE PAYMENT TO CORRECT MODULE, UPON COMPLETION AND RELEASE FREEZE.

    3. Write FORM 3465 PREPARED on the return, to the left of the Entity section.

    4. Enter CCC X in Field 01CCC.
    The payment posted correctly,

    1. Enter the correct EIN in Field 01EIN and on the return.

    2. Enter C in the Clear Code Field.
    Payment cannot be located, Enter C in the Clear Code field.

3.12.14.20.5  (01-01-2012)
♦Error Code 007 – Received Date Earlier Than Tax Year♦

  1. Fields Displayed – Error Code 007 will display as follows:

    Field Designator Field Name Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10

  2. Invalid Condition – Error Code 007 will generate when the Received Date is earlier than the first day of the Tax Period/Year.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

      If... And... Then...
      The Received Date is invalid and it appears that the incorrect year was used (i.e., 20110115 instead of 20120115), and other information (Julian date, postmark date, and/or signature date) indicates that the received date should be a current year,   Change the Received Date year to the current year in Field 01RCD.
      The return is an early filed Final return,  

      1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.

      2. Enter F in Field 01CCC.
      The return is not an early filed Final return, The Tax Period ending is less than four months after the Received Date,

      1. SSPND 480.

      2. Prepare Form 4227 with the notation EARLY FILED.


      2.
      The Tax Period ending is more than four months after the Received Date,

      1. Initiate correspondence for clarification of the Tax Period.

      2. SSPND 211.
      The month of the Received Date is prior to the Tax Period ending, Change the month of the Received date to equal the month of the Tax Period.

  4. Suspense Correction:

    If... Then...
    The taxpayer replies that the return is a Final,

    1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.

    2. Enter F in Field 01CCC.
    The taxpayer replies that the return is not a final return, SSPND 480 until the end of the tax period provided by the taxpayer.
    The taxpayer fails to reply or the reply is not adequate,

    1. Enter 3 in Field 01CCC.

    2. SSPND 480 until the end of the tax period indicated on the return.

3.12.14.20.6  (01-01-2012)
♦Error Code 010 – Amended Return"G" Coded♦

  1. Fields Displayed – Error Code 010 will generate as follows:

    Field Designator Field Name Length
    01NC Name Control 4
    >>>> Name Control Computer 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    >>>> Tax Period Computer 2
    01FID Fiduciary Code 1
    01TRC Trust Code 1
    01CCC Computer Condition Code 10
    01RCD Received Date 8
    01RDD> Return Due Date-Computer 8
    01FIN Fiduciary EIN 9
    01CBI Paid Preparer Checkbox Indicator 1
    01PSN Preparer PTIN 9
    01PEN Preparer Employer Identification Number 9
    01PTN Paid Preparer Telephone Number 10
    01CRD Correspondence Received Date 8
    01ADC Audit Code 3
    01ESB ESBT Indicator 1
    01PII Pooled Income Fund Indicator 1
    01PIC Penalty and Interest Code 1
    01MSC Missing Schedule Code 4
    01ISI Installment Sale Indicator 1
    01HSC Historic Structure Code 1
    01QNT Form 1041-QFT – Number of Trusts 6
    01EWI E-file Mandate Waiver Indicator 1
    Section 02    
    Section 03    
    Section 04    
    Section 05    
    Section 06    
    Section 07    
    Section 15    
    Section 16    
    Section 17    
    Section 18    
    Section 20    
    Section 21    

  2. Invalid Condition – Error Code 010 will generate when Computer Condition Code G is present and fields other than 01NC, 01EIN, 01TXP, 01RCD, 01CCC, 01CRD, and 01EWI contain entries.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. Determine if CCC G was input correctly:

    If... Then...
    Return indicates amended, revised, supplemental, corrected or superseding, Research the applicable Command Code(s) e.g., BRTVU, BMFOL, SUMRY, and/or TXMOD to determine if information is exactly the same as the posted return.
    All information is not the same,

    1. Process the return with CCC G.

    2. DLSEC to delete all sections except Section 01.

    3. Delete the invalid entries that are present in Section 01. GTSEC 01, if necessary.
    All information is exactly the same, SSPND 640 and route to Rejects.
    A return is not posted for the tax period and the return is an amended return, Continue processing as an amended return.
    A return is not posted for the tax period and the return is not amended (G coded in error),

    1. Enter all data in sections, as needed.

    2. Ensure that the Section 01 fields are correct.

    3. Delete the G code in Field 01CCC.

    Note:

    When deleting CCC G and the sections required are shown as being present, no further verification of section entries is needed.

3.12.14.20.7  (01-01-2012)
Error Code 011 – Remittance/No Section 5

  1. Error Code 011 will display as follows:

    Field
    Designator     		Field Name
    RMIT> Remittance
    01RCD Received Date
    01CCC Computer Condition Code

    Note:

    The literal "SECTION 05 NOT PRESENT" will display if no entries are in Section 05.

3.12.14.20.7.1  (01-01-2012)
Invalid Condition – Error Code 011

  1. Error Code 011 will generate when a Remittance amount is present but there is no data in Section 05 and Computer Condition Code "G" is not present.

3.12.14.20.7.2  (01-01-2012)
Correction Procedures – Error Code 011

  1. Correct all misplaced entries, coding errors, and transcription errors.

  2. If the record required Computer Condition Code "G" :

    • Enter "G" in Field 01CCC.

  3. If data is present on Form 1041 for any of the fields in Section 05:

    • GTSEC 05.

    • Enter the appropriate data in all applicable fields.

  4. If no entries are present in Field RMIT> and Field 05B/D but the literal "RPS" is present on the top line of the screen display:

    • Enter $.01 in Field 0523.

3.12.14.20.8  (01-01-2012)
♦Error Code 014 – Missing Address Entries♦

  1. Fields Displayed – Error Code 014 will display as follows:

    Field Designator on Form 1041 Field Name Length
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Condition – Error Code 014 will generate when any of the following conditions is present:

    • If the street address is present, Field 02CTY and Field 02ST must be present, unless a Major City Code is used.

    • If a Major City Code is used, Field 02ADD must be present.

    • A City must be present. If the city is not in the Major City format, Field 02ST must be present. Field 02 ADD can be blank.

    • A Major City Code is used and Field 02ST is present.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare the displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. Research using any of the following for valid address information: INOLES, NAMEB/NAMEE, ENMOD, or Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      If... And... Then...
      A Major City Code is present, A street address is not available,

      1. Enter the City Name (spelled out, not MCC format) in Field 02CTY.

      2. Enter the State Code in Field 02ST.

      The Major City Code is correct, The state is present, Delete Field 02ST.
      The ZIP Code or Address cannot be corrected from the information on the return, attachments or research,   DLSEC 02.

3.12.14.20.9  (01-01-2012)
♦Error Code 015 - Foreign Address/State♦

  1. Fields Displayed – Error Code 015 will display as follows:

    Field Designator on Form 1041 Field Name Length
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Condition – Error Code 015 will generate when any of the following conditions is present:

    • Field 02ST has an entry other than "." (period/space) when Field 02FAD is present.

    • Field 02ZIP has an entry when a Field 02FAD is present.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

      Reminder:

      Field 04FAD is Ogden SPC only.

      If... Then...
      A foreign address is present in Field 02FAD,

      1. Field 02ST must contain ". " (period/space)

      2. Delete any entry in Field 02ZIP.

      A foreign address is not present in Field 02FAD, Check return for foreign address.
      A foreign address is present on the return,

      1. Enter the foreign address in Field 02FAD..

        Note:

        If additional space is required, continue entering the address in Field 02ADD.

      2. Field 02CTY must contain the appropriate foreign country code. Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries).

      3. Field 02ST must contain ". " (period/space).

      4. Delete any entry in Field 02ZIP .

      A foreign address is not present on the return,

      1. Verify the address on the return is not a foreign address.

      2. SSPND 610.

      3. Renumber return with domestic DLN.

3.12.14.20.10  (01-01-2012)
♦Error Code 016 – ZIP Code/State Mismatch♦

  1. Fields Displayed – Error Code 016 will display as follows:

    Field Designator on Form 1041 Field Name Length
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Condition – Error Code 016 will generate when the ZIP Code is inconsistent with the Major City Code or State Code.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. Research using any of the following for valid ZIP Code information: INOLES, NAMEB/NAMEE, ENMOD, or Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      If... And... Then...
      Unable to determine a valid ZIP Code from the return or attachments, A valid ZIP Code is found through IDRS research, Enter the valid ZIP Code found in Field 02ZIP.
      Only the first three digits of the ZIP Code can be determined,   Enter 01 in the fourth and fifth position.
      A ZIP Code cannot be determined,   Enter the three digits followed by 01 of the ZIP Code listed for the applicable state found in Document 7475 (e.g. 99501 for Alaska)
      The address is in a major city, A Major City Code can be determined, Enter Major City Code in Field 02CTY.
      The address is in a major city, A Major City Code cannot be determined,

      1. Enter the name of the city in Field 02CTY.

      2. Enter the State Code in Field 02ST.

      The address is not in a major city,  

      1. Enter the appropriate state abbreviation in Field 02ST.

      2. Enter ZIP Code in Field 02ZIP.

    4. APO/DPO/FPO Addresses – An Army Post Office (APO), Diplomatic Post Office (DPO, or Fleet Post Office (FPO) is not a foreign address. The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses.

      If an address appears in the old APO/DPO/FPO format, convert to the new State Code abbreviation based on the ZIP Code. For example, APO New York, NY 091XX would be converted to APO AE 091XX. Refer to the APO/DPO/FPO conversion chart below:

      ZIP Code State Code
      340 AA
      090-098 AE
      962-966 AP

3.12.14.20.11  (01-01-2012)
Error Code 026 – Tax Period

  1. Error Code 026 will display as follows:

    Field
    Designator     		Field Name
    CL Clear Code
    01EIN Employer Identification Number
    01TXP Tax Period
    >>>> Tax Period – Computer
    01CCC Computer Condition Code
    01ADC Audit Code

3.12.14.20.11.1  (01-01-2012)
Invalid Condition – Error Code 026

  1. Error Code 026 will generate when all of the following conditions are present:

    • The Tax Period underprint does not agree with the month on the Entity Index File.

    • CCC "F" or"Y" are not present in Field 01CCC.

3.12.14.20.11.2  (01-01-2012)
Correction Procedures – Error Code 026

  1. Drop the cursor to the bottom of the screen and transmit, additional research is not required. This will ensure that any prior changes to the Tax Period, have posted to the NAP. If Error Code 026 reappears, continue with the remainder of the correction procedures.

  2. Correct all misplaced entries, coding errors, and transcription errors.

    • When corrections are made to Field 01TXP or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the ERS screen.

  3. Trusts and Estates may file 52-53 week returns. A 52-53 week tax year can end 6 days before the end of the month or 3 days after.

    If... Then...
    Tax year ends up to 3 days after the end of the month, Use the previous month in Field 01TXP.

    Example:

    May 2, 2010 becomes 201004
    Tax year ends 6 days before the end of the month, Use the current month in Field 01TXP.

    Example:

    April 24, 2010 becomes 201004

  4. Short period returns may be filed if they met certain qualifications. Acceptable reasons include, but are not limited to, the following:

    • IRC or Section 444 - Election of taxable year other than required taxable year.

    • IRC or Section 645 - Certain revocable trusts treated as part of estate.

    • IRC or Sections 671 through 679 - Grantors and others treated as substantial owners.

    • IRC or Section 806 - Small life insurance company deduction.

    • Treas. Regs. 1.442.1(b)(2) - Change of annual accounting period.

    • Rev. Proc. 76-10 - Group change to annual accounting period.

    • Rev. Proc. 85-58 or 87-32 - Changes in accounting periods and accounting methods.

    • Rev. Proc. 2002-38 - Changes in accounting periods; automatic approval for flow through entities.

    • Rev. Proc. 2006-48 - Period of computation of taxable income.

  5. The following table lists the transaction codes and meanings. It is provided as an aid for researching IDRS for this error code.

    Transaction Code Definition
    016 Indicates changes to entity data (e.g., filing requirements, fiscal year month. etc.)
    052 Reverses TC053, 054 and 055
    053 Approved Form 1128 to accept change of accounting period.
    054 Retained Fiscal Year Month (FYM) (Rev. Proc 87-32)
    055 Approved Form 8716 - Election to have tax year other than a required tax year.
    057 Generated reversal of TC 054 and 055.

  6. For additional correction procedures, see Exhibit 3.12.14-13 (Error Code 026 Flowchart – Error Correction Procedures).

    Caution:

    If the account indicates there are extensions, payments and/or prepaid credits and the return is for a short period, SSPND 351 and attach Form 4227 to have the credits moved to the correct period prior to the input of the TC 016.

3.12.14.20.11.3  (01-01-2012)
Suspense Correction – Error Code 026

  1. See Exhibit 3.12.14-14 for suspense correction procedures.

  2. If no reply, Rejects will process as follows:

    If... Then...
    The last Tax Period with a TC 150 is more than 12 months prior to the Tax Period of the return

    1. Input TC 474 on REQ77 for the year and month before the beginning month of the Tax Period on Form 1041 and enter 1 for the number of cycles.

      Example:

      If the Tax Period is 201009, use 201008

    2. Input TC 016 on BNCHG (follow local procedures) so that the TC 474 will post.

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. Enter 3 in Field 01CCC.

    5. SSPND 430.

    6. After the return has been held for one cycle, enter a "C" in the Clear Code field.

    The last Tax Period with a TC 150 is less than 12 months prior to the Tax Period of the return

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Enter a Y and 3 in Field 01CCC.

3.12.14.20.12  (01-01-2012)
Error Code 030 – Penalty and Interest Code

  1. Error Code 030 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    01RCD Received Date
    01RDD> Return Due Date – Computer
    01CCC Computer Condition Code
    01PIC Penalty and Interest Code

3.12.14.20.12.1  (01-01-2012)
Invalid Condition – Error Code 030

  1. Error Code 030 will generate when all of the following conditions are present:

    • Code "1" is present in Field 01PIC (Penalty and Interest Code).

    • The Received Date is on or before the Return Due Date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

3.12.14.20.12.2  (01-01-2012)
Correction Procedures – Error Code 030

  1. Correct all misplaced entries, coding errors, and transcription errors.

  2. Determine the Received Date as follows:

    If... Then...
    Field 01PIC is correct Enter the correct Received Date.
    The correct Received Date is equal to or earlier than the Return Due Date Delete Code "1" from Field 01PIC.
    The Received Date is correct but is later than the Return Due Date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Delete Code "1" from Field 01PIC.
    More than one Received Date is present on Form 1041 Use the earliest date.

3.12.14.20.13  (01-01-2012)
Error Code 034 – Correspondence Received Date/Received Date

  1. Error Code 034 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    01RCD Received Date
    01RDD> Return Due Date – Computer
    01CRD Correspondence Received Date

3.12.14.20.13.1  (01-01-2012)
Invalid Condition – Error Code 034

  1. Error Code 034 will generate when any of the following conditions are present:

    • Field 01CRD is equal to or earlier than Field 01RCD.

    • The Correspondence Received Date is later than the processing date.

3.12.14.20.13.2  (01-01-2012)
Correction Procedures – Error Code 034

  1. Correct all misplaced entries, coding errors, and transcription errors.

  2. Field 01CRD will be determined from the date the reply was received in the Submission Processing Campus.

    • Determine the correct Correspondence Received Date (CRD) from the stamped date on the correspondence attached to the return.

    If... Then...
    The CRD is present and is earlier than or equal to the Received Date or is later than the processing date Delete the CRD from Field 01CRD.
    More than one CRD is present Enter the earliest date in Field 01CRD.

3.12.14.20.14  (01-01-2012)
Error Code 062 – Low Income Housing

  1. Error Code 062 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    01CCC Computer Condition Code
    031D Form 8586 – Low-Income Housing Credit

    Note:

    The literal "SECTION 03 NOT PRESENT" will display if no entries are in Section 03.

3.12.14.20.14.1  (01-01-2012)
Invalid Condition – Error Code 062

  1. Error Code 062 will generate when any of the following conditions are present:

    • An entry is present in Field 031D but an entry of "9" is not present in Field 01CCC.

    • A "9" is present in Field 01CCC (Low Income Housing Credit) but there is no entry in Field 031D.

3.12.14.20.14.2  (01-01-2012)
Correction Procedures – Error Code 062

  1. Correct all misplaced entries, coding errors, and transcription errors.

  2. CCC "9" must be present in Field 01CCC if an entry is present in Field 031D.

    • If Field 01CCC is blank, enter "9" in Field 01CCC.

  3. Field 031D must be present if CCC "9" is present in Field 01CCC. If Field 031D is blank:

    • Determine if any of the following forms are attached: Form 8586, Form 8609, Form 8609–A, and Form 8693.

    If... Then...
    An applicable form is attached, Enter the amount from Line 2c of Schedule G (Low Income Housing Credit) to Field 031D.
    An applicable form is not attached or Line 2c is blank or zero, Delete the "9" in Field 01CCC.
    Form 8586 is present and Schedule G, Line 2c is blank, Enter "1" in Field 031D.

3.12.14.20.15  (01-01-2012)
Error Code 073 – CCC "3" and Correspondence Received Date

  1. Error Code 073 will display as follows:

    Field
    Designator     		Field Name
    01CCC Computer Condition Code
    01CRD Correspondence Received Date

3.12.14.20.15.1  (01-01-2012)
Invalid Condition – Error Code 073

  1. Error Code 073 will generate when a "3" is present in Field 01CCC and an entry is present in Field 01CRD.

3.12.14.20.15.2  (01-01-2012)
Correction Procedures – Error Code 073

  1. Correct all misplaced entries, coding errors, and transcription errors.

  2. If IRS correspondence is attached, determine if a reply has been received from the taxpayer.

    If... Then...
    The reply is attached Delete the "3" in Field 01CCC.
    Reply is not attached Delete the entry in Field 01CRD.

3.12.14.20.16  (01-01-2012)
Error Code 162 – Section 07 Total Wages Differ or are Below Minimum Taxable Wages

  1. Error Code 162 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    0701 Schedule H – Total Social Security Wages
    0703 Schedule H – Total Medicare Wages

3.12.14.20.16.1  (01-01-2012)
Invalid Condition – Error Code 162

  1. Error Code 162 will generate when Section 07 is present and any of the following conditions are present:

    If... Then...
    Tax Period 200912 and subsequent.

    • Field 0701 is greater than Field 0703 by more than $1.00; or

    • Field 0701 is present and is $1,699.99 or less; or

    • Field 0703 is present and is $1,699.99 or less.

    Tax Period 200812 through 200911

    • Field 0701 is greater than Field 0703 by more than $1.00; or

    • Field 0701 is present and is $1,599.99 or less; or

    • Field 0703 is present and is $1,599.99 or less.

    Tax Period 200612 through 200811

    • Field 0701 is greater than Field 0703 by more than $1.00; or

    • Field 0701 is present and is $1,499.99 or less; or

    • Field 0703 is present and is $1,499.99 or less.

    Tax Period 200312 through 200611 • Field 0701 is greater than Field 0703 by more than $1.00; or
    • Field 0701 is present and is $1,399.99 or less; or
    • Field 0703 is present and is $1,399.99 or less.
    Tax Period 200112 through 200311 • Field 0701 is greater than Field 0703 by more than $1.00; or
    • Field 0701 is present and is $1,299.99 or less; or
    • Field 0703 is present and is $1,299.99 or less.
    Tax Period 200012 through 200111 • Field 0701 is greater than Field 0703 by more than $1.00; or
    • Field 0701 is present and is $1,199.99 or less; or
    • Field 0703 is present and is $1,199.99 or less.

3.12.14.20.16.2  (01-01-2012)
Correction Procedures – Error Code 162

  1. GTSEC 07 and correct all misplaced entries, coding errors, and transcription errors.

  2. Estates and trusts which employ household employees must report household employment wages on Form 1041 if the wages exceed the minimum amount required to be reported for the Tax Year.

    • Delete the entry in Fields 0701 and/or 0703 if they contain an entry for less than the minimum reportable amount.

      Tax Period Delete Fields 0701 and 0703 If:
      200912 and subsequent $1,699.99 or less.
      200812 through 200911 $1,599.99 or less.
      200612 through 200811 $1,499.99 or less.
      200312 through 200611 $1,399.99 or less.
      200112 through 200311 $1,299.99 or less.
      200012 through 200111 $1,199.99 or less.

    • If Field 0701 is not present but Line 2 contains an entry, divide Line 2 by 12.4%(0.124) (10.4% (0.104) for tax year 2011) and enter the result in Field 0701.

    • If Field 0703 is not present but Line 4 contains an entry, divide Line 4 by 2.9% (0.029) and enter the result in Field 0703.

  3. Field 0701 should never be larger than Field 0703.

    1. If Field 0701 is greater than Field 0703, determine the correct amounts. If unable to determine, increase Field 0703 so that it is equal to Field 0701. If Error Code 872 generates, follow correction procedures for EC 872.

3.12.14.20.17  (01-01-2012)
Error Code 163 - GBC Credits Claimed Exceed Limits

  1. Error Code 163 will display as follows:

    Field Designators Field Name
    01TXP Tax Period
    2301E Form 3800 - Disabled access credit
    2401J Form 3800 - Credit for small employer pension plan start-up costs
    2401V Form 3800 - Agricultural chemicals security credit

3.12.14.20.17.1  (01-01-2012)
Invalid Condition - Error Code 163

  1. Error C ode 163 will generate when any of the following conditions apply:

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

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

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

3.12.14.20.17.2  (01-01-2012)
Correction Procedures - Error Code 163

  1. Correct all misplaced entries, coding errors, and transcription errors.

    If... Then...
    Taxpayer has claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 3800, Part III, Line 1e, Enter ≡ ≡ ≡ ≡ ≡ in Field 2301E and send TPNC 08.
    Taxpayer has claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 3800, Part III, Line 1j, Enter ≡ ≡ ≡ ≡ in Field 2401J and send TPNC 08.
    Taxpayer has claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 3800, Part III, Line 1v, Enter ≡ ≡ ≡ ≡ ≡ ≡ ≡ in Field 2401V and sent TPNC 08.

3.12.14.20.17.3  (01-01-2012)
Valid Taxpayer Notice Codes for Error Code 163

  1. Valid TPNCs for Error Code 163 are:

    TPNC Literal
    08 The credit claimed was more than the law allows.
    90 Blank Notice

3.12.14.20.18  (01-01-2012)
Error Code 174 – Advanced EIC is Greater Than Total Medicare Wages

  1. Error Code 174 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    0703 Schedule H – Total Medicare Wages
    0706 Schedule H – SS/Medicare/WH Taxes
    >>>> Schedule H – SS/Medicare/WH Taxes – Computer
    0707 Schedule H – Advance EIC
    0708 Schedule H – Total SS/Medicare/WH Taxes
    >>>> Schedule H – Total SS/Medicare/WH Taxes – Computer

3.12.14.20.18.1  (01-01-2012)
Invalid Condition – Error Code 174

  1. Error Code 174 will generate when Field 0707 is greater than 20.4% of Field 0703.

    Note:

    Advance EIC credit expired on December 31, 2010. EC 174 does not apply to returns for returns after tax year 2010.

3.12.14.20.18.2  (01-01-2012)
Correction Procedures – Error Code 174

  1. EC 174 does not apply to returns for returns after tax year 2010.

  2. GTSEC 07 and correct all misplaced entries, coding errors, and transcription errors.

    Caution:

    Before adjusting Field 0707, beware of a misplaced entry or transcription error involving Line 7. Also be aware the Advanced EIC credit expired on 12/31/2010.

  3. Field 0707 cannot exceed a certain percentage of wages paid by the employer. If Field 0707 is greater than the allowable percentage:

    1. Compute the maximum allowable amount by multiplying Field 0703 by 20.4% (0.204) and enter result in Field 0707.

      Reminder:

      The provision for Advance EIC credit expired on 12/31/2010.

    2. If Error Code 875 generates, assign TPNC 90 with the following literal:
       
      "YOU FIGURED YOUR HOUSEHOLD EMPLOYMENT TAXES INCORRECTLY. THE ADVANCE EARNED-INCOME CREDIT PAYMENT CANNOT BE MORE THAN THE APPROPRIATE PERCENT OF THE TOTAL WAGES YOU PAID. WE ADJUSTED YOUR SCHEDULE H ACCORDINGLY."

      Note:

      For instructions for correcting Error Code 875, see IRM 3.12.14.20.46

3.12.14.20.19  (01-01-2012)
Error Code 175 – Schedule H (Fields 07FIN and 07TTC)

  1. Error Code 175 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    07FIN Schedule H – FUTA Yes/No Indicator
    07TTC Schedule H – Tentative Credit
    07TFW Schedule H – Total FUTA Wages

3.12.14.20.19.1  (01-01-2012)
Invalid Condition – Error Code 175

  1. Error Code 175 will generate when any of the following conditions is present:

    • Field 07FIN is "1" and an entry is not present in Field 07TTC.

    • Field 07FIN is blank and an entry is present in Field 07TTC.

3.12.14.20.19.2  (01-01-2012)
Correction Procedures – Error Code 175

  1. GTSEC 07 and correct all misplaced entries, coding errors, and transcription errors.

  2. Determine Field 07TTC in the following priority order:

    If... Then...
    Line 16 is blank or illegible, Determine Field 07TTC by adding Lines 15(g) and 15(h)..
    Lines 15(g) and 15(h) are blank, Enter $1.00 in Field 07TTC.

    Note:

    Column (h) can be determined if Columns (c) and (e) have entries.

  3. If Field 07FIN is blank and an entry is present in Field 07TTC, enter a "1" in Field 07FIN.

3.12.14.20.20  (01-01-2012)
Error Code 176 – Schedule H (Fields 07TTC and 07TFW)

  1. Error Code 176 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    07FIN Schedule H – FUTA Yes/No Indicator
    07TTC Schedule H – Tentative Credit
    07TFW Schedule H – Total FUTA Wages
    07FTV Schedule H – FUTA Tax Verified

3.12.14.20.20.1  (01-01-2012)
Invalid Condition – Error Code 176

  1. Error Code 176 will generate when Field 07TTC is present but Field 07TFW is not present.

3.12.14.20.20.2  (01-01-2012)
Correction Procedures – Error Code 176

  1. GTSEC 07 and correct all misplaced entries, coding errors, and transcription errors.

  2. Field 07TFW must have an entry present if an entry is present in Field 07TTC. If Field 07TTC has an entry, but Field 07TFW is not present:

    • Determine Field 07TFW by dividing Field 07BAS> (Line 22) by 6.2% (0.062).

    • If Field 07TFW still cannot be determined, correspond for "Schedule H Total Cash Wages subject to FUTA Tax" .

3.12.14.20.20.3  (01-01-2012)
Suspense Correction – Error Code 176

  1. Determine if reply has been received:

    If... Then...
    Reply received, Continue processing based on the information received.
    No reply,

    1. Enter 3 in Field 01CCC.

    2. Enter $1.00 in Field 07TFW

    3. GTSEC 07 and enter the Total FUTA Tax in Field 07FTV.

3.12.14.20.21  (01-01-2012)
Error Code 177 – Schedule H State Code

  1. Error Code 177 will display as follows:

    Field
    Designator     		Field Name
    01TXP Tax Period
    07FIN Schedule H – FUTA Yes/No Indicator
    07SC1 Schedule H – State Code 1
    07SC2 Schedule H – State Code 2
    07SC3 Schedule H – State Code 3
    07SC4 Schedule H – State Code 4
    07SC5 Schedule H – State Code 5

3.12.14.20.21.1  (01-01-2012)
Invalid Condition – Error Code 177

  1. Error Code 177 will generate when any of Fields 07SC1 through 07SC5 are present and the preceding State Code Field is not present (not in contiguous order).

    Example:

    If Field 07SC2 is present, Field 07SC1 must be present; if Field 07SC3 is present, Field 07SC2 and Field 07SC1 must be present; etc.

3.12.14.20.21.2  (01-01-2012)
Correction Procedures – Error Code 177

  1. GTSEC 07 and correct all misplaced entries, coding errors, and transcription errors.

  2. State Codes must be present in field order (Field 07SC1 through 07SC5).

    • Arrange State Codes from Field 07SC1 through Field 07SC5.


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