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

Manual Transmittal

November 07, 2013

Purpose

(1) This transmits revised IRM Section 3.12.14, Error Resolution, Income Tax Returns for Estates and Trusts (Form 1041, Form 1041-QFT, and Form 1041-N)

Material Changes

(1) Made various editorial changes throughout the IRM, including tax years, line numbers, and tax rate changes.

(2) IRM 3.12.14.1.1(2) Restricted note.

(3) IRM 3.12.14.1.3(2) Removed SBSE.

(4) IRM 3.12.14.2.3(1) Removed note.

(5) IRM 3.12.14.2.3(2) Removed outdated information.

(6) IRM 3.12.14.2.3(5) Added transaction posting information.

(7) IRM 3.12.14.3(2) Added Form 8960 to list of attachments to Form 1041.

(8) IPU 13U0847 issued 05-01-2013 IRM 3.12.14.7.1 Added regarding common cause of Quality errors being uncorrected transcription errors.

(9) IRM 3.12.14.7.1.1(4)(4) Added instructions to check the fields and attachments that lead to the field causing the error.

(10) IPU 13U0847 issued 05-01-2013 IRM 3.12.14.7.5(2) Added caution: If a math error ripples to another error code, verify the tax, using the spreadsheets on SERP, before rippling the TPNC.

(11) IRM 3.12.14.7.9(2) Added instructions to contact Revenue Officer for issues with IRC 6020(b) returns. Do not contact taxpayer.

(12) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.9.8(3) - Added valid vehicle dates.

(13) IPU 13U0873 issued 05-07-2013 IRM 3.12.14.9.8(3) Removed CCC 2 instructions for Form 8938.

(14) IRM 3.12.14.9.20(2) Removed MSC 32, 43, and 76. We will correspond for these forms.

(15) IRM 3.12.14.10.4(4)(2) Added Form 8822-B, added note that business may have two addresses, and added AND column to table.

(16) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.11.3(1) Changed correspond for Schedule to use MSC 32.

(17) IRM 3.12.14.11.3 (4) and (5) Added paragraphs for new fields 0415B and 0415C.

(18) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.11.3(1) - Changed back to correspond.

(19) IPU 13U0847 issued 05-01-2013 IRM 3.12.14.11.3(3)(7) Added Line 15a and Line 22 can be used to claim net operating losses.

(20) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.12(2) - Changed back to correspond.

(21) IRM 3.12.14.12.1(1) Added new Field 05G04 for Net Investment Income Tax on Line 4, Schedule G.

(22) IRM 3.12.14.12.8(2) Removed MSC 43 for Form 3800. We will correspond.

(23) IRM 3.12.14.12.11 Added subsection on Field 05G04, Net Investment Income Tax on Line 4, Schedule G.

(24) IRM 3.12.14.12.16 Added Field 05G04 to computations for Total Tax, Line 23.

(25) IRM 3.12.14.13 Revised Section 05 to show removal of Schedule D fields.

(26) IRM 3.12.14.14 Added two new Field for Schedule H and removed old references to Fields 07RN1 - 07RN5, no longer needed.

(27) IRM 3.12.14.14.11 Deleted duplicate section.

(28) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.14.19(2) Updated list of Credit Reduction States.

(29) IRM 3.12.14.14.19 Deleted 07RN1 section, no longer used.

(30) IRM 3.12.14.14.20 Deleted 07RN2 section, no longer used.

(31) IRM 3.12.14.14.21 Deleted 07RN3 - 07RN5 section, no longer used.

(32) IRM 3.12.14.15 Added subsection for new Section 10 - Schedule D, (1041) Capital Gain or Loss

(33) 3.12.14.18.1(1) Added Field 2117 for Line 17 of Form 8941.

(34) IRM 3.12.14.20.1(1) Removed Field 23031. The line has been reserved.

(35) IRM 3.12.20.3(1) Removed Field 25SBC, no longer valid.

(36) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.20.3.3(1) - Added valid vehicle dates.

(37) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.20.3.4 Added new subsection for Field 2501AA and renumbered subsequent subsections.

(38) IRM 3.12.14.20.4 Added new subsection for Section 28 used for Form 8960.

(39) IRM 3.12.14.21.1(3)(2) Added citation for 6020(b).

(40) IRM 3.12.14.21.2(5)(1) Added IRS received date.

(41) IRM 3.12.14.21.3 Removed EC 003 for invalid check digits which are obsolete. Reserved this subsection.

(42) IRM 3.12.14.21.4(4)(1) Added IRM received date.

(43) IRM 3.12.14.21.5(2) Clarified invalid condition.

(44) IRM 3.12.14.21.6(1) Removed bold around name control. Added S28DP to fields displayed.

(45) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.6(1) Corrected screen display fields.

(46) IRM 3.12.14.21.8(1) Removed "on Form 1041" after "fields displayed" .

(47) IRM 3.12.14.21.9(1) Removed "on Form 1041" after "fields displayed" and removed note OSPC only.

(48) IRM 3.12.14.21.10(1) Removed "on Form 1041" after "fields displayed" .

(49) IPU 13U0420 issued 02-27-2013 IRM 3.12.14.21.14.1(1) and IRM 3.12.14.20.14.2(2) Added Field 2504D to EC 062 invalid conditions.

(50) IRM 3.12.14.21.14(1) Added Field 2504D to screen display.

(51) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.14.2(3) Corrected to read enter amount from form.

(52) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.22.2(2) Removed reference to Multiple State Indictor (obsolete).

(53) IRM 3.12.14.21.23 Deleted EC 179 and reserved section, no longer needed.

(54) IRM 3.12.14.21.24 Deleted EC 180 and reserved section, no longer needed.

(55) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.25.2(2) Updated EC 181 with rates for tax year 2012.

(56) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.27.2(2) Clarified that if Field 07SC1 has a state that is subject to credit reduction, then ensure that entries are in fields listed.

(57) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.27.2 Changes made to correction procedures for programming issue.

(58) IRM 3.12.14.20.28 Deleted EC 185 and reserved section, no longer needed.

(59) IRM 3.12.14.21.36.2(2) EC 842 Added instructions to check the fields and attachments that lead to Field 0409.

(60) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.36.2(6)(1) and IRM 3.12.14.20.36.2(6)(5) Changed correspond for Schedule to use MSC 32.

(61) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.21.36.2(6)(1) and (5) - Changed back to correspond.

(62) IRM 3.12.14.21.37.2(2) EC 845 Added instructions to check the fields and attachments that lead to Field 0416.

(63) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.41(1) Added fields for 05G1D to screen display.

(64) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.41.2.3(3) Changed correspond for Schedule to use MSC 32.

(65) IPU 13U0095 issued 01-09-2013 IRM 3.12.14.21.41.2.3(3) - Changed back to correspond.

(66) IRM 3.12.14.21.43 Added new Error Code 861 for Net Investment Income Tax (Form 8960).

(67) IRM 3.12.14.21.45.2(4)(1) Removed MSC 43 for Form 3800. We will correspond.

(68) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.45.2(5)(19) Removed eligible small business credits from list of forms required to support Form 3800.

(69) IRM 3.12.14.21.46 Added new Error Code 868 for Credit for Small Employer Health Insurance Premiums (Form 8941).

(70) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.47.2(2) Added EC 872 only applies to 201012 and prior returns.

(71) IPU 13U0743 issued 04-16-2013 IRM 3.12.14.21.47 Changed EC 872 to current year returns not just 201012 and earlier returns.

(72) IRM IRM 3.12.14.21.52(1) Added Fields 05G2E> and 05G04 to screen display for EC 887.

(73) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.52.2.3(1) Added instructions for misplaced entry for Form 3800.

(74) IRM 3.12.14.21.52.2.3(2) Removed MSC 43 for Form 3800. We will correspond.

(75) IRM 3.12.14.21.52.2.6 Added subsection for Field 05G04, Schedule G, Line 4, Net Investment Income Tax.

(76) IRM 3.12.14.21.52.2.9 Added Field 05G04 to computations used for Field 0523.

(77) IPU 13U0216 issued 01-28-2013 IRM 3.12.14.21.55.1 - Updated valid tax periods for CRNs.

(78) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.56.2(2) Removed instruction to clear code and replace it with ripple the TPNC.

(79) IRM 3.12.14.21.58.1 Added SSPND 410 for Sch H on EC 902 when no misplaced entries, transcription or coding errors are found.

(80) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.58.1(1) Corrected references for Schedule H.

(81) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.59.2(2) Added that if the posted or pending refund is the same as the overpayment on the return minus the TC770, then O code the return.

(82) IPU 13U0847 issued 05-01-2013 IRM 3.12.14.21.59.2(3) Added if no manual refund is pending.

(83) IPU 13U0038 issued 01-03-2013 IRM 3.12.14.21.60(1)(2) Corrected references for Schedule H.

(84) IRM 3.12.14.21.60.1 Added SSPND 410 for Sch H on EC 904 when no misplaced entries, transcription or coding errors are found.

(85) IRM 3.12.14.21.61.1 Added new Error Code 905 for expedite processing of refund.

(86) IRM 3.12.14.21.63 Added EC 074 for TETR in case of fall out from transcription errors.

(87) IPU 13U0216 issued 01-28-2013 IRM Exhibit 3.12.14-6 - Updated literals for CRNs.

(88) IRM Exhibit 3.12.14-10 Added new Form 8960, Net Investment Income Tax exhibit.

(89) IPU 13U0847 issued 05-01-2013 Exhibit 3.12.14-16 Added bullet to clarify Field 042B2 entry causes computer to use Schedule D tax computation.

(90) IPU 13U0038 issued 01-03-2013 IRM Exhibit 3.12.14-23 Updated fields and conditions in exhibit.

(91) IRM Exhibit 3.12.14-23 Added new error codes and reserved some obsolete ones.

(92) IRM Exhibit 3.12.14-24 Added new TPNCs to exhibit. Removed 88 and 89 from exhibit.

(93) IRM Exhibit 3.12.14-28 Restricted note, updated and added link for notice.

(94) IPU 13U0216 issued 01-28-2013 IRM Exhibit 3.12.14-30 - Removed 4th row from CI Funny box criteria.

(95) IPU 13U0038 issued 01-03-2013 IRM Exhibit 3.12.14-32 Updated Credit Reduction States in exhibit.

(96) Various IRM Exhibits were rearranged so they are now in transcription order.

Effect on Other Documents

IRM 3.12.14 dated October 16,2012 is superseded. This IRM also incorporates the following Interim Procedural Updates (IPUs) - 13U0038, 13U0095, 13U0216, 13U0420, 13U0743, 13U0847, 13U0873, 13U1085.

Audience

Wage and Investment (W&I) Error Resolution

Effective Date

(01-01-2014)

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

3.12.14.1  (01-01-2014)
Overview

  1. IRM 3.12.14 provides instructions for correcting errors on the Error Resolution Systems, made by taxpayers as well as those made during Submission Processing Campus operations for all of the following Business Master File (BMF) forms:

    • Form 1041 (U.S. Income Tax Return for Estates and Trusts).

    • Form 1041-QFT (U.S. Income Tax Return for Qualified Funeral Trusts).

    • Form 1041-N (U.S. Income Tax Return for Electing Alaska Native Settlement Trusts).

  2. Form 1041 is used by a fiduciary of a domestic estate, trust, or bankruptcy estate to report the following:

    • Income received by the estate or trust.

    • Income that is either accumulated, held for future distribution or is distributed currently to the beneficiaries.

    • Any applicable tax liability of the fiduciary.

  3. Form 1041-QFT was added to the Internal Revenue Code by the Taxpayer Relief Act of 1997 to permit certain trusts which previously filed Form 1041 as Grantor Trusts to elect Qualified Funeral Trust status.

    1. All domestic Form 1041-QFT are processed at the Cincinnati Submission Processing Campus (CSPC) only.

    2. All foreign Form 1041 returns (including 1041-QFT) are processed at the Ogden Submission Processing Campus (OSPC) only.

    3. If Form 1041-QFT is received at any Submission Processing Campus (SPC) other than above, process as follows:

      If... Then...
      Unnumbered Form 1041-QFT Detach and forward to CSPC. (OSPC if foreign)
      Numbered Form 1041-QFT 1. SSPND 640 and attach Form 4227 with the notation "FORWARD TO CINCINNATI SUBMISSION PROCESSING CAMPUS"
      Internal Revenue Service
      Cincinnati, OH 45999.

      Note:

      If foreign send to OSPC with Form 4227 annotated appropriately.
      Department of Treasury
      Internal Revenue Service
      Ogden, UT 84201

  4. Form 1041-N was added to the Internal Revenue Code by the Economic Growth and Tax Reconciliation Act of 2001. All Form 1041-N are processed at the Ogden Submission Processing Campus (OSPC) only.

    1. If Form 1041-N is received at any Submission Processing Campus other than OSPC, process as follows:

      If... Then...
      Unnumbered Form 1041-N. Detach and forward to OSPC.
      Numbered Form 1041-N. SSPND 650 and attach Form 4227 with the notation "FORWARD TO OGDEN SUBMISSION PROCESSING CAMPUS"
      Department of Treasury
      Internal Revenue Service
      Ogden, UT 84201.

  5. The Return Due Date for Forms 1041, 1041-QFT, and 1041-N is the fifteenth day of the fourth month after the Tax Period Ending (April 15 for calendar year returns).

  6. This IRM cannot address every possibility that may arise while correcting Forms 1041. Taxpayer intent must be taken into consideration. In some cases, it may be necessary to refer the issue to your Subject Matter Expert (SME), lead and/or manager to determine the proper corrective action.

  7. Employees must be able to use sound judgement in some instances, i.e., when determining which TPNC is the most appropriate to send, or determining when to correspond for clarification. If the judgement is made in the taxpayer's best interests and the reasoning is sound, no error should be charged.

3.12.14.1.1  (01-01-2014)
♦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 IRM 4.10.12, Frivolous Return Program (FRP), shown in IRM 3.12.14.21.61.2.

  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 IRM 3.12.14.21.61.2

    Exception:

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

    SSPND 331, attach routing slip marked FRP, 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 process" , but sends the return for processing. Continue processing the return using procedures in IRM 3.12.14. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.14.1.2  (01-01-2014)
♦Criminal Investigation (CI) "Funny Box" ♦

  1. Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC are willful and deliberate attempts to evade or defeat the income tax. Flagrant criminal activity 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. Any return identified as having any CI criteria found in Exhibit 3.12.14-30 SSPND 332 and place in "CI Funny Box" .

  3. 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.

3.12.14.1.3  (01-01-2014)
♦Examination (Exam) "Funny Box" ♦

  1. The primary objective in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination will provide support and assist Submission Processing (SP) with any questionable return identified during processing. Exam has a vast multitude of programs and tolerance criteria already identified in various IRM sections. Exam does not restrict SP with the flexibility to refer questions returns other than what is currently identified in various IRMs.

3.12.14.2  (01-01-2014)
♦BMF Consistency♦

  1. The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) processing IRMs.

  2. Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and Paper Processing Branch BMF Code & Edit/ERS Section.

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

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

3.12.14.2.1  (01-01-2014)
♦Taxpayer Advocate Service (TAS)♦

  1. Refer taxpayers to the Taxpayer Advocate Service (TAS) (IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS in accordance with your local procedures.

3.12.14.2.1.1  (01-01-2014)
♦TAS - Service Level Agreement (SLA)♦

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage & Investment (W&I) Division, Small Business/Self-Employed (SB/SE) Division, Tax Exemption & Government Entities (TE/GE) Division, Criminal Investigation (CI), Appeals and Large Business and International (LB&I) Division, that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete a case transaction rests outside of TAS.

  2. The SLAs are located at http://tas.web.irs.gov/policy/sla/default.aspx under the heading "Policy/Procedures/Guidance" .

3.12.14.2.2  (01-01-2014)
♦Use of Fax for Taxpayer Submissions♦

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

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

  3. 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/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.

3.12.14.2.2.1  (01-01-2014)
♦IRS Employee Contacts - RRA98 IRC §3705(a)♦

  1. The Restructuring and Reform Act of 1998 (RRA98), IRC §3705(a), provides identification requirements for all IRS employees working tax-related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face, and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

  2. All IRS employees who communicate by telephone, correspondence or face to face, with taxpayers or their personal representative, on tax-related matters are required to provide (at a minimum) the following information:

    1. Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number.

    2. Face to Face Contact - Their title (e.g., Mr., Mrs., Ms., Miss), provided as appropriate during the conversation, their last name and badge identification (ID Card) number.

    3. Correspondence - All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually generated and handwritten correspondence must have their title (e.g., Mr., Mrs., Ms., Miss), last name, and IDRS (Integrated Data Retrieval System) number, letter system number or their badge identification (ID Card) number.

    4. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated or a handwritten note is prepared, the badge identification (ID Card) number must be used. Toll-free employees may also provide their location for identification purposes. Faxes to taxpayers on tax-related matters are considered manually-generated correspondence and must include the required information.

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

    6. When a taxpayer requests to speak with a specific employee who previously handled their inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer's inquiry. If the issue cannot be resolve, the employee should refer the inquiry using established procedures to his or her manager.

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

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

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

    10. It is not necessary to repeat the badge identification (ID Card) number on a subsequent contact, when the nature of an employee's work involves multiple contacts with the same taxpayer, and the employee has given the taxpayer (either telephone or in-person) his or her badge identification (ID Card) number on the first contact.

3.12.14.2.3  (01-01-2014)
♦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. The 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. Transaction 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.

3.12.14.3  (01-01-2014)
Schedules Found In Form 1041

  1. The following schedules are found within Form 1041:

    • Schedule A, Charitable Deductions - Used by a trust that claims a contribution deduction under IRC 642(c), or by a trust described in IRC 4947(a)(2).

    • Schedule B, Income Distribution Deduction.

    • Schedule G, Tax Computation

  2. Listed below are additional schedules and forms which may be filed with Form 1041:

    • Schedule C, Business Income or Loss

    • Schedule D, Capital Gains and Losses - Used to report details of gain or loss, from the sales or exchanges of capital assets.

    • Schedule E, Supplemental Income and Loss

    • Schedule F, Farm Income or Loss

    • Schedule H (Form 1040), Household Employment Taxes

    • Schedule I, Alternative Minimum Tax

    • Schedule J, Accumulation Distribution for Certain Complex Trusts - Used by domestic complex trusts to report accumulation distributions.

    • Schedule K-1, Beneficiary's Share of Income, Deductions, Credits, etc. - Used to report each beneficiary's share of the Income, Deductions, Credits, and Alternative Minimum Taxable Income from the estate or trust.

    • Form 1041-A, U.S. Information Return - Trust Accumulation of Charitable Accounts - Used by a trust that claims a contribution deduction under IRC 642(c), or by a trust described in IRC 4947(a)(2).

    • Form 1041-ES, Estimated Income Tax for Fiduciaries - Used to figure and pay Estimated Tax for fiduciaries.

    • Form 1041-T, Transmittal of Estimated Tax Credited to Beneficiaries - Used by an estate or trust to make an election under IRC 643(g) to allocate an Estimated Tax payment to beneficiaries.

    • Form 3800, General Business Credits

    • Form 8938, Statement of Foreign Financial Assets

    • Form 4136, Computation of Credit for Federal Tax on Fuels

    • Form 4797, Sale of Business Property

    • Form 4952, Investment Interest Expense Deduction

    • Form 5884-B, New Hire Retention Credit - 2011 tax year only.

    • Form 8913, Credit for Federal Telephone Excise Tax Paid - 2006 tax year only.

    • Form 8941, Credit for Small Employers Health Insurance Premiums

    • Form 8960 , Net Investment Income Tax - Individuals, Estates, and Trusts.

    • Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness

3.12.14.4  (01-01-2014)
Organization, Function and Program (OFP) Codes

  1. The organization for the ERS processing is "3X000" . Consult local management for the correct code.

  2. To record the time spent reviewing and correcting the screen displays, use the following function and program codes:

    Item Form 1041 Form 1041-QFT Form 1041-N
    Function 340 340 340
    Program 11900 11910 11910
    Tax Class 2 2 2
    Document Code 44 (Paper)
    and
    36 (Electronic)
    39 39
    MFT 05 05 05
    Blocking Series 400-499 400-499 (Remit.)
    and
    500-999 (Non-Remit.)
    400-499 (Remit.)
    and
    500-999 (Non-Remit.)
    Processing Site All Campuses CSPC Only (domestic) OSPC Only
    Audit Code    
    IMPORTANT: Always enter Audit Code "8" on all Form 1041–N.

3.12.14.5  (01-01-2014)
Related Forms

  1. The following forms are referred to in this IRM:

    Form Title Use
    3465 Adjustment Request To request transfer of credits.
    3696/3696A Correspondence Action Sheet To initiate correspondence to taxpayers through the Typing function or via IDRS.
    4227 Intra-SPC Reject To identify the reason for Routing Slip using the Action Code.
    8161 ERS Return Charge-Out To charge out returns on the Suspense List, Reject Records List and Duplicate Document DLN Register. Also, Input Perfection Branch will use as a routing slip and history item.

    Note:

    Sites may use locally approved correspondence action sheets.

3.12.14.6  (01-01-2014)
Reserved

  1. IRM 3.12.14.6 is reserved for future use.

3.12.14.7  (01-01-2014)
General Information

  1. IRM 3.12.14.7 provides definitions and terms for the issues applicable to the processing of Form 1041, Form 1041-QFT, and Form 1041–N.

3.12.14.7.1  (01-01-2014)
General Correction Procedures

  1. IRM 3.12.14.7.1 provides general correction procedures for perfecting Form 1041.

    Note:

    Quality Review reports many errors charged to ERS Tax Examiners are due to uncorrected transcription errors. Always verify transcription and editing for errors, unless the error code specifically tells you to drop and transmit.

3.12.14.7.1.1  (01-01-2014)
Perfecting Form 1041 and Error Screen Displays

  1. Form 1041 Error Screen Displays shows the following data as part of the standard display heading:

    • Document Locator Number (DLN).

    • Employer Identification Number (EIN).

    • Check Digits/Name Control (NC).

    • Current processing date.

    • ERS Status Code.

      Note:

      Previously assigned Taxpayer Notice Codes are displayed in the upper right corner (beneath the header information).

  2. Before making corrections to the Error Screen Displays, ensure that the DLN of the screen display matches the DLN of the document. If one field in the display heading is incorrect, correct as follows:

    If... Then...
    DLN is incorrect
    1. Stop processing

    2. Give the block to your manager.

    EIN is incorrect
    1. GTSEC 01.

    2. Enter the correct data to Section 01.

      Note:

      The original error condition should be displayed.

    Name Control is incorrect
    1. GTSEC 01.

    2. Enter the correct data to Section 01.

      Note:

      The original error condition should be displayed.

    Current Processing Date is incorrect
    1. Stop processing.

    2. Give the block to your manager.

  3. Returns may be in error due to a "mixed data situation" . This occurs when information from two taxpayers' returns appears on the error record under one DLN or the DLN does not match the return on the screen display. If this occurs:

    1. Stop processing.

    2. Give the block to your manager to determine if the mixed data can be corrected via the terminal screen displays or will take action to have the blocks deleted and reinput.

  4. Determine if taxpayer entries are on the appropriate lines of Form 1041.

    1. Correct all misplaced entries, coding errors and transcription errors in each section and field of the screen display.

    2. Follow specific instructions for each section and field.

    3. Make certain all sections and fields were transcribed.

    4. Check all fields leading to the field you're working. Also check Form 1041 for any schedules or attachments that the taxpayer may have used in arriving at the amount in the field before assigning a TPNC.

  5. When making corrections to the Error Screen Display:

    Note:

    Be sure money amounts within a section have been transcribed in dollars–only or in dollars and cents according to the requirements shown in the instructions for each section

    .

  6. Missing Signature – A signature is required on most returns. If no signature is present:

    1. If a signature is not present in the Signature Section of Form 1041 (below Line 29), SSPND 225 and correspond. (If multiple issues SSPND 211).

    2. If no reply, follow "No Reply" procedures. See Exhibit 3.12.14-27

    3. For additional instructions for processing missing signatures, see IRM 3.11.14.27.

    Exception:

    Do not correspond for a signature on "CIS" returns with Form 13596 attached. Route reinput/reprocessable "CIS" returns missing a signature to Accounts Management. IRM 3.12.14.7.2.1.

  7. Error Inventory Listing –This report is printed daily, and lists each Block DLN in the Error Inventory. It is used to assign work to tax examiners, to associate documents with the error records and to release documents from previous days workload. Unworked records will remain on the list.

  8. Change of Address –Tax Examiners may input Entity changes whenever clear and concise written notification is received from a taxpayer (i.e.,, a statement signed by the taxpayer informing the Service that the taxpayer wishes their address of record to be changed to a new address).

    • If correspondence (including notices) sent by the Service is returned by the taxpayer with corrections marked on the taxpayer's address information, the correspondence will constitute written notification of a change of address. The taxpayer's signature on the correspondence is not required.

    • A return (including an amended return) filed by a taxpayer with new address information is written notification of a change of address. The proper processing of the return will update the taxpayer's address of record.

    • Form 8822 (Change of Address) is also available for taxpayers to furnish a change of address to the Service.

  9. Cellulosic Biofuel Credit refund or CBR - May be notated on the top of some 2009 tax year returns as an indicator of the Qualified Cellulosic Biofuel Credit refund. If Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, has an amount on Line 5 and/or Line 7 (2010 version - Line 5 and/or Line 8, 2008 version - Line 5 and/or Line 9). The credit will roll up to Form 3800, General Business Credits, Line 29c. These returns should be coded in C&E with an Action Code 343, which will cause the returns to fall out in ERS/Rejects for a special review.

    Caution:

    These instructions apply to 2009 tax year only, including fiscal year filers (200901 through 201011)

3.12.14.7.1.2  (01-01-2014)
Error Displays and Corrections

  1. All Form 1041 Error Screen Displays will display as follows:

    • Each field is identified by an Alpha/Numeric Field Designator (AFD) before the field.

    • Fields are displayed with no breaker. Negative values are indicated by a minus (–) sign following the amount.

    • Decimal points are displayed for dollars and cents.

      Exception:

      The cents digits are not displayed for "dollars–only" fields. Two asterisks (**) are displayed in the cents position of the dollars–only field.

    • Leading zeroes in amount fields are suppressed and the significant digits are displayed beginning in the left position.

    • If more than one amount field of a record is to be shown, the fields are aligned beneath one another.

  2. Corrections are entered starting with the left-most position of the field. Blank-out unused positions.

    • If fewer than the maximum number of positions is required, the program will automatically move to the right of the digits.

    • It is not necessary to enter the decimal point.

    • A minus sign must be entered last, if the amount is negative.

  3. Be careful not to enter more than the number of positions allowed for a particular field. If more data is entered, the overflow characters will display on the screen but are dropped when the field is added to the record. This is especially important for the EIN, name, and address.

  4. Corrections can be made to a displayed field by overlaying only the digits in error and not reentering the entire field. It is not necessary to eliminate the decimal point when correcting in this manner.

  5. If it is necessary to add a missing section:

    1. Transmit with Command Code GTSEC, followed by the desired Section Number.

    2. When the empty section format is displayed, enter the missing data in the proper fields and transmit with Command Code CRECT.

  6. If it is necessary to see a field or section of the record other than that shown in the display:

    1. Enter Command Code GTSEC, followed by the desired Section Number.

    2. If a correction is not made to the section, drop to the bottom of the screen and transmit.

    3. Any error display not showing all fields necessary for resolution should be reported to the National Office.

      Reminder:

      When correcting a screen display, move the cursor below the last field containing data before transmitting.

  7. If it is necessary to delete a section of the record, enter Command Code DLSEC, followed by the desired Section Number.

  8. If determined that additional information or research is necessary to resolve a Priority II, III, or IV Error (or if the error is rejected), enter the appropriate Action Code with either Command Code SSPND or RJECT.

    Note:

    For additional information on Priority Errors, IRM 3.12.14.8.

3.12.14.7.2  (01-01-2014)
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, follow "No Reply" procedures.

  2. ERS tax examiners issuing correspondence may perform either of the following:

    • Command Code LETER.

    • Initiate correspondence by using the Form 3696, Correspondence Action Sheet, Form 3696-A, IDRS Correspondence Action Sheet or other locally approved Correspondence Action Sheet (CAS).

  3. Most correspondence is either a computer-generated notice, a computer-generated letter or a pre-printed letter.

    Note:

    All correspondence now reflects a response period within 30 days and the consequences for no reply.

  4. If special notes or letters are developed, ensure that the following guidelines are used:

    • All correspondence to taxpayers requesting information should indicate that a response is required.

    • Specify the length of time the taxpayer has to respond.

    • Include a statement about the action the IRS will take if the response is not received timely.

    • Be sure to include the following statement: 
      "WHEN YOU REPLY, PLEASE SEND US YOUR TELEPHONE NUMBER AND THE MOST CONVENIENT TIME FOR US TO CALL SO WE MAY CONTACT YOU IF WE NEED ADDITIONAL INFORMATION" .

    • Provide for a purge date at least 10 days after the date provided in the letter to the taxpayer.

    • Whenever possible, form letters should be used to correspond with taxpayers. If a CNOTE or QUICKNOTE is used, be sure that it clearly communicates the message in simple language and contains the required information.

    • When taxpayers make errors that cause delays, advise the taxpayer that they made the error and explain what the error was that caused the delay.

    • Before initiating manual correspondence on an account dealing with anything other than a recently filed return, check the Centralized Authorization File (CAF) to ensure that the information will be mailed to the taxpayer's representative (if one is on record).

3.12.14.7.2.1  (01-01-2014)
♦Correspondence Imaging System (CIS) Returns♦

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

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

  3. Follow the instructions below for processing "CIS" returns:

    If... And... Then...
    The CIS return has a Form 13596 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 processing return,

    The return is not complete (e.g., 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 AM, to secure missing information.

    Note:

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

    The "CIS" return does not have a Form 13596 attached, The return is not complete (e.g., missing signature, schedules or forms), Research for prior posting (TC 150 posted),
    1. If TC 150 is 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.

3.12.14.7.3  (01-01-2014)
Action Codes

  1. The ERS Action Codes are used to indicate whether correspondence, research or some other action is necessary. These codes reject or suspend records, placing them in Suspense Inventory (either Workable or Unworkable) and identify the specific action taken. A listing of valid ERS Action Codes is available, see Exhibit 3.12.14-25

  2. Action Code 001 occurs when the Block out of Balance (BOB) Resolution Function has added a missing document by only inputting the Taxpayer Identification Number (TIN) and the Name Control for the missing document. For procedures for determining and correcting Priority I Errors, IRM 3.12.14.8.2.

    Exception:

    Action Code 001 does not place the record in the Suspense Inventory.

  3. Code & Edit assigns Action Codes to numbered returns if the document is unprocessable. This code is edited in the lower left margin of the return and the letters "AC" may precede the code."AC" may be omitted at the option of the Campus.

  4. Correspondence Action Sheets are used for initiating correspondence and are attached by the Tax Examiner suspending the document. The Action Codes and descriptions should be sufficient for routing these returns within the Campus.

    1. If Code & Edit has not assigned an Action Code (or if Integrated Submission and Remittance Processing [ISRP] did not transcribe the Action Code), enter the Action Code on Form 1041 and on the Screen Display.

  5. If the Action Code assigned by Code & Edit is invalid, incomplete, or is "001" , the record is assigned to the Error Inventory for correction or deletion of the code.

  6. Only one Action Code can be assigned to a record at one time. Assign Action Codes in the following priority order:

    1. Action Code 310.

    2. Action Code 320.

    3. Action Code 4XX.

    4. Action Code 6XX.

    5. Action Code 3XX.

    6. Action Code 2XX.

      Note:

      If multiple conditions are present and one of them is an entity condition, enter Action Code 320 (Entity) as the primary code, except when Action Code 310 (Statute Control) is also needed. Action Code 310 will always have first priority.

  7. If more than one Action Code of the same priority is required (i.e., 342 and 355), use the code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition.

  8. An ERS Tax Examiner may enter an Action Code on a record, correct or delete an invalid code or overlay the present Action Code with another to re-suspend or reject from ERS.

    1. Enter a valid Action Code with a Command Code SSPND, RJECT, or NWDLN.

  9. SSPND —When entered by an ERS Tax Examiner, SSPND clears the record from the screen and places it in either Workable or Unworkable Suspense.

  10. RJECT —When entered by a Rejects Tax Examiner, RJECT rejects the record from ERS. Generally, Service Center Control File (SCCF) is automatically updated for the rejected record.

  11. NWDLN —When entered by a Rejects Tax Examiner, NWDLN rejects the record from ERS and establish the new DLN under which the record is to be input.

  12. Management Suspense —Management may direct that certain documents be held for further processing instructions. Some reasons for such a suspension are:

    • A computer program bug exists for a particular type record.

    • Master File programs are not yet available or are incorrect for a specific type of document.

    • These documents will remain in the Unworkable Suspense Inventory until requested to be placed in the Workable Suspense Inventory (via the ERS Control File or until the Workable Suspense period expires, whichever comes first).

3.12.14.7.4  (01-01-2014)
Command Codes

  1. The Command Codes needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below. They are also explained in IRM 3.12.38, ERS, General Instructions. Any Command Code permitted by the Employees Security File is available.

  2. Command Codes are used to tell the system which function to perform.

  3. Command Codes must be entered in a valid format. Otherwise, a field error displays.

    • Correct the data entered using the applicable Command Code.

  4. The valid Command Codes are:

    Command
    Code
    Description
    ACTON To establish control bases, to update or close control bases that are open, to correct name controls on dummy accounts, to append history items to modules on IDRS, and to generate TC 902 to secure tax modules and their related entity data from the Master File.
    BMFOL To research entity and/or tax data which may or may not be available on IDRS. This command code allows several screen displays based on the definer code input. It should be used in lieu of the Command Code MFTRA.
    BRTVU To access data that was transcribed from line items and/or computer generated transactions from BMF returns and their schedules. It can be used in researching original returns.
    CRECT Displayed with all error displays.
    DLSEC To delete a section of a record.
    ENMOD To research for name control and transaction code information.
    ENREQ Entered (with a blank definer) after a response to ENMOD indicates that the entry is on the file.
    ERINV To research a DLN or TIN on ERS.
    ERVOL Used with a Status Code to display the number of records in the current Workable Inventory.
    GTREC To access the first error in a block in the Error Inventory or a specific record in the Workable Suspense Inventory.
    GTRECW To retrieve and correct an error record that has been previously worked. Can be used only on the day that the record block was worked.
    GTSEC To obtain the display of any section of an error record in process.
    INOLE To research the entity module. This information includes name lines, name control, address, employment codes, filing requirements, etc.
    MFREQ To request an entity module or a tax module and its related entity data from Individual Master File (IMF), BMF, Individual Retirement Account (IRA), or Employee Plan Master File (EPMF) when case control is not required.
    NAMEB/NAMEE To research for a missing TIN. A name is required to be input to research the Names Search Facility (NSF).
    NWDLN To change (renumber) the DLN and MFT of the record and reject the record.
    RJECT To reject a record from ERS.
    SSPND To assign an Action Code when placing a record in suspense.
    TERUP To allow an employee to delete his/her erroneous entry on the day of input. An employee can only delete his/her own entries.
    TRDBV Tax Return Data Base—To access 100% of return data as well as all subsequent corrections entered via ERS and Generalized Unpostable Framework (GUF). This command code can be used to verify specific line items (including any correction activity), resolve taxpayer inquiries, identify refund issues, and verify filing and return status. Also available is Command Code TRERS, which will link the DLN entered with Command Code GTREC to Command Code TRDBV.
    TRERS Is an extension of CC TRDBV developed for ERS processing and acts like TRDBV. It allows the TE to select a return based on the DLN of the latest GTREC command executed.

3.12.14.7.5  (01-01-2014)
Taxpayer Notice Codes (TPNC) – 6 Positions

  1. This code is used when a math error is present involving Tax liability or Tax Due/Overpayment. Each math error display requires a correction to a field or the assignment of a TPNC.

    • TPNCs are entered on the terminal screen following the literal "NC" and also in the upper left corner of Form 1041.

      Reminder:

      The transmission of a TPNC cannot be accompanied by any other correction.

  2. A TPNC is entered only after determining that no other corrections to the record can be made. Prior to assignment of a TPNC:

    • All corrections must be entered and transmitted for each error condition.

    • A working trail showing the changes made must be edited on the return at the point of error.

    • The Total Tax (Line 23) must be present.

    Caution:

    If a math error ripples to another error code, verify the tax, using the spreadsheets on SERP, before rippling the TPNC.

  3. Each math error has certain TPNCs that are valid to clear that error. If an invalid code is assigned, the error will re-display.

  4. Each Form 1041 can have a maximum of three TPNCs.

    • If more than three TPNCs are needed, assign TPNC 90 as the third notice code and list the errors for Notice Review to type and send to the taxpayer.

  5. TPNC 90 is actually a "fill-in" and should be used when no other TPNC fully explains the correction made.

    • Write the exact wording of the error and attach it to the face of the return.

    • Charge out the return and route it to Notice Review. Notice Review will type the math error explanation before mailing it to the taxpayer.

  6. Once a TPNC is transmitted to the record, it may be changed or removed in the following manner:

    • For records which have not cleared the terminal (errors remain after transmitting the TPNC), create an error with a higher priority.

      Note:

      This causes all clear codes and any TPNCs previously assigned to a lower priority error, to be deleted from the record. TPNCs are deleted from the header display. Beginning with the higher Priority IV error created, all subsequent Error Codes are displayed for resolution, even though they may have been displayed previously.

    • For records which have cleared the terminal, the "C" or TPNC on this error and all subsequent Error Codes are displayed for resolution whether or not they were displayed previously. TPNCs previously assigned for this error and subsequent Error Codes will be deleted from the screen.

    • Records which have been worked may be reworked using Command Code GTRECW. See IRM 3.12.38. (ERS General Instructions) for further details.

  7. All TPNCs are erased when a record is suspended with Command Code SSPND.

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

  9. For a listing of valid TPNCs and the information communicated to the taxpayer, Exhibit 3.12.14-24 (Taxpayer Notice Codes).

    Note:

    A TPNC assigned to a math error is displayed on subsequent displays for the record. The field is used for display purposes only and is not correctable.

3.12.14.7.6  (01-01-2014)
Clear Codes

  1. IRM 3.12.14.7.6.1 provides procedures for entering Clear Codes when perfecting Form 1041.

3.12.14.7.6.1  (01-01-2014)
Clear Code "C"

  1. A "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 or correction to the record as displayed.

    • The Screen Display includes a clear field, labeled "CL" to indicate the possible use of a Clear Code.

    • The Clear Field is always located to the right of CRECT on the screen display.

  2. Error Codes indicating the possible use 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:

    1. Enter and transmit prior to entry of the Clear Code "C" .

    2. Assure that all corrective procedures have been input as shown under each individual Error Code before entering a "C" in the Clear Code Field.

  3. 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 that you have made the corrections to the action code and now wish to have any other errors on the record displayed.

  4. Command Code SSPND causes all "C" Clear Codes for Error Codes to be erased.

  5. The program erases all "C" Clear Codes for Error Codes and 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 assigned to a record that was not completely worked.

  6. The "C" Clear Code cannot accompany any corrections to the record. If a correction must be entered and the record has already been transmitted:

    1. Enter Command Code GTRECW to retrieve the record and make all corrections.

3.12.14.7.6.2  (01-01-2014)
Error Codes

  1. Error Codes (including those which may require a "C" Clear Code) are numbered consecutively for correction.

  2. There may be instances when an ERS Tax Examiner creates an Error Code with a higher priority than the Error Code that has already cleared with a TPNC or "C" Clear Code.

    • If this occurs, the program deletes all "C" Clear Codes and TPNCs for Error Codes with a lower priority than the one created.

    • Beginning with the higher priority Error Code created, the program continues to display Error Codes for the record. Displays using the corrected data are apt to be different from those previously displayed.

  3. There may be instances when an ERS tax examiner makes a correction that erases an Error Code which was previously cleared with a "C" and now the error condition no longer exists.

    • If this occurs, the program deletes the "C" Clear Codes and TPNCs for all subsequent errors in the record.

    • If there are errors remaining on the record after deleting the "C" and TPNCs, the program continues to display Error Codes for the record whether or not they were previously displayed.

3.12.14.7.6.3  (01-01-2014)
Clear Code 000

  1. Clear Code 000 is used when deleting an action code.

    1. Only use Clear Code 000 for invalid or erroneous Action Codes when you have determined that there is no reason to suspend the record.

      Note:

      The "000" cannot be used in suspense correction.

3.12.14.7.7  (01-01-2014)
Transshipment of Returns to OSPC (Form 4720, Form 5227, and Form 99X)

  1. If Form 1041 with Form 4720, Form 5227, and/or any Form 990 Series return attached is received at any Submission Processing Campus other than OSPC, process as follows:

    1. Detach Form 1041 from Form 4720, Form 5227, and/or Form 99X.

    2. Copy the Received Date from Form 1041.

    3. If not already present, copy the EIN from Form 1041 to each detached document.

    4. Prepare Form 4227 and notate "FORM 1041 – EXEMPT ORGANIZATION – TRANSFER TO OSPC" .

    5. Transfer all credits to the correct Tax Period and MFT before forwarding to OSPC.

    6. Route Form 4720, Form 5227, and/or Form 99X to OSPC.

    7. Continue normal processing of Form 1041.

  2. If Form 1041 with Form 4720, Form 5227, and/or any Form 990 Series return attached is received at the Ogden Submission Processing Campus (OSPC), process as follows:

    1. Detach Form 1041 from Form 4720, Form 5227, and/or Form 99X.

    2. Copy the Received Date from Form 1041 to each detached document.

    3. If not already present, copy the EIN from Form 1041 to each detached document.

    4. If Reasonable Cause For Failure To Pay Taxes Timely has been granted for Form 1041, notate "REASONABLE CAUSE GRANTED" on each detached document. For instructions for determining Reasonable Cause, see IRM 3.11.14.20.1 and 3.11.14.20.6.

    5. Route Form 4720, Form 5227, and/or Form 99X to the function responsible for processing.

    6. Continue normal processing of Form 1041.

  3. For additional procedures for processing Split-Interest Trusts, see IRM 3.12.14.21.11.2 (Error Code 026).

3.12.14.7.8  (01-01-2014)
Working Trail

  1. Working Trail – It is important to leave a legible "working trail" for those who may work with the return later. If your Campus has written "in-house" agreements which vary from the instructions below, you may follow them. However, the following procedures have been coordinated with appropriate areas in the National Office.

  2. A "Working Trail" is to be left at the point of error on the return or schedule for each correction made in the areas specified below in blue erasable ink. Place an "X" beside the incorrect data and write the correct data to the left or above the "X" . However, If the information is available on the page, you may use an arrow to move the information to the correct line.

  3. Enter the following transcribed items when making a change to the return:

    • Tax Period (Field 01TXP).

    • Name Control (Field 01NC).

    • Employee Identification Number (Field 01EIN).

    • Correspondence Received Date (Field 01CRD).

    • Action Code (bottom left corner of the return, unless otherwise instructed).

    • Taxpayer Notice Code (TPNC).

    • Transaction Code (e.g., TC 013).

    • Non-Suspense Letters (e.g., 3875C).

    • Form 3465 (Adjustment Request).

3.12.14.7.9  (01-01-2014)
IRC §6020(b) Returns

  1. If the return has a statement that it was "SECURED UNDER THE AUTHORITY OF SECTION 6020(b)" :

    1. GTSEC 01.

    2. Enter "4" in Field 01CCC.

    3. If the return is stamped "DO NOT ASSESS FAILURE TO PAY" , GTSEC 01 and enter "D" and "4" in Field 01CCC.

  2. If any unprocessable conditions exist contact the Revenue Officer that prepared and signed the return. Do not contact the taxpayer on any secured return.

3.12.14.7.10  (01-01-2014)
Refund Returns 45 Day Jeopardy and $10 Million or more Refunds

  1. Document Perfection and ERS are responsible for identifying refunds and for 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 & Edit to show that a manual refund is needed. If these conditions are not identified in Code & Edit, ERS must follow the following criteria:

    If... Then...
    The processing date is more than 20 days after the 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 periods

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

3.12.14.8  (01-01-2014)
Types of Errors

  1. IRM 3.12.14.8 provides a description of the types of errors generated during Form 1041 processing.

3.12.14.8.1  (01-01-2014)
General

  1. The Error Resolution System identifies errors according to type and priority. The record heading shows the type of error:

    • Action Code Error (Priority I).

    • Section Error (Priority II) – Includes Terminus and ISRP errors.

    • Validity Error (Priority III).

    • Math/Consistency Error (Error Codes) (Priority IV).

  2. There may be records where the tax examiner finds that programming has not furnished a section that is needed to solve an error. If this occurs:

    1. Enter Command Code GTSEC.

    2. Report to the National Office for correction of the display.

3.12.14.8.2  (01-01-2014)
Priority I Errors – Action Code/Unpostable Code Errors

  1. Description:

    • All records with an invalid Action Code assigned by Document Perfection, are placed in the Error Inventory and displayed as a Priority I Error.

    • All records with a valid Action Code, are assigned to a Suspense Inventory and displayed as a Priority I Error.

  2. Display – The Action Code for the record with the literal description of the action or unpostable condition will be shown.

  3. Error Correction – Process Priority I errors as follows:

    If... Then...
    Suspense action is required Enter CC "SSPND" with the correct Action Code.
    Suspense action is not required Enter "000" in the Clear Code (CL) field.

    Note:

    Except for priority statute and manual refund cases, do not remove the document from the block.

  4. Action Code 001 is a Priority I error. This condition occurs whenever the BOB Resolution function has added a document to a block by entering only the Name Control and TIN. The remainder of the record must be added by ERS.

    • Enter Command Code GTSEC for each record section that should contain data.

    • Add the required data.

    • When all of the sections have been entered, enter "C" in the Clear Field.

  5. See IRM 3.12.38, BMF General Instructions for procedures for correcting Priority I Action Code errors in Suspense and Unpostable Code Correction.

3.12.14.8.3  (01-01-2014)
Priority II Errors – Section Errors

  1. Most edit, missing section, and terminus errors should be eliminated by Integrated Submission and Remittance Processing (ISRP). However, edit errors and/or terminus errors may be present if normal ISRP validity checks have been bypassed.

  2. Edit Error - A section with an error detected by ISRP. Edit errors are coded as follows:

    • Code 1 - Split-screen transmission. Occurs when the Key Verifier attempted to change the Check Digit or changed four or more digits of the Primary TIN. Also occurs when the Original Entry Operator indicates that a required section was missing.

    • Code 3 - Invalid section ending point.

    • Code 4 - Invalid field length.

    • Code 5 - Questionable section. Occurs when a section is entered twice or is entered out of sequence by ISRP.

  3. Terminus Error - A section with variable length fields containing an erroneous size field or otherwise being of erroneous size.

  4. Display – All fields except the ERS Action Code and the Remittance (Payment Received) fields are displayed in columnar format with or without data. The error type is indicated for ISRP Problem Code errors. Only one section (error) is displayed at a time.

  5. Content – Any individual section excluding computer-generated fields and the Action Code. The Action Code is an uncorrectable field, except as defined for SSPND and RJECT.

  6. Correction Procedures:

    • ISRP Errors – All fields in the section must be examined when a ISRP error is present. If Section 01 of a return is coded, examine the section for an error to ensure that the return is for the taxpayer whose name is in Section 01. Correct the section and transmit.

    • Terminus Errors – All fields of the section must be examined when a terminus error is present. Correct the section and transmit.

    • Questionable Section – Verify and enter all of the data for the displayed section. Transmit when all of the data is correct.

3.12.14.8.4  (01-01-2014)
Priority III Errors – Field Errors

  1. Definition – Any field failing to meet the requirements for that field (and that field only) is shown as a Priority III error. Consistency and/or relationships with other fields are not a factor. Individual field validity errors to be bypassed after initial consideration, are shown as Priority IV Errors.

  2. Some reasons for field errors include the following:

    • Non-numeric character in a numeric field.

    • Non-alphabetic character in an alpha field.

    • Blank space in a number field.

    • Blank in the first position of an alpha field.

  3. Display – Every field displayed is in error.

    • All fields with a Priority III error are displayed in columnar format in the order encountered in the record.

    • An overflow field is identified by all question marks for a money field or a single pound sign in the last position of a Name Line.

    Note:

    The Action Code and Taxpayer Notice Codes are never displayed as a Priority III Error.

  4. Correction Procedures:

    1. Correct every error field displayed using the specific instructions within each section for the field in error.

    2. Check the information on the source document to determine if each displayed field has been correctly coded and transcribed.

    3. Enter the correct data for each field displayed.

    4. If no data is to be in a displayed field, blank the field.

3.12.14.8.5  (01-01-2014)
Part IV Errors – Consistency/Math Errors

  1. Definition –Any valid field used in any computation where the result is inconsistent with (or contradictory to) any other valid field, will have Error Code 001–999 assigned and be shown as a Priority IV Error.

    • If the result of the computer computation of an amount differs from the record, the computation fields are shown as a Priority IV Error.

  2. Display –Priority IV errors are displayed with the Error Code for the specific error. The screen display shows the Error Code assigned and the fields needed to make the necessary correction.

    1. Compare the displayed fields with the return. If the field was coded or transcribed incorrectly, overlay the screen display with the correct data.

    2. For those amounts entered from ERS Input Only Fields (e.g., Field 05GVT), the first corrections will be entered to the taxpayer's amount.

    3. For all math Error Codes, a field labeled "NC" followed by "XX" will generate. The "NC" field is located on Line 4 of the screen display (to the right of CRECT). Multiple TPNCs may be entered when multiple XX's are shown.

    4. Previously assigned TPNCs are displayed on Line 3 preceded by the literal "NC" .

    5. If determined that the generated Math Error Code was the direct result of a previous error, any previously assigned TPNC may be entered.

    6. A field labeled "CL" is displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed. The "CL" field is located on Line 4 of the screen display (to the right of CRECT). All coding and transcription errors displayed must be corrected and IRM procedures for each field shown on the screen display must be applied before entering a "C" in the Clear Field.

    7. All errors must be resolved by eliminating (or suspending) the error, entering the Clear Code, or entering a Taxpayer Notice Code.

  3. Correction Procedures:

    If... Then...
    Clearable consistency errors
    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If the data in the field is correct, enter a "C" in the Clear Code field.

    Non-clearable consistency errors Correct all misplaced entries, coding errors, and transcription errors.
    Math errors
    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If no editing or transcription error is present or the error is the fault of the taxpayer, issue the appropriate Taxpayer Notice Code (TPNC).

      Note:

      Once a TPNC is assigned to the record, it will be displayed in all subsequent displays for the record unless a higher Priority IV Error is created.

    A correction causes a clear Error Code to no longer be in the error
    • The TPNC or Clear Code for that Error Code is deleted.

    • All TPNCs and Clear Codes assigned to all lower priority (higher numeric) Error Codes are deleted also.

    • Any remaining Error Codes previously cleared are re-displayed.

  4. For specific correction instructions for each Error Code, see IRM 3.12.14.21

3.12.14.9  (01-01-2014)
Section 01 – Entity Remittance and Miscellaneous Information

  1. IRM 3.12.14.9 provides instruction for perfecting Section 01 error conditions.

3.12.14.9.1  (01-01-2014)
General Information

  1. Section 01 contains entity data, remittance, fields for codes, Received Date, and miscellaneous information.

  2. The Remittance field cannot be changed by ERS.

    • Non-Remittance Returns –This field must be blank.

    • Remittance Returns –This field must be present and all numeric.

3.12.14.9.2  (01-01-2014)
Error Record Format – Section 01

  1. Listed below are the fields contained in Section 01. Data in this section is obtained from Form 1041, Form 1041-QFT, and Form 1041-N:

    Field
    Designator
    Maximum
    Length
    Title Location
    01NC 4 Name Control/ Check Digit First Name Line, Forms 1041, 1041-QFT, and 1041-N.
    01EIN 9 Employer Identification Number Box "C" , Form 1041.
    Line 2, Form 1041-QFT and Form 1041-N.
    01TXP 6 Tax Period Upper Right Corner, Forms 1041, 1041-QFT, and 1041-N.
    01FID 1 Fiduciary Code Right of the "Simple Trust" box, Form 1041.
    01TRC 1 Trust Code Right of the "Pooled Income Fund" box, Form 1041.
    01CCC 10 Computer Condition Code Center of Line 1 (dotted area), Forms 1041, 1041-QFT, and 1041-N.
    01RCD 8 Received Date Center of Forms 1041, 1041-QFT and 1041-N.
    01FIN 9 Fiduciary EIN Form 1041, Right of Fiduciary's Signature.
    01CBI 1 Paid Preparer Checkbox Indicator Forms 1041, 1041-QFT, and 1041-N, Right of Fiduciary EIN.
    01PSN 9 Paid Preparer SSN/PTIN Forms 1041, 1041-QFT, 1041-N, Right of Paid Preparer Signature.
    01PEN 9 Paid Preparer EIN Forms 1041, 1041-QFT, and 1041-N, Right of Paid Preparer Signature.
    01PTN 10 Paid Preparer Telephone Number Forms 1041, 1041-QFT, and 1041-N, below Paid Preparer EIN.
    01CRD 8 Correspondence Received Date  
    01ADC 3 Audit Code Form 1041, page 1, left margin next to Line 10. (Also, on Form 1041-N.) Shown as "1 -" followed by audit code(s).
    01ESB 1 ESBT Indicator Form 1041, page 1, left margin next to Line 10. Shown as "2 - 1" .
    01PII 1 Pooled Income Fund Indicator Form 1041, page 1, left margin next to Line 10. Shown as "3 - 1" .
    01PIC 1 Penalty and Interest Code Form 1041, page 1, left margin next to Line 10. Shown as "4 - 1" .
    01MSC 4 Missing Schedule Code Form 1041, page 1, left margin next to Line 10. Shown as "5 -" followed by appropriate missing schedule code(s).
    01ISI 1 Installment Sale Indicator Form 1041, page 1, left margin next to Line 10. Shown as "6 -" followed by appropriate code.
    01HSC 1 Historic Structure Code Form 1041, page 1, left margin next to Line 10. Shown as "7 - 3" .
    01QNT 6 Form 1041-QFT – Number of Trusts Form 1041-QFT, Line 4 (Part I).
    01EWI 1 E-file Mandate Waiver Indicator Form 1041, page 1, bottom center margin

3.12.14.9.3  (01-01-2014)
Field 01NC – Name Control (4 Positions)

  1. Description – Field 01NC is located in the Entity Section of Form 1041.

    • Valid characters are alpha, numeric, hyphen, ampersand, and blank.

  2. Invalid Condition – Field 01NC is invalid if any of the following conditions are present:

    • The first position is not alpha or numeric.

    • The second, third, or fourth position is not an alpha, numeric, hyphen, ampersand, or blank.

    • There are any intervening blanks between characters.

  3. Correction Procedures:

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

    2. If the Name Control cannot be determined, research ENMOD or INOLE to secure the Name Control.

      If... Then...
      Able to locate Enter the correct Name Control in Field 01NC.
      Unable to locate SSPND 320.

      Note:

      If IDRS is not available, SSPND 351/352.

  4. For information on determining the Name Control for an Estate or Trust, refer to Document 7071-A, BMF Name Control Job Aid.

3.12.14.9.4  (01-01-2014)
Field 01EIN – Employer Identification Number (9 Positions)

  1. Description – Field 01EIN is located in the Entity Section of Form 1041/1041-QFT/1041-N.

    • Only numeric characters are valid.

  2. Invalid Condition – Field 01EIN is invalid if any of the following conditions are present:

    • The EIN is not numeric.

    • The EIN is less than nine characters.

    • The first two digits of the EIN are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

    • The EIN is all zeros or all nines.

  3. Correction Procedures:

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

      If... Then...
      The EIN was transcribed correctly Research for another EIN on the return or attachments and enter in Field 01EIN.
      The EIN cannot be determined Research IDRS for the correct EIN using CC NAMEB/NAMEE, ENMOD, or INOLE. If located, enter the correct EIN. If more than one EIN is located or the correct EIN cannot be located, SSPND 320.

      Note:

      If research command codes are not available, SSPND 351.

      No EIN can be found SSPND record with Action Code 320. Route to Entity Control using Routing Slip notated "NO RECORD FOUND" .

    2. If the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return. Continue processing the return.

      Note:

      Do not send Letter 3875C: if 3 or less digits of the EIN are transposed, different, missing, when INOLES indicates the account has been merged, or If the EIN on the return is the taxpayer's SSN and research shows there is a valid EIN for that taxpayer.

  4. Suspense Correction:

    1. Enter the EIN assigned by Entity in Field 01EIN and the Entity Assignment Date in Field 01CRD.

    2. If the EIN is changed from the taxpayer's entry and Entity has not already issued Letter 3875C, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C: if 3 or less digits of the EIN are transposed, different, missing, when INOLES indicates the account has been merged, or when an SSN is used on a BMF return and research has shown there is no entity on Master File when the number is in EIN format.

3.12.14.9.5  (01-01-2014)
Field 01TXP – Tax Period (6 Positions)

  1. Description – Field 01TXP is located in the upper right corner of Page 1 of Form 1041. The pre-printed calendar year Tax Period is located in the top center margin of Form 1041. If other than the pre-printed calendar year, the Tax Period is indicated under the heading "U.S. Income Tax Return for Estates and Trusts" .

    • The Tax Period will be shown in "YYYYMM" format.

      Example:

      Tax Period 0812 will display as 200812.

    • Only numeric characters are valid.

    • The Tax Period is the basis for all Tax Period related mathematical comparisons and validity checks.

  2. Invalid Condition – Field 01TXP is invalid, if any of the following conditions are present:

    • The Tax Period is not all numeric.

    • The month (last two digits) is not 01 through 12.

    • The Tax Year (first four digits) is after the current year.

    • The Tax Year is equal to the current year but the month is after the current processing month.

    • Form 1041 – The Tax Period is prior to 196112.

    • Form 1041-QFT – The Tax Period is prior to 199708.

    • Form 1041-N – The Tax Period is prior to 200312

  3. Correction Procedures:

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

    2. Determine the correct Tax Period from Form 1041 and attachments.

    Note:

    See IRM 3.12.14.22.3 for 52-53 week filers.

    If... Then...
    The Tax Period cannot be determined Enter the current year
    A Final return and the Tax Period Ending is the same as or later than the Received Date Change the Tax Period to the month preceding the Received Date.
    A non-final return and the Tax Period Ending is less than four months after the processing date

    Example:

    A return with a Tax Period Ending of 9/10/2008 that is being processed on 6/15/2008

    SSPND 480 and attach Routing Slip notated "EARLY FILED"
    A non-final return and the Tax Period Ending is four months or more after the processing date

    Example:

    A return with a Tax Period Ending of 11/30/2008 that is being processed on 6/15/2008

    SSPND 211 and initiate correspondence requesting confirmation of the Tax Period Ending (or follow local procedures for confirmation of the Tax Period Ending).

    Note:

    When confirmed, the return will be processed after the end of that Tax Period. If no reply, use current processing year.

    The Tax Period Ending is later than the current year-month combination by one year or more Reduce the Tax Period Ending to the lowest number of full years that make it valid.
    The Tax Period begins and ends in the middle of the month SSPND 211 and correspond to request confirmation of the Tax Period.

    Exception:

    If the return is for a Decedent's estate, use the end of the month for the Tax Period, for example a return ending December 21, 2008 would be 200812.

    Form 1041 –The Tax Period Ending is prior to 196112 (Non-ADP) SSPND 620 and attach Routing Slip notated "PRE-ADP" .
    Form 1041-QFT –The Tax Period Ending is prior to 199708 SSPND 211 and correspond to determine the correct Tax Period. If no reply, use current processing year.
    Form 1041-N –The Tax Period Ending is prior to 200312 SSPND 211 and correspond to determine the correct Tax Period. If no reply, use current processing year.

  4. The following applies to all returns if Field 01TXP has been changed or needs to be changed:

    If... Then...
    The Tax Period is changed and prepaid credits are present SSPND 342 and attach Routing Slip and notate "VERIFY CREDITS" .
    Payments are posted to an incorrect Tax Period SSPND 351 and attach Routing Slip notated "CREDIT TRANSFER" .

3.12.14.9.6  (01-01-2014)
Field 01FID – Fiduciary Code (1 Position)

  1. Description – Field 01FID is a single numeric field edited to the right of the "Simple Trust" box (Box "A" of Form 1041).

  2. Valid characters are as follows:

    Fiduciary
    Code
    Description
    1 Decedent's Estate
    2 Simple Trust or Grantor Trust (Partially Taxable)
    3 Complex Trust
    4 Grantor Trust (Non-Taxable) or Family Estate Trust
    5 Bankruptcy Estate - Chapter 7
    6 Bankruptcy Estate - Chapter 11
    8 Qualified Disability Trust (QDT)

    Note:

    "8" is valid for Tax Period 200109 and subsequent.

    9 Nonexempt Charitable and Split-Interest Trust described in IRC §4947(a)(2)

    Note:

    Always enter "9" in Field 01FID and Audit Code "6" in Field 01ADC when the "Section 4947(a)(2)" box is checked, even if another box is checked.

    Caution:

    A blank is valid only if Computer Condition Code "G" (Amended Return) is present in Field 01CCC.

  3. Correction Procedures:

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

    2. If Field 01FID is other than "1" through "6" , "8" , or "9" , correct as follows:

      If... Then...
      The "Decedent's Estate" box is checked Enter "1" in Field 01FID.
      The "Simple Trust" box is checked Enter "2" in Field 01FID.
      The "Complex Trust" box is checked Enter "3" in Field 01FID.
      The "Qualified Disability Trust" box is checked or"Section 642(b)(2)(C)" is notated on the dotted portion of Line 20 and Field 0420 contains an entry of $3,900 or less. Enter "8" in Field 01FID.
      The "Grantor Trust" box is checked or you have determined that the return is for a Grantor Trust and the return is taxable, entries are present on any of Lines 1 through 29 of Form 1041 Enter "2" in Field 01FID and enter "3" in Field 01TRC.

      Exception:

      Process Form 1041 as a Non-Taxable Grantor Trust (a "4" in Field 01FID) if it is apparent that the return is non-taxable and the taxpayer has erroneously entered data to Lines 1 through 22.

      The "Grantor Trust" box is checked or you have determined that the return is for a Grantor Trust and the return is non-taxable, no entries on Lines 1 through 22 or the taxpayer has erroneously entered data to Lines 1 through 22 Enter "4" in Field 01FID and enter "3" in Field 01TRC.
      The "Bankruptcy Estate - Ch. 7" box is checked Enter "5" in Field 01FID.
      The "Bankruptcy Estate Ch. 11" box is checked Enter "6" in Field 01FID.
      If neither Bankruptcy box is checked Enter "5" in Field 01FID, if the return indicates it is for a "Bankruptcy Estate" .
      Only the "Pooled Income Fund" box is checked Enter "3" in Field 01FID. GTSEC 01 and enter "1" in Field 01PII.
      A 1985 or subsequent Form 1041 is received with a notation that it is for a Testamentary Trust or the Testamentary Trust box is checked on a 1984 or prior Form 1041 Enter "3" in Field 01FID.
      A current year Form 1041 is received with the Yes box checked on Line 9 of the Other Information Section (Page 2) or a notation that it is for a GENERATION SKIPPING TRUST,
      or
      A prior year Form 1041 is received with a notation that it is for a Generation Skipping Trust or the Generation Skipping Trust box is checked (Tax Year 1986 or prior)
      Enter "3" in Field 01FID and "1" in Field 01TRC.
      The Described in Section 4947(a)(2) box is checked Enter "9" in Field 01FID and enter "6" in Field 01ADC.
      No box is checked and the Name Line contains a notation that it is for Estate Trust. Enter "1" in Field 01FID.

      Caution:

      In addition to checking the applicable Type of Entity in Section A of Form 1041, taxpayers are instructed to check the ESBT (S–Portion Only) box in Section A when ESBT (Electing Small Business Trusts) tax applies (if ESBT box is checked, "1" should be in Field 01ESB). Determine the Fiduciary and Trust Code from the box checked, other than the ESBT box. If no other box is checked, follow the procedures below.

    3. If no boxes (or multiple boxes) are checked in the Entity Section of the return and the type of return cannot be determined from the Name line, Exemption amount, or there isn't a notation on the return indicating the Entity type, or the taxpayer notates Nominee enter "3" in Field 01FID.

      Exception:

      If the taxpayer has notated "RECEIVERSHIP" , "SUBSTANTIAL OWNER" , "Revocable (Living) Trust" , "Generation Skipping Trust" , or "IRC Section 671 - 678)" , code as a Grantor Trust.

      If... Then...
      Grantor Trust (Non-Taxable) Enter a "4" in Field 01FID and "3" in Field 01TRC.
      Grantor Trust (Partially Taxable) Enter a "2" in Field 01FID and "3" in Field 01TRC.

      Note:

      If Government National Mortgage Association (GNMA - Ginnie Mae) Pool is notated on Form 1041, but entries are present on any of Lines 1 through 21, and Line 22 has a positive amount, then Code & Edit (C&E) has been instructed to correspond to determine if Form 1041 is a Taxable or Non-taxable return. GNMA Pool returns are Non-taxable returns only.

    Caution:

    Amended returns (edited with CCC "G" ) do not receive either a Fiduciary Code or a Trust Code. Every other 1041 must have a Fiduciary Code and may have a Trust Code.

3.12.14.9.7  (01-01-2014)
Field 01TRC – Trust Code (1 Position)

  1. Description – Field 01TRC is a single numeric field edited to the right of the "Pooled Income Fund" box (Box "A" of Form 1041).

  2. Valid characters are "1" , "2" , "3" , "4" , and blank:

    • Trust Code 1 – Generation Skipping Trust (should only be present with Fiduciary Code "3" ).

    • Code 2 – Reserved.

    • Code 3 – Grantor Trust (should only be present with Fiduciary Codes "2" or "4" ).

    • Code 4 – Family Estate Trust (should only be present with Fiduciary Code "4" ).

      Note:

      Use Trust Code "3" for a Family Estate Trust when the Grantor Trust box has been checked on the return.

  3. Correction Procedures:

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

    2. If Field 01TRC is other than "1" through "4" , or blank, correct as follows:

    If... Then...
    A current year Form 1041 is received with the Yes box checked on Line 9 of the Other Information Section (Page 2) or a notation that it is for a Generation Skipping Trust,
    Or
    A prior year Form 1041 is received with a notation that it is for a Generation Skipping Trust or the Generation Skipping Trust box is checked (Tax Year 1986 or prior)
    GTSEC 01 and enter "3" in Field 01FID and "1" in Field 01TRC.
    The Grantor Trust box is checked (either Taxable or non-Taxable) Enter "3" in Field 01TRC.
    A 1993 or subsequent Form 1041 is received with a notation that it is for a Family Estate Trust or the Family Estate Trust box is checked on a 1992 or prior Form 1041 Enter "4" in Field 01TRC.

    Exception:

    Enter "3" in Field 01TRC if the Grantor Trust box is checked.

    Form 1041 is received with the notation QUALIFIED SETTLEMENT FUND or SETTLEMENT FUND SSPND 320 and attach Routing Slip notated "POSSIBLE FILING REQUIREMENT DISCREPANCY" .

3.12.14.9.8  (01-01-2014)
Field 01CCC – Computer Condition Code

  1. Description – Field 01CCC is an alpha or numeric field edited in the center of Line 1 of Form 1041.

    • Computer Condition Codes post to the Master File and are used to identify a special condition or computation for the computer.

  2. Correction Procedures:

    1. When the code(s) edited on Form 1041 are illegible or invalid, examine the return to determine the correct code(s) and enter on the screen.

    2. If no reply to correspondence or if the correspondence was undeliverable, enter a "3" in Field 01CCC.

  3. Listed below are the valid Computer Condition Codes for Form 1041:

    Code Definition Error Checks Remarks
    C Invalid in service date and/or vehicle year   C&E will CCC C any return with an invalid in service date and/or vehicle year listed on the attached forms:
    • Form 8834 valid in service date after 2/17/2009, vehicle year 2009, 2010, and 2011.

    • Form 8936 valid in service date after 1/01/2009, vehicle year 2009, 2010, and 2011.

    • Form 8910 valid in service date after 2/17/2009.

      Note:

      ERS will disallow the credits and notify the taxpayer that we have disallowed the credits due to invalid in service date and/or vehicle year.

    D Reasonable Cause for Failure to Pay Taxes Timely Can be used with CCC "R" or "7" , but not both (validity check).  
    F Final Return Cannot be Coded "G" (Field Error).  
    G Amended Return • No other codes allowed, except "W" , "T" , and "3" .
    • All fields must be blank except RMIT>, 01NC, 01EIN, 01TXP, and 01RCD and O1CRD (EC 010).
    If CCC "G" is deleted from Field 01CCC, GTSEC to review all sections and input data where necessary.
    I Regulated Futures Contracts and Tax Straddles (Form 6781)   No action – Information item only.
    K Qualifying Small Business Taxpayer   •Indicates box F checked in Part II of Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, or
    •Indicates box C is checked in Part I of Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen.

    Caution:

    Only valid after 200912 through 201011.

    N Form 8939   Indicates that Form 8939, Allocation of Increase in Basis for Property Received from a Decedent, is attached to the 1041 return.
    O Module Freeze   • Indicates that a pre-settlement manual refund was made or will be made.
    • Form 3753 or Form 5792 should be attached to Form 1041.
    • If TC 840 (Manual Refund) has not posted to BMFOL or TXMOD, SSPND via Action Code 341 (Manual Refund). Otherwise, continue processing.
    R Reasonable Cause for Failure to File Tax Return Timely Can be used with CCC "D" or "7" , but not both (validity check).
    • A notation such as do not Assess Failure to File Penalty on an SFR,

    T Form 8886   Indicates that Form 8886, Reportable Transaction Disclosure Statement is attached to the 1041 return.
    T Investor Reporting of Tax Shelter (Form 8271 attached to Form 1041).   No action – Information item only.

    Note:

    Only applies to 200709 returns and prior.

    V Claiming Qualifying Therapeutic Discovery Project Credit   Any return with an amount on Line 1a of Form 3800, and part of the amount is from Line 8, Form 3468.

    Note:

    Credit is not valid after 201011.

    W Return Cleared by Statute Must be present on Statute Cases (EC 001).  
    X Credit Freeze   • Used to freeze a credit balance, when appropriate (unsigned, refund return, and no reply).
    • Prepare Form 3465 and photocopy the return for Adjustments.
    Y Return Filed – Short Period EC 898 Computer accepts, posts, and settles on return as submitted.

    Note:

    Not used on initial or final returns.

    1 Related Party Like-Kind Exchange – Form 8824 is attached.   If Form 8824, Like-Kind Exchanges, is attached.
    3 No Reply to Correspondence Cannot be present with Field 01CRD (Field 073).  
    4 Return Prepared Under IRC §6020(b) Cannot be used with CCC R. No action – Information item only.
    8 Waiver of Estimated Tax Penalty  
    1. When the date entity created is within two years of the tax year ending and:

      • The return is for a decedent estate or bankruptcy estate, or

      • Taxpayer notated Testamentary Trust, Tstmtry, Trust under the Will, T.U.W., or TR/W in the entity portion of the return.

    2. Form 2210 is attached and any boxes are checked, or Form 2210-F has any other boxes checked.

    3. The taxpayer notates Waiver on Line 26 of Form 1041, or on Form 2210 or 2210-F.

    4. Taxpayer provides a valid explanation for underpayment, e.g., retired or became disabled during tax year.

    5. If all the following conditions are met:

      • Schedule H is attached to the return,

      • Form 1041 does not contain withholding credit, and

      • Total tax without household employment tax is less than $1,000.

    9 Low Income Housing Credit (LIHC) Not valid before Tax Period 198701 (EC 062).
    • Form 8586, Low-Income Housing Credit

    • Form 8609, Low-Income Housing Credit Allocation and Certification, for 200412 and prior.

    • For 8609-A, Annual Statement for Low-income Housing Credit.

    • Form 8693, Low-Income Housing Credit Disposition Bond.

    Caution:

    Do not use for Form 8611, Recapture of Low-Income Housing Credit.

  4. When CCC "G" is present, no other CCC's are valid except"W" and "3" .

    • If a CCC other than "W" or "3" is present with CCC "G" , delete the invalid CCC.

3.12.14.9.9  (01-01-2014)
Field 01RCD – Received Date (8 Positions)

  1. Description – Field 01RCD is a numeric field, which is either date stamped or edited in the center of Page 1 of Form 1041.

    • Field 01RCD must be present and entered in YYYYMMDD format.

  2. Invalid Condition – Field 01RCD is invalid if any of the following conditions are present:

    • The Received Date is not present.

    • The Received Date is not in YYYYMMDD format.

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

    • The Received Date is not all numeric.

    • The Received Date is prior to 19620101.

    • The Received Date is not within the valid month, day range detailed below:

    Month Day
    01, 03, 05, 07, 08, 10, and 12 01–31
    04, 06, 09, and 11 01–30
    02 01–28 (29 leap year)

  3. Correction Procedures:

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

    If... Then...
    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 "minus 10 days" , Postmark Date, and/or Signature Date) indicates that the Received Date should be the current year Change the Received Date year to the current year.
    The Received Date cannot be determined Determine the entry to Field 01RCD using the following priority order:
    a) The earliest legible Postmark Date (U.S. Postal Service or Private Delivery Service) on the envelope. Note: If an envelope is not attached, use the postmark date stamped on the face of the return.
    b) Service Center Automated Mail Processing System (SCAMPS) digital date.
    c) The Revenue Officer's Signature Date.
    d) The Return Signature Date (if within the current year).
    e) The Julian Date in the DLN minus 10 days (on numbered returns).
    f) The Current Date minus 10 days (on unnumbered returns).
    Multiple Received Dates are present Enter the earliest Received Date in Field 01RCD.
    The Tax Period Ending is prior to 19620101 (Non-ADP) SSPND 620.
    The return was addressed to the IRS and delivered to a State agency Use the postmark date as the received date.
    The return was addressed to a State agency Use the IRS date stamp as the received date.

  4. Determining Postmark Dates:

    • Only legible official postmark date and/or label dates (Killer Bar Strips or Postage Validation Imprinted Labels) are accepted as proof of filing timely.

    • Metered Postmarks are easily identified by the official marking of arrows. These types of markings are not found on a privately metered postmark.

    • Valid official Killer Bar Strips are identified by a series of solid or broken lines containing a date, city, and state that is used to cancel postage stamps. Accept the postmark date as the Received Date.

    • For further information and procedures on Postmarks, see IRM 3.10.72, Receiving, Extracting, and Sorting.

  5. Private Delivery Services - A private delivery service (PDS) is a business, designated by the IRS (rather than by the U.S. Postal Service), to send returns to the IRS. Private delivery services do not deliver to P.O. Boxes. Taxpayers must use the U.S. Postal Service to mail items to an IRS P.O. Box address. The postmark date is the date the private delivery service records in its database or marks on the mailing label.

    1. Accept all designated PDS marks. Do not use marks from a non-designated PDS to determine the IRS Received Date.

    2. The only designated delivery services are listed below:

      Private Delivery Service:
      Federal Express (FedEx):
      • FedEx Priority Overnight
      • FedEx Standard Overnight
      • FedEx Two Day
      • FedEx International Priority
      • FedEx International First
      United Parcel Services (UPS):
      • UPS Next Day Air
      • UPS Next Day Air Saver
      • UPS Second Day Air
      • UPS Second Day Air A.M.
      • UPS Worldwide Express
      • UPS Worldwide Express Plus
      DHL Worldwide Express:
      • DHL "Same Day" Service
      • DHL USA Overnight
      • DHL 2nd Day Service
      Airborne Express (Airborne):
      • Overnight Air Express Service
      • Next Afternoon Service
      • Second Day Service

    3. The "Timely Mailing as Timely Filing" rule applies only to the U.S. Postal Service and to a PDS. When the rule applies to a PDS, it is referred to as a "Designated" PDS.

    4. Currently, only FedEx marks airbills with the mailing date. Do not use FedEx "Power ship 3" airbills for determining the mail date. Accept all other FedEx airbills.

    5. Use the instructions in IRM 3.10.72 for determining the Received Date when the mail marks are not from a designated PDS.

3.12.14.9.10  (01-01-2014)
Field 01FIN – Fiduciary EIN

  1. Description – Transcribed from the right of the Signature Section of Form 1041.

  2. Invalid Condition – Field 01FIN is invalid if any of the following conditions are present:

    • Field 01FIN is not nine numbers.

    • Field 01FIN is all zeros or all nines.

    • The first two digits (Area Office Code) are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

  3. Correction Procedures:

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

    2. If the Fiduciary EIN is still invalid or if the return is nontaxable, amended or for an Estate, delete Field 01FIN.

  4. Do not enter the Fiduciary EIN if any of the following conditions exist:

    • The return is for an Estate (Box A).

    • Field 0524A is blank.

    • Field 0422 is blank.

    • The Fiduciary's EIN is illegible or less than nine numeric digits.

    • The Fiduciary's EIN is the same as the Trust's EIN (Box C).

    • The fiduciary is not a trust or financial institution (i.e.,, bank, credit union, savings and loan).

    • The return is amended (Box F).

3.12.14.9.11  (01-01-2014)
Field 01CBI – Paid Preparer Checkbox Indicator

  1. Description –Transcribed from the right of Field 01FIN (Fiduciary EIN) in the Signature Section of Form 1041. The Paid Preparer Checkbox is used to indicate whether the taxpayer has elected to allow the Paid Preparer to answer questions about the taxpayer's return as it is processed.

    • Valid characters are "1" and blank.

    • If the taxpayer checks only the Yes box, Code & Edit should edit a "1" in the margin to the right of the Paid Preparer Checkbox.

  2. Invalid Condition –Field 01CBI is invalid if other than "1" or blank

  3. Correction Procedures:

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

    If... Then...
    The "Yes" box is checked Enter "1" in Field 01CBI.
    The "No" box is checked;
    Neither box is checked; or,
    Both boxes are checked
    Delete Field 01CBI and continue processing.

3.12.14.9.12  (01-01-2014)
Field 01PSN – Paid Preparer's TIN (PTIN)

  1. Description – Transcribed from the right of the Paid Preparer's Section of Form 1041.

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

    • Valid characters are all blank, or with a "P" in the first character followed by eight numerics (PTIN).

      Note:

      The first character in the PTIN must begin with the alpha "P" . The range for a valid PTIN is P00000001 through P99999998. A "P" followed by all zeroes or all nines is not valid.

  2. Invalid Condition – Field 01PSN is invalid if any of the following conditions are present:

    • Field 01PSN is other than a "P" followed by eight numeric digits,

    • Field 01PSN is all zeros or all nines.

    Caution:

    Preparer's Social Security Number (SSN) is no longer acceptable.

  3. Correction Procedures:

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

    2. If unable to determine a valid entry, delete Field 01PSN.

3.12.14.9.13  (01-01-2014)
Field 01PEN – Paid Preparer EIN

  1. Description – Transcribed from the right of the Paid Preparer's Section of Form 1041.

    • Data may or may not be present in Field 01PEN.

    • Valid characters are all blank or all numeric.

      Exception:

      Field 01PEN will be invalid if all nines, all zeroes, or less than nine digits.

  2. Invalid Condition – Field 01PEN is invalid if any of the following conditions are present:

    • Field 01PEN is not nine numeric digits.

    • The first two digits of the EIN are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

    • Field 01PEN is all zeros or all nines.

  3. Correction Procedures:

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

    2. If unable to determine the valid entry, delete Field 01PEN.

3.12.14.9.14  (01-01-2014)
Field 01PTN – Paid Preparer Telephone Number

  1. Description – Transcribed from the right of the Paid Preparer's Section of Form 1041.

    Note:

    If the taxpayer has checked Yes in the Paid Preparer Checkbox, a telephone number should be entered to allow contact, but this field is not required and may be blank.

    • Data may or may not be present in Field 01PTN.

    • Valid characters are alpha and numeric.

  2. Invalid Condition – Field 01PTN is invalid if other than alpha, numeric or blank.

  3. Correction Procedures:

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

    2. If invalid, delete Field 01PTN and continue processing.

3.12.14.9.15  (01-01-2014)
Field 01CRD – Correspondence Received Date (8 Positions)

  1. Field 01CRD is a numeric field edited on the front of the 1041.

    • 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.

    • If present, Field 01CRD must be entered in YYYYMMDD format.

  2. Invalid Condition - Field 01CRD is invalid if any of the following conditions are present:

    • Not numeric.

    • Not in YYYYMMDD format.

    • Not a valid date.

  3. Correction Procedures - Correct all misplaced entries, coding errors, and transcription errors.

    1. Compare the field with the return:

      If... Then...
      The Correspondence Received Date cannot be determined (i.e., illegible) Check the attached correspondence for the CRD.
      Multiple Correspondence Received Dates are present Use the CRD that made the return processable in Field 01CRD.

  4. Determining the CRD – If the reply was not date stamped, determine the CRD in the following priority order:

    1. The IRS Date Stamp - Placed on the return or reply by the Receipt and Control function when the return is received with a reply to the correspondence.

    2. The U.S. Postal Service postmark or metered date on the reply envelope.

    3. The current date.

  5. Enter the CRD (YYYYMMDD) in Field 01CRD except in the following situations:

    • Correspondence was not necessary or was issued in error.

    • The correspondence reply was received prior to the Return Due Date.

    • The correspondence was required because an IRS processing error was identified.

  6. If no reply or the correspondence was undeliverable, enter "3" in Field 01CCC.

  7. On returns, which have been sent back to the taxpayer (correspondence is attached), the original stamped Received Date should be circled-out and the date on which the correspondence is received should be entered as the Received Date in Field 01RCD and edited in the Deductions Section on Form 1041.

  8. If there is an indication that Entity has assigned an EIN to the return, enter the Entity Assignment Date (lower left corner of Form 1041) in Field 01CRD, if the Entity Assignment Date is later than the Received Date and Return Due Date.

3.12.14.9.16  (01-01-2014)
Field 01ADC – Audit Codes (3 Positions)

  1. Description - Field 01ADC is a three-digit numeric field transcribed from the left margin next to Line 10 identified by "1 -" followed by the appropriate audit code(s). Audit Codes are used to alert Examination to a particular condition on the return.

  2. Up to three Audit Codes may be entered in Field 01ADC. If more than three Audit Codes apply, enter only the first three Audit Codes using the following priority order:

    Priority Order Audit Code Description
    1 8 Form 1041-N
    2 3 Inconsistent Treatment
    3 2 Foreign Interest
    4 1 International
    5 4 Prompt Audit Request
    6 5 Ineligible Fiscal Year Filers
    7 6 Nonexempt Charitable and Split-Interest Trusts

  3. Invalid Condition - Field 01ADC will generate as a field error, if the Audit Code is other than blank or the valid codes listed above.

  4. Field 01ADC will also generate when Audit Code "8" is present and the Document Code is not "39" .

  5. Correction Procedures Correct all misplaced entries, coding errors, and transcription errors.

  6. Determine the appropriate Audit Code as follows:

    Audit Code Description
    1 International – Enter "1" in Field 01ADC if any of the following conditions are present:
    1. Line 2a of Schedule G (Form 1116) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Line 18 (Income Distribution) or Line 22 (Taxable Income) of 1041 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and any of the following conditions are present:
      • Form 5471 is attached.
      • Form 8865 is attached.
      • Schedule K-1 (Form 1041) has a non-U.S. Address.
      • The Yes box is checked on Line 4 (Foreign Trust) of the "Other Information" section.

    2 Foreign Interest - Enter "2" in Field 01ADC if the Yes box is checked and/or a foreign country is listed on Line 3 (Foreign Interests) of the "Other Information" section of Form 1041.
    3 Inconsistent Treatment – Enter "3" in Field 01ADC if any of the following conditions are present:
    • Form 8082 is attached.

    • Form 8275/8275-R is attached.

    • Form 8886 is attached.

    • After correspondence, the taxpayer has failed to provide a Form 8824 (Like-Kind Exchange).

    • After correspondence, the taxpayer has failed to provide a Schedule K-1 or the K-1 is incomplete.

    • The taxpayer has notated that they are "COMPLYING WITH IRS REGULATION 1.442-1(c)" .

    4 Prompt Audit Request – Enter "4" in Field 01ADC if any of the following conditions are present:
    • Form 4810 is attached.

    • The return contains an attachment or notation of a "REQUEST FOR PROMPT AUDIT ASSESSMENT" or by citing "IRC §6501(d)" .

    5 Ineligible Fiscal Year Filers – Enter "5" in Field 01ADC if the taxpayer is filing a Fiscal Year return and the return is not for one of the following filers (qualified to file on a Fiscal Year basis):
    • Estate or a trust filing as an estate under IRC §645

    • Nonexempt Charitable Trust under IRC §4947(a)(1).

    • One of the following notations is shown on the return:
      • IRC §501(a)
      • IRC §671 through IRC §678
      • IRC §443(b)(2)

    • No reply to correspondence on unexplained short period returns.

      Caution:

      Do not use Audit Code "5" on an Initial or Final Return that has a Tax Period ending date in December (calendar year filer).

    6 Nonexempt Charitable and Split-Interest Trusts – Enter Audit Code "6" if :
    • The first box (Described in section 4947(a)(1)) or third box (Described in section 4947(a)(2)) is checked in Section E of Form 1041.

    8 Form 1041-N –Only enter "8" in Field 01ADC for all Form 1041-N (Electing Alaska Native Settlement Trusts) returns.

    Caution:

    No other Audit Codes are valid if Audit Code "8" is required.


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