3.12.106  Estate Tax Returns - Paper Correction Processing

Manual Transmittal

October 30, 2014

Purpose

(1) This transmits revised IRM 3.12.106, Error Resolution - Estate and Gift Tax Returns - Paper Correction Processing.

Material Changes

(1) IRM 3.12.106.1.18, Updated for BMF consistency.

(2) IRM 3.12.106.2.1.2(1) and (4), Changed reference to Form 4227 to Form 10886 per CD request.

(3) IRM 3.12.106.2.1.3.2(5)c, Changed instruction to send to Entity function for input of TC 000 per CD request.

(4) IRM 3.12.106.2.1.4(4)c, Added instruction to reject using AC 3 to Entity Control per CD request.

(5) IRM 3.12.106.2.3(5)b, Changed reference to Form 4227 to Form 10886 per CD request.

(6) IRM 3.12.106.2.3.8(4), Added 2014 tax rate to table.

(7) IRM 3.12.106.3.1.2(2) and (6)b, Changed reference to Form 4227 to Form 10886 per CD request.

(8) IRM 3.12.106.3.3.1(3), Added 2014 tax rate to table.

(9) Updated IRM references throughout the IRM.

(10) Made various editorial changes throughout the IRM including the updating of tax years and money amounts.

(11) Revised figures and exhibits.

Effect on Other Documents

IRM 3.12.106, dated November 12, 2013 (effective January 1, 2014), is superseded.

Audience

Wage and Investment (W&I), Submission Processing - Input Correction Operation, Error Resolution employees

Effective Date

(01-01-2015)

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

3.12.106.1  (01-01-2015)
General

  1. This sub-section provides descriptions of the purpose, scope, abbreviations, and definition of terms used in processing of certain Form 706 series returns.

3.12.106.1.1  (01-01-2015)
Purpose and Scope

  1. This Section provides instructions for correcting error and reject registers for estate, gift, and generation-skipping tax returns. Records appear on registers because of validity, consistency, math, and/or input errors.

  2. These are instructions used for correcting paper registers of the following Business Master File (BMF) returns:

    • Form 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions

    • Form 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations

  3. If general and specific instructions conflict, always follow specific instructions.

  4. It may be necessary to refer at times to instructions in the following IRMs:

    • IRM 3.11.106 - Returns and Document Analysis, Estate and Gift Tax Returns

    • IRM 3.12.38 - Error Resolution, BMF General Instructions

    • IRM 3.24.106 - ISRP System, Estate Tax Returns

  5. Refer to IRM 3.12.263, Error Resolution, Estate and Gift Tax Returns, for correction information regarding the following forms:

    • Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return

    • Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return

    • Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return

3.12.106.1.2  (01-01-2015)
General Requirements - Forms 706 series

  1. Instructions provided in the following are to be used in conjunction with the IRM:

    Form 706-GS(D) IRM 3.11.106.17, Processing Form 706-GS(D), Generation-Skipping Transfer Tax For Distribution
    Form 706-GS(D-1) IRM 3.11.106.18, Processing Form 706-GS(D-1), Notification of Distribution From a Generation-Skipping Trust (INFORMATION RETURN ONLY)
    Form 706-GS(T) IRM 3.11.106.19, Processing Form 706-GS(T), Generation-Skipping Transfer Tax Return For Terminations

3.12.106.1.3  (01-01-2015)
♦Customer Account Data Engine (CADE) 2♦

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

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

  3. 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 timeframes are outlined as follows:

    1. Transactions will be viewable using CFOL (Corporate Files On-line) command codes on Saturday following the weekly Master File processing run on Thursday.

    2. Transactions will be viewable as posted transactions using IDRS (Integrated Data Retrieval System) 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 (Individual Master File) transactions, the following values for "DD" are defined:

    1. 01 = Friday

    2. 02 = Monday

    3. 03 = Tuesday

    4. 04 = Wednesday

    5. 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.

3.12.106.1.4  (01-01-2015)
Glossary of Abbreviations

  1. Abbreviations listed below are used to process gift and generation-skipping tax returns:

    Abbreviation Definition
    AIMS Audit Information Management System
    ADP Automatic Data Processing
    BMF Business Master File
    CAF Centralized Authorization File
    DLN Document Locator Number
    DSSN Donor's Social Security Number
    DOD Date of Death
    EIF Entity Index File
    EIN Employer Identification Number
    IDRS Integrated Data Retrieval System
    IRC Internal Revenue Code
    IRM Internal Revenue Manual
    ISRP Integrated Submission and Remittance Processing
    NAP National Accounts Profile
    POA Power of Attorney
    PSPC Philadelphia Submission Processing Center
    PSSN Primary Social Security Number
    SPC Submission Processing Center
    SSN Social Security Number
    SSSN Secondary Social Security Number
    TAS Taxpayer Advocate Service
    TIA Tax Information Authorization
    TIN Taxpayer Identification Number
    TPNC Taxpayer Notice Code
    TRS Transcript Research System

3.12.106.1.5  (01-01-2015)
Definitions

  1. Error Register - When the computer finds an error (consistency, math verification or validity) in the data input for a return, it generates an error register. It is a printed document which shows sections and fields corresponding to the information entered into the computer.

  2. Section - A portion of the return. Each section is numbered with a two-digit code beginning with 01.

  3. Field - An item in a section on the return, usually a line on the return.

  4. Alpha Field Designator - The first field of each section is designated the "A" field. Subsequent fields are designated "B" , "C" , "D" , etc.

  5. Field Breakers - A symbol that shows the end of a field. By itself, it means there was no data entered into that field.

    1. Sometimes, a "+" (plus) or "-" (minus) is used for the field breaker to show that an amount is positive or negative. If it is necessary to change a field from a positive to a negative, enter a pound sign (#) at the end of the amount to tell ISRP to input the amount as negative. To change a field from negative to positive, use a comma (,) to alert ISRP.

    2. A fixed length field does not have a field breaker. All spaces must be accounted for. When correcting a fixed length field, show the number of blanks to be used by writing and circling the number above the field.

  6. Document Locator Number (DLN) - A DLN is given to each document processed in the ADP System and is used to find the document. We distinguish between different types of returns by giving them specific tax classes and document codes.

3.12.106.1.6  (01-01-2015)
Action Code (AC)

  1. An Action Code (AC) tells the computer what to do next. Every correction made on the error register has a corresponding AC edited to the left of a particular section that needs to be corrected. ACs 0, 1, 3 and 7 may not be used at the same time as any other AC.

  2. Enter ACs 0, 1, 2, 3 and 7 on the register to the left of Section 01. See Figure 3.12.106-1.

    Figure 3.12.106-1

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. Enter ACs 4, 5, and 6 to the left of the appropriate section number. See Figure 3.12.106-2.

    Figure 3.12.106-2

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

3.12.106.1.6.1  (01-01-2015)
AC 0

  1. AC 0 - Accept taxpayer's or examiner's figures.

    1. Use only when data on the register is correct.

    2. Use when computer's computation is to be disregarded because the taxpayer's or examiner's figures are correct.

3.12.106.1.6.2  (01-01-2015)
AC 1

  1. AC 1 - Taxpayer math error above tolerance.

    1. Correct validity errors before using this code.

    2. Use when the data in a record has been transcribed correctly, but the taxpayer made an error on the return and the computer's tax computation should be accepted.

    3. Use a Taxpayer Notice Code (TPNC) when a math error is present which affects the tax liability or settlement amounts. Enter the TPNC to the right of AC 1, preceded by a dash (-). Use a maximum of three TPNCs per return. The codes are covered in the specific subsections of this Section for each return being processed. See IRM 3.12.106.2.1.13 for the list of TPNCs for Form 706-GS(D) and IRM 3.12.106.3.1.13 for Form 706-GS(T). Also see Figure 3.12.106-3.

      Figure 3.12.106-3

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

3.12.106.1.6.3  (01-01-2015)
AC 2 (Information Only)

  1. AC 2 - Delete document from campus processing (Rejects Only).

    1. Used by Rejects to delete a record from campus processing.

      Note:

      AC 2 is NOT used in the Form 706-GS(D) or Form 706-GS(T) correction programs.

3.12.106.1.6.4  (01-01-2015)
AC 3

  1. AC 3 - Document is unprocessable.

    1. Use to transfer record from error register to reject register so Reject function can resolve the unprocessable condition.

    2. When AC 3 is used, attach Form 3696, Correspondence Action Sheet, or Form 4227, Intra-SC Reject or Routing Slip, to the return, noting the reason for the action taken.

3.12.106.1.6.5  (01-01-2015)
AC 4

  1. AC 4 - Delete any section except section 01.

    1. Use to delete section from record on the register.

      Reminder:

      Section 01 cannot be deleted.

    2. A generated missing section (present but no entries) cannot be deleted by using AC 4. See IRM 3.12.106.1.8.4, Missing Section.

3.12.106.1.6.6  (01-01-2015)
AC 5

  1. AC 5 - Add sections other than 01.

    1. Use to add section to record on the register or to correct a section on the record that was computer generated.

    2. Enter alpha field designator followed by field data and field breaker for all significant fields.

    3. If field has no data, do not enter alpha field designator, field data, or field breaker.

3.12.106.1.6.7  (01-01-2015)
AC 6

  1. AC 6 - Change field(s) in any section.

    1. Use to correct any field except remittance and TPNCs. Line out incorrect data and enter correct data above.

    2. Correct any number of fields during one correction cycle.

    3. When blanking or correcting a fixed length field, always enter the encircled number of characters prescribed for the field which does not contain significant data.

      Example:

      If the prescribed number of characters for the field is 7 and only 3 significant characters will be input, encircle 4 to show number of blanks. If the entire field will be blank, encircle 7.

3.12.106.1.6.8  (01-01-2015)
AC 7

  1. AC 7 - No change required.

    1. Use to clear a record which has been sent to the register for one-time review.

    2. Use to clear a record which will be revalidated as it currently exists.

3.12.106.1.7  (01-01-2015)
Error Correction Rules

  1. Error Resolution tax examiners make corrections on the returns and registers. Make certain all entries are legible.

  2. Returns Secured or Prepared by Examination Division. To audit a taxpayer who has not filed an original return, Examination Division occasionally prepares returns or secures an unsigned copy from the taxpayer. The return is submitted for computer processing as an original. It will precede an AIMS (Audit Information Management System) adjustment to the BMF. It is marked SUBSTITUTE or COPY SECURED BY EXAMINATION DIVISION and may have audit papers attached. Forms you may see attached are: Form 3198, Special Handling Notice for Examination Case Processing, and Form 3233, Report of Gift Tax Examination.

    1. If there is a math error and taxpayer correspondence is required, AC 3 to Rejects for unprocessable conditions. Rejects will void the document from the system and send it to Examination Division for further processing.

    2. DO NOT correspond with the taxpayer or executor for clarification or additional information.

3.12.106.1.8  (01-01-2015)
Validity Errors

  1. There are three general types of errors that will cause a record to print on the error register:

    • Field Validity Error

    • Section Validity Error

    • Math Error

3.12.106.1.8.1  (01-01-2015)
Integrated Submission and Remittance Processing (ISRP) Error

  1. The Error Indicator prints to the left of the section number and appears on the register as follows:

    1. "#1" - Split screen transmission. Key Verifier attempted to change the check digit or four or more digits in the TIN or Original Entry Operator entered required section as "missing" .

    2. "#3" - Invalid Section ending point.

    3. "#4" - Invalid field length (e.g., too many digits entered for field). See Figure 3.12.106-4.

    4. "#5" - Operator inputs the same section more than once. Computer program drops all duplicate sections and displays on the error register the first section encountered.

    Figure 3.12.106-4

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  2. To correct this error, perform the following steps:

    1. Compare the return data with the register fields.

    2. Line out each incorrect field and enter the correct data immediately above the lined out data.

    3. Enter AC 6.

  3. If no error is found, use AC 7 to clear the register.

3.12.106.1.8.2  (01-01-2015)
Extraneous Section

  1. A pound sign (#) indicator prints to the left of the section number if unnecessary section appears.

  2. To fix this error, delete section using AC 4.

3.12.106.1.8.3  (01-01-2015)
Terminus Error

  1. Double asterisk (**) indicator prints to the left of the section number if alpha data is entered in numeric field or vice versa.

  2. To correct this error:

    1. Look at all fields of the section.

    2. Line out each incorrect field and enter the correct data immediately above the lined out data.

    3. Enter AC 6. See Figure 3.12.106-5.

      Figure 3.12.106-5

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

3.12.106.1.8.4  (01-01-2015)
Missing Section

  1. An asterisk (*) indicator prints to the left of the section number when a required section was not transcribed.

  2. To correct this error:

    1. Enter the necessary information.

    2. Enter AC 6. See Figure 3.12.106-6.

      Figure 3.12.106-6

      This image is too large to be displayed in the current screen. Please click the link to view the image.
    3. A generated missing section (present with no entries) cannot be deleted by using AC 4. If no corrections to the register are necessary, use AC 7 to clear it.

3.12.106.1.9  (01-01-2015)
Re-entry Documents

  1. This sub-section defines re-entry documents and provides instructions for their control and processing.

3.12.106.1.9.1  (01-01-2015)
Definitions of Re-entry Documents

  1. The following definitions describe re-entry documents:

    1. A document unprocessable after blocking and numbering, but which becomes processable after making corrections or additions.

      Note:

      A document discovered to be unprocessable before it was blocked and numbered but will not be considered to be a re-entry document when it is input after correction.

    2. Document did not post to Master File on input, but now is processable if re-entered.

    3. Document posted to wrong account or module on input and will post to correct account or module if re-entered.

3.12.106.1.9.2  (01-01-2015)
Identification of Re-entry Documents

  1. Re-entry documents can be identified by the presence of Computer Condition Codes (CCC) "U" , and/or Form 4227 on the document when it is received in Document Perfection, or by the presence of a Re-entry Document Control, Form 3893. Since June 2007, documents processed previously at Philadelphia Submission Processing Campus (PSPC) are processed at the Cincinnati Submission Processing Campus (CSPC).

3.12.106.1.9.3  (01-01-2015)
Processing of Re-entry Documents

  1. If a re-entry return is unprocessable, use AC 3 and route to the originating area on Form 4227 following local procedures. See IRM 3.12.106.1.6.4, AC 3, for unprocessable conditions.

3.12.106.1.10  (01-01-2015)
Correction of Invalid Correction Attempt

  1. "AA" will print to the right of the batch number on the loop register when the computer indicates an invalid correction attempt.

    1. Correct register as if no attempt has been made to correct it before. You should examine the prior correction.

    2. If all fields are correct as transcribed, use AC 7.

3.12.106.1.11  (01-01-2015)
Statute Control

  1. Any return with a received date that is 2 years and 9 months or more after the return due date is a potential statute control return.

  2. Treat all statute control documents as unprocessable.

    1. Reject documents by using AC 3.

    2. Prepare Form 4227 and route return to Statute Control Unit. See Figure 3.12.106-7.

    Figure 3.12.106-7

    This image is too large to be displayed in the current screen. Please click the link to view the image.
  3. Enter CCC "W" if the return is stamped "Cleared by Statute" , so checks will not be made on returns already cleared.

  4. If it appears that a rejected document will not reach the Statute Control Unit in time for clearance, photocopy page one of the return, stamp photocopy "Photocopy-Do Not Process" , and expedite, forwarding to the Statute Control Unit using local procedures.

  5. If the document was received timely, and the return is being processed within 34 months of the due date of the original return, delete CCC "W" whether or not Statute Control has cleared the document.

3.12.106.1.11.1  (01-01-2015)
Non "G" Coded Returns

  1. If there is a return that has not cleared the Statute Control Unit with a current processing date that is two years and nine months or more after the later of the original due date or the received date, reject the return, using AC 3. Prepare Form 4227 and route the return to the Statute Control Unit.

  2. The tax period (Field 01-E) will asterisk for Statute. Check if the processing date is two years and nine months after the return due date or received date, whichever is later, and CCC "W" is not present.

3.12.106.1.11.2  (01-01-2015)
CCC "G" Returns

  1. If there is a return that has not cleared the Statute Control Unit with a current processing date that is two years and nine months or more after the later of the original due date or the received date, reject the return, using AC 3. Prepare Form 4227 and route the return to the Statute Control Unit.

  2. On both non-CCC "G" and CCC "G" coded returns, both the tax period (Field 01-E) and CCC field (Field 01-F) will asterisk if the processing date is less than two years after the return due date and a CCC "W" is present.

3.12.106.1.11.3  (01-01-2015)
Returns Secured or Prepared by Examination Division

  1. Examination Division may prepare dummy returns or secure unsigned copies from taxpayers to use as a source document to complete an examination case. The return is submitted for computer processing as an original. It will precede an AIMS adjustment to the BMF. It is marked "SUBSTITUTE OR COPY SECURED BY EXAMINATION DIVISION" and may have audit papers attached. Forms you may see attached are: Form 3198, Special Handling Notice for Examination Case Processing, and Form 3233, Report of Gift Tax Examination. DO NOT correspond with taxpayer or executor for clarification or additional information. Send to Examination for further instructions. If Statute Control Date has expired, do not send to Statute Control Unit. Enter CCC "W" .

3.12.106.1.12  (01-01-2015)
Accounts Receivable Guidelines

  1. To keep the amount owed to the IRS down, we must minimize the number of unresolved large dollar debit and credit modules/issues in inventory. Therefore, consistent with prevailing guidelines and other processing timeliness requirements (i.e., first-in, first-out), resolve all modules/issues with balances of $25,000 or more as soon as possible.

  2. Each region annually identifies complex BMF entities such as large dollar accounts, federal agencies, or entities which have a history of complex issues. A "Large Complex Corporation" indicator will be set on the BMF to alert the Submission Processing Centers when a notice has been generated on these accounts. This replaces the previous "L" Coded Corporate Processing activity.

  3. A "Large Corp CD" indicator will appear on IDRS, and all applicable Master File transcripts, under ENMOD and TXMOD. The CD field will be overlaid by the campus location code (i.e., LARGE CORP 17). These notices will be routed to the Technical Unit (or designated function) for review before being sent to the taxpayer. When this indicator is identified, employees should coordinate their case with the Technical Unit (or designated function) prior to taking action.

  4. The Service is also monitoring large dollar cases identified on the Accounts Receivable "Large Dollar Trend Record" (LDTR) report. Cases listed on the LDTR report may include the Large Complex Corporation code, so the region may contact the Technical Unit (or designated function) to determine the current status of the account/module.

3.12.106.1.13  (01-01-2015)
Business Master File On-Line (BMFOL) and Business Return View (BRTVU)

  1. You can research Master File accounts and return data with Business Master File On-Line (BMFOL) and Business Return View (BRTVU).

  2. Since Master File does not carry all information available on the IDRS screen displays (IDRS notice status, case control information, pending transactions, etc.), you must research IDRS using BMFOL or BRTVU. Also, if you cannot use BMFOL or BRTVU, then use IDRS input command codes that will cause a change to Master File.

  3. Use these command codes to research entity and/or tax data which may not be available on IDRS.

  4. BMFOL provides screen displays from BMF data based on an input definer code. For more information on screen displays and applicable definer codes, see IRM 2.3, IDRS Terminal Responses, and the 2545 training series.

  5. BRTVU gets data from the Return Transaction File (RTF). It will give you all edited, transcribed, and error corrected data from data entry lines of related forms and schedules filed in the current processing year including late filed returns and two prior years. BRTVU needs a definer to get a particular screen and has a summary screen for each return.

3.12.106.1.13.1  (01-01-2015)
CFOL (Corporate Files On-Line) Command Codes

  1. IRPTR (Information Returns Program Transcript File On Line) - provides two payee addresses if present, filing status, one payer name and address, cross reference information, and a summary of up to 36 IRP (Information Returns Program) money amounts by income type.

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

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

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

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

  6. NAMEI is used to research for missing or invalid SSNs, names and addresses.

  7. NAMEB is used to research for missing or invalid EINs, business names and addresses.

  8. PMFOL (Payer Master File On-Line) - is a research tool which provides information from the Payer Master File (PMF). The summary screen displays all dollar amounts, withholding of income tax, number of documents filed by payer and by document type (i.e., Form 1099 series). It contains the Annual Summary and Transmittal of information returns (Form 1096) filed, and the civil penalties associated with each document type. CC PMFOL provides access to Form W-3, Transmittal of Wage and Tax Statements, data (unpostable data only) beginning with tax year 1990 submissions.

3.12.106.1.14  (01-01-2015)
Forms List

  1. Forms listed below are used or referred to in estate, gift, and generation-skipping tax return processing:

    Form Title
    56 Notice Concerning Fiduciary Relationship
    706-GS(D) Generation-Skipping Transfer Tax Return for Distributions
    706-GS(D-1) Notification of Distribution from a Generation-Skipping Trust
    706-GS(T) Generation-Skipping Transfer Tax Return for Terminations
    706-QDT U.S. Estate Tax Return for Qualified Domestic Trusts
    712 Life Insurance Statement
    813 813 Document Register
    843 Claim for Refund and Request for Abatement
    1310 Statement of Person Claiming Refund Due a Deceased Taxpayer
    1332 Block and Selection Record
    2350 Application for Extension of Time to File U.S. Income Tax Return
    2758 Application for Extension of Time to File Certain Excise, Income, Information and Other Returns
    2848 Power of Attorney and Declaration of Representative
    3465 Adjustment Request
    3696 Correspondence Action Sheet
    3696A IDRS Correspondence Action Sheet
    3753 Manual Refund Posting Voucher
    3893 Re-Entry Document Control
    4227 Intra-SC Reject or Routing Slip
    4868 Application for Automatic Extension of Time to File U.S. Individual Tax Return
    5495 Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905
    5792 Request for IDRS Generated Refund (IGR)
    6800 Request for Missing Information or Papers To Complete Your Tax Return or Form 8038-CP
    6882 IDRS/Masterfile Information Request
    8821 Tax Information Authorization

3.12.106.1.15  (01-01-2015)
♦BMF Consistency♦

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

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

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

  4. 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.

3.12.106.1.16  (01-01-2015)
♦Taxpayer Advocate Service (TAS)♦

  1. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that assist taxpayers who are experiencing economic harm, seeking help in resolving tax problems that have not been resolved through normal channels, or believe that an IRS system or procedure is not working as it should.

  2. Refer taxpayers to TAS (see IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) or has Form 911 attached, 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 it to TAS in accordance with your local procedures.

  3. The following subsection provides information for TAS cases.

3.12.106.1.16.1  (01-01-2015)
♦Taxpayer Advocate Service - Service Level Agreements (SLAs)♦

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

3.12.106.1.17  (01-01-2015)
♦IRS Employee Contacts - RRA98, IRC Section 3705(a)♦

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

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

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

    2. Face to Face: This information should be their title (e.g., Mr., Mrs., Ms., Miss), their last name, and their badge number provided as appropriate during their conversation.

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

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

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

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

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

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

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

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

3.12.106.1.18  (01-01-2015)
♦Criminal Investigation (CI) "Funny Box" ♦

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

  2. Pull any return identified as having CI criteria found in paragraph (4) below and place in "CI Funny Box" .

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

  4. ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.12.106.1.19  (01-01-2015)
♦Examination (Exam) "Funny Box" ♦

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

3.12.106.1.20  (01-01-2015)
♦Use of Fax for Taxpayer Submissions♦

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

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

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

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

3.12.106.2  (01-01-2015)
Processing Form 706-GS(D), Generation-Skipping Transfer Tax Return For Distributions

  1. This sub-section includes instructions for correcting Sections 01 through 03 of Form 706-GS(D).

    Note:

    When the Schedule D-1 is entered as a Form 706-GS(D), the document must be deleted and be associated with the 706-GS(D). Reject with AC 3 for deletion.

  2. Please note that two (2) revisions of the Form 706-GS(D) were issued in calendar year 2011:

    1. Form 706-GS(D), Generation Skipping Transfer Tax Return For 2010 Distributions (Rev. February 2011);

    2. Form 706-GS(D), Generation Skipping Transfer Tax Return For Distributions (Use for Distributions made after December 31, 2010; For Calendar Year ......... (Rev. November 2011).

3.12.106.2.1  (01-01-2015)
Section 01-Form 706-GS(D)

  1. Section 01 alpha field designators, field lengths and titles are listed below. Section 01 are fixed length fields.

    Alpha Field
    Designator
    Line
    Number
    Field
    Length


    Title
    A Right margin of Line 12 11 Remittance Amount
    B Line 1a 4 Name Control
    Name Control Underprint
    C Line 1b or 1c 9 TIN
    D Right margin of Line b 1 TIN Type
    E Top of the return 6 Tax Period
    F Dotted portion of Line 6 tax computation area 8 Received Date
    G Upper left of the return 10 Computer Condition Code
    H Left OMB (Office of Management and Budget) number on upper portion of return 1 Penalty and Interest Code
    I Right margin of line 2b 1 CAF Indicator
    J Left margin of Line 6 8 Correspondence Received Date
    K   1 Entity Underprint Code
    L Upper left margin of return 6 Taxpayer Notice Code
    M Refund Code 1 1 Refund Code
    N Bottom Portion of Part III (Tax Computation) -"Paid Preparer's Use Only" Box (to the right of preparer's signature) 9 Preparer's SSN or PTIN
    O Bottom Portion of Part III (Tax Computation) -"Paid Preparer's Use Only" Box (to the right of preparer firm's name and address) 9 Preparer's EIN
    P Bottom Portion of Part III (Tax Computation) -"Paid Preparer's Use Only" Box (to the right of preparer firm's name and address) 10 Preparer's Phone Number

3.12.106.2.1.1  (01-01-2015)
Due Date

  1. Forms 706-GS(D) are due on April 15th following the calendar year when the distributions were made. If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day.

3.12.106.2.1.2  (01-01-2015)
Field 01-A, Remittance Amount

  1. You cannot change this field. If the amount is incorrect, treat the return and related error record as unprocessable. Reject with AC 3 and prepare Form 10886, Reject Routing Slip to explain the error. The Reject function will prepare Form 3893 for re-entry.

  2. The Remittance Amount is located on the Balance Due line of a full paid return and is designated by a green rocker.

  3. If a remittance amount is shown on an apparent nontaxable return, but an examination reveals that it should be taxable, enter the missing data in the appropriate fields and sections of the register and enter AC 6.

  4. Field 01-A (Remittance Amount) will asterisk if an amount is present in Field 01-A and there is no entry in Field 03-H (Net GST Tax), or Net GST Tax Computer. If the return is a true nontaxable, (i.e., taxpayer shows "none" , "not liable" , tax is zero due to a math error, or just signs the return) and no other non-math errors are involved, treat return as "unprocessable" . Bring up the underprint for Field 03-H. Reject with AC 3. Indicate excess remittance on Form 10886. If nontax status is due to a math error, note on Form 10886, "Zero tax due to math error. Refund if no other tax due" .


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