3.12.16  Corporate Income Tax Returns (Cont. 2)

3.12.16.7 
Section 07, Data - Form 1120-FSC, Form 1120-ND and Form 1120-SF

3.12.16.7.19  (01-01-2015)
Field 07-Z, Manually Corrected Total Tax

  1. Field 07-Z is used when a manual computation return has a math error.

  2. This often indicates that neither the transcribed amount nor the underprinted (generated) amount is correct except for "Y" coded returns (short period).

  3. Enter the correct amount of tax in Field 07-Z and change the appropriate line on the return to the corrected amount. When the manually corrected tax is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in Field 07-Z.

  4. On loop, send TPNC 90 to inform the taxpayer of the error. Attach a TPNC 90 card/paper with the exact statement to be printed on the notice.

    Note:

    See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

  5. When a taxpayer files a consolidated return with a "Mixed Component Member," ensure Audit Code "3" has been entered. Accept the taxpayer entries for taxable income and tax and enter in Field 07-Z.

    Note:

    Field 07-Z must be entered on Form 1120-SF if there is a math error in tax.
    Field 07-A will underprint. Use Action Code 6 to enter correct tax in Field 07-Z. When document loops send TPNC 90.

    See Figure 3.12.16-10, Manually Correct Tax.

    Figure 3.12.16-10

    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.12.16.8  (01-01-2015)
Section 08, Data - Form 1120-SF

  1. Section 08 contains information fields that are variable in length and are money amounts.

  2. Fields 08-A through 08-C are valid for Form 1120-SF.

  3. Fields 08-A and 08-B are transcribed in dollars only.

  4. If a field is asterisked, check to determine if that field is valid for that return and/or document code.

3.12.16.8.1  (01-01-2015)
Section 08, Error Register Format

  1. The chart below shows Section 08: Alpha Field Designator (AFD), Title, Field Length, Dollars and Cents ($ / ¢), and the Location.

    Section 08
    AFD Title Field Length $ / ¢ Location
    A Transfer’s Fund 13 $ Form 1120-SF, Page 2, Additional Information, Line 1a
    B Direct/Indirect Payment 13 $ Form 1120-SF, Page 2, Additional Information, Line 3b
    C Distribution Indicator 1   Form 1120-SF, Page 2, Additional Information, Dotted portion of Line 4a

3.12.16.8.2  (01-01-2015)
Field 08-A, Transfer’s Fund

  1. Field 08-A is transcribed from Form 1120-SF, Page 2, Additional Information, Line 1a.

  2. Field 08-A must be all numeric or blank.

  3. Field 08-A must be transcribed in dollars only.

  4. Field 08-A must be positive.

3.12.16.8.3  (01-01-2015)
Field 08-B, Direct/Indirect Payment

  1. Field 08-B is transcribed from Form 1120-SF, Page 2, Additional Information, Line 3b.

  2. Field 08-B must be all numeric or blank.

  3. Field 08-B must be transcribed in dollars only.

  4. Field 08-B must be positive.

3.12.16.8.4  (01-01-2015)
Field 08-C, Distribution Indicator

  1. Field 08-C is transcribed from Form 1120-SF, Page 2, Additional Information, the dotted portion Line 4a.

  2. This is a one-digit numeric field.

    Code Description
    1 Yes
    2 No

3.12.16.8.5  (01-01-2015)
Additional Credits

  1. Additional credits that may be attached or indicated on a return are shown below.

3.12.16.8.5.1  (01-01-2015)
Non-Qualifying Vehicles

  1. Non-Qualifying Vehicles - As a result of erroneous credits being allowed for Non-Qualifying Vehicles, Code and Edit will edit Computer Condition Code "C" on any return with an invalid in service date listed on the attached forms:

    Form Valid In Service Date
    8834 After 2/17/2009
    8936 (Credit Under Section 30D) After 12/31/2008
    8936 (Qualified 2 and 3-wheeled plug-in electric vehicles) After 12/31/2011
    8910 (Plug-in conversion credit) After 2/17/2009
    8910 (Credit Under Section 30B) After 12/31/2005

    Note:

    Form 8834, Qualified Electric Vehicle Credit, Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, and Form 8910, Alternative Motor Vehicle Credit, reflect the expiration of the qualified plug-in electric vehicle credit per Public Law (P.L.) 111-312, Section 101; Internal Revenue Code (IRC) 30(f).

  2. ERS will remove the CCC "C" and disallow the credits. Send TPNC 90 and notify the taxpayer that we have disallowed the credits due to an invalid in service date (or similar language).

    Note:

    See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.8.5.2  (01-01-2015)
Qualified Cellulosic Biofuel known as "Black Liquor"

  1. Qualified Cellulosic Biofuel known as "Black Liquor" - If Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, has a significant amount on Line 5* Column (c) and/or Line 8*, *(Line 5(c) and/or Line 7 for 2009, Line 7(c) or Line 9 for 2008), and/or indicates "Cellulosic Biofuel Refund (CBR)," with a significant amount on Form 6478 (as indicated above), Code and Edit will edit CCC "U" and attach Form 4227 (or other appropriate routing slip) and route to Rejects for a special review. Not applicable for revisions not listed.

  2. If a return is identified with the above criteria:

    1. Reject the record with Action Code 3.

    2. Prepare Form 4227 (or other appropriate routing slip) notating "CBR" and route to Rejects for a special review.

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

    Reminder:

    Do not reject the record with Action Code 3 for tax period 201012.

  4. SBSE Exam and LB&I Exam will provide someone (Revenue Agent/Classifier) to perform review of the claim. The Revenue Agent/Classifier will then indicate (stamp) that the return has been reviewed.

  5. ERS/Rejects will not make any adjustments, send a letter or send a notice specifically for this project. Any other notices or letters to be generated, as a result of the taxpayer filing the return, still need to be issued.

  6. Rejects will continue processing the return.

3.12.16.9  (01-01-2015)
Manual Verifications

  1. Math verification of Form 1120-FSC and Form 1120-ND is limited to the following instructions:

    1. On "G" coded returns, math verification is not required.

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

    3. Check the transfer of summary figures from related sections and schedules. Verify the computation and if there is a discrepancy between the two figures, correct when required.

3.12.16.9.1  (01-01-2015)
Form 1120-FSC

  1. Check the transfer of figures from Schedule J to Page 1.

  2. Math verify Page 3, Schedule B, Part I, Columns (a) and (b) and Part II, Lines 16 through 20.

  3. Math verify Page 4, Schedule F.

  4. Math verify Page 5, Schedule J.

  5. Use Action Code 0 to clear the register, if tax agrees with Line 1.

  6. Enter correct tax in Field 07-Z (Manually Correct Total Tax), if tax disagrees. Use TPNC 90 to notify the taxpayer of the error.

    Note:

    See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.9.2  (01-01-2015)
Form 1120-ND

  1. Check the transfer of figures from related schedules to Page 1.

  2. Math verify Page 1.

  3. Math verify tax computation work sheet if attached (Line 13 amount). See IRM 3.12.16.21, Corporate Income Tax Rates, for tax rates.

  4. Use Action Code 0 to clear the register, if tax agrees with Line 13.

  5. Enter correct tax in Field 07-Z (Manually Correct Total Tax), if tax disagrees. Use TPNC 90 to notify the taxpayer of the error.

    Note:

    See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.9.3  (01-01-2015)
Form 1120-SF

  1. Form 1120-SF is math verified by the computer.

  2. Use Action Code 0 to clear the register when no other errors are present.

3.12.16.10  (01-01-2015)
Section 14, Data - Form 1120-FSC

  1. Form 1120-FSC, Page 2, Additional Information, Questions 5 and 6, are valid for tax periods beginning after 199912. Questions 5 and 6 are identical to questions on Schedule N. Form 1120-FSC filers are not required to file a Schedule N.

  2. The Form 1120-L and Form 1120-PC moved to the Error Resolution System (ERS). In order to keep the error register in the same format and prevent additional programming, various fields are "Reserved" .

3.12.16.10.1  (01-01-2015)
Section 14, Error Register Format

  1. The chart below shows Section 14: Alpha Field Designator (AFD), Title, Field Length, and the Location on the Return.

    Note:

    The Form 1120-L and Form 1120-PC moved to the Error Resolution System (ERS). In order to keep the error register in the same format and prevent additional programming, Field 14-B (Number of Forms 8865) is "Reserved" .

    Section 14
    AFD Title Field Length Location
    A Disregarded Entity 1 Form 1120-FSC, Page 2, Additional Info, Question 4
    B Number of Forms 8865 3 Reserved
    C Direct/Indirect Interest 1 Form 1120-FSC, Page 2, Additional Info Question 5

3.12.16.10.2  (01-01-2015)
Field 14-A, Disregarded Entity

  1. Field 14-A (Disregarded Entity) is transcribed from Form 1120-FSC, Page 2, Additional Information, Question 4.

  2. The valid characters for this field are 1, 2, 3, or blank.

  3. If Field 14-A (Disregarded Entity) asterisks, check for all coding errors and transcription errors.

  4. Take the following action:

    If Then
    Form 1120-FSC, Page 2, Additional Information, Question 4, box is checked Yes, Enter a "1" in Field 14-A (Disregarded Entity).
    Form 1120-FSC, Page 2, Additional Information, Question 5, box is checked No, Enter a "2" in Field 14-A (Disregarded Entity).
    Form 1120-FSC, Page 2, Additional Information, Question 4, has both the Yes and No box checked, Enter a "3" in Field 14-A (Disregarded Entity).
    Form 1120-FSC, Page 2, Additional Information, Question 4, has neither the Yes or No box checked, Delete entry in Field 14-A (Disregarded Entity).

3.12.16.10.3  (01-01-2015)
Field 14-B, Number of Forms 8865

  1. This field is Reserved.

3.12.16.10.4  (01-01-2015)
Field 14-C, Direct/Indirect Interest

  1. Field 14-C is transcribed from Form 1120-FSC, Page 2, Additional Information, Question 5.

  2. The valid characters for this field are 1, 2, 3, or blank.

  3. If Field 14-C asterisks, check for all coding errors and transcription errors.

  4. Take the following action:

    If Then
    Form 1120-FSC, Page 2, Additional Information, Question 5, box is checked Yes, Enter a "1" in Field 14-C (Direct/Indirect Interest).
    Form 1120-FSC, Page 2, Additional Information, Question 5, box is checked No, Enter a "2" in Field 14-C (Direct/Indirect Interest).
    Form 1120-FSC, Page 2, Additional Information, Question 6, has both the Yes and No box checked, Enter a "3" in Field 14-C (Direct/Indirect Interest).
    Form 1120-FSC, Page 2, Additional Information, Question 5, has neither the Yes or No box checked, Delete the entry in Field 14-C (Direct/Indirect Interest).

3.12.16.11  (01-01-2015)
Section 15, Data - Form 4136, Credit for Federal Tax Paid on Fuels

  1. Section(s) 15, 16, 17 and 18 contain credit information from Form 4136, Credit for Federal Tax Paid on Fuels. Section 15 does not have to be present; therefore, it will never be error coded as missing.

  2. If Section 15 is present, Field 15-A will display the Total Gas Tax Credit (Form 4136), computer generated amounts of Section(s) 15, 16, 17 and 18.

  3. Fields 15-B through 15-Y must consist of only money amounts and Credit Reference Numbers (CRNs).

  4. Action Codes 4, 5 and 6 are applicable to this section.

  5. Section 15 may be present.

  6. All fields are variable in length and the money amounts are transcribed in dollars and cents.

  7. The maximum field length is 10 positions and significant positions must be numeric.

  8. All negative amounts are computer-forced positive.

  9. See Exhibit 3.12.16-15, Form 4136 - Prior Year Conversion Chart, for prior years 2000 - 1997.

3.12.16.11.1  (01-01-2015)
Section 15, Error Register Format

  1. Form 4136 is transcribed using the credit amount (amount of claim) and corresponding Credit Reference Number (CRN) until all amounts and CRNs are entered. The first 12 credit amounts and CRNs will display in Section 15.

  2. The first credit amount (amount of claim) transcribed from Form 4136 will display in Field 15-B and the corresponding CRN will display in Field 15-C. The second credit amount will display in Field 15-D and the corresponding CRN will display in Field 15-E, etc.

  3. The Error Register format for Section 15 is as follows:

    Section 15
    Field Title
    15-A Total Gas Tax Credit (Computer Generated)
    15-B Amount of Claim 1
    15-C Credit Reference Number 1
    15-D Amount of Claim 2
    15-E Credit Reference Number 2
    15-F Amount of Claim 3
    15-G Credit Reference Number 3
    15-H Amount of Claim 4
    15-I Credit Reference Number 4
    15-J Amount of Claim 5
    15-K Credit Reference Number 5
    15-L Amount of Claim 6
    15-M Credit Reference Number 6
    15-N Amount of Claim 7
    15-O Credit Reference Number 7
    15-P Amount of Claim 8
    15-Q Credit Reference Number 8
    15-R Amount of Claim 9
    15-S Credit Reference Number 9
    15-T Amount of Claim 10
    15-U Credit Reference Number 10
    15-V Amount of Claim 11
    15-W Credit Reference Number 11
    15-X Amount of Claim 12
    15-Y Credit Reference Number 12

    Note:

    All transcription lines are located in Column (d), "Amount of Credit" .

  4. This section supports the credit from Form 4136 and part of Field 07-I (Balance Due/Overpayment).

    1. Correspond if Form 4136 is not attached.

    2. If no reply, delete the credit, enter CCC "3" . Send TPNC 90 stating the credit cannot be allowed without the required supporting documentation.

      Note:

      See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.11.2  (01-01-2015)
Correction Procedures

  1. The following table identifies corrective procedures for Section 15, Form 4136.

    If Then
    Section 15 is terminus, 1. Determine the correct data from Form 4136.
    2. Enter the correct data in the appropriate fields with Action Code 6.
    3. If data is correct, re-enter a field with Action Code 6.
    No data is present for any of the fields, or if CCC "G" is present in Field 01-F, Delete Section 15 with Action Code 4.
    The section is not present for an original return (non "G" coded) and Form 4136 is attached, Add Section 15 with Action Code 5.
    Any of the fields in Section 15 are asterisked (*), Check for coding errors and transcription errors and correct the field(s) as appropriate.
    Field 07-A (Total Tax) is underprinted.
    1. Compare Field 15-A with the applicable "Total income tax credit claimed" (e.g., Form 4136, Line 17 for 2011 - 2008, Line 18 for 2007, Line 20 for 2006, Line 15 for 2005, Line 10 for 2004-2001, Line 9 for 2000-1997).
    2. If different, verify that the fields in Section(s) 15, 16, 17 and 18 were correctly transcribed.
    3. If so,
    Bring up the underprint in Field 07-A (Total Tax) and correct the applicable line on the return. Otherwise, correct any fields transcribed incorrectly.
  2. Field 01-D (Tax Period) and the CRN field will asterisk if a CRN is present for an invalid tax period.

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

    2. Verify prior year CRNs (e.g., tax year 2000 and prior) are converted to current year CRNs. See Exhibit 3.12.16-15, Form 4136 - Prior Year Conversion Chart, for prior years 2000 - 1997.

    3. Verify the CRN and Form 4136 credit amount is claimed for a valid tax period. See Exhibit 3.12.16-16, Form 4136 - Valid Tax Period Chart.

  3. If the CRN is not valid,

    1. Delete the entries from the CRN and Form 4136 credit amount fields.

    2. Send TPNC 90. See Exhibit 3.12.16-14 for the applicable literal.

      Note:

      See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

  4. The Form 4136 credit amount field and the CRN field will asterisk when a Form 4136 credit amount is present and the corresponding CRN is not present or a CRN is present and the corresponding Form 4136 credit amount is not present.

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

      If Then
      A Form 4136 credit amount is present with no CRN (prior year form revisions when no CRN printed on the form), 1. Enter the CRN if there is a credit amount present on Form 4136, or
      2. Delete the credit amount if the CRN is not present on Form 4136.
      A CRN is present without a Form 4136 credit amount, 1. Enter the credit amount from Form 4136, if present, or
      2. Delete the CRN if a credit amount is not present on Form 4136.
  5. The following table identifies what line the credit is reported on.

    Form Line Number
    Form 1120-FSC Page 1, Tax and Payments, Line 2f.
  6. The following table provides corrective procedures for Form 4136.

    If Then
    Form 4136 is missing, 1. Reject the record for correspondence.
    2. Prepare Form 3696, Correspondence Action Sheet (or other approved Correspondence Action Sheet).
    The taxpayer does not reply to correspondence, 1. Delete the credit.
    2. Adjust Field 07-A (Total Tax) accordingly.
    The "Total income tax credit claimed" (e.g., Form 4136, Line 18 for 2007, Line 20 for 2006, Line 15 for 2005, Line 10 for 2004-2001, Line 9 for 2000-1997) is the only amount available, Correspond.

3.12.16.12  (01-01-2015)
Section 16, Data - Form 4136, Credit for Federal Tax Paid on Fuels

  1. Section 16 is the second of four sections that contains credit information from Form 4136, Credit for Federal Tax Paid on Fuels. Section 16 does not have to be present; therefore, it will never be error coded as missing.

  2. If Section 16 is present, it must consist of only money amounts and Credit Reference Numbers (CRNs).

  3. Action Codes 4, 5 and 6 are applicable to this section.

  4. Section 16 may be present.

  5. All fields are variable in length and the money amounts are transcribed in dollars and cents.

  6. The maximum field length is 10 positions and significant positions must be numeric.

  7. All negative amounts are computer-forced positive.

  8. The total of these fields is computer generated into Field 15-A (Total Gas Tax Credit).

  9. See Exhibit 3.12.16-15, Form 4136 - Prior Year Conversion Chart, for prior years 2000 - 1997.

3.12.16.12.1  (01-01-2015)
Section 16, Error Register Format

  1. Form 4136 is transcribed using the credit amount (amount of claim) and corresponding Credit Reference Number (CRN) until all amounts and CRNs are entered. Section 16 will consist of the thirteenth through twenty-fourth credit amounts and CRNs.

  2. The thirteenth credit amount transcribed from Form 4136 will display in Field 16-A and the corresponding CRN will display in Field 16-B. The fourteenth credit amount will display in Field 16-C and the corresponding CRN will display in Field 16-D, etc.

  3. The Error Register format for Section 16 is as follows:

    Section 16
    Field Title
    16-A Amount of Claim 13
    16-B Credit Reference Number 13
    16-C Amount of Claim 14
    16-D Credit Reference Number 14
    16-E Amount of Claim 15
    16-F Credit Reference Number 15
    16-G Amount of Claim 16
    16-H Credit Reference Number 16
    16-I Amount of Claim 17
    16-J Credit Reference Number 17
    16-K Amount of Claim 18
    16-L Credit Reference Number 18
    16-M Amount of Claim 19
    16-N Credit Reference Number 19
    16-O Amount of Claim 20
    16-P Credit Reference Number 20
    16-Q Amount of Claim 21
    16-R Credit Reference Number 21
    16-S Amount of Claim 22
    16-T Credit Reference Number 22
    16-U Amount of Claim 23
    16-V Credit Reference Number 23
    16-W Amount of Claim 24
    16-X Credit Reference Number 24

    Note:

    All transcription lines are located in Column (d), "Amount of Credit" .

  4. This section supports the credit from Form 4136 and part of Field 07-I (Balance Due/Overpayment).

    1. Correspond if Form 4136 is not attached.

    2. If no reply, delete the credit, enter CCC "3" . Send TPNC 90 stating credit cannot be allowed without the required supporting documentation.

      Note:

      See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.12.2  (01-01-2015)
Correction Procedures

  1. Follow Section 15 correction procedures.

3.12.16.13  (01-01-2015)
Section 17, Data - Form 4136, Credit for Federal Tax Paid on Fuels

  1. Section 17 is the third of four sections that contains credit information from Form 4136, Credit for Federal Tax Paid on Fuels. Section 17 does not have to be present; therefore, it will never be error coded as missing.

  2. If Section 17 is present, it must consist of only money amounts and Credit Reference Numbers (CRNs).

  3. Action Codes 4, 5 and 6 are applicable to this section.

  4. Section 17 may be present.

  5. All fields are variable in length and the money amounts are transcribed in dollars and cents.

  6. The maximum field length is 10 positions and significant positions must be numeric.

  7. All negative amounts are computer-forced positive.

  8. The total of these fields is computer generated into Field 15-A (Total Gas Tax Credit).

  9. See Exhibit 3.12.16-15, Form 4136 - Prior Year Conversion Chart, for prior years 2000 - 1997.

3.12.16.13.1  (01-01-2015)
Section 17, Error Register Format

  1. Form 4136 is transcribed using the credit amount (amount of claim) and corresponding Credit Reference Number (CRN) until all amounts and CRNs are entered. Section 17 will consist of the twenty-fifth through thirty-sixth credit amounts and CRNs.

  2. The twenty-fifth credit amount will display in Field 17-A and the corresponding CRN will display in Field 17-B. The twenty-sixth credit amount will display in Field 17-C and the corresponding CRN will display in Field 17-D, etc.

  3. The Error Register format for Section 17 is as follows:

    Section 17
    Field Title
    17-A Amount of Claim 25
    17-B Credit Reference Number 25
    17-C Amount of Claim 26
    17-D Credit Reference Number 26
    17-E Amount of Claim 27
    17-F Credit Reference Number 27
    17-G Amount of Claim 28
    17-H Credit Reference Number 28
    17-I Amount of Claim 29
    17-J Credit Reference Number 29
    17-K Amount of Claim 30
    17-L Credit Reference Number 30
    17-M Amount of Claim 31
    17-N Credit Reference Number 31
    17-O Amount of Claim 32
    17-P Credit Reference Number 32
    17-Q Amount of Claim 33
    17-R Credit Reference Number 33
    17-S Amount of Claim 34
    17-T Credit Reference Number 34
    17-U Amount of Claim 35
    17-V Credit Reference Number 35
    17-W Amount of Claim 36
    17-X Credit Reference Number 36

    Note:

    All transcription lines are located in Column (d), "Amount of Credit"

  4. This section supports the credit from Form 4136 and part of Field 07-I (Balance Due/Overpayment).

    1. Correspond if Form 4136 is not attached.

    2. If no reply, delete the credit, enter CCC "3" . Send TPNC 90 stating credit cannot be allowed without the required supporting documentation.

      Note:

      See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.13.2  (01-01-2015)
Correction Procedures

  1. Follow Section 15 correction procedures.

3.12.16.14  (01-01-2015)
Section 18, Data - Form 4136, Credit for Federal Tax Paid on Fuels

  1. Section 18 is the fourth of four sections that contains credit information from Form 4136, Credit for Federal Tax Paid on Fuels. Section 18 does not have to be present; therefore, it will never be error coded as missing.

  2. If Section 18 is present, it must consist of only money amounts and Credit Reference Numbers (CRNs).

  3. Action Codes 4, 5 and 6 are applicable to this section.

  4. Section 18 may be present.

  5. All fields are variable in length and the money amounts are transcribed in dollars and cents.

  6. The maximum field length is 10 positions and significant positions must be numeric.

  7. All negative amounts are computer-forced positive.

  8. The total of these fields is computer generated into Field 15-A (Total Gas Tax Credit).

  9. See Exhibit 3.12.16-15, Form 4136 - Prior Year Conversion Chart, for prior years 2000 - 1997.

3.12.16.14.1  (01-01-2015)
Section 18, Error Register Format

  1. Form 4136 is transcribed using the credit amount (amount of claim) and corresponding Credit Reference Number (CRN) until all amounts and CRNs are entered. Section 18 will consist of the thirty-seventh through forty-third credit amounts and CRNs.

  2. The thirty-seventh credit amount will display in Field 18-A and the corresponding CRN will display in Field 18-B. The thirty-eighth credit amount will display in Field 18-C and the corresponding CRN will display in Field 18-D, etc.

  3. The Error Register format for Section 18 is as follows:

    Section 18
    Field Title
    18-A Amount of Claim 37
    18-B Credit Reference Number 37
    18-C Amount of Claim 38
    18-D Credit Reference Number 38
    18-E Amount of Claim 39
    18-F Credit Reference Number 39
    18-G Amount of Claim 40
    18-H Credit Reference Number 40
    18-I Amount of Claim 41
    18-J Credit Reference Number 41
    18-K Amount of Claim 42
    18-L Credit Reference Number 42
    18-M Amount of Claim 43
    18-N Credit Reference Number 43

    Note:

    All transcription lines are located in Column (d), "Amount of Credit" .

  4. This section supports the credit from Form 4136 and part of Field 07-I (Balance Due/Overpayment).

    1. Correspond if Form 4136 is not attached.

    2. If no reply, delete the credit, enter CCC "3" . Send TPNC 90 stating credit cannot be allowed without the required supporting documentation.

      Note:

      See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

3.12.16.14.2  (01-01-2015)
Correction Procedures

  1. Follow Section 15 correction procedures.

3.12.16.15  (01-01-2015)
Section 20, Data - Form 8913, Credit for Federal Telephone Excise Tax Paid

  1. Section 20 contains data from Form 8913, Credit for Federal Telephone Excise Tax Paid.

  2. All fields are positive only, dollars and cents, and may contain 15 digits.

  3. Fields must be numeric or blank.

  4. The chart below shows Section 20: Alpha Field Designator (AFD), Title, Field Length and Location on the Form 8913. See Exhibit 3.12.16-4, Form 8913, Credit for Federal Telephone Excise Tax Paid, for field locations.

    Section 20
    AFD Title Field Length Location on the Form 8913
    A Tax Refund 15 Line 15, Column (d)
    B Interest on Tax Refund 15 Line 15, Column (e)
  5. Refer to attached Form 8913 to correct all coding errors and transcription errors.

3.12.16.16  (01-01-2015)
Reject Procedures - General "No Reply" Procedures

  1. If there is no reply to correspondence, perfect the document from available information.

  2. Disallow unsubstantiated credits where substantiation is required.

  3. When unable to identify an excess remittance, transfer the remittance to the Unidentified Remittance File (URF).

  4. Enter CCC "3" in Field 01-F (CCC).

  5. Enter CCC "X" in Field 01-F (CCC) on refund returns.

  6. Refer to the chart of "No Reply" cases.

    "No Reply" Cases
    Condition(s) Required Action
    Tax Period
    One to six months later than current date.
    Hold one to six months as necessary.
    More than 12 months. Research for the correct period ending and change the tax period.
    Unexplained short year or unauthorized change in accounting period. Process, post to tax period or return, after corresponding with taxpayer. Enter Audit Code "3" with an explanation (valid for Forms 1120-FSC, 1120-ND and 1120-SF only).
    Multiple tax periods. Use earliest tax period.
    Future Tax period. Hold and process for the tax period indicated on the return.
    Tax period differs from Master File and last tax period with a TC 150 is more than 12 months prior to the return tax period. 1. Input TC 016 so that the TC 474 will post.
    2. Input TC 474 on CC REQ77 (using one cycle delay) for one year prior to the tax period on the return being processed.
    3. Hold for one week.
    4. Correct the return and the register one cycle after the input of TC 474.
    Tax period differs from Master File and last tax period with a TC 150 is less than 12 months prior to the return tax period. 1. Enter CCC "Y" in Field 01-F (CCC)
    2. Enter the appropriate code in the Entity Underprint Code.
    Signature Enter CCC "X" (on refund returns only) and enter CCC "3" in Field 01-F (CCC).
    Unsubstantiated Credits
    Form 1118, Foreign Tax Credit - Corporations
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
    Form 4136, Credit for Federal Tax Paid on Fuels
    Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
    1. Disallow the credit when the taxpayer fails to reply to our correspondence.
    2. Delete credit from register and the return.
    Controlled Group - No Apportionment Schedule.
    5% (percent) and/or 3% Additional Tax
    Allocation of income - Section 1561 Lines 2ai-iv, 2bi and 2bii
    Manually compute the 5% and/or 3% Additional Tax and send TPNC 90. See IRM 3.12.16.3.17, Field 01-M, Taxpayer Notice Code (TPNC), for additional information. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid at http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc .

    Note:

    Refer to Schedule O (Form 1120), Consent Plan and Apportionment Schedule, for a Controlled Group for returns filed for tax periods beginning January 1, 2007, and subsequent.

3.12.16.16.1  (01-01-2015)
Remittance

  1. When a remittance is submitted with a Corporate Income Tax Return, take the following action:

    If Then
    The remittance was transcribed incorrectly, Reinput the document to correct the remittance amount.
    A remittance is present and total tax is not significant, Determine the purpose of the remittance.
    The remittance was obviously made in error (for example equal to the overpayment amount), 1. Prepare Form 3244, Payment Posting Voucher, to post the amount to the module for the return tax period.
    2. Renumber and process the return as a non-remittance.
    The taxpayer has indicated on the return the purpose of the payment,
    1. Prepare Form 3465, Adjustment Request, for routing to Accounts Management, request that the payments, etc. be moved to the correct tax period.
    2. Enter a CCC "X" in Field 01-F (CCC) and write a note on the bottom of Form 3465 to remove "X" once credits have been moved.
    No explanation is attached to the return, Research and/or correspond with the taxpayer and apply the payment accordingly.
    No reply and research is unsuccessful, Transfer the money to Unidentified Remittance File (URF).

3.12.16.16.2  (01-01-2015)
Return Secured by Audit

  1. If a return secured by Audit is unprocessable due to missing information, do not correspond. Reject and route the return to Examination

3.12.16.16.3  (01-01-2015)
Tax Exempt Status Pending by Audit

  1. Transfer any credits present in the module.

  2. Void the reject register and send the return to the Examination Division in the applicable Exempt Organization (EO) Area Office, Attention: EO Coordinator as indicated in the following chart.

    EO Area Office Office Code States of Jurisdiction
    Northeast Area 01 Connecticut
    Maine
    Massachusetts
    New Hampshire
    CT
    ME
    MA
    NH
    New York
    Rhode Island
    Vermont
    NY
    RI
    VT
    Mid-Atlantic Area 02 Delaware
    District of Columbia
    Maryland
    New Jersey
    North Carolina
    DE
    DC
    MD
    NJ
    NC
    Pennsylvania
    South Carolina
    Virginia
    Washington DC
    PA
    SC
    VA
    DC
    Great Lakes Area 03 Foreign
    Illinois
    Indiana
    Kentucky
    Michigan

    IL
    IN
    KY
    MI
    Military
    Ohio
    West Virginia
    Wisconsin

    OH
    WV
    WI
    Gulf Coast Area 04 Alabama
    Arkansas
    Florida
    Georgia
    Louisiana
    AL
    AR
    FL
    GA
    LA
    Mississippi
    Oklahoma
    Tennessee
    Texas
    MS
    OK
    TN
    TX
    Central Mountain Area 05 Arizona
    Colorado
    Iowa
    Kansas
    Minnesota
    Montana
    AZ
    CO
    IA
    KS
    MN
    MT
    Nebraska
    Nevada
    New Mexico
    North Dakota
    South Dakota
    Utah
    NE
    NV
    NM
    ND
    SD
    UT
    Pacific Coast Area 06 Alaska
    California
    Hawaii
    AK
    CA
    HI
    Idaho
    Oregon
    Washington
    ID
    OR
    WA

3.12.16.16.4  (01-01-2015)
Replies to Correspondence

  1. Enter the stamped correspondence received date in Field 01-G (Correspondence Received Date), if it is prior to the return due date.

  2. Process the return according to the information received.

  3. If the taxpayer sends in a partial reply, follow "No Reply" procedures for the missing information.

  4. If the taxpayer's correspondence addresses issues not related to the return being processed, photocopy the request and forward to the appropriate area.

  5. If there is an Entity Assignment Date and a correspondence received date, enter the latest date in Field 01-G (Correspondence Received Date).

3.12.16.17  (01-01-2015)
Manual Computations

  1. The computer will accurately compute the tax on most returns if they have been properly filled out, edited, and transcribed.

  2. It is imperative that tax examiners be able to determine a return requiring manual computation. If the tax examiner fails to identify such returns, incorrect settlement with the taxpayer will result.

  3. A "manual computation" return requires an Action Code 0 or an entry of corrected tax in the Manually Corrected Tax Field and Action Code 1.

    Note:

    These corrections override the computer determination of what is the correct Total Income Tax. You may, therefore, never use this code unless and until the transcribed Total Income Tax printed on the Error Register agrees with the correct Total Income Tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ as you have computed it, and all other transcription is correct.

  4. Code and Edit is instructed to enter CCC "Y" for returns that have a "change of accounting period" on a short period return.

  5. Other returns will print out on the register because of the underprint in the Total Tax Field. Therefore you must examine the entire return to determine if it requires manual verification or not. Before performing the computation, everything must be present and correct on the register.

  6. Returns that require manual computations are more frequent in years when the tax rates change as they did in 1982, 1983, 1984 and 1993 (corporations with $1 million or more in Taxable Income), tax periods straddling July 1, 1987, and Control Group Corporations with $100,000 or more in Taxable Income with tax periods 198707-198811.

  7. Returns that are 52-53 week filers and those that are "initial" or "final " short year need to be manually computed only when they straddle two different tax rates. For these returns as well as "change of accounting period" returns, the tax must be computed on the actual days or months used.

3.12.16.17.1  (01-01-2015)
Rule of Two

  1. Under normal circumstances, the computer and the taxpayer or the taxpayer and the tax examiner agree on the computation of the tax. This satisfies the Rule of Two.

  2. On most returns with TRUE MATH ERRORS, the computer and the tax examiner will agree on the computation of the tax. This satisfies the Rule of Two.

  3. On a manually computed return with a TRUE MATH ERROR, the Rule of Two is not satisfied until two tax examiners arrive at the same tax computation.

3.12.16.17.2  (01-01-2015)
Specifically Quoted Sections

  1. When a taxpayer has quoted specific sections of the Internal Revenue Code, and his tax computation is mathematically verified as correct, it is preferable to accept this computation than to send a taxpayer a notice.

  2. If the reference is questionable, refer the record to the manager for research of the Internal Revenue Code. A large (erroneous) refund or a large increase in tax could create bad taxpayer relations.

3.12.16.17.3  (01-01-2015)
Corrective Procedures

  1. Compute the tax using the corporate manual computation requirements.

  2. Use the credits and additional taxes as you normally would. Compute tax from the Taxable Income through Total Tax Field. If there is no error, use Action Code 0.

  3. If there is an error:

    1. Enter the correct tax in Manually Corrected Tax Field.

    2. Attach your tape with two stamps on it or two individual tapes (this applies the Rule of Two). When verifying the 5% (percent) or 3% surcharge, a tape is not required.

    3. Correct the document from the point of error. Exception: The Total Tax Field must always reflect the taxpayer’s figure. Change only the fields on the register that are being changed to achieve the figure entered in the Manually Corrected Tax Field, an adjustment in the credits used before the Total Tax Field.

    4. On loop, if there are no transcription errors, send the applicable TPNC.

  4. If the correct tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the underprint in the Total Tax Field, use the computer’s figures and send the applicable TPNC, except with CCC "Y" returns. On "Y" coded returns, the Manually Corrected Tax Field must always be used when the taxpayer has made an error.

3.12.16.17.4  (01-01-2015)
Returns Requiring Manual Computation

  1. Follow these procedures for returns requiring manual computation.

    Methods Types of Return
    Annualization 1. Treasury Regulation 1.442-1(c) or (d).
    2. "Y" Coded, "Change of Accounting Period" .
    Manual Verifications Form 1120-FSC, Form 1120-ND and Form 1120-SF
    1. Minimum tax.
    2. Treasury Regulation Section 1.1502 - "Y" coded inclusion in consolidated.
    3. Fields over maximum number of digits.
    4. Controlled Group Returns

3.12.16.18  (01-01-2015)
Annualization Computations

  1. "Y" Coded, "Change of Accounting Period" returns cover a period of less than 12 months or 52-53 weeks. These returns are not "Initial" or "Final" returns.

  2. Proof of permission of the change must be attached, such as one of the following:

    1. Form 1128 with approval space signed.

    2. Statement by the taxpayer that such permission has been granted (e.g., Headquarters Grant Letter).

    3. Statement that the taxpayer is changing the accounting period under Treasury Regulation 1.442-1(c) or (c), Treasury Regulation 1.1502-76, IRC 898(c)(1)(A), IRC 898(c)(2) or IRC Section 444, IRC 1398, Revenue Procedure (Rev. Proc.) 76-10, Rev. Proc. 82-25, Rev. Proc. 85-58, Rev. Proc. 87-32, Rev. Proc. 92-13, Rev. Proc. 2000-11, Rev. Proc. 2002-37, Rev. Proc. 2006-45 or Rev. Proc. 2006-46.

      Note:

      If Revenue Procedure (Rev. Proc.) 2006-46, Rev. Proc. 2006-45, Rev. Proc. 82-25 or Treasury Regulations 1.442-1(c) or (d). is stated, Audit Code "3" must be present (Forms 1120-FSC, 1120-ND and 1120-SF only).

  3. If proof of permission is not attached, initiate research of the Form 1128 file maintained by Entity Control.

  4. If proof of permission is not attached and not found in Entity, correspond with taxpayer for reason for short period.

  5. CCC "Y" must be present on all returns that have a "Change of Accounting Period" to update the tax period on the Master File.

  6. A subsidiary prior to its inclusion in a consolidated return (IRC 1502) is "Y" coded but not annualized.

3.12.16.18.1  (01-01-2015)
Optional Method of Annualization

  1. IRC Section 443 requires a taxpayer to file a short period return if it changes its accounting period. In completing the short period return, the taxable income and corresponding tax liability for the short period must be annualized under IRC Section 443(b)(1).

    1. Under the IRC Section 443(b)(1) method, the modified taxable income for the short period is annualized by multiplying the short period income by 12 and then dividing that amount by the number of months in the short period.

    2. Next, applicable tax rates are used to compute an annualized tax liability.

    3. The annualized tax liability is then multiplied by a fraction, the numerator of which is the number of months in the short period and the denominator of which is 12.

    4. The result is the short period tax liability under IRC Section 443(b)(1).

      Note:

      See Step 1 in the Example below.

  2. An alternate short period tax liability may also be computed under IRC Section 443(b)(2) if the taxpayer timely applies to use that alternate method of calculation and if the alternate method results in less tax liability. The short period tax liability determined under IRC Section 443(b)(2) is actually the greater of the amount determined under IRC Section 443(b)(2)(A)(i) or the amount determined under Section 443(b)(2)(A)(ii). The amount determined under IRC Section 443(b)(2)(A)(i) is based on the modified taxable income from the 12 month period beginning on the first day of the short period.

    1. First, applicable tax rates are used to compute the tax liability for the 12 month period.

    2. Second, the short period tax liability is determined by multiplying the tax liability for the 12 month period by a fraction, the numerator of which is the income for the short period and the denominator of which is the modified taxable income for the 12 month period.

      Note:

      See Step 2 in the Example below.

  3. The amount determined under IRC Section 443(b)(2)(A)(ii) is the actual tax computed on the short period income. See Step 3 in the Example below.

    Example:

    Assume the tax period is 200912; the taxable income for the five month short period is $40,000; and the tax rates are as follows:

    • 15% (percent) of income up to $50,000

    • 25% of income from $50,000 to $75,000

    • 34% of income in excess of $75,000

    Note:

    Assume also that in doing the IRC Section 443(b)(2) alternate 12 month calculation, the income for the seven month period following the five month short period is $50,000.

    Example: Tax period 200912; the taxable income for the five month short period is $40,000; the income for the seven month period following the five month short period is $50,000; taxable income for 12 month period is $90,000
    Step 1 Regular annualization (IRC Section 443(b)(1))
    $40,000 x 12 ÷ 5 = $96,000 (annualized income)
    $96,000 x tax rate (34% (percent) - $11,750) = $20,890 (annualized tax)
    $20,890 x 5 ÷ 12 = $8,704 (gross tax)
    Step 2 12 month period calculation (IRC Section 443(b)(2)(A)(i))
    $90,000 x tax rate (34% - $11,750) = $18,850 (actual tax)
    $18,850 x 40,000 ÷ 90,000 = $8,378
    Step 3 Short period calculation (IRC Section 443(b)(2)(A)(ii))
    $40,000 x tax rate (15%) = $6,000
    Step 4 Take the greater of Step 2 ($8,378) and Step 3 ($6,000), which in this example is $8,378.
    Step 5 The tax liability for the short period is the lesser of Step 1 ($8,704) and Step 4 ($8,378), which in this example is $8,378.

3.12.16.18.2  (01-01-2015)
Short Period Returns Due To Change of Accounting Period

  1. Annualized Tax with One Tax Rate - The formula for computing tax with one rate due to "Change of Accounting Period" is as follows:

    Step 1 Taxable income × 12
    No. of months in tax period
    = Annualized income
    Step 2 Annualized income × applicable tax rate = Annualized tax
    Step 3 Annualized tax × No. of months in tax period
    12
    = Gross Tax

    Note:

    Compute using rounded figures.

  2. Example - The tax on a single corporation with the taxable income of $115,572.00 for the tax period beginning January 1, 2009, and ending September 30, 2009, is computed as follows:

    Step 1 $115,572.00 x 12 = $1,386,864.00 ÷ 9 = $154,096.00
    Step 2 $154,096.00 x tax rate (39% (percent) - $16,750.00) = $43,347.44
    Step 3 $43,347.44 x 9 ÷ 12 = $32,510.68
  3. If you use the short method you are prone to less errors and it saves time. On a control group member with uneven allocated surtax exemptions and/or taxable income brackets you will have to use the long method.

  4. Days versus Months - If the taxpayer has used days to compute tax, verify the computation using days. This applies to the short period when a taxpayer is changing to/from a 52-53 week tax year, but not if such change results in a short period of more than 359 days, but less than seven days. The following is an example of a single corporation with a "change of accounting period" with 1 tax rate, taxable income of $10,501.00 and tax period from September 1, 2009, to December 31, 2009.

    Days versus Months
    $10,501.00 × 365 = $3,832,865.00 ÷ 122 = $31,416.93
    $31,416.93 × .15 = $4,712.54
    $4,712.54 × 122 = $574,929.76 ÷ 365 = $1,575.15
  5. In the next example, the taxable income is $75,000 for 90 days of business in 2009.

    Days versus Months
    $75,000 × 365 = $27,375,000.00 ÷ 90 = $304,166.67
    $304,166.67 × .39 - $16,750 = $101,875.00
    $101,875 × 90 = $9,168,750 ÷ 365 = $25,119.86

3.12.16.19  (01-01-2015)
Manual Verifications

  1. The information provided within this section will provide a breakdown of different types of manual verifications.

3.12.16.19.1  (01-01-2015)
"Y" Coded, Treasury Regulation Section 1.1502 Return

  1. A "Y" coded, Treasury Regulation Section 1.1502, return is computed under normal corporate tax rates. The return is the last return of a subsidiary prior to its inclusion in a consolidated return. The Computer Condition Code "Y" must be entered to change the fiscal year ending.

3.12.16.19.2  (01-01-2015)
Personal Service Corporations

  1. If the return is for a Personal Service Corporation and the tax year begins in 1993 or later, tax will be computed at a flat 35% (percent).

3.12.16.19.3  (01-01-2015)
Regulated Investment Companies

  1. For tax periods 198701 and subsequent, the Regulated Investment Company taxpayers will file Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies. Form 1120-RIC is on the Error Resolution System (ERS). See IRM 3.12.251, Error Resolution - Corporation Income Tax Returns.

3.12.16.19.4  (01-01-2015)
Controlled Group Returns, Tax Period Beginning 01-01-1993

  1. A controlled group is a group of two or more corporations treated as one for determining the group's tax rates.

  2. For tax years beginning January 1, 1993, and later, a corporation with Taxable Income over $100,000:

    1. Besides paying its regular tax, they will pay an additional 5% tax on income that exceeds $100,000 up to $15,000,000, (not to exceed $11,750 in tax).

    2. Any corporation or members of a corporation of a controlled group that has Taxable Income that exceeds $15,000,000 will pay the above tax; plus an additional tax of 3% (not to exceed $100,000 in tax).

    3. Corporations who are members of a controlled group are also supposed to attach Schedule O (Form 1120), Consent Plan and Apportionment Schedule.

    Note:

    Refer to Schedule O (Form 1120), Consent Plan and Apportionment Schedule, for a Controlled Group for returns filed for tax periods beginning January 1, 2007, and subsequent.

  3. Corporations that are members of a controlled group are instructed to check a particular box on their tax returns. On Form 1120-FSC, the box is on Page 1 of the return ("Parent-subsidiary controlled group." ) and Page 5, Schedule J ("Check if the FSC is a member of a controlled group..." ). See IRM 3.12.16.5.12, Field 03-M, Subsidiary Filer Code, for additional information.

  4. Members of a controlled group will be treated as one corporation.

    1. If the Taxable Income exceeds $100,000, each member will pay the additional tax based on the portion of the tax allocated above and agreed upon by each member.

    2. Each member should attach a schedule showing the computation of each member of the controlled group.

    3. When taxable income exceeds a $100,000, and there is no additional tax present, correspond to the taxpayer for an apportionment plan or schedule for each member of the Controlled Group.

    4. When the taxpayer fails to reply to our correspondence, see the "No Reply" procedures.

    Note:

    Refer to Schedule O (Form 1120), Consent Plan and Apportionment Schedule, for a Controlled Group for returns filed for tax periods beginning January 1, 2007, and subsequent.

3.12.16.20  (01-01-2015)
Legislative Changes Affecting Tax Computations

  1. The information within this section explains how tax computations are affected by legislative changes.

3.12.16.20.1  (01-01-2015)
Omnibus Budget Reconciliation Act of 1993 (OBRA)

  1. Omnibus Budget Reconciliation Act of 1993 (OBRA) made changes to the tax rates and the estimated tax rules that affected tax periods beginning after January 1, 1993.

  2. The Act also mandated a retroactive tax increase on corporate tax returns with tax periods of 199301-199311.

  3. This legislation introduced a third taxable income bracket. The first taxable income bracket amount can be from 0 to under $50,000 at a 15% tax rate, the second taxable income bracket amount can be from $50,000 to $75,000 at a 25% tax rate, the third taxable income bracket amount can be from $75,000 to $9,925,000 at a 34% tax rate.

  4. The tax rate for Form 1120-ND decreased to 20%; under OBRA (Omnibus Budget Reconciliation Act of 1993) for tax period 199601 and subsequent. If the taxpayer’s return straddles two tax periods with different rates, the return must be manually verified.

  5. The tax rate for Form 1120-ND decreased to 22% under OBRA for tax period 199401 through 199512. If the taxpayer’s return straddles two tax periods with different rates, the return must be manually verified.

    1. The tax rate for Form 1120-ND increased to 35% under OBRA for tax period 199301-199312.

    2. The tax rate for Form 1120-ND increased after the 1992 tax returns were filed, which made the tax for tax period ending in 199301-199311 retroactive.

  6. Form 1120-SF, which replaced Form 1120-DF, was included in OBRA. The Act increased the tax rate for Form 1120-SF to a maximum tax rate of 39.6%. It is also retroactive for tax periods 199301-199311.

  7. All the rules and regulations that applies to Form 1120-DF, apply to Form 1120-SF.

  8. Each of the above retroactive tax forms will require prorated computation for tax period 199301-199311.

3.12.16.21  (01-01-2015)
Corporate Income Tax Rates

  1. The following corporate income tax rates apply to tax periods 199312 through present:

    Taxable Income Times (X) Tax Rate
    under $50,000 x 15%
    from $50,000 to $75,000 x 25% - $5,000
    from $75,000 to $100,000 x 34% - $11,750
    from $100,000 to $335,000 x 39% - $16,750
    from $335,000 to $10,000,000 x 34%
    from $10,000,000 to $15,000,000 x 35% - $100,000

    Note:

    Do not use this table for Controlled Groups or Personal Service Corporations.

  2. The following corporate income tax rates apply to a Personal Service Corporation:

    Tax Period Tax Rate
    199312 to present Taxable Income x 35% (percent)
    199301 through 199311 Pro-rate
    199212 and prior Taxable Income x 34%
  3. The following corporate income tax rates apply toForm 1120-SF:

    Tax Period Tax Rate
    201312 and subsequent Taxable Income x 39.6% (percent)
    200301 through 201311 Taxable Income x 35%
    200201 through 200212 Taxable income x 38.6%
    200101 through 200112 Taxable income x 39.1%
    200012 and prior Taxable income x 39.6%

    Note:

    Section 101(b) of American Taxpayer Relief Act (ATRA) of 2012 permanently extends the maximum tax rate in effect of 39.6%.

  4. Beginning in 1993, Form 1120-DF, U.S. Income Tax Return for Designated Settlement Funds (Under Section 468B), became Form 1120-SF. Prior year Form 1120-SF, use the Form 1120-DF rate for that year. The following corporate income tax rates apply to Form 1120-DF:

    Tax Period Tax Rate
    199101 through 199212 Taxable income X 31% (percent)
    198812 through 199012 Taxable income X 28%
    198712 through 198811 Taxable income X 38.5%
    198412 through 198711 Taxable income X 50%
  5. The following corporate income tax rates apply to Forms 1120-ND:

    Tax Period Tax Rate
    199601 through present Taxable income x 20% (percent)
    199412 through 199512 Taxable income x 22%
    199401 through 199411 Taxable income prorated between 35% and 22%
    199301 through 199312 Taxable income x 35%
    198806 through 199212 Taxable income x 34%

3.12.16.22  (01-01-2015)
Internal Revenue Codes

  1. The following table identifies some of the Revenue Procedures, Internal Revenue Code (IRC) Sections and Treasury Regulations identified throughout this manual and the corrective action.

    Revenue Procedures, IRC Sections and Treasury Regulations Corrective Action
    Revenue Procedures: 76-10, 85-58, 87-32, 92-13, 2000-11, 2002-37, 2006-45 or 2006-46 Enter CCC "Y" . Annualize tax.
    Revenue Procedure 82-25 Enter CCC "Y" Enter Audit Code "3" .
    IRC 38(c)(2) Accept taxpayer's entry.
    IRC Section 443(b)(2) Enter CCC "Y" . Use optional method of annualization.
    IRC Section 444 Election Enter CCC "Y" . Annualize tax.
    IRC Section 444 Termination Enter CCC "Y" . Annualize tax.
    IRC 453A Accept taxpayer's entry.
    IRC 453(d) & (e) Accept taxpayer's entry.
    IRC 898(c)(1)(A) or IRC 898(c)(2) Enter CCC "Y" . Annualize tax.
    IRC 1398 Enter CCC "Y" . Annualize tax.
    IRC 1561 See IRM 3.12.16.5.12, Field 03-M, Subsidiary Filer Code, for additional information.
    IRC 6114 Enter CCC "L" .
    IRC 6222(b) Enter Audit Code "1" .
    IRC 6662 Enter Audit Code "1" .
    Treasury Regulation 1.442-1(c) or (d) Enter CCC "Y" . Enter Audit Code "3" Annualize tax.
    Treasury Regulation 1.1502-76 Enter CCC "Y" . Do not annualize tax.

Exhibit 3.12.16-1 
Form 1120-FSC

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Exhibit 3.12.16-2 
Form 1120-ND

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Exhibit 3.12.16-3 
Form 1120-SF

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Exhibit 3.12.16-4 
Form 8913, Credit for Federal Telephone Excise Tax Paid

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Exhibit 3.12.16-5 
Potential Frivolous Arguments Criteria

Potential Frivolous Argument Description
Alleged Churches/First Amendment Income from non-religious sources and may claim a vow of poverty.
Altered Form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/Uniform Commercial Code (UCC) 1-207 Return contains income and deductions but the jurat has been altered or stricken. May include reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 843 Claim Amended return or a Form 843 filed to obtain a total refund of all taxes paid in prior years, based on a tax avoidance argument.
C-Filings This frivolous position includes the following four categories:
  1. Files a return claiming various types of deductions, credits, or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.

  2. Files a return containing the filer's identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.

  3. Files a return with various types of rambling dialogue and/or confusing arguments that no one could reasonably view as a good faith attempt to comply with the law.

  4. Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying information for the Service to either determine the identity of the taxpayer or correspondent or return address.

Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, privacy act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named.
Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a state or local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due," making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.
Form 1099-OID (Original Issue Discount) An individual or business files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and claims a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID (Original Issue Discount) attached and some have Forms 1096. Other false financial instruments may be filed in the place of or in addition to the Forms 1099-OID, such as Form 2439, promissory notes, bonds, sight drafts, etc.
IRC 861 Business Employment Tax (BMF 861) Argument targets employers and advises them that wages are exempt from withholding. Based on 26 Code of Federal Regulations (CFR) Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee’s wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a "new world order" .
Not a Person Argues that a taxpayer is not a "person" within the meaning of Section 7701(a)(14).
Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "straw man" and any tax obligations are exclusively those of the "straw man" .
Taxes are Voluntary/Law Does Not Require Submits a return, amended return or correspondence that argues income taxes are voluntary.
U.S. v. Long Submits a return with zero money amounts much the same as the Zero Return category and U.S. vs. Long is referenced. See Note in Zero returns below.
Unsigned Returns The individual completes a return but fails to sign; a statement indicating disagreement with the tax system is attached or added to the return.
Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC 861, Forms 2439, OID and other BMF filings that claim no income and request refunds). See Revenue Ruling 2004-34. A statement is attached claiming there is no section of the Internal Revenue Code that established an income tax liability. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

Note:

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

Other All others including those listed in Notice 2010-33 or any subsequent superseding notice. See also http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Introduction on IRS.gov. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.

Note:

Frivolous arguments citing "Collection Due Process (CDP)" should be reviewed by Collections for possible referral to Appeals. Refer to IRM 5.19.8, Collection Appeal Rights, for additional information.

Exhibit 3.12.16-6 
Foreign Country Codes

The Foreign Country Code (FCC) table is valid for all Form 1120 series returns.

Use the Foreign Country Code table below to enter the two-digit "Country Code" .

Note:

If the table contains two Country Codes, use the first Country Code for the Entity Section. Use the second Country Code for other than the Entity Section (e.g., Schedule K). Also, "Holland" is not an official country name; it is part of The Netherlands.

Foreign Country Country Code
Afghanistan AF
Akrotiri AX (Entity Section Only)
OC (Other than Entity Section)
Albania AL
Algeria AG
American Samoa

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

AQ (Other than Entity Section)
Andorra AN
Angola AO
Anguilla AV
Antarctic Lands (Southern Lands) FS
Antarctica AY
Antigua AC
Antigua & Barbuda AC
Argentina AR
Armenia AM
Aruba AA
Ascension SH
Ashmore Island AT
Ashmore & Cartier Islands AT
Australia AS
Austria AU
Azerbaijan AJ
Bahamas BF
Bahrain BA
Baker Island FQ
Bangladesh BG
Barbados BB
Barbuda AC
Belarus BO
Belgium BE
Belize BH
Benin (Dahomey) BN
Bermuda BD
Bhutan BT
Bolivia BL
Bosnia - Herzegovina BK
Botswana BC
Bouvet Island BV
Brazil BR
British Indian Ocean Territory IO
British Virgin Islands VI
Brunei BX
Bulgaria BU
Burkina Faso (Upper Falto) UV
Burma BM
Burundi BY
Caicos Islands (Turks Islands) TK
Cambodia (Kampuchea) CB
Cameroon CM
Canada If the Canadian Postal Code begins with one of the following, use the corresponding Foreign Country Code in the right most column CA
Canada (Alberta) T XA
Canada (British Columbia) V XB
Canada (Manitoba) R XM
Canada (New Brunswick) E XN
Canada (Newfoundland and Labrador) A XL
Canada (Northwest Territories) X XT
Canada (Nova Scotia) B XS
Canada (Nunavut) X XV
Canada (Ontario) K, L, M, N, or P XO
Canada (Prince Edward Island) C XP
Canada (Quebec) G, H, or J XQ
Canada (Saskatchewan) S XW
Canada (Yukon) Y XY
Cape Verde CV
Cartier Island AT
Cayman Islands CJ
Central African Republic CT
Chad CD
Chile CI
China, People’s Republic of (including Inner Mongolia, Tibet and Manchuria) CH
Christmas Island (Indian Ocean) KT
Clipperton Islands IP
Cocos (Keeling) Island CK
Colombia CO
Comoros CN
Congo, Democratic Republic of (Kinshasa) (formerly Zaire) CG
Cook Islands CW
Coral Sea Islands Territory CR
Costa Rica CS
Cote d'Ivoire (Ivory Coast) IV
Croatia HR
Cuba CU
Cyprus CY
Czech Republic EZ
Democratic People's Republic of Korea (North) KN
Democratic Republic of Congo (Kinshasa) (formerly Zaire) CG
Denmark DA
Dhekelia DX (Entity Section Only)
OC (Other than Entity Section)
Djibouti DJ
Dominica DO
Dominican Republic DR
East Timor TT
Ecuador EC
Egypt EG
El Salvador ES
Eleuthera Island BF
England UK
Equatorial Guinea EK
Eritrea ER
Estonia EN
Ethiopia ET
Falkland Islands FK
Faroe Islands FO
Federated States of Micronesia

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

FM (Other than Entity Section)
Fiji FJ
Finland FI
France FR
French Polynesia (Tahiti) FP
French Southern & Antarctic Lands FS
Futuna WF
Gabon GB
Gambia GA
Georgia GG
Germany GM
Ghana GH
Gibraltar GI
Great Britain UK
Greece GR
Greenland GL
Grenada GJ
Grenadines VC
Guam

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

GQ
Guatemala GT
Guernsey GK
Guinea GV
Guinea-Bissau PU
Guyana GY
Haiti HA
Heard Island & McDonald Island HM
Holy See VT
Honduras HO
Hong Kong HK
Howland Island HQ
Hungary HU
Iceland IC
India IN
Indonesia ID
Iran IR
Iraq IZ
Ireland EI
Isle of Man IM
Israel IS
Italy IT
Jamaica JM
Jan Mayen JN
Japan JA
Jarvis Island DQ
Jersey JE
Johnston Atoll JQ
Jordan JO
Kazakhstan KZ
Kenya KE
Kingman Reef KQ
Kinshasa (Democratic Republic of Congo) CG
Kiribati KR
Korea, Democratic People's Republic of (North) KN
Korea, Republic of (South) KS
Kosovo, Republic of KV (Entity Section Only)
OC (Other than Entity Section)
Kuwait KU
Kyrgyzstan KG
Laos LA
Latvia LG
Lebanon LE
Lesotho LT
Liberia LI
Libya LY
Liechtenstein LS
Lithuania LH
Luxembourg LU
Macau MC
Macedonia MK
Madagascar MA
Malawi MI
Malaysia MY
Maldives MV
Mali ML
Malta MT
Marshall Islands

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

RM (Other than Entity Section)
Mauritania MR
Mauritus MP
Mayotte MF
McDonald Island HM
Mexico MX
Midway Islands MQ
Miquelon SB
Moldova MD (Entity Section Only)
OC (Other than Entity Section)
Monaco MN
Mongolia MG
Montenegro MJ (Entity Section Only)
MW (Other than Entity Section)
Montserrat MH
Morocco MO
Mozambique MZ
Namibia WA
Nauru NR
Navassa Island BQ
Nepal NP
Netherlands NL
Netherlands Antilles NT
Nevis SC
New Caledonia NC
New Zealand NZ
Nicaragua NU
Niger NG
Nigeria NI
Niue NE
Norfolk Island NF
North Korea KN
Northern Mariana Islands

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

CQ (Other than Entity Section)
Norway NO
Oman MU
Other (Country not identified elsewhere) OC (Other than Entity Section)
Pakistan PK
Palau

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

PS (Other than Entity Section)
Palmyra Atoll LQ
Panama PM
Papua New Guinea PP
Paracel Islands PF
Paraguay PA
Peru PE
Philippines RP
Pitcairn Islands PC
Poland PL
Portugal PO
Principe TP
Puerto Rico

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

RQ (Other than Entity Section)
Qatar QA
Republic of Congo (Brazzaville) CF
Republic of Korea (South) KS
Republic of Kosovo KV (Entity Section Only)
OC (Other than Entity Section)
Republic of Singapore SN
Romania RO
Russia RS
Rwanda RW
Saint Barthelemy TB
Saint Martin RN
Samoa WS
San Marino SM
Sao Tome and Principe TP
Saudi Arabia SA
Scotland UK
Senegal SG
Serbia RI (Entity Section Only)
SR (Other than Entity Section)
Seychelles SE
Sierra Leone SL
Singapore SN
Slovakia LO
Slovenia SI
Solomon Islands BP
Somalia SO
South Africa SF
South Georgia Island (and South Sandwich Island) SX
South Korea KS
South Sandwich Island (and South Georgia Island) SX
Spain SP
Spratly Islands PG
Sri Lanka CE
St. Barthelemy TB
St. Helena SH
St. Kitts & Nevis SC
St. Lucia ST
St. Martin RN
St. Miquelon SB
St. Pierre SB
St. Pierre & Miquelon SB
St. Vincent & Grenadines VC
Sudan SU
Suriname NS
Svalbard SV
Swaziland WZ
Sweden SW
Switzerland SZ
Syria SY
Taiwan TW
Tajikistan TI
Tanzania TZ
Thailand TH
The Bahamas BF
The Gambia GA
The Netherlands NL
Timor-Leste TT
Tobago TD
Togo TO
Tokelau TL
Tonga TN
Trinidad TD
Tunisia TS
Turkey TU
Turkmenistan TX
Turks & Caicos Islands TK
Tuvalu TV
Uganda UG
Ukraine UP
United Arab Emirates AE
United Kingdom UK
Uruguay UY
Uzbekistan UZ
Vanuatu NH
Venezuela VE
Vietnam VM
Virgin Islands (British) VI
Virgin Islands (United States)

Caution:

Do not use as a Foreign Country Code when entering the Entity Section. See Exhibit 3.12.16-11, U.S. Possessions/Territories and ZIP Codes.

VQ (Other than Entity Section)
Wake Island WQ
Wallis and Futuna WF
Western Sahara WI
Windward Island VC
Yemen YM
Zambia ZA
Zimbabwe ZI

Exhibit 3.12.16-7 
Province and Country Code - Canada

Canadian Province/Territory Province/Territory Abbreviation Postal Code Beginning

Note:

If the Canadian Postal Code begins with one of the following, use the corresponding Foreign Country Code Abbreviation in the right most column.

Country Code
Alberta AB T XA
British Columbia BC V XB
Manitoba MB R XM
New Brunswick NB E XN
Newfoundland and Labrador NL A XL
Northwest Territories NT X XT
Nova Scotia NS B XS
Nunavut NU X XV
Ontario ON K, L, M, N, or P XO
Prince Edward Island PE C XP
Quebec QC G, H, or J XQ
Saskatchewan SK S XW
Yukon YT Y XY

Exhibit 3.12.16-8 
Province, State and Territory Abbreviations

Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Esperito Santo ES
Goias GO
Maranhao MA
Mato Grosso MT
Mato Grosso do Sul MS
Minas Gerais MG
Para PA
Paraiba PB
Parana PR
Pernambuco PE
Piaui PI
Rio de Janeiro RJ
Rio Grande do Norte RN
Rio Grande do Sul RS
Rondonia RO
Roraima RR
Santa Catarina SC
Sergipe SE
Sao Paulo SP
Tocantins TO
Canada Province/Territory Canadian Postal Code

Note:

If the Canadian Postal Code begins with one of the following, use the corresponding Foreign Country Code Abbreviation in the right most column.

Abbreviation
Alberta T AB
British Columbia V BC
Manitoba R MB
New Brunswick E NB
Newfoundland and Labrador A NL
Northwest Territories X NT
Nova Scotia B NS
Nunavut X NU
Ontario K, L, M, N, or P ON
Prince Edward Island C PE
Quebec G, H, or J QC
Saskatchewan S SK
Yukon Y YT
Cuba Provincias Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad de La Habana CH
Granma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matanzas MT
Municipio Especial Isla de la Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
Italy Provincia Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Bari BA
Belluna BL
Beneveto BN
Bergamo BG
Biella BI
Bologna BO
Bolozano Bolzen BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanisetta CL
Campobasso CB
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CZ
Crotone KR
Cuneo CN
Enna EN
Ferrara FE
Firenze FI
Foggia FG
Forli FO
Frosinone FR
Genova GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova MN
Massa-Carrara MS
Matera MT
Messina ME
Milano MI
Modena MO
Napoli NA
Novara NO
Nuoro NU
Oristano OR
Padova PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Ravenna RA
Reggio de Calabria RC
Reggio Emilia RE
Rieti RI
Rimini RN
Roma RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino TO
Trapani TO
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia VE
Verbania VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vincenza VI
Viterbo VT
Mexico State Abbreviation
Aguascalientes AGS
Baja California Norte BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana Roo QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Lemburg LB
North Brabant NB
North Holland NH
Overijssel OV
South Holland ZH
Utrecht UT
Zeeland SLD

Exhibit 3.12.16-9 
Major City and ZIP Codes

State City Major City Code ZIP Code
Alabama Birmingham BI 352
Alabama Huntsville HU 358
Alabama Montgomery MG 361
Alabama Mobile MO 366
Alaska Anchorage AN 995
Arkansas Little Rock LR 722
Arizona Phoenix PX 850
Arizona Tucson TU 857
California Anaheim AH 928
California Bakersfield BD 833
California Berkeley BE 947
California Fresno FO 937
California Glendale GL 912
California Huntington Beach HB 926
California Inglewood ID 903
California Los Angeles LA 900
California Long Beach LB 908
California North Hollywood NW 916
California Oakland OA 946
California Pasadena PD 911
California Riverside RS 925
California Sacramento SC 958
California Santa Ana SA 927
California San Bernardino SR 924
California San Diego SD 921
California San Francisco SF 941
California San Jose SJ 951
California Stockton SN 952
California Torrance TN 905
California Van Nuys VN 914
Colorado Aurora AZ 800
Colorado Colorado Springs CS 809
Colorado Denver DN 802
Colorado Lakewood LW 802
Colorado Pueblo PU 810
Connecticut Bridgeport BP 066
Connecticut Hartford HD 061
Connecticut New Haven NH 065
Connecticut Stamford ST 069
Connecticut Waterbury WT 067
Delaware Wilmington WI 198
District of Columbia Washington DC 200
Florida Daytona Beach DG 320, 321
Florida Ft. Lauderdale FL 333
Florida Hialeah HI 330
Florida Hollywood HW 330
Florida Jacksonville JV 322
Florida Miami MF 330-332
Florida Orlando OR 328
Florida Pensacola PE 325
Florida St. Petersburg SP 337
Florida Tampa TA 336
Florida Tallahassee TL 323
Florida West Palm Beach WP 334
Georgia Augusta AG 309
Georgia Albany AY 217
Georgia Atlanta AT 303, 311
Georgia Columbus CM 319
Georgia Macon MA 312
Georgia Savannah GS 314
Hawaii Honolulu HL 968
Idaho Boise BS 837
Iowa Grand Rapids CR 524
Iowa Des Moines DM 503
Iowa Davenport DP 528
Iowa Dubuque DQ 520
Iowa Sioux City SX 511
Iowa Waterloo WL 507
Illinois Aurora AO 605
Illinois Chicago CH 606
Illinois Cicero CI 606
Illinois Decatur DT 625
Illinois East St. Louis ES 622
Illinois Evanston EN 602
Illinois Joliet JT 604
Illinois Oak Park OP 603
Illinois Peoria PL 616
Illinois Rockford RF 611
Illinois Springfield XL 627
Indiana Evansville EV 477
Indiana Fort Wayne FY 468
Indiana Gary GY 464
Indiana Hammond HM 463
Indiana Indianapolis IN 462
Indiana South Bend SB 466
Indiana Terre Haute TH 478
Kansas Kansas City KA 661
Kansas Shawnee Mission SM 662
Kansas Topeka TP 666
Kansas Wichita WK 672
Kentucky Lexington LX 405
Kentucky Louisville LE 402
Louisiana Baton Rouge BR 708
Louisiana Lake Charles LC 706
Louisiana Metairie MI 700
Louisiana New Orleans NO 701
Louisiana Shreveport SH 711
Maine Augusta AA 043
Maine Portland PT 041
Maryland Baltimore BA 212
Maryland Silver Spring SS 209
Massachusetts Boston BO 021, 022
Massachusetts Cambridge CB 021, 022
Massachusetts Fall River FR 027
Massachusetts Lowell LM 018
Massachusetts Lynn LY 019
Massachusetts New Bedford ND 027
Massachusetts Newton NE 021
Massachusetts Quincy QA 021
Massachusetts Springfield XA 011
Massachusetts Sommerville SV 021
Massachusetts Worcester WE 016
Michigan Dearborn DB 481
Michigan Detroit DE 482
Michigan Flint FT 485
Michigan Grand Rapids CR 495
Michigan Kalamazoo KZ 490
Michigan Lansing LG 489
Michigan Saginaw SG 486
Michigan Warren WR 480
Minnesota Duluth DL 558
Minnesota Minneapolis MS 554
Minnesota St. Paul SU 551
Mississippi Biloxi BL 395
Mississippi Greenwood GW 389
Mississippi Hattiesburg HR 394
Mississippi Jackson JN 392
Mississippi Meridian MD 393
Missouri Independence IE 640
Missouri St. Joseph XM 645
Missouri St. Louis SL 631
Missouri Springfield XO 658
Montana Helena HE 596
Nebraska Lincoln LN 685
Nebraska Omaha OM 681
Nevada Las Vegas LV 891
Nevada Reno RE 895
New Hampshire Manchester MR 031
New Hampshire Portsmouth PS 038
New Jersey Atlantic City AC 084
New Jersey Camden CD 081
New Jersey Elizabeth EL 072
New Jersey East Orange EO 070
New Jersey Hackensack HS 076
New Jersey Jersey City JC 073
New Jersey New Brunswick NB 089
New Jersey Newark NK 071
New Jersey Paterson PN 075
New Jersey Trenton TR 086
New Mexico Albuquerque AQ 871
New York Albany Al 122
New York Brooklyn BK 112
New York Bronx BX 104
New York Buffalo BF 142
New York Far Rockaway RK 116
New York Flushing FG 113
New York Jamaica JA 114
New York Long Island City LI 111
New York New York City NY 100-102
New York Niagara Falls NF 143
New York Rochester RC 146
New York Schenectady SK 123
New York Staten Island SI 103
New York Syracuse SY 132
New York Utica UT 135
New York Yonkers YK 107
North Carolina Asheville AS 288
North Carolina Charlotte CE 282
North Carolina Durham DU 277
North Carolina Greensboro GO 274
North Carolina Raleigh RL 276
North Carolina Wilmington WN 284
North Carolina Winston-Salem WS 271
North Dakota Fargo FA 581
Ohio Akron AK 443
Ohio Canton CA 447
Ohio Cleveland CL 441
Ohio Cincinnati CN 452
Ohio Columbus CO 432
Ohio Dayton DY 454
Ohio Hamilton HA 450
Ohio Lorain LO 440
Ohio Parma PZ 441
Ohio Springfield XH 455
Ohio Toledo TO 436
Ohio Warren WO 444
Ohio Youngstown YO 445
Oklahoma Oklahoma City OC 731
Oklahoma Tulsa TS 741
Oregon Eugene EU 974
Oregon Portland PO 972
Oregon Salem XR 973
Pennsylvania Allentown AW 181
Pennsylvania Bethlehem BM 180
Pennsylvania Erie ER 165
Pennsylvania Harrisburg HG 171
Pennsylvania Johnstown JO 159
Pennsylvania Lancaster LP 176
Pennsylvania Philadelphia PH 191
Pennsylvania Pittsburgh PI 152
Pennsylvania Reading RD 196
Pennsylvania Scranton XC 185
Pennsylvania Wilkes-Barre WB 187
Pennsylvania Williamsport WM 177
Pennsylvania York YK 174
Rhode Island Providence PR 029
South Carolina Columbia CU 292
South Carolina Charleston CT 294
South Carolina Florence FE 295
South Carolina Greenville GV 296
South Carolina Spartanburg SQ 293
South Dakota Aberdeen AD 574
Tennessee Chattanooga CG 374
Tennessee Knoxville KN 379
Tennessee Memphis ME 381
Tennessee Nashville NA 372
Texas Abilene AB 796
Texas Amarillo AM 791
Texas Austin AU 787
Texas Beaumont BT 777
Texas Corpus Christi CC 784
Texas Dallas DA 752, 753
Texas El Paso EP 799
Texas Fort Worth FW 761
Missouri Kansas City KC 641
Texas Galveston GA 775
Texas Houston HO 770-772
Texas Irving IR 750
Texas Laredo LD 780
Texas Lubbock LU 794
Texas Port Arthur PA 776
Texas San Antonio SO 782
Texas Waco WX 767
Texas Wichita Falls WF 763
Utah Ogden OG 844
Utah Salt Lake City XU 841
Utah West Valley City WF 841
Vermont Burlington BU 054
Virginia Alexandria AX 223
Virginia Arlington AR 222
Virginia Hampton HP 236
Virginia Newport News NN 236
Virginia Norfolk NV 235
Virginia Portsmouth PM 237
Virginia Richmond RI 232
Virginia Roanoke RO 240
Virginia Virginia Beach VB 234
Washington Seattle SE 981, 987
Washington Spokane SW 992
Washington Tacoma TC 983, 984
West Virginia Charleston CW 253
West Virginia Huntington HN 257
West Virginia Parkersburg PK 261
West Virginia Wheeling WH 260
Wisconsin Green Bay GB 543
Wisconsin Kenosha KE 531
Wisconsin Madison MN 537
Wisconsin Milwaukee MW 532
Wisconsin Racine RA 534
Wisconsin West Allis WAS 532
Wyoming Cheyenne CY 820
Puerto Rico San Juan XJ 009

Exhibit 3.12.16-10 
State Codes and ZIP Codes

State Codes and ZIP Codes
Abbr. State or Area ZIP   Abbr. State or Area ZIP
AA America-Atlantic 34001   MS Mississippi 38601
AE America-Europe 09001   MO Missouri 63001
AP America-Pacific 96201   MT Montana 59001
AL Alabama 35001   NE Nebraska 68001
AK Alaska 99501   NV Nevada 88901
AZ Arizona 85001   NH New Hampshire 03001
AR Arkansas 71601   NJ New Jersey 07001
CA California 90001   NM New Mexico 87001
CO Colorado 80001   NY New York 00501
CT Connecticut 06001   NC North Carolina 27001
DE Delaware 19701   ND North Dakota 58001
DC District of Columbia 20001   OH Ohio 43001
FL Florida 32001   OK Oklahoma 73001
GA Georgia 30001   OR Oregon 97001
HI Hawaii 96701   PA Pennsylvania 15001
ID Idaho 83201   RI Rhode Island 02801
IL Illinois 60001   SC South Carolina 29001
IN Indiana 46001   SD South Dakota 57001
IA Iowa 50001   TN Tennessee 37001
KS Kansas 66001   TX Texas 75001
KY Kentucky 40001   UT Utah 84001
LA Louisiana 70001   VT Vermont 05001
ME Maine 03901   VA Virginia 20101
MD Maryland 20601   WA Washington 98001
MA Massachusetts 01001   WV West Virginia 24701
MI Michigan 48001   WI Wisconsin 53001
MN Minnesota 55001   WY Wyoming 82001

Exhibit 3.12.16-11 
U.S. Possessions/Territories and ZIP Codes

If the table contains two Country Codes, use the first Country Code for the Entity Section. Use the second Country Code for other than the Entity Section (e.g., Schedule K).

City ZIP Code   City ZIP Code
American Samoa (AS - Entity Section) (AQ - Other than Entity Section)
Faga'itua 96799   Olosega Manua' 96799
Leone 96799 Pago Pago 96799
Federated States of Micronesia (FM - All Sections)
Chuuk 96942   Pohnpei 96941
Kosrae 96944 Yap 96943
Guam (GU - Entity Section) (GQ - Other than Entity Section)
Agana 96910   Tamuning 96931
Inarajan 96917 Umatac 96915
Merizo 96916 Yona 96915
Marshall Islands (MH - Entity Section) (RM - Other than Entity Section)
Ebeye 96970   Majuro 96960
Northern Mariana Islands (MP - Entity Section) (CQ - Other than Entity Section)
Capitol Hill 96950   Saipan 96950
Rota 96951 Tinian 96952
Palau (PW - Entity Section) (PS - Other than Entity Section)
Koror 96940   Palau 96940
Puerto Rico (PR - Entity Section) (RQ - Other than Entity Section)
Adjuntas 00601   Laplata 00786
Aquada 00602   Lares 00669
Aquadilla 00603   Las Marias 00670
Agnes Buenas 00703   Las Piedras 00771
Aguirre 00704   Levittown 00949
Aibonito 00705   Loiza 00772
Anasco 00610   Loiza Street Station 00936
Angeles 00611   Loquillo 00773
Arecibo 00612   Manati 00674
Arroyo 00714   Maricao 00606
Bajadero 00616   Maunabo 00707
Barceloneta 00617   Mayaquez 00680
Barraquitas 00794   Mercedita 00715
Barrio Obrero Station 00935   Minillas Center 00936
Bayamon 00956   Moca 00676
Boqueron 00622   Morovis 00687
Cabo Rojo 00623   Naguabo 00718
Caguas 00725   Narajito 00719
Camuy 00627   Orocovis 00720
Canovanas 00729   Palmer 00721
Caparra Heights 00920   Patillas 00723
Carolina 00982   Penuelas 00624
Catano 00962   Ponce 00731
Cayey 00736   Puerta de Tierra 00936
Ceiba 00735   Puerta Real 00740
Cerro Gordon 00754   Punta Santiago 00741
Ciales 00638   Quebradillas 00678
Cidra 00739   Ramey 00603
Coamo 00769   Rincon 00677
Comerio 00782   Rio Blanco 00744
Condado 00907   Rio Grande 00721
Corozal 00783   Rio Piedras 00927
Coto Laurel 00780   Rosario 00636
Culebra 00775   Sabana Grande 00637
Dorado 00646   Sabana Hoyos 00688
Ensenada 00647   Sabana Seca 00952
Esperanza 00765   Saint Just 00978
Fajardo 00738   Salinas 00751
Fernandez Juncos 00936   San Antonio 00690
Florida 00650   San Francisco 00927
Fort Buchanan 00934   San German 00683
Garrachales 00652   San Juan 00936
Guanica 00653   San Lorenzo 00754
Guayama 00784   San Sebastian 00685
Guayanilla 00656   Santa Isabel 00757
Guaynabo 00965   Sanrurce 00936
Gurabo 00778   Toa Alta 00953
Hatillo 00659   Toa Boa 00949
Hato Rey 00936   Trujillo Alto 00976
Harmingueros 00660   University 00936
Humacao 00791   Utuado 00641
Isabela 00662   Vega Alta 00692
Jayuya 00664   Vega Baja (box 1-9049) 00694
Juana Diaz 00795   Vieques 00765
Juncos 00777   Villalba 00766
La Cumbre 00926   Yabucoa 00767
Lajas 00667   Yauco 00698
Virgin Islands - U.S. (VI - Entity Section) (VQ - Other than Entity Section)
Charlotte Amalie 00802   Saint Croix 00820
Christiansted 00820 Saint John 00830
Cruz Bay 00830 Saint Thomas 00805
Downtown 00840 Sunny Isle 00850
Frederiksted 00840 Veterans Annex 00820
Kingshill 00850    

Exhibit 3.12.16-12 
"No Reply" Procedures

Enter Computer Condition Code "3" for all "No Replies" in Field 01-F (CCC).

Correspondence Issue No Reply Procedures
Form 8913 Follow IRM Procedures for possible disallowance of Federal Telephone Excise Tax Paid Credit.
See IRM 3.12.16.7.14, Field 07-R, Credit for Federal Telephone Excise Tax Paid and IRM 3.12.16.15, Section 20, Data - Form 8913, Credit for Federal Telephone Excise Tax Paid, for additional information.
Unsubstantiated Credits of $500 or more Delete credits and send TPNC.
Form 4136 Delete credit and send TPNC.
Allocation Schedule (Controlled Groups) /
Schedule O (Form 1120)
See IRM 3.12.16.5.12, Field 03-M, Subsidiary Filer Code, for additional information.
Assess maximum tax.
Send applicable TPNC.
Schedule L Process without the information.

Exhibit 3.12.16-13 
North American Industry Classification System (NAICS) Code

NAICS Code Business Activity
Wholesale Trade
Merchant Wholesalers Durable Goods
423100 Motor Vehicle and Motor Vehicle Parts and Supplies
423200 Furniture and Home Furnishings
423300 Lumber and Other Construction Materials
423400 Professional and Commercial Equipment and Supplies
423500 Metal and Mineral (except petroleum)
423600 Household Appliances and Electrical and Electronic Goods
423700 Hardware and Plumbing and Heating Equipment and Supplies
423800 Machinery, Equipment and Supplies
423910 Sporting and Recreational Goods and Supplies
423920 Toy and Hobby Goods and Supplies
423930 Recyclable Materials
423940 Jewelry, Watch, Precious Stone and Precious Metal
423990 Other Miscellaneous Durable Goods
Merchant Wholesalers, Nondurable Goods
424100 Paper and Paper Products
424210 Drugs and Druggists' Sundries
424300 Apparel, Piece Goods and Notions
424400 Grocery and Related Products
424500 Farm Product Raw Materials
424600 Chemical and Allied Products
424700 Petroleum and Petroleum Products
424800 Beer, Wine and Distilled Alcoholic Beverages
424910 Farm Supplies
424920 Book, Periodicals and Newspaper
424930 Flower, Nursery Stock and Florists' Supplies
424940 Tobacco and Tobacco Products
424950 Paint, Varnish and Supplies
424990 Other Miscellaneous Nondurable Goods
Wholesale Electronic Markets and Agents and Brokers
425110 Business-to-Business Electronic Markets
425120 Wholesale Trade Agents and Brokers
Other Services
899000 Other Personal Services, not classified elsewhere
999000 Nonservices, not classified elsewhere

Exhibit 3.12.16-14 
Form 4136 - Invalid Credit Reference Number (CRN) and TPNC 90 Literal

Invalid CRN TPNC 90 Literal
306 We computed your return without applying your nontaxable use of exported diesel-water fuel emulsion credit. The credit is not valid for tax periods earlier than 200601.
307 We computed your return without applying your renewable diesel mixtures fuel credit. The credit is not valid for tax periods earlier than 200601 or after 201411.
309 We computed your return without applying your nontaxable use of a diesel-water fuel emulsion credit. The credit is not valid for tax periods earlier than 200601.
310 We computed your return without applying your diesel-water fuel emulsion blender credit. The credit is not valid for tax periods earlier than 200601.
318 We computed your return without applying your diesel-powered highway vehicle fuel credit. The credit is not valid for tax periods after 199707.
324 We computed your return without applying your sales by registered ultimate vendors of aviation fuel credit. The credit is not valid for tax periods earlier than 199701.
346 We computed your return without applying your sale and use of kerosene and undyed kerosene used in aviation and state or local government fuel credit. The credit is not valid for tax periods earlier than 199801.
347 We computed your return without applying your sale and nontaxable use of undyed kerosene used in certain intercity and local buses fuel credit. The credit is not valid for tax periods earlier than 199801.
350 We computed your return without applying your sale and nontaxable use of undyed diesel fuel used in certain intercity and local buses fuel credit. The credit is not valid for tax periods earlier than 199801.
352 We computed your return without applying your nontaxable use of liquefied petroleum gas (lpg) used in certain intercity and local buses fuel credit. The credit is not valid for tax periods earlier than 199401 or after 200708.
356 We computed your return without applying your sale and nontaxable use of 10% gasohol blending fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
357 We computed your return without applying your sale and nontaxable use of 7.7% gasohol blending fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
359 We computed your return without applying your nontaxable use of 10% gasohol fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
361 We computed your return without applying your nontaxable use of liquefied petroleum gas (lpg) used in qualified local or school buses fuel credit. The credit is not valid for tax periods earlier than 199401 or after 200708.
362 We computed your return without applying your nontaxable use of gasoline and gasohol fuel credit. The credit is not valid for tax periods earlier than 199401.
363 We computed your return without applying your 5.7% gasohol blending fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
369 We computed your return without applying your 5.7% gasohol blending fuel credit. The credit is not valid for tax periods earlier than 199401.
375 We computed your return without applying your nontaxable use of gasoline and 7.7% gasohol fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
376 We computed your return without applying your nontaxable use of gasoline and 5.7% gasohol fuel credit. The credit is not valid for tax periods earlier than 199301 or after 200511.
377
(Depends on the tax year)
We computed your return without applying your nontaxable use of aviation grade kerosene used in foreign trade fuel credit. The credit is not valid for tax periods earlier than 199301.
377
(Depends on the tax year)
We computed your return without applying your nontaxable use of aviation grade kerosene used in foreign trade fuel credit. The credit is not valid for tax periods after 200511 and before 200712.
388 We computed your return without applying your nontaxable use of biodiesel mixtures (other than agri-biodiesel mixtures) fuel credit. The credit is not valid for tax periods earlier than 200501 or after 201411.
390 We computed your return without applying your agri-biodiesel mixtures fuel credit. The credit is not valid for tax periods earlier than 200501 or after 201411.
393 We computed your return without applying your alcohol fuel mixture containing ethanol fuel credit. The credit is not valid for tax periods earlier than 200501 or after 201211.
394 We computed your return without applying your alcohol fuel mixture containing alcohol (other than ethanol) fuel credit. The credit is not valid for tax periods earlier than 200501 or after 201211.
395 We computed your return without applying your other nontaxable use of liquefied petroleum gas (lpg) fuel credit. The credit is not valid for tax periods earlier than 200501 or after 200708.
411 We computed your return without applying your nontaxable use of exported gasoline fuel credit. The credit is not valid for tax periods earlier than 200601.
412 We computed your return without applying your nontaxable use of exported aviation gasoline fuel credit. The credit is not valid for tax periods earlier than 200601.
413 We computed your return without applying your nontaxable use of exported undyed diesel fuel credit. The credit is not valid for tax periods earlier than 200601.
414 We computed your return without applying your nontaxable use of exported undyed kerosene (other than kerosene used in aviation) fuel credit. The credit is not valid for tax periods earlier than 200601.
415 We computed your return without applying your nontaxable use of exported dyed diesel fuel credit. The credit is not valid for tax periods earlier than 200601.
416 We computed your return without applying your nontaxable use of exported dyed kerosene fuel credit. The credit is not valid for tax periods earlier than 200601.
417 We computed your return without applying your nontaxable use of kerosene used in commercial aviation (other than foreign trade) taxed at $.244 fuel credit. The credit is not valid for tax periods earlier than 200601.
418 We computed your return without applying your sale of kerosene used in aviation fuel credit. The credit is not valid for tax periods earlier than 200601.
419 We computed your return without applying your nontaxable use of alternative fuel credit. The credit is not valid for tax periods earlier than 200610.
420 We computed your return without applying your nontaxable use of alternative fuel ("P series" fuel) credit. The credit is not valid for tax periods earlier than 200610.
421 We computed your return without applying your nontaxable use of alternative fuel (compressed natural gas) credit. The credit is not valid for tax periods earlier than 200610.
422 We computed your return without applying your nontaxable use of alternative fuel (liquefied hydrogen) credit. The credit is not valid for tax periods earlier than 200610 or after 201508.
423 We computed your return without applying your nontaxable use of alternative liquid fuel derived from coal credit. The credit is not valid for tax periods earlier than 200610.
424 We computed your return without applying your nontaxable use of alternative liquid hydrocarbon fuel derived from biomass credit. The credit is not valid for tax periods earlier than 200610.
425 We computed your return without applying your nontaxable use of alternative fuel (liquefied natural gas) credit. The credit is not valid for tax periods earlier than 200610.
426 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (liquefied petroleum gas). The credit is not valid for tax periods earlier than 200610 or after 201411.
427 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit ("P series" ). The credit is not valid for tax periods earlier than 200610 or after 201411.
428 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (compressed natural gas). The credit is not valid for tax periods earlier than 200610 or after 201411.
429 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (liquefied hydrogen). The credit is not valid for tax periods earlier than 200610 or after 201508.
430 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (derived from coal). The credit is not valid for tax periods earlier than 200610 or after 201411.
431 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (liquid fuel derived from biomass). The credit is not valid for tax periods earlier than 200610 or after 201411.
432 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (liquefied natural gas). The credit is not valid for tax periods earlier than 200610 or after 201411.
433 We computed your return without applying your leaking underground storage tanks (lust) tax credit. The credit is not valid for tax periods earlier than 200510.
434 We computed your return without applying your leaking underground storage tanks (lust) tax credit. The credit is not valid for tax periods earlier than 200510 or after 200712.
435 We computed your return without applying your nontaxable use of alternative fuel (liquified gas derived from biomass) credit. The credit is not valid for tax periods earlier than 200810.
436 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (liquified gas derived from biomass). The credit is not valid for tax periods earlier than 200810 or after 201411.
437 We computed your return without applying your alternative fuel credit and alternative fuel mixture credit (compressed gas derived from biomass). The credit is not valid for tax periods earlier than 200810 or after 201411.

Exhibit 3.12.16-15 
Form 4136 - Prior Year Conversion Chart

Tax Years 2000 - 1998 Conversion Chart
Line Number Credit Reference Number (CRN) Change Credit Reference Number To
1a - c 301 362
1d - f 312 359
2a - b 307 324
3a 303 360
3b 305 353
3c 303 350
4a - b 310 369
5a - b 303 360
6a - c 303 346
7a - b 304 361
8a - c 302 356

Note:

No conversion required for tax years after 2001.

Tax Year 1997 Conversion Chart
Line Number Credit Reference Number (CRN) Change Credit Reference Number To
1a - c 301 362
2a - c 312 359
3a - d 303 360
4a - d 304 361
5a - b 307 324
6a - b 310 369
7a - c 302 356
8a - b 305 353

Exhibit 3.12.16-16 
Form 4136 - Valid Tax Period Chart

Credit Reference Number (CRN) Valid Tax Period(s)
306 200601 and later
307 200601 through 201411
309 200601 and later
310 200601 and later
318 199707 and earlier
324 199701 and later
346 199801 and later
347 199801 and later
350 199801 and later
352 199401 through 200708
353 All
354 All
355 All
356 199301 through 200511
357 199301 through 200511
359 199301 through 200511
360 All
361 199401 through 200708
362 199401 and later
363 199301 through 200511
369 199401 and later
375 199301 through 200511
376 199301 through 200511
377 199301 through 200511 and 200712 and later
388 200501 through 201411
390 200501 through 201411
393 200501 through 201211
394 200501 through 201211
395 200501 through 200708
411 200601 and later
412 200601 and later
413 200601 and later
414 200601 and later
415 200601 and later
416 200601 and later
417 200601 and later
418 200601 and later
419 200610 and later
420 200610 and later
421 200610 and later
422 200610 through 201508
423 200610 and later
424 200610 and later
425 200610 and later
426 200610 through 201411
427 200610 through 201411
428 200610 through 201411
429 200610 through 201508
430 200610 through 201411
431 200610 through 201411
432 200610 through 201411
433 200510 and later
434 200510 and later
435 200810 and later
436 200810 through 201411
437 200810 through 201411

Exhibit 3.12.16-17 
Tax Period Underprint Flow Chart

Tax Period Underprint Flow Chart

Note:

If prepaid credits are present, see Field 01-D (Tax Period) for instructions.

Is the EIN transcribed correctly?






Yes↓
No→ 1. Change the EIN on the return and in Field 01-C (EIN).
2. Research IDRS using Command Code (CC) INOLES on the new EIN to ensure the FYM agrees with the return.
3. Enter appropriate Entity Underprint Code, if applicable.
Is the tax period transcribed correctly?


Yes↓
No→ 1. Correct Field 01-D (Tax Period).
2. Enter appropriate Entity Underprint Code.
Is the tax period edited correctly?

Note:

Search the return and attachments for the correct tax period if there is no pre-printed label and/or no written date(s) on the top of Page 1 of the return.



Yes↓
No→ 1. Correct the tax period on the return and in Field 01-D (Tax Period).
2. Enter appropriate Entity Underprint Code.

Note:

Be aware of special situations; such as, 52-53 week filers before changing the tax period.

Is Computer Condition Code (CCC) "G" present?

No↓
Yes→ Enter appropriate Entity Underprint Code.
Is the return a "Final" or approved "Change of Accounting Period" ?



No↓
Yes→ 1. Enter CCC "F" or CCC "Y" in Field 01-F (CCC), as applicable.
2. Enter appropriate Entity Underprint Code, if applicable.
Is the return for a Short Period (not "Initial" or "Final" ) with an acceptable reason attached (e.g., IRC Section or Revenue Procedure quoted)?

Note:

See Field 01-D (Tax Period) for additional information.



No↓

Research IDRS using Command Codes INOLES, ENMOD, BMFOLE, or other applicable Command Code.
Yes→ 1. Enter CCC "Y" .
2. Enter appropriate Entity Underprint Code.

Does the FYM agree with the FYM on the return, or is there a pending (PN) Transaction Code (TC) 016 or TC 090 with the correct FYM shown on ENMOD?

Note:

See Document 6209 for a list of pending Transaction Codes (TCs).



No↓
Yes→ Enter appropriate Entity Underprint Code.
Is TC 052, TC 053, TC 054, TC 055, TC 057, TC 059, TC 090, TC 091, TC 092, TC 093, TC 094, TC 095, or TC 096 present, and is the date of the transaction within 12 months of the tax period on the return?






No↓

Research IDRS using CC BMFOLI.
Yes→ 1. If the transaction code tax period matches the return, enter the applicable Entity Underprint Code.
2. If TC 053, TC 054 or TC 055 is present, enter a "Y" in Field 01-F (CCC) and the applicable Entity Underprint Code.
3. If TC 059 is present, enter Action Code 3. Attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).
4. If there is a tax period mismatch, enter Action Code 3. Route to Entity Control following local procedures.
Is the MFT 02 present?

Yes↓
No→ Enter appropriate Entity Underprint Code.
Are there returns posted for the MFT of the return?

Note:

A "Y" in the "Posted Return" column indicates a return is posted.



Yes↓
No→ 1. Enter Action Code 3.
2. Attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).
Are all of the posted returns for the MFT of the return subsequent to the tax period of the return?







No↓
Yes→ 1. Enter Action Code 3.
2. Attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).

Note:

When remittance is present that needs to be transferred to the correct FYM, prepare Form 3465, Adjustment Request, and route to Accounts Management to request that the remittance be moved to the correct tax period.

Does the posting prior to the tax period of the return agree with the FYM of the return?

Note:

If all postings are for the same fiscal year and there are no dates on the top of Page 1, change the FYM of the return to the fiscal year.



No↓
Yes→ 1. Enter Action Code 3.
2. Attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).
Can you clearly determine from CC BMFOLI research that the return should post as filed? (See Example below.)

No↓
Yes→ 1. Enter Action Code 3.
2. Attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).
Correspond    
Example: The return is filed for FYM 201209
CC INOLES shows: FYM 09
CC BMFOLI shows:
Tax Period 200712, Posted Return Y
Tax Period 200812, Posted Return Y
Tax Period 200912, Posted Return Y
Tax Period 201012, Posted Return Y
Tax Period 201109, Posted Return Y
Tax Period 201209, Posted Return N

The tax return for 201209 still needs to post. In this example, enter Action Code 3, attach Form 4227 (or other appropriate routing slip) and route to Rejects for input of TC 016 (or follow local procedures).

Exhibit 3.12.16-18 
Tax Period Underprint Flow Chart for "Reply" and "No Reply"

Reply Procedures
Short Period
Did the taxpayer reply with Form 1128 or Form 8716?

No↓
Yes→ Route to Entity Control following local procedures
1. Enter CCC Y.
2. Enter appropriate Entity Underprint Code.
   
Full Year
Does the tax period indicated by the taxpayer agree with the FYM?

No↓
Yes→ Change the tax period to agree with the underprint.
Is the last tax period with a TC 150, 12 months or more prior to the return tax period?









No↓
Yes→ 1. Input TC 016 on CC ENMOD using CC BNCHG.
2. Input TC 474 on CC REQ77 (using one (1) cycle delay) for the year and month prior to the beginning month of the tax period on the return being processed.
3. Hold for one week.
4. Correct the return and the register one (1) cycle after the input of TC 474.
5. When PN 016 generates on CC ENMOD, enter appropriate Entity Underprint Code.
Is the last TC 150 less than 12 months prior to the return tax period? Yes→ 1. Enter CCC "Y" .
2. Enter appropriate Entity Underprint Code.

Note:

When remittance is present that needs to be transferred to the correct FYM, prepare Form 3465, Adjustment Request, and route to Accounts Management to request that the remittance be moved to the correct tax period.

No Reply Procedures
Short Period
Is the return for a Short Period?



No↓
Yes→ 1. Enter CCC "Y" .
2. Enter appropriate Entity Underprint Code.

Full Year
Is the last tax period with a TC 150, 12 months or more prior to the return tax period?









No↓
Yes→ 1. Input TC 016 on CC ENMOD using CC BNCHG.
2. Input TC 474 on CC REQ77 (using one (1) cycle delay) for the year and month prior to the beginning month of the tax period on the return being processed.
3. Hold for one week.
4. Correct the return and the register one (1) cycle after the input of TC 474.
5. When PN 016 generates on CC ENMOD, enter appropriate Entity Underprint Code.
Is the last TC 150 less than 12 months prior to the return tax period? Yes→ 1. Enter CCC "Y" .
2. Enter appropriate Entity Underprint Code.

Note:

When remittance is present that needs to be transferred to the correct FYM, prepare Form 3465, Adjustment Request, and route to Accounts Management to request that the remittance be moved to the correct tax period.

Exhibit 3.12.16-19 
USPS.com Track & Confirm

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