3.12.23  Excise Tax Returns

Manual Transmittal

October 9, 2014

Purpose

(1) This transmits revised Internal Revenue Manual (IRM) 3.12.23, Error Resolution - Excise Tax Returns.

Material Changes

(1) Minor editorial changes have been made throughout this IRM.

(2) IRM 3.12.23 - Removed reference to Check Digits throughout the IRM.

(3) IRM 3.12.23.8.3.9(6) - Second row of table updated to include Part II Line 5c when the tax has been paid for additional agents.

Effect on Other Documents

This IRM supersedes IRM 3.12.23 dated November 13, 2013 (effective January 1, 2014).

Audience

Wage and Investment Submission Processing Error Resolution Tax Examiners

Effective Date

(01-01-2015)

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

3.12.23.1  (01-01-2015)
Overview

  1. The Excise Tax Return processing is centralized at the Cincinnati Submission Processing Campus (CSPC). When returns are received in other campuses or field offices they will be forwarded to the CSPC for processing.

  2. This section contains instructions for correcting validity check errors detected by the computer and resolving math errors resulting from differences in the taxpayer’s computations and the computer computations.

  3. Report time spent and volume completed under the following program codes for reviewing and correcting records on error registers:

    1. Form 11-C, Occupational Tax and Registration Return for Wagering use 270-12701.

    2. Form 730, Monthly Tax Return for Wagering use 270-12702.

3.12.23.1.1  (01-01-2015)
General

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

  2. This book provides procedures for correcting records that are printed on the error registers. Specific procedures that pertain to Form 730, Monthly Tax Return for Wagers, and Form 11-C, Occupational Tax and Registration Return for Wagering.

    Note:

    In the case of a conflict of instructions between general and specific, follow the specific procedures.

  3. The tax examiners applying these instructions must be familiar with the editing procedures in IRM 3.11.23, Returns and Document Analysis - Excise Tax Returns, and the general procedures in IRM 3.12.38, Error Resolution - BMF General Procedures. The telephone may be used, at the discretion of management, to resolve questions pertaining to returns that are on the Error Register in lieu of rejecting those returns for subsequent correspondence action.

  4. You are not expected to review or redo the work of Code and Edit. However, if an error or omission made by the examiner is noticed while working the error register, enter the correct information on the return and the error register. A complete review of the return is not required. If this section instructs you to do something without telling you how, refer to IRM 3.11.23, Returns and Document Analysis - Excise Tax Returns.

3.12.23.1.2  (01-01-2015)
♦ Business Master File (BMF) Consistency ♦

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

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

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

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

3.12.23.1.3  (01-01-2015)
IRS Employee Contacts with Taxpayers (TP) - RRA 98 Section 3705(a)

  1. The Restructuring and Reform Act of 1998, Section 3705(a) provides identification requirements for all IRS employees working tax related matters in the field, national, and regional office.

  2. All Internal Revenue Service employees who communicate, by telephone, correspondence or face to face, with taxpayers, or their representatives, on tax related matters are required to provide a minimum amount of identification information which must include:

    • Title (e.g., Mr., Mrs., Ms., Miss)

    • Last name

    • Employee's identification (ID) number (e.g., Integrated Data Retrieval System (IDRS), badge, or ID Card).

  3. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

  4. All correspondence (including faxes and e-mail) must include a telephone number where the taxpayer's question can be answered.

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

  6. Toll Free employees may also provide their location for identification purposes.

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

  8. Manually generated and handwritten correspondence must include:

    • Title (e.g., Mr., Mrs., Ms., Miss),

    • Last name,

    • Employee's identification number (IDRS, badge, or ID Card)

    • Telephone number where the taxpayer's question can be answered.

  9. Automatically generated correspondence and letter systems computer generate the IDRS or identification number.

    1. If it is not generated, correspondence must include: title (e.g., Mr., Mrs., Ms., Miss), last name, employees identification number (IDRS, badge, or ID Card), and telephone number where the taxpayer's question can be answered.

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

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

  10. Faxes to taxpayers on tax related matters, are considered manually generated correspondence and must include the required identification information. See IRM 11.3.1.11, Facsimile Transmission of Tax Information, for additional details.

  11. Telephone Contact: When telephone contact is made with taxpayers or their personal representative on tax related matters the following must be provided during the conversation:

    • Title (e.g., Mr., Mrs., Ms., Miss)

    • Last name

    • Employee's identification number (IDRS, badge, or ID Card).

    Note:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3, Accounts Management and Compliance Services Operation Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 21.1.3.9, Mailing and Faxing Tax Account Information, must be reviewed prior to faxing confidential information to the taxpayer.

  12. Face to Face: When face to face contact is made employee identification must be provided during the conversation and must include:

    • Title (e.g., Mr., Mrs., Ms., Miss)

    • Last name

    • Employee's identification number (IDRS, badge, or ID Card).

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

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

3.12.23.1.4  (01-01-2015)
♦ Taxpayer Advocate Service (TAS) ♦

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

3.12.23.1.4.1  (01-01-2015)
♦ TAS Service Level Agreements (SLA) ♦

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

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

3.12.23.1.5  (01-01-2015)
♦ Frivolous Returns and Claims ♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to the examples in IRM 4.10.12, Frivolous Return Program, shown in Exhibit 3.12.23-4, Potential Frivolous Return Chart. For further information, refer to Notice 2008-14.

    Note:

    Returns having only zeros, no entries, are blank or indicate "None" , "Not Liable" , etc. with no evidence of a frivolous argument are not to be considered as frivolous returns.

  2. Processing procedures: Review the return to determine whether it appears to be a frivolous return.

    IF: THEN:
    The return meets any of the FRP conditions. See Exhibit 3.12.23-4.

    Caution:

    If the return shows Action Code (AC) 331, a Computer Condition Code (CCC) X and has a Form 10886, Reject Routing Slip, attached with the remarks, "Refer to Exam FRP for audit after processing" , continue to next procedure.

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.

    Note:

    IRM 4.10.12.1.3.3, Campus FRP Coordinators, requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two (2) business days. If a determination is not made within the allowed time frame, the Examination examiner will edit Action Code 331.

    Examination has selected the return as frivolous, e.g., indicated by an Action Code 331, a CCC X and a Form 10886, Reject Routing Slip, with the remarks, "Refer to Exam FRP for audit after processing" , but sends the return for processing. Continue processing the return. However, do not circle or void the Action Code or CCC X indicating a frivolous return.

3.12.23.1.6  (01-01-2015)
Excise Tax Codes

  1. Chart of Tax Class, Document Codes, and Master File Tax (MFT) for excise taxes.

    Form Tax Class Doc Code MFT Code
    Form 11-C 4 03 63
    Form 730 4 13 64

3.12.23.1.7  (01-01-2015)
Definitions

  1. Action Codes - A number that is coded to notify the computer what action should be taken.

  2. Alpha Field Designation - The first field of each section is identified as the "A" field, and subsequent fields in that section are assigned alpha letters in sequence.

  3. BMFOL - provides nationwide Business Master File (BMF) entity and tax data information online for tax accounts that are in credit or debit status, contain freeze conditions or open IDRS control bases. It will also display a list of accounts moved to the retention register. Other accounts that are not on the retention register will be available online within 24 hours upon request.

  4. BRTVU - provides business return transaction information. The file consists of original input return data, including schedules. This return information includes Code and Edit, Error Resolution System (ERS), and computer generated fields.

  5. Command Code (CC) - A five character code which identifies the nature of an inquiry or update request for a real time terminal.

  6. Entity Index File (EIF) - A computer file that stores name data for each Employer Identification Number (EIN) on file. A check is made between the EIN and the name entered.

  7. Error Reason Code - A specific code explaining the reason an input document is on the error register. If the document does not have errors then this field will be blank. A maximum of nine two digit codes can be present in this field.

  8. Error Register - A listing of documents on which the entered data failed one or more of the consistency, math verification, or validity tests in the computer program. The register consists of sections and fields that are directly or indirectly related to data sections and items input to the computer.

  9. Field - A specific item input from a tax document. Each field may contain data or be blank and is prefixed by an alpha character A thru Z.

  10. Field Breakers - Used on the Error Register are @, (+) and (-). When entering field breakers use an asterisk (*) for (@), a comma (,) for (+) and a pound sign (#) for (-). They will convert to the proper sign.

  11. Generalized Mainline Framework (GMF) - The system used to process and control all documents through the Campus pipeline.

  12. INOLE - Used to research the entity module (name control, filing requirements, employment codes and addresses).

  13. IRPOL - Provides two payee addresses if present, filing status, one payer name and address, cross reference information, and summary of up to 36 Information Returns Processing (IRP) money amounts by income type.

  14. ISRP - Integrated Submission and Remittance Processing (ISRP) replaced the previous Distributed Input System (DIS) and Remittance Processing System (RPS) systems. The Excise tax processing system is now referred to as "DIS/ISRP" The ERS function has access to the system via a terminal in their area.

  15. Key Index File (KIF) - A computer file of Taxpayer Identification Numbers (TINs).

  16. NAMEE - Used to research for a missing or invalid EIN.

  17. Real time - Instantaneous access to a data base which allows you to make changes to the database or just display data.

  18. RTVUE - provides online access to the Individual Return Transaction File. The file consists of original input return data, including schedules. This return information contains Code and Edit, Error Resolution (ERS), and computer generated fields.

  19. Section - A specific portion of the return input. Each section is prefixed by a two digit numeric code beginning with 01.

3.12.23.1.8  (01-01-2015)
Action Codes (AC)

  1. A number code which signifies to the computer what action should be taken on the error record. Only one AC may be entered on the error record to correct any one section. If two are required, it must loop. No other AC can be used with AC 0, 2, 1, 3 or 7. If incorrect data is present, it must be corrected with AC 4, 5 or 6 before AC 1 is used.

  2. Action Code 0 - Used to indicate that the data on the Error Tape record is correct and the computers computation should be disregarded.

  3. Action Code 1 - Used to indicate that the data in a record on the Error Tape has been entered correctly by the key station terminal operator. The taxpayer has an error on his/her return and the computer's computation of the tax due should be accepted. This code may not be used if an amount field has a transcription error or if a field validity error is present in any field of a section. No other AC may be used in the same correction attempt. All validity errors must be corrected before this action code will clear a record from the Error Register. However, if a dummy correction will clear the record, AC 7 may also be used. A Taxpayer Notice Code (TPNC) must be used with an AC 1.

  4. Action Code 2 - To delete a record from Campus processing. (Rejects Only).

  5. Action Code 3 - Used to reject a record on the Error Tape which is not processable to BMF or is a Non Automated Data Processing (ADP) Record. Notate action on Form 1332, Block and Selection Record, and remove document from the pack and sign out. This creates a working trail. Use Form 10886, Reject Routing Slip, and route to rejects.

  6. Action Code 4 - Used to delete a section from a record on the Error Tape. Section 01 of each record cannot be deleted. Do not delete with AC 4 any section with an asterisk appearing before the section number.

  7. Action Code 5 - Used to add a section to a record on the Error Tape. Enter the field designation followed by field data and field breaker for all significant fields. If the field is insignificant (does not contain data), it is not necessary to enter the field at all, not even the field designation or breaker.

  8. Action Code 6 - Used to change a field or fields (excluding remittance). To correct a field the incorrect field data must be lined out and the corrected data entered above it. Any number of fields may be changed during one correction cycle. When blanking or correcting the name control field, always enter the encircled number of positions prescribed for the field which will not contain significant data. In other words, if the prescribed number of characters for the field is "7" , and only "3" significant characters will be input, encircle "4" to show the number of blanks; if the entire field will be blank, encircle "7" .

  9. Action Code 7 - No change required. Used to clear a record which has been sent to the register for one time review. May not be used simultaneously with any other AC. If information for a particular section was not input, the section may be generated for review with an asterisk before the section number. Use AC 7 to clear this item if no error exists.

    1. Enter an AC 0, 2, 1, 3, and 7 on the Error Register to the left of Section 01.

    2. Enter AC 4, 5, and 6 to the left of the appropriate section number.

3.12.23.1.9  (01-01-2015)
Taxpayer Notice Codes (TPNC)

  1. A two digit numeric code is used when a math error is present involving the tax liability or settlement amounts. This Taxpayer Notice Code (TPNC) is entered, on the register to the right of AC 1, preceded by a dash (-).

    1. Enter the code in the upper left corner of the return.

    2. A maximum of three codes may be entered for each correction record.

  2. TPNC 90 is actually a "fill in" and should be used when no other TPNC fully explains the correction(s) made.

    1. When TPNC 90 is generated, Notice Review will type the Math Error explanation on the notice before mailing to the taxpayer.

    2. When using TPNC 90, DO NOT USE ANY OTHER TAXPAYER NOTICE CODE.

  3. Field 01L (Form 730) and Field 01P (Form 11-C) will contain data only on a Loop Register and if AC 1 did not resolve the initial error. Correct any other invalid conditions but not this field. The use of AC 1 and the proper TPNC on a subsequent loop will be sufficient.

3.12.23.1.10  (01-01-2015)
Error Correction Rules

  1. Make certain that all correction entries are legible.

  2. When Action Code 3 is used, Form 3177, Notice of Action for Entry on Master File, and/or Form 10886, Reject Routing Slip, must be prepared and attached to the return with a notation of the reason for the action taken. Charge the return out of the block as a Reject "U" with the date. It is not necessary to prepare Form 3177 on any timely filed "first" return when:

    • A substitute return is prepared by Examination/Collections

    • A new EIN is assigned through IDRS

    • A return is processed through the ISRP/RPS

3.12.23.1.11  (01-01-2015)
Error Register Coding

  1. If an action code (AC) has been entered on the Error Register after all necessary corrections, no further action is necessary.

  2. If an action code has not been entered on the Error Register after all necessary ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Mark an "X" to the left of the taxpayer’s incorrect figures and enter the computer generated figures.

    2. Enter AC 1 and the appropriate TPNC on the Error Register.

  3. If an AC has not been entered on the Error Register and the balance due field does not have an underprint, enter AC 7.

3.12.23.1.12  (01-01-2015)
Correction of Invalid Correction Attempt

  1. An Error Reason Code "AA" is printed on the Loop Error Register when an invalid correction attempt is detected by the computer processes.

  2. Correct the Error Register as if no attempt has been made to correct it before.

3.12.23.1.13  (01-01-2015)
Unprocessable Returns

  1. A return must contain specific items before it is considered processable. Perfect all returns to the extent possible from schedules and other attachments. The specific items needed are:

    • Taxpayers Identification Number (TIN)

    • Legible name (for name control)

    • Valid tax period

    • Legible tax data, if tax liability is indicated

    • Signature

  2. Conditions that make a document unprocessable include:

    1. Name so illegible or incomplete that the name control cannot be determined.

    2. Employer Identification Number (EIN) is other than 9 numeric digits and cannot be perfected from information on the return or attachments.

    3. The document has two or more different EINs.

    4. Taxpayer has stated on the document or attachment that they have combined liability for more than one tax period.

    5. Tax data entries on the document are so incomplete, illegible, or contradictory that the tax liability cannot be determined.

    6. The document has been mis-blocked.

    7. Any condition set forth as unprocessable in the sections on processing specific documents.

    8. The return is unsigned.

    9. The return has only entity data and no other statements, attachments or signature by the taxpayer.

  3. During the processing of a return, if a correction cannot be made because of illegible or missing data, enter AC 3 and:

    IF: THEN:
    The name and/or address is illegible or missing and cannot be perfected through research Prepare Form 10886, Reject Routing Slip, and attach to the return, and route to Entity.
    The name and address are legible or can be corrected through research Correspond for missing or illegible data.

    Note:

    Never send an excise tax return back to the taxpayer.

  4. Reject Correction will do the following:

    IF: THEN:
    Perfection can be made through research, Field Office contact, or taxpayer contact Perfect any document entries which are erroneous, incomplete, or missing. Then, continue processing.
    Perfection is not possible
    1. Initiate action to have Document Locator Number (DLN), voided and return "Canceled to Files."

    2. If a remittance is involved, transfer to the "Unidentified Remittance File."

     
    EIN, Name Control, MFT, and Tax Period are present Input correct Transaction Code (TC) 599xx using CC FRM 49 and the following transaction codes:
    1. TC 599 Closing Code (cc) 17 Unprocessable return, or

    2. TC 599 Closing Code 18 Unprocessable return (more than ten weeks past the due date).

    Note:

    It is not necessary to input TC 599xx if the return is a timely filed "first" return, a substitute return prepared by Examination/Collections, when the EIN is newly assigned on IDRS, or if the return was processed through RPS, Remittance Processing System.

     
     
     
     

3.12.23.1.14  (01-01-2015)
♦ Use of Fax for Taxpayer Submissions ♦

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

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

  3. Code and Edit examiners will indicate the fax paragraph on the Form 3696, Correspondence Action Sheet, to advise taxpayers of the option to fax their response.

3.12.23.1.15  (01-01-2015)
Correspondence Imaging System (CIS) Returns

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

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

  3. Accounts Management is required to ensure "CIS" returns are complete for processing.

  4. Follow the correspondence instructions below for "CIS" returns.

    If: And: Then:
    The "CIS" return has a Form 13596, Reprocessing Returns, or Form 3893, Re-Entry Document Control, attached,

    Note:

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

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

    2. Void the DLN.

    3. Attach Form 4227, Intra-SC Reject or Routing Slip, to the return and route to Accounts Management to secure missing information.

    The "CIS" return does not have a Form 13596 or Form 3893 attached It is not a complete return (i.e., missing signature, schedules, or forms), Follow normal correspondence procedures.

3.12.23.1.16  (01-01-2015)
Pre Computed Penalty

  1. If a penalty other than a delinquency, late payment, failure to deposit (FTD), or failure to pay (e.g., negligence or fraud) is shown on a return, and the notation "3465 Prepared" , does not appear on the return, then computation of penalty must be done by Excise Operations. Route as follows:

    1. Photocopy return.

    2. Prepare Form 3465, Adjustment Request, to request an assessment of the penalty. Notate in remarks, "Photocopy - Do Not Process" .

    3. Enter CCC R on the return and error register if fraud penalty is assessed.

    4. Enter CCC X on the return and on the register to freeze the module from refunding or offsetting.

    5. Indicate on Form 3465 the portion of the remittance that is available for application to the penalty assessment if the return remittance includes an amount applicable to all or part of the penalty.

    6. Note on the return "3465 Prepared" .

    7. Prepare Form 3465 with remarks.

    8. Route Form 3465 with photocopy of the return to Excise Program area.

3.12.23.1.17  (01-01-2015)
Suppression of Erroneous Balance Due and Return Delinquency Notices - Reject/Suspense Correction

  1. For any returns received within the specified accounting period which cannot be processed by the Program Completion Date (PCD) as established in IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates, a TC 599 Closing Code (cc) 18 must be input (see IRM 3.30.123.2.4, Acceptable Inventory and Aged Criteria for Submission Processing Databases). This includes block deletes, nullified unpostable and rejects suspense/correction. Input of TC 599 - 18 does not need to be completed until 3 weeks prior to delinquency checks. However, checks can begin as soon as three weeks after the return’s PCD.

    Note:

    Paper registers must have the fact of filing (TC 599) input manually to prevent erroneous notices. Automatic generation if a TC 599 is done only by the Error Resolutions System (ERS).

  2. Whenever a return or payment must be withdrawn from the work flow, immediate consideration must be given to the possibility that erroneous balance due or return delinquency notices may be issued. This includes block deletes, nullified unpostable, and rejects suspense/correction.

  3. If notices would be sent erroneously, IDRS action must be input to the correct account by the first person identifying any of the following conditions:

    1. If the return is more than ten weeks past the due date, input CC FRM49 with TC 599, cc 18.

    2. Any subsequent payment transaction (Doc. Code 17, 18, 19) requires input of CC STAUP for six cycles.

    3. Annotate the document with "TC 599 cc 18" or "STAUP 6" in the upper margin.

      Note:

      If the document has already been annotated, no further action is required.

  4. A TC 599 is not necessary when:

    1. An Error Resolutions System (ERS) action Code is entered. A fact of filing (TC 599) is automatically generated on IDRS to prevent delinquency notice issuance; therefore, a TC 599 is not necessary.

    2. Returns processed through the ISRP/RPS. The payments have already posted as a TC 610 and this satisfies the BMF delinquency check.

      Exception:

      If the ISRP/RPS return is unprocessable because it has been misblocked and processed under the wrong MFT, Master File Transaction Code, input TC 599 cc 17, for the correct MFT.

    3. Returns processed through a Collection Function will show a TC 59X in the middle of the left margin.

3.12.23.1.18  (01-01-2015)
Internal Revenue Code (IRC) § 6020(b) Returns

  1. The Internal Revenue Service has the authority under IRC § 6020(b) to prepare a substitute for return from personal knowledge or from other information for any person who fails to file a return or files a false or fraudulent return. A Form 5604, Section 6020(b) Action Sheet, may be attached to a IRC § 6020(b) return.

  2. A substitute for return generated under IRC § 6020(b) must contain taxpayer identifying information (including taxpayer's name, address, and identifying number), must contain sufficient data to compute the taxpayer's liability, and must be signed by the Secretary of the Treasury or his delegate. A IRC § 6020(b) return is not necessarily contained in a single document, but may consist of several documents that together satisfy the three requirements.

  3. If the IRS does not have sufficient data to compute the taxpayer's tax liability, the IRS may instead prepare a "dummy return." A "dummy return" contains taxpayer identifying information only and is used to open up an account for the taxpayer on the Master File. A dummy return does not constitute a valid IRC § 6020(b) return unless it is accompanied by other documents that satisfy the three requirements listed above.

  4. You can identity IRC § 6020(b) returns by the presence of the notation "Return prepared under IRC § 6020(b)" . This notation is usually on or near the signature line. The return must be signed by the preparer (a revenue officer/agent or a Campus Collection/Examination manager) or must be attached to another document that is signed by the preparer.

    Note:

    FOR CSPC ONLY- If the return is not signed or is completely unprocessable, route the return to your Planning and Analysis analyst who will forward it to the National Office Compliance (Field) analyst.

  5. Process the return:

    1. Based on the information shown so that the return will settle on the figures submitted by the preparer. CCC 4 must be present on all IRC § 6020(b) returns. CCC C, R, or Z must not be used with CCC 4.

    2. If the preparer requests that no penalty be assessed, edit CCC D, and enter in the appropriate field.

    3. DO NOT correspond with the taxpayer for any unprocessable condition.

    4. DO NOT send a TPNC. If a TPNC would be necessary, reject the return with AC 3 and attach Form 10886, Reject Routing Slip, with an explanation.

3.12.23.1.19  (01-01-2015)
Statute Control Documents

  1. Any original return that has a due date or received date, whichever is later, (disregarding extensions of time to file) as much as two years and nine months before the current processing date constitutes a statute control document.

  2. An amended return which has a due date as much as two years and nine months before the current processing date constitutes a statute control document.

  3. All statute control documents must be cleared by the Statute Control Unit. See instructions under each document for correction procedures.

  4. See IRM 25.6.1, Statutes of Limitations Processes and Procedures, for further information.

3.12.23.1.20  (01-01-2015)
♦ CADE 2 ♦

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

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

  3. The new BMF campus cycles are:

    1. Campus Cycle: Thursday - Wednesday

    2. Master File Processing: Friday - Thursday

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

    4. Unpostables: New available Tuesday; Closing Tuesday

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

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

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

      Note:

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

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

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

      Note:

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

3.12.23.2  (01-01-2015)
Integrated Submission and Remittance Processing (ISRP) Error

  1. This is an error that has been identified by the ISRP edit run.

  2. The ISRP Error Indicator is printed to the left of the section number. This error will appear on the error register as follows (see Figure 3.12.23-1):

    ISRP Error Indicator: Description:
    " #1" - Split screen transmission. Key Verifier attempted to change 4 or more digits of TIN, or the Original Entry (OE) operator entered a required section as "missing" .
    "#2" - Invalid section ending point. Invalid section ending point.
    "#3" - Invalid field length. Invalid field length.
    "#4" - Questionable section. The ISRP operator input the same section more than once. The computer program will drop all duplicate sections and display the first one encountered on the error register.

    Figure 3.12.23-1
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. All fields of a section must be examined when this condition exists. If section 01 of a return is error coded, examine the tax based data section for errors to ensure the return data is for the taxpayer name in section 01.

  4. Even though one or more sections of a record are error coded, the validity and consistency checks necessary for the record are made for all sections. Be sure to:

    1. Line out each incorrect field.

    2. Enter the correct data. Use AC 6.

    3. Enter AC 7 if the record is correct as it appears on the Error Register.

3.12.23.3  (01-01-2015)
Terminus Error

  1. A terminus error results when:

    • A non numeric character appears in a numeric field, or

    • The format of the section is incorrect. See Figure 3.12.23-2.

    Figure 3.12.23-2
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  2. A terminus error is present and is shown as two asterisks printed to the left of the selection number.

  3. Correct a terminus error as follows:

    1. Assure that any fields containing data are correct. Correct or reject as applicable.

    2. Enter data in any blank fields that should contain data.

3.12.23.4  (01-01-2015)
Field Validity Error

  1. An invalid field is identified by an asterisk (*) before the field. See Figure 3.12.23-3.

    Figure 3.12.23-3
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  2. All fields will be printed on the Error Register, but if a math error is not present, there will be no underprint.

  3. Some fields must contain data, and if they are blank, they are invalid. To correct:

    1. Compare the return with the Error Register.

    2. Line out the incorrect field.

    3. Enter the correct data directly above the lined out data.

    4. Enter AC 6.

  4. There are some fields which have asterisks "on the raw only" for a cursory review. These may be cleared with AC 7 if there are no other errors present.

3.12.23.4.1  (01-01-2015)
Field 01 - A Remittance Received

  1. The field cannot be changed in error resolution.

  2. If the amount is incorrect:

    • Treat the return and error register as unprocessable

    • Reject with AC 3

    • Prepare Form 10886, Reject Routing Slip, to explain the error

  3. The Reject Function will prepare Form 3893, ReEntry Document Control, after corrective action has been taken.

3.12.23.4.1.1  (01-01-2015)
Field 01 - A Remittance With No Liability

  1. A non G coded remittance return with no tax liability will not post to the Master File (i.e., Unpostable Code 331).

    IF: THEN:
    There is a math error Resolve it by using AC 1 to send the appropriate TPNC
    There is no math error Transfer the payment of the return per IRM 3.12.38, BMF General Instructions, or IRM 21.5.8, Credit Transfers, for credit transfer procedures
    The RPS indicator is 2 and there is no remittance with the return Use AC 3 and send it to be reinput as nonremit
    A remittance amount is shown on a nontaxable return An asterisk will appear before this field
    An examination reveals that it is taxable Enter the missing amounts above the applicable fields; enter the amounts on the applicable line of the return if they are not already shown; and enter AC 6
    You are unable to determine the tax liability of the return Treat the return as unprocessable. Reject the return with AC 3. Rejects will research to determine the liability.

3.12.23.4.1.2  (01-01-2015)
Field 01 - A Excess Remittance Returns

  1. The Rejects Unit will determine the proper application of an excess remittance through research, correspondence, or other existing procedures.

  2. When Rejects determines that the remittance should be applied to a different tax class or module they will transfer the credit(s) per IRM 3.12.38, BMF General Instructions, or IRM 21.5.8, Credit Transfer. Remember to freeze the tax module from refunding or offsetting by generating a TC 570.

  3. To prevent the issuance of erroneous notices, follow normal procedures when a math error is also present, or when the indicated credit transfer will place the module in debit status.

    Note:

    Paper register must have the TC 599 or STAUP input manually to prevent erroneous notices. Automatic generation is done only by the Error Resolutions Systems (ERS).

  4. See IRM 3.12.38, BMF General Instructions, if additional information is required.

3.12.23.4.2  (01-01-2015)
Field 01-B Name Control

  1. This field must have 1 to 4 characters.

  2. If there are fewer than 4 characters every position must be accounted for by editing the number of blanks and encircling it.

3.12.23.4.2.1  (01-01-2015)
Field 01-B Correction Procedures

  1. A name control is invalid if:

    1. The 1st position is other than a letter or number.

    2. The 2nd, 3rd and 4th positions contain characters other than letters, numbers, ampersands (&), hyphens (-), or blanks.

    3. Any character follows a blank.

  2. Correct by lining through the entry in Field 01-B. Enter the correct name control above it. If the name control contains fewer than 4 characters enter and circle the number of positions remaining.

  3. When the transcribed name control does not match the name control for the transcribed EIN on the Entity Index File (EIF), there will be an underprint to Field 01-B. See IRM 3.12.23.4.9(1), Entity Underprint Code (EUC), for Field 01-O (Form 11-C) and 01-K (Form 730).

  4. The name control underprint will be removed when:

    1. The name control underprint and the entry in Field 01-B agree.

    2. The entity underprint field contains a "1" .

  5. When the name control on the return does not match the name control on the EIF, one of the following has occurred:

    1. The EIN was entered wrong, either by the taxpayer or the IRS.

    2. The name control was edited, or transcribed incorrectly.

    3. The name control on the EIF is incorrect.

    4. The taxpayer altered the order of the name on the return. Thus, the name control no longer agrees with the BMF.

    5. The taxpayer’s name changed.

    6. The taxpayer’s identity has changed. For example, a change from a partnership to a corporation.

  6. Compare the entries in Fields 01-B and 01-C to the name control and EIN on the return.

    IF: THEN:
    EIN on the return and the EIN in Field 01-C do not agree Correct Field 01-C to agree with the return
    The correct name control is in Field 01-B Enter a "1" in the entity underprint code field
    Name control in Field 01-B is not correct according to the information on the return Change Field 01-B
    The correction does not agree with the name control underprint Enter a "1" in the entity underprint code field
    The money has posted to the wrong module Send request to the Excise function to transfer the money.
    EIN on the return agrees with the EIN in Field 01-C Determine why the name control underprint is present
    Name control edited on the return agrees with the name control in Field 01-B
    1. Compare the name control underprint with Field 01-B and the name on the return.

    2. If the underprint is the correct name control and it was edited wrong on the document, change Field 01-B to agree with the underprint.

     
  7. If it is not an obvious error, request research using IDRS Command Codes:

    1. NAMEE, NAMEB, NAMES, and NAMEI for the name on the return.

    2. ENMOD or ENMODA for the EIN on the return.

    3. INOLE to research the entity module (name control, filing requirement(s), employment code(s) and addresses).

    4. BMFOL for the EIN on the return and/or EIN found on CC NAMEE, request the entity module from the BMF.

    IF: AND: THEN:
    Taxpayer used a Social Security Number (SSN) and you are researching for a name control, You find a cross reference EIN on CC INOLE Change the SSN to the EIN.
  8. Determine the correct EIN and name control from the research, and:

    IF: THEN:
    Another EIN is found for the entity on the return Change Field 01-C to the correct EIN and follow the procedures in (8) above
    EIN on the return is correct and the taxpayer rearranged the name(s) on the return, Change Field 01-B to agree with the name control on the EIF
    EIN on the return is correct but the name control on the EIF does not meet name control guidelines Reject with AC 3.
    Attach Form 10886, Reject Routing Slip, to forward the case along with any research to Entity Control
    EIN on the return and in Field 01-C agree, but the name control does not agree with the name on the EIF Attach Form 10886, Reject Routing Slip, to forward the case along with any research to Entity Control. See Figure 3.12.23-4.

    Figure 3.12.23-4

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  9. If the EIN is changed from the one the taxpayer used by more than 3 digits, issue Letter 3875C, Missing or Incorrect EIN on Return, as a non-suspense letter to the address on the return. Continue processing the return.

    Note:

    Obvious transposed or missing digits can be excluded as criteria for sending the Letter 3875C.

3.12.23.4.3  (01-01-2015)
Field 01-C Employer Identification Number (EIN)

  1. This field has nine positions. It is invalid if:

    • It is not nine numeric characters,

    • It is all nines or all zeros, or

    • The first two digits are 00, 07, 08, 09, 10, 12, 17, 18, 19, 20, 26, 27, 28, 29, 30, 32, 40, 49, 50, 60, 69, 70, 78, 79, 80, 89, or 90.

  2. If the EIN is invalid, take the following action:

    1. Compare with the EIN on the return, and correct the Error Register with AC 6, if the number has been incorrectly transcribed.

    2. Search the return and any attachments for a valid EIN if transcribed correctly. If one is found, enter the number on the return, and correct the Error Register with AC 6. If no valid EIN is found research IDRS or follow Campus procedures. Follow instructions above for RPS/Lockbox returns.

  3. If the EIN is changed from the one the taxpayer used by more than 3 digits, issue Letter 3875C as a non-suspense letter to the address on the return. Continue processing the return.

    Note:

    Obvious transposed or missing digits can be excluded as criteria for sending the Letter 3875C.

  4. Reject Correction:

    IF: THEN:
    Entity Control has found the correct EIN, Enter it in Field 01-C
    Entity Control has assigned an EIN,
    • Enter it in Field 01-C, enter the entity assignment date, in the CRD Field.

    • The date is found in the left hand margin with an edited "E" or "A" .

     

3.12.23.4.4  (01-01-2015)
Field 01 Tax Period

  1. The fields for Tax Period are:

    Form type: Field:
    Form 11-C 01-E
    Form 730 01-D
  2. Tax period information is listed under each individual return section.

    1. For Form 11-C, see IRM 3.12.23.8.3.2, Form 11-C Section 01 Field E - Tax Period.

    2. For Form 730, see IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period.

3.12.23.4.5  (01-01-2015)
Field 01 Computer Condition Codes

  1. The fields for CCC are:

    Form type: Field:
    Form 11-C 01-F
    Form 730 01-E
  2. Computer Condition Codes (CCC) are edited to the right of the name and address area of the document being examined.

  3. Below are the definitions of each CCC used on excise tax returns. For the invalid conditions.

    1. "D" - Reasonable Cause for Failure To Pay timely. (All Excise forms). CCC D is no longer a requirement of Code and Edit if a taxpayer requests a waiver for Failing to Pay Timely when the return is submitted. The Code and Edit examiner should send Letter 1382C, Penalty Removal Request Incomplete, which will inform the taxpayer of the proper procedure to follow to request abatement, if and when a penalty is assessed. For IRC § 6020(b) returns, continue to edit the Computer Condition Code, if the revenue officer designates that the filed return should not be liable for the assessment of a penalty for Failure To Pay timely. In cases of disaster, the examiners will be provided with coding procedures.

    2. "F" - Final Return (Form 11-C and Form 730). Enter the code on return and the error register if the taxpayer gives positive indication that this is the final return from the taxpayer, (e.g., "Final" , "Out of Business" , "No longer Liable" , etc.). Do not finalize if the taxpayer says "not wagering at this time" .

    3. "G" - Amended Return (All Excise forms). Enter the code on a return (either a photocopy or an original) which clearly indicates "Amended" , "Superseding" , "Tentative" ," Supplemental" , "Duplicate" , or any other statement that the return is not the first one filed for the same tax period. If the return has both a TC 59X (notated on the return by the Collection function), and no indication of a potential duplicate condition (e.g., "Duplicate" etc.) process the return as an original.

      Note:

      Conditions or restrictions have been placed on the use of the CCC G. One, the return must be perfected for Name Control, EIN, Tax Period, and Received Date, and two the CCC G code may not be used with any other CCCs except 3, U or W.

    4. "O" - Module Freeze (All Excise forms). Enter to indicate that a pre-settlement manual refund was made. If a completed Form 3753, Manual Refund Posting Voucher, Form 5792, Request for IDRS Generated Refund (IGR), or Form 12857, Refund Transfer Posting Voucher, is attached to the return, verify that the Name Control, EIN, and Tax Period on the return is the same as the data on the form. Research to determine if TC 840 (Manual Refund Transaction) has posted. If the TC 840 has posted, enter CCC O and continue processing. If the TC 840 has not posted, enter AC 344 in the left margin of the return to issue a manual refund.

    5. "R" - Reasonable Cause for Failure To File timely (All Excise forms). CCC R is no longer a requirement of Code and Edit examiners, if the taxpayer requests abatement for Failure To File timely when the return is submitted. The Code and Edit examiner should have sent Letter 1382C, which will inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. In the cases of disaster, the examiners will be provided with coding procedures.

    6. "U" - Unprocessable Return (All Excise forms). If present, reject the return with AC 3. Prepare a Form 10886, Reject Routing Slip, to reject within the Campus, to correspond with the taxpayer. See IRM 3.12.23.1.13, Unprocessable Returns, for further details.

    7. "W" - Return Cleared by Statute (All Excise forms). Enter if the return is stamped "Cleared by Statute" . This code will prevent the validity check on returns which are filed two years and nine months after the due date if it has been previously cleared by Statute Control. Also, enter the code on a statute return that bears a TC 59X indicating that the return was secured or prepared as a result of a Delinquency Investigation, whether or not cleared by Statute Control.

      Note:

      Enter CCC W only when the above conditions apply and the return processing date is two years and nine months after the return due date or received date, whichever is later and the "Cleared by Statute" stamp is less than 90 days old. If more than 90 days return to the Statute function.

    8. "X" - Refund Freeze Code (All Excise forms). Enter on the return and the register when the Rejects examiner determines that an excess remittance should be applied to a different tax, class or module, or when there is no reply to correspondence and a refund is due. This CCC will freeze the tax module from refunding or offsetting by generating a TC 570.

    9. "1" - Wagers Authorized by the laws of the State in which accepted. This designates that a lower amount of tax is due with Form 11-C. Use on Form 11-C when the tax is $50.00 per year.

    10. "3" - Correspondence Received Date. Enter when the taxpayer fails to respond to correspondence, or when the correspondence is undeliverable. Suppresses credit interest from generating at the Master File level.

    11. "4" - Return Prepared by IRS under IRC § 6020(b) (All Excise forms). If Collection employee prepares a return under IRC § 6020(b) after the taxpayer fails to file a return. It is signed by the revenue officer on or near the signature line mentioning IRC § 6020(b). Always enter this code on these returns.

      Note:

      DO NOT CORRESPOND WITH TAXPAYER. CCC 4 cannot be used with CCC R. IRM 3.12.23.1.17, IRC § 6020(b) Returns for further information.

    12. "7" - Reasonable Cause Statement Denied (All Excise forms) -This Computer Condition Code is not used by Code and Edit. Code and Edit examiners are no longer responsible to make penalty or interest determinations on taxpayer requests, except for returns indicating a disaster. In cases of a disaster, the examiners will be provided with coding procedures.

3.12.23.4.5.1  (01-01-2015)
CCC Chart

  1. The following chart shows the invalid conditions for these Computer Condition Codes on excise tax returns:

    CCC Form 730 Form 11-C
    D No longer a requirement for Code and Edit when the taxpayer requests abatement of Failure to Pay Timely penalty when the return is submitted. Instead, send a Letter 1382C letter (if Code and Edit has not done so) to inform the taxpayer of the proper procedure to follow to request the abatement, if, and when a penalty is assessed.
    Examiners will be provided with proper procedures, when such a penalty is due to a declared disaster.
    No longer a requirement for Code and Edit when the taxpayer requests abatement of Failure to Pay Timely penalty when the return is submitted. Instead, send a Letter 1382C letter (if Code and Edit has not done so) to inform the taxpayer of the proper procedure to follow to request the abatement, if and when a penalty is assessed.
    Examiners will be provided with proper procedures, when such a penalty is due to a declared disaster.
    F No validity checks No validity checks
    G Date is not present Date is not present
    Extraneous fields present Extraneous fields present
    CCCs other than 3, W or U are present CCCs other than 3, W or U are present
    O No validity checks No validity checks
    U Present on correction processing Present on correction processing
    W Must be present if processing date is more than 2 years and 9 months after the Return Due Date on "G" coded returns. Must be present if processing date is more than 2 years and 9 months after the Return Due Date on "G" coded returns.
    On all other returns, if it is more than 2 years and 9 months after the later of the Return Due Date or Received Date, or the processing date must be equal to or greater than 2 years after Return Due Date. On all other returns, if it is more than 2 years and 9 months after the later of the Return Due Date or Received Date, or the processing date must be equal to or greater than 2 years after Return Due Date.
    X No validity checks No validity checks
    1 N/A Tax period is prior to 8307
    3 CRD is prior to received date. CRD is prior to received date.
    CRD is later than processing date. CRD is later than processing date.

3.12.23.4.6  (01-01-2015)
Field 01- Received Date

  1. The fields for Received Date are:

    Form type field
    Form 11-C 01-G
    Form 730 01-F
  2. The Received Date Field is invalid if:

    1. The format is not in YYYYMMDD and the month is other than 01 through 12.

    2. The day is other than 01 through 31 for the months 01, 03, 05, 07, 08, 10, or 12; 01-30 for the months 04, 06, 09, or 11: 01-28 for the month 02; or 01-29 for month 02 during leap year.

    3. It is later than the processing date.

    4. An alpha, special character, or blank is present in the field.

    5. It is blank with a CCC G, R, or D.

    6. The Penalty and Interest CCC is 1; and the Received Date is blank or greater than the due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or less than the due date.

    7. It is blank and the processing date is greater than the year-month of the tax period by more than 6 months. This condition is valid on the correction run (except on Form 730).

    8. Not in valid YYYYMMDD format.

    9. It is not present on Form 11-C and Form 730.

  3. If the Received Date Field is invalid, refer to the return and attachments to determine the correct Received Date. Determine the Received Date in the order listed below:

    • Earliest IRS stamped received date

    • Earliest legible postmark (e.g., U.S. Post Office, Foreign Postmark, or Private Delivery Service)

    • Service Center Automated Mail Processing System (SCAMPS) digital date.

    • Revenue Officer’s or other IRS official's signature date

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

    • DLN (Document Locator Number) Julian Date minus 10 days.

    • Current Date minus 10 days.

    Note:

    On early filed Form 11-C only: if the received date on Form 11-C is prior to the beginning of tax period, use the return due date as the received date.

3.12.23.4.6.1  (01-01-2015)
Postmarks

  1. Postmarks are used to determine the timeliness of filing IRS returns. The following guidelines and IRM figures are used to determine if postmarks have been affixed by a U.S. Postal facility, Foreign Postal facility or have been privately metered. ONLY LEGIBLE official postmark dates or Postage Validation Imprinter (PVI) Labels are accepted as proof of filing timely.

  2. Valid Samples of PVI Labels are:

    1. Affixed to letters that are first and third class, certified and registered.

    2. Used on small parcels, rolls and ordinary parcels.

    3. Affixed to flats mailed at single piece rate; both priority and third class.

  3. Metered Postmarks

    1. Arrows indicate easily identified official markings.

    2. No official markings.

  4. Using AC 6, line out the Received Date on the register and enter the correct date above the lined out date. See Figure 3.12.23-5.

    If: Then:
    The received date on Form 11-C is earlier than the due date of the return Use the due date of the return as the IRS received date.
    The received date on Form 730 is prior to the tax period ending See IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period, for determining the correct tax period.

    Figure 3.12.23-5
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  5. If the received date precedes the due date of the return (except Form 730) use the due date of the return as the IRS received date. For additional correction instructions, see the instructions for the field under each form.

3.12.23.4.6.2  (01-01-2015)
Returns Due Date Chart

  1. The following chart shows return due dates for the forms covered in this excise tax handbook.

    Monthly Returns - Form 730 Wagers Received Return Due Date

    Note:

    Chart does not take into account the due date falling on a Saturday, Sunday, or legal holiday.

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      January February 28 ≡ ≡ ≡ ≡
      February March 31 ≡ ≡ ≡ ≡ ≡ ≡
      March April 30 ≡ ≡ ≡ ≡ ≡
      April May 31 ≡ ≡ ≡ ≡
      May June 30 ≡ ≡ ≡
      June July 31 ≡ ≡ ≡ ≡ ≡
      July August 31 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      August September 30 ≡ ≡ ≡ ≡
      September October 31 ≡ ≡ ≡ ≡ ≡ ≡ ≡
      October November 30 ≡ ≡ ≡ ≡ ≡ ≡
      November December 31 ≡ ≡ ≡ ≡ ≡ ≡ ≡
      December January 31 ≡ ≡ ≡ ≡ ≡ ≡
    Form 11-C Annual Return July 1 ≡ ≡ ≡ ≡ ≡ ≡
      First Return and application Before receiving wagers.
    See IRM 3.12.23.8.1, Due Dates and Types of Form 11-C Returns.
    ≡ ≡ ≡ ≡ ≡ ≡
      Supplemental Returns 30 days after change.
    See IRM 3.12.23.8.1, Due Dates and Types of Form 11-C Returns.
    ≡ ≡ ≡

3.12.23.4.7  (01-01-2015)
Field 01 Penalty and Interest Code (P/I Code)

  1. The fields for P/I Codes are:

    Form type field
    Form 11-C 01-H
    Form 730 01-G
  2. This field is invalid if it is:

    1. Other than blank or "1" .

    2. "1" and the received date is not present.

    3. "1" and the received date is not within the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. To correct, refer to the received date and tax period on the return and the chart in IRM 3.12.23.4.6.2, Returns Due Date Chart, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    IF: THEN:
    The taxpayer has not computed penalty or interest, or if the received date is not within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Blank the field 01
    The taxpayer has computed penalty and interest ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Enter a "1" in field 01. This will cause the computer to compute penalty and interest.

    2. Enter the received date in Field 01-F for Form 730 and Field 01-G for Form 11-C if it is not present.

3.12.23.4.8  (01-01-2015)
Correspondence Received Date (CRD)

  1. The CRD Field is found in the following fields depending on the return. Code and Edit is no longer required to edit the CRD.

    Form CRD Field
    11-C 01-N
    730 01-J
  2. The Correspondence Received Date (CRD) is invalid if:

    1. It is not numeric.

    2. Not in valid YYYYMMDD format.

    3. It is a 9.

    4. This date and a CCC 3 are both present.

    5. It is later than the processing date.

    6. It is not later than the received date.

3.12.23.4.9  (01-01-2015)
Entity Underprint Code

  1. The field is called the Entity Underprint Code (EUC) field. It will be in section 01 immediately before the TPNC, Taxpayer Notice Code, Field on the error register.

    Form Type Field IRM Reference
    Form 11-C Field 01-O Reference: IRM 3.12.23.8.3.10, Form 11-C Section 01 Field N-O.
    Form 730 Field 01-K Reference: IRM 3.12.23.7.2.4, Form 730 Corrections Section 01 Field G-H-I-J-K.
  2. In order to clear a record to good tape:

    IF: THEN:
    There is no name control underprint, Leave the field blank.
    You are accepting the name control as transcribed, Enter a "1" .
  3. In all cases where there is an underprint of name control, the record will not go to good tape until the applicable code is in the EUC field, or the name control has been corrected to match the underprint.

3.12.23.5  (01-01-2015)
Address Section 02 - All Forms

  1. This section contains address information. Section 02 on Form 730 and Form 11-C will be present when a change of address has been entered.

  2. Fields A through F are variable length and it is not necessary to account for every position allotted.

  3. This section should not be present on returns with CCC G.

  4. ACs 4, 5, and 6 are valid.

  5. This section should be present if a return has a street, P.O. Box Number, city, state, or ZIP code change.

    IF: THEN:
    A foreign address is present Check IDRS CC INOLE to see if address is the same.
    The foreign address is the same Take no action.
    The foreign address is different Update address on ENMOD.
    CCC G is present and Section 02 contains information Enter AC 4 to delete Section 02

3.12.23.5.1  (01-01-2015)
Field 02A - "IN-CARE-OF" NAME LINE

  1. Description - Field 02A is located in the Entity Section of both Form 730 and Form 11-C.

  2. Valid Condition - Field 02A has 35 positions and the valid characters are alpha, numeric, ampersand, dash or slash.

    Note:

    The first position must be alpha or numeric

  3. Invalid Condition - Field 02A is invalid if:

    • The first position is % (percent) and the second position is not blank, or

    • The first position is blank, or

    • The first position is not alpha or numeric, or

    • There are two consecutive blanks between significant characters

  4. Correction Procedures:

    • Correct coding and transcription errors.

    IF: THEN:
    A blank is in the first position
    1. Line through field.

    2. Enter the in-care-of name beginning with an alpha or numeric in Field 02A.

    First position is not alpha or numeric
    1. Line through field.

    2. Verify in-care-of name on the return.

    3. Enter the in-care-of name beginning with an alpha or numeric in Field 02A.

    Two consecutive blanks present between significant characters
    1. Line through field.

    2. Enter the in-care-of name beginning with an alpha or numeric in Field 02A.

3.12.23.5.2  (01-01-2015)
Field 02B - Foreign Address- General information

  1. For Form 730 and Form 11-C, Cincinnati Submission Processing Campus (CSPC) will process excise foreign/international addresses and U.S. Possessions returns.

  2. The determination of a foreign address is based only on the address of the entity. A foreign (international) address is any address that is not in one of the 50 states or the District of Columbia.

    U.S. Possession Abbreviation U.S. Possession Abbreviation
    American Samoa AS N. Mariana Islands MP
    Federated States of Micronesia FM Palau PW
    Guam GU Puerto Rico PR
    Marshall Islands MH U.S. Virgin Islands VI
  3. An Army Post Office (APO), Diplomatic Post Office (DPO), or Fleet Post Office (FPO) is not a foreign address. The Postal Service established new address requirements for APO/DPO/FPO addresses. If an address appears in the old APO/DPO/FPO format, such as "APO New York, NY 091XX" , convert to the new State code based on the ZIP Code as follows: "APO AE 091XX" .

    ZIP Code State Code
    340 AA
    090 - 098 AE
    962 - 966 AP
  4. All excise returns with a foreign address must be shipped to CSPC.

    1. SSPND 650.

    2. Attach Form 10886 with the notation "FORWARD TO CSPC" .

    3. Prepare letter 86C to inform the taxpayer that the return has been sent to Cincinnati.

3.12.23.5.2.1  (01-01-2015)
Foreign Addresses (Cincinnati Submission Processing Campus (CSPC) Only)

  1. A foreign address will contain:

    • Street Address or P.O. Box

    • City or town name

    • Other principal subdivision (i.e., province, state, county, etc.)

    • Postal code, if present

    • Foreign country

  2. Returns with addresses in the U.S. Possessions are considered to be a foreign return for processing purposes and are entered in the same way as domestic addresses.

    1. A two-character alpha code must be entered in Field 02-B for the possession name.

      U.S. Possession Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      Virgin Islands (U.S.) VI
    2. A ZIP Code must be present.

3.12.23.5.2.2  (01-01-2015)
Field 02-B Foreign Address - Processing

  1. Description - Field 02-B is located in the Entity Section of the return.

    1. This field will contain an entry when a foreign address is present on the return.

    2. Field 02-B should not be present on a return with CCC "G" .

  2. Valid Condition - Valid characters are alpha, numeric and special characters.

  3. Invalid Condition - Field 2-B will error with an asterisk when any of these conditions are present:

    • The first position is blank

    • Any character follows two consecutive blanks

    • There are more than 35 characters present in the field.

    Note:

    ISRP is instructed to input a pound sign (#) as the 35th character if there are more than 35 characters present for this field on the return.

  4. Correction Procedures: Correct all coding and transcription errors.

    IF: THEN:
    Field 02-B is present Ensure that the field 02-B contains a foreign country code.
    A foreign address is not present on the return Continue processing the return.
  5. If Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached to the return, compare the name and address information on the Form 8822 or Form 8822-B to the return.

    IF: THEN:
    The information is the same Take no action and continue processing.
    The information is different
    1. Detach Form 8822/Form 8822-B.

    2. Route to Entity Control on Form 10886. Reject Routing Slip, or follow local procedures.

    3. Notate on Form 10886, "CHANGE OF ADDRESS PER FORM 8822" .

    Note:

    The lead tax examiner is required to batch Form 8822/Form 8822-B daily and hand carry to Entity Control for expedited processing.


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