3.12.213  Form 1066, U.S. REMIC Income Tax Return (Cont. 1)

3.12.213.4 
Section 01 - Correction Procedures General Information

3.12.213.4.10  (01-03-2012)
Correspondence Received Date - 01CRD

  1. A Correspondence Received Date (CRD) will be determined from the date the reply was received in the submission processing campus.

    If... Then...
    The reply was not date stamped, 1. Use the U. S. Postal Service postmark date on the envelope attached to the reply to determine the Correspondence Received Date, except in the following situations:
     a. The correspondence reply was received prior to the due date of the return.
     b. The correspondence was required because of an IRS processing error, such as a request for a return or schedule that we lost during processing.
     c. The correspondence was not necessary, or was issued in error.
    There is no reply to correspondence, Enter "3" in Field 01CCC and to the dotted portion of Section 1, Line 1. This suppresses credit interest.

    Note:

    If there is an indication that Entity Control has researched and found or has assigned an EIN to the return, edit the Entity Date found in the lower left hand corner of the return to the left margin of the Deductions section preceded by "6-" and in 01CRD, if it is later than the actual correspondence received date. If there are both a CRD and an Entity Assignment date, enter the later of the two.

3.12.213.4.11  (01-01-2012)
Audit Code - 01ADC

  1. The valid entries are blank, 1, 2, 3, 4, 5 and 6.

  2. Enter Audit Code "1" if any of the following are attached:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).

    2. Form 8275, Disclosure Statement.

    3. Form 8275-R, Regulation Disclosure Statement.

  3. Enter Audit Code "2" if any of the following conditions exist:

    1. Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation is attached.

    2. Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached.

    3. Form 5713, International Boycott Report, is attached.

    4. The taxpayer answered "Yes" to the foreign trust question, "I" , Page 3, Additional Information.

  4. Although Audit Codes 3, 4, 5 and 6 are also valid for this field, no uses for these codes have been identified in Form 1066 processing.

3.12.213.4.12  (01-01-2014)
Installment Sale Indicator - 01ISI

  1. The valid codes are blank, 1, 2, and 3.

  2. The Installment Sale Indicator is coded from the partnership's response to Form 6252, Installment Sale Income, Question 3, as follows:

    Code One Form 6252 Multiple Forms 6252
    1 "Yes" response to Question 3. At least one form has a "Yes" response.
    2 "No" response to Question 3. All "No" responses, or a combination of "No" and blank responses.
    3 "Yes" and "No" are checked or Question 3 is blank. Question 3 is blank on all forms.

3.12.213.4.12.1  (01-01-2014)
Correction Procedures

  1. Correction procedures for Field 01ISI, Installment Sale Indicator.

    If... Then...
    The correct code needs to be determined, 1. Examine the return and attachments.
    2. Delete the incorrect entry and enter the correct code on the screen and in the left margin of the Deductions section preceded by "9-" .
    A code should not be present, Blank the entry on the screen.
    Multiple Forms 6252, Installment Sale Income, are attached and at least one form has a positive response, Use code "1" .
    Multiple Forms 6252, Installment Sale Income, are attached; at least one has a negative response and the others are blank, Use code "2" .
    Multiple Forms 6252, Installment Sale Income, are attached but Question 3 is blank on all forms, Use code "3" .

3.12.213.4.13  (01-01-2014)
Paid Preparer Checkbox - 01CBI

  1. The Paid Preparer Checkbox is located beside the taxpayer signature area. It indicates whether the taxpayer has elected, or not elected, to allow the paid preparer to represent him/her in order to reach settlement of the return tax period. Code and Edit is instructed not to code amended returns (e.g., returns indicating "Amended" , "Superseding" , "Corrected" , etc.) with an indicator.

  2. If the taxpayer checks only the "Yes" box, Code and Edit should indicate a "1" in the right margin beside the Paid Preparer Checkbox.

  3. There are validity checks on the field.

  4. Invalid Condition: If the value is other than "1" or blank.

3.12.213.4.13.1  (01-01-2014)
Correction Procedures

  1. If invalid, delete the field 01CBI and continue processing.

3.12.213.4.14  (01-01-2014)
Preparer's Tax Identification Number (PTIN) - 01PSN

  1. The Preparer's Tax Identification Number (PTIN) (Preparer's SSN or PTIN box - 2009 and prior revisions) is located at the bottom of Page 1, Form 1066.

  2. Valid characters are all blank, all numeric, or a "P" in the first position followed by eight numeric characters (a PTIN). If the field is all numeric, it must have nine positions and cannot be all zeroes or all nines.

    Note:

    The range for a valid PTIN is P00000001 through P99999998. A "P" followed by all zeroes or all nines is not valid.

3.12.213.4.14.1  (01-01-2014)
Correction Procedures

  1. Check for coding and transcription errors and correct accordingly.

3.12.213.4.15  (01-01-2014)
Firm's EIN - 01PEN

  1. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is transcribed from the bottom of Page 1, Form 1066.

  2. This field can be all blank or all numeric.

  3. The field is invalid if it is all nines, all zeroes or less than 9 positions.

3.12.213.4.15.1  (01-01-2014)
Correction Procedures

  1. Check for coding and transcription errors and correct accordingly.

3.12.213.4.16  (01-01-2014)
Paid Preparer Phone Number - 01PTN

  1. If the taxpayer checks only the "Yes" box, then a telephone number for the paid preparer should also be entered to allow contact. However, this field is not required and may be left blank.

  2. There are validity checks on the field, but the field is not correctable. Valid characters are any combination of alpha (A to Z), numeric (0 to 9), or both, characters.

  3. Invalid Condition: If any of the characters are not alpha or numeric.

3.12.213.4.16.1  (01-01-2014)
Correction Procedures

  1. If invalid, delete the field 01PTN and continue processing.

3.12.213.5  (01-01-2014)
Section 02 Correction Procedures

  1. The following information pertains to Section 02 correction procedures.

3.12.213.5.1  (01-01-2014)
Address Data

  1. Section 02 contains the address changes for a return.

  2. The field designator, title, maximum field length, and the location where the entry can be found are listed below:

    Field Designator Title Maximum Field Length Location
    02CON In-Care-Of Name 35 Entity area, Page 1, Name line
    02FAD Foreign Address 35 Entity area, Page 1, Address line
    02ADD Street Address 35 Entity area, Page 1, Address line
    02CTY City 22 Entity area, Page 1, city, state, ZIP code line
    02ST State 2 Entity area, Page 1, city, state, ZIP code line
    02ZIP ZIP Code 12 Entity area, Page 1, city, state, ZIP code line

3.12.213.5.2  (01-01-2014)
Address Changes

  1. Section 02 should be present if:

    1. A return has an address change or the change of address box is checked on Page 1.

    2. Section 02 cannot be present on a "G" coded return.

  2. 02ADD - Street Address (35 character entry).

    1. This entry may be blank or contain alpha and numeric characters, hyphen (-), or slash (/).

    2. If the first position is blank, all positions must be blank.

    3. There cannot be two consecutive blanks within significant data.

  3. 02FAD - Foreign Street Address.

    1. This entry may be blank or contain alpha and numeric characters, hyphen (-), or slash (/).

    2. If the first position is blank, all positions must be blank.

    3. There cannot be two consecutive blanks within significant data.

  4. 02CTY - City (22 character entry).

    1. The first position of this entry cannot be blank.

    2. The second and third position cannot both be blank (this allows for the Major City Code).

    3. There cannot be two consecutive blanks within significant data.

    4. This entry can contain alpha and numeric characters, hyphens (-), and blanks.

    5. Determine whether a Major City Code was used.

  5. 02ST - State (2 character entry). (See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries for the valid state abbreviations.)

  6. 02ZIP - ZIP code (12 character entry).

    1. This entry must be five (5), nine (9), or twelve (12) numerics.

    2. If a valid ZIP code is not available from the return, perfect the ZIP code using the chart in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP codes and Countries.

3.12.213.5.3  (01-01-2014)
Correction Procedures

  1. Check for transcription errors. If it is transcribed incorrectly, enter the actual city and state data.

  2. The Ogden Submission Processing Campus (OSPC) will process any return that has an international address. Suspend processing of Form 1066 with Action Code 650; attach to Form 4227 for routing to OSPC.

  3. The Postal Service established new address requirements for Army Post Office (APO)/Diplomatic Post Office (DPO)/Fleet Post Office (FPO) addresses. If the old address appears (e.g., APO New York, NY 091XX) it must be converted to the new state code abbreviation based on the ZIP code (e.g., the previous example would be converted to APO AE 091XX).

    ZIP Code State Code
    34000 AA
    090–098 AE
    962–966 AP

3.12.213.5.4  (01-01-2014)
♦Field 02CON - "In-Care-of" Name (XREF EC 002, 014, 016)♦

  1. Description – Field 02CON is located in the Entity section of the return.

  2. Valid Condition – Field 02CON has 35 positions and the valid characters are alpha, numeric, ampersand (&), dash (-), slash (/) or percent (%).

    Note:

    The first character of the "in-care-of" name must be alpha or numeric.

  3. Invalid Condition - Field 02CON is invalid if any of the following conditions are present:

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

    • The first position is blank, or

    • The first character of the "in-care-of" name is not alpha or numeric, or

    • There are two consecutive blanks between significant characters

  4. Correction Procedures:

    1. Check for coding and transcription errors.

    If... Then...
    A % (percent) is in the first position, 1. Verify there is a blank in the second position.
    2. If not blank, enter a blank followed by the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    A blank is in the first position, 1. Delete blank.
    2. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    The first character of the "in-care-of" name is not alpha or numeric, 1. Verify "in-care-of" name on the return.
    2. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    Two consecutive blanks are present between significant characters, Delete any unnecessary blanks in Field 02CON.

3.12.213.5.5  (01-01-2014)
♦Field 02FAD - Foreign Address ♦(XREF EC 002, 014, 016)

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

    • The field will contain an entry when there is a foreign address present on the return.

    • Field 02FAD should not be present on "G" coded short length returns.

  2. Valid Characters: Valid characters are alpha, numeric, and special characters.

  3. Invalid Conditions: Field 02FAD will generate as an error when any of the following 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.

    .

3.12.213.5.5.1  (01-01-2012)
Correction Procedures

  1. Correct all coding and transcription errors.

    If... Then...
    Field 02FAD is present, 1. GTSEC 02.
    2. Ensure Field 02CTY contains a foreign country code and Field 02ST (state) contains a "." (period/space). See Document, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

    Exception:

    Use the country code based on the province in Field 02CTY if the foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.213-4.

    A province abbreviation is not present for Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands but a province name is present, 1. Enter the province abbreviation in the appropriate position in Field 02FAD. See Exhibit 3.12.213-5.
    A foreign address is not present on the return, 1. SSPND 610.
    2. Renumber return to domestic DLN.

  2. If Form 8822, Change of Address, or Form 8822-B, Change of Address - 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. Enter address shown on Form 8822, Change of Address, or Form 8822-B, Change of Address - Business, in Field 02FAD.
    2. Notate "8822 detached" or "8822-B detached" on tax return.
    3. Detach Form 8822/Form 8822-B and route to Entity Control on Form 4227 or follow local procedures.
    4. Notate on Form 4227, "CHANGE OF ADDRESS PER FORM 8822/Form 8822-B" , which ever one applies.

    Note:

    The lead tax examiner is required to batch all Forms 8822 and Forms 8822-B daily and hand carry them to Entity Control for expedite processing.

3.12.213.5.6  (01-01-2014)
Field 02ADD - Street Address (XREF EC 002, 014, 016)

  1. This field is transcribed from the Street Address line of the entity portion of the return.

  2. Invalid Condition - Field 02ADD is invalid if:

    1. Street Address is present and the first position is blank,

    2. A character other than alpha, numeric, blank, dash or slash is present,

    3. Any character follows two consecutive blanks, or

    4. There are more than 35 characters in this field.

      Note:

      ISRP will input a pound (#) sign as the 35th character to indicate an overflow condition.

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

    2. If the 35th character is a pound sign (#), refer to Document 7475, State Abbreviations, Major City Codes and Address Abbreviations. Abbreviate the address to 35 or fewer characters.

    3. If unable to correct, DLSEC 02.

3.12.213.5.7  (01-01-2014)
Field 02CTY - City (XREF EC 002, 014, 016)

  1. This field is transcribed from the city, state, ZIP line of the entity portion, on page 1 of the return.

    1. Certain cities are designated "Major Cities" and have been assigned a designator that consists of two alpha characters. This code represents both the city and state.

    2. Whenever the city is on the Major City list, ISRP will enter the Major City Code instead of entering the entire name of the city and the state.

    3. When a Major City Code is used, it will be the first two positions of Field 02CTY.

  2. Invalid Condition - Field 02CTY is invalid if:

    1. City is present and the first position is blank.

    2. Any character other than alpha or blank is present.

    3. Any character follows two consecutive blanks.

    4. A Major City Code is present and it is not a valid Major City Code.

    5. Invalid Foreign Country Code is present.

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

      Note:

      For a listing of Major City Codes (listed by state) and valid Foreign Country Codes (FCC) see Document 7475, State and Address Abbreviations, Major City Codes, ZIP Codes and Countries.

      If ... Then ...
      A Major City Code is used, Field 02CTY must be present.
      Field 02CTY contains an error, Verify the Major City Code.
      Field 02CTY is not valid and a Major City Code cannot be determined, Input the entire city name.
      A Major City Code is not used and Field 02CTY is present, Field 02ST must be present.
      A foreign address is shown on the return, Enter the appropriate FCC in Field 02CTY
      Field 02CTY contains an incorrect country code or "XX" Enter appropriate FCC in Field 02CTY. If there is no valid FCC, input the entire country name.
      Unable to correct DLSEC 02

3.12.213.5.8  (01-01-2014)
Field 02ST - State (XREF EC 002, 014, 016)

  1. This field is transcribed from the city, state, ZIP code line of the entity portion of the return.

  2. Invalid Condition - Field 02ST is invalid if the entry is not a state code that is listed in the State Code Table in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

  3. Correction Procedures:

    1. Correct any coding and/or transcription errors.

    2. If a valid state code is not available from the return or envelope, take any of the following steps: Research using INOLES or ENMOD to determine state, or refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP codes and Countries for correct code.

      Note:

      If a major city code is found, GTSEC 02 and enter in Field 02CTY and delete Field 02ST.

    3. If unable to correct, DLSEC 02.

3.12.213.5.9  (01-01-2014)
Field 02ZIP - ZIP Code (Xref EC 002, 014, 016)

  1. This field is transcribed from the city, state, ZIP code line of the entity portion of the return.

  2. Invalid Condition - Field 02ZIP is invalid if:

    • ZIP code is present and the first 5 positions are not numeric

    • The last 4 positions are not all numeric or all blank, or

    • Positions 4 and 5 are "00"

      Exception:

      ZIP code 20500

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

    2. If a valid ZIP code is not available from the return or envelope, research using any of the following to determine the ZIP code: INOLES and/or ENMOD or Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

3.12.213.6  (01-01-2014)
Money Amounts General Information

  1. Sections 03 through 08 contain money amounts. The entries are of variable length. Only sections 01, 02, 03, 07 and 20 are being transcribed by ISRP.

3.12.213.6.1  (01-07-2010)
Section 03

  1. Listed below are the entries displayed in Section 03 of Form 1066.

    Field Designator Title Max Char $/c Field Type Location
    03TAS Total Assets 13 $ (+ −) Page 1, Box C
    03STG Net Short Term Capital Gain/Loss 11 $ (+ −) Lower right margin preceded by "11-"
    03LTG Net Long Term Capital Gain/Loss 11 $ (+ −) Lower right margin preceded by "12-"

  2. Correct Field Designator 03TAS by entering "2-" if Total Assets is a negative greater than 2.

3.12.213.6.2  (01-01-2014)
Section 07

  1. Listed below are the entries displayed in Section 07 of Form 1066.

  2. Correct as required.

    Field Designator Title Max Char $/c Field Type Location
    0704 Net Income from Prohibited Transactions 13 $/c (+) Page 2 Schedule J. Part 1, Line 4.
    >>>> Net Income from Prohibited Transactions Computer        
    0705A Tax on Net Income (Total Tax) 13 $/c (+) Page 1, Section II, Line 1.
    0706 Tax Paid, Form on Form 7004 13 $/c (+) Page 1, Section II, Line 2.
    07TTE Telephone Excise Tax Return 15 $/c (+) Page 1, Section II, dotted portion to the left of Line 4. Tax Year 2006 only.
    07TRV Telephone Excise Tax Return (Verified Field) 15 $/c (+) >>>>
    07B/R Balance Due/Overpayment 13 $/c (+ -) Page 1, Section II, Line 3/4.

    Note:

    07B/R is an ERS input only field.

3.12.213.7  (01-01-2014)
Math/Consistency Priority IV General Information

  1. These errors will be displayed with the Error Code assigned to them for a specific error in ascending numerical order. The screen display will show the error code assigned and the fields needed to make the necessary correction.

  2. The blank field "CL" will be displayed for the entry of a "C" Clear Code on records where the possibility exists that a change or correction may not be needed.

  3. All errors must be resolved by either eliminating the error, or entering "C" in the Clear Code field.

3.12.213.7.1  (01-01-2014)
♦Error Code 001 - Tax Year - Invalid Entry♦

  1. Fields Displayed:

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

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

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

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

    • "G" Coded and Non-"G" Coded Returns - The processing date is less than 2 years after the Return Due Date and CCC "W" is present

  3. Correction Procedures:

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

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

    3. Do not send the following return to Statute Control for clearance. Instead, enter "W" in Field 01CCC and on the return and continue processing:

    1. any return secured by Compliance (i.e., 6020(b))

    2. any return with a Transaction Code (TC) 59X

    3. any return that is a Substitute for Return prepared by Examination ("SFR" in the margin) with Document 13133, Expedite Processing Cycle, attached

      If ... Then ...
      Field 01RCD is blank .
      1. Enter the Received Date in Field 01RCD. Use the earliest date if multiple Received Dates are present.

      2. See IRM 3.12.213.4.4 to determine the IRS received date.

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

      Note:

      Do not send the return to Statute Control.

      The return is not stamped by Statute Control within the last ninety days, 1. Suspend (SSPND) 310.
      2. Prepare Form 4227 to route to Statute Control.

  4. Suspense Correction:

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

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

3.12.213.7.2  (01-01-2014)
♦Error Code 002 - Name Control Mismatch♦

  1. Fields Displayed:

    Field Designator Field Name Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Conditions:: Error Code 002 will generate when the name control mismatched against the National Account Profile (NAP) or Entity Index File (EIF).

  3. Correction Procedures:

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

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

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

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

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

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

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

    7. If a new EIN is located, verify the name control using CC INOLES.

      If ... Then ...
      The name control on INOLES matches the name on the return or attachment, 1. Ensure that the entity information matches the return.
      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C when:

      • Three or less digits of the EIN are transposed, different, or missing, or

      • INOLES indicates the account has been "merged to" or "merged from" , or

      • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN

      Multiple EINs are located, 1. SSPND 320 to Entity Control.
      2. Prepare Form 4227 with the notation "MULTIPLE EINs" .
      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on INOLES.
      The "MT" EIN matches the entity on the return or attachments, Enter the "MT" EIN in Field 01EIN.

      Note:

      Do not send Letter 3875C on "MT" EIN cases.

      The "MT" EIN does not match the entity on the return or attachments, SSPND 320 to Entity Control.

    8. If the name on the return or attachment does not agree with the name control on INOLES or there is an indication of a name change on Form 1066 (Line D, Box 2), research ENMOD for a new name.

      If ... Then ...
      The name control on ENMOD matches the name on the return or attachments, Enter "C" in the Clear Code field.
      The name control on ENMOD or INOLES does not match the name on the return or attachments, 1. SSPND 320 to route the return to Entity Control.
      2. Attach Form 4227 with the notation, "NO RECORD" .

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

      If ... Then ...
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present, 1. SSPND 320 to route to Entity Control.
      2. Attach Form 4227 with the notation "REQUEST NAME CHANGE (TC 013)" .

  4. Suspense Correction:

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

      If ... Then ...
      The Entity Assignment Date is past the Return Due Date or Received Date, 1. GTSEC 01
      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.

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

      If ... Then ...
      The payment posted to the wrong EIN, 1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.
      2. Notate on Form 3465, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .
      3. Write, "FORM 3465 PREPARED" on return, to the left of the Entity section.
      4. Enter CCC "X" in Field 01CCC.
      The payment posted correctly, 1. Enter correct EIN in Field 01EIN and on the return.
      2. Enter "C" in the Clear Code field.
      Payment cannot be located, Enter "C" in the Clear Code field.

3.12.213.7.3  (01-01-2014)
♦Error Code 004 - Name Control/EIN Validation♦

  1. Fields Displayed:

    Field Designator Field Name Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9

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

    1. The EIN is not present at Master File (MF).

    2. The EIF and the NAP were not accessed or were not operational causing a blank underprint in Field 01NC.

      Note:

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

  3. Correction Procedures:

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

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

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

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

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

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

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

    7. If a new EIN is located, verify the name control using CC INOLES.

      If ... Then ...
      The name control on INOLES matches the name on the return or attachments, 1. Ensure that the entity information matches the return.
      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C when:

      • Three or less digits of the EIN are transposed, different, or missing, or

      • INOLES indicates the account has been "merged to" or "merged from" , or

      • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN

      Multiple EINs are located, 1. SSPND 320 to Entity Control.
      2. Prepare Form 4227 with the notation "MULTIPLE EINs" .
      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on INOLES.
      The "MT" EIN matches the entity on the return or attachments, Enter the "MT" EIN in Field 01EIN.
      The "MT" EIN does not match the entity on the return or attachments, SSPND 320 to Entity Control.

    8. If the name on the return or attachments does not agree with the name control on INOLES or there is an indication of a name change on Form 1066 (Line D, Box 2), research ENMOD for a new name.

      If ... Then ...
      The name control on ENMOD matches the name on the return or attachments, Enter "C" in the Clear Code field.
      The name control on ENMOD or INOLES does not match the name on the return or attachments, 1. SSPND 320 to route the return to Entity Control.
      2. Attach Form 4227 with the notation, "NO RECORD" .

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

      If ... Then ...
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present, 1. SSPND 320 to route to Entity Control.
      2. Attach Form 4227 with the notation, "REQUEST NAME CHANGE" .

  4. Suspense Correction:

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

      If ... Then ...
      The Entity Assignment Date is past the Return Due Date or Received Date, 1. GTSEC 01
      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.

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

      If ... Then ...
      The payment posted to the wrong EIN, 1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.
      2. Notate on Form 3465, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .
      3. Write "FORM 3465 PREPARED" on the return, to the left of the Entity section.
      4. Enter CCC "X" in Field 01CCC.
      The payment posted correctly, 1. Enter correct EIN in Field 01EIN and on the return.
      2. Enter "C" in the Clear Code field.
      Payment cannot be located, Enter "C" in the Clear Code field.

3.12.213.7.4  (01-01-2014)
♦Error Code 005 - Received Date♦

  1. Fields Displayed:

    Field Designator Field Name Length
    CL Clear Code 1
    01TXP Tax Period 6
    01RCD Received Date 8

  2. Invalid Conditions: Error Code 005 will generate when the year-month of the processing date is later than the Tax Period plus 6 months and the Received Date is not present.

  3. Correction Procedures:

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

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

    3. A Received Date must be in Field 01RCD if the return is not timely filed.

    4. Use the earliest Received Date in Field 01RCD if there are multiple received dates on the return.

      Exception:

      Do not use a Received Date in Field 01RCD that is prior to the end of the tax period.

    5. Determine the Received Date following IRM 3.12.213.4.4 when one is needed but is not stamped on the return or a valid handwritten Received Date is not present.

3.12.213.7.5  (01-01-2014)
Error Code 006 - Remittance with No Received Date

  1. Fields Displayed:

    Field Designator Field Name
    RMIT (Non-correctable field)
    01RCD Received Date

  2. Invalid Condition: Error Code 006 will display when a remittance is received with the return but a received date is not present.

  3. Correction Procedures:

    1. Compare the displayed fields with the return.

    2. If incorrect, overlay the screen with the correct information.

    3. If no received date is noted please refer to IRM 3.12.213.4.4 to determine the correct received date.

      Note:

      If multiple dates are on the return, use the earliest date as the received date.
      (Enter in YYYYMMDD format.)

3.12.213.7.6  (01-01-2014)
♦Error Code 007 - Received Date is Earlier Than Tax Year♦

  1. Fields Displayed

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

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

  3. Correction Procedures:

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

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

      If ... And ... Then ...
      The Received Date is invalid and it appears that the incorrect year was used (i.e. 20110115 instead of 20120115), and other information (Julian date, postmark date, and/or signature date) indicates that the received date should be the current year,   Change the Received Date year to the current year in Field 01RCD.
      The return is an early filed "Final" return,   1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.
      2. Enter "F" in Field 01CCC.
      The return is not an early filed "Final" return, The Tax Period ending is less than four months after the Received Date, 1. SSPND 480
      2. Prepare Form 4224 with the notation, "EARLY FILED" .
      The return is not an early filed "Final" return, The Tax Period ending is more than four months after the Received Date, 1. Initiate correspondence for clarification of the Tax Period.
      2. SSPND 211.
      The return is not an early filed "Final" return, The month of the Received Date is prior to the Tax Period ending, Change the month of the Received Date to equal the month of the Tax Period.

  4. Suspense Correction:

    1. When the reply is received, correct the screen as follows:

      If ... Then ...
      The taxpayer replies that the return is a "Final" , 1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.
      2. Enter "F" in Field 01CCC.
      The taxpayer replies that the return is not a final return, SSPND 480 until the end of the tax period provided by the taxpayer.
      The taxpayer fails to reply or the reply is not adequate, 1. Enter "3" in Field 01CCC.
      2. SSPND 480 until the end of the tax period indicated on the return.

3.12.213.7.7  (01-01-2014)
♦Error Code 010 - Amended Return "G" Coded♦

  1. Fields Displayed:

    Field Designator Field Name Length
    01RCD Received Date 8
    01CCC Computer Condition Code 10
    01DOB Date REMIC Started 6
    01NOR Number of Residual Holders 6
    01TEF TEFRA 1
    01MSC Missing Schedule Code 4
    01ADC Audit Code 3
    01ISI Installment Sales Indicator 1
    Section 02 Present or Not Present  
    Section 03 Present or Not Present  
    Section 04 Present or Not Present  
    Section 05 Present or Not Present  
    Section 06 Present or Not Present  
    Section 07 Present or Not Present  
    Section 08 Present or Not Present  

    Note:

    The literal SECTION XX PRESENT or "SECTION XX NOT PRESENT" will display for Sections 02 through 08 (XX = section number).

  2. Invalid Condition: Error Code 010 will generate when Computer Condition Code "G" is present and fields other than Fields 01CCC, 01NC, 01EIN, 01TXP, O1CRD, and 01RCD contain entries.

  3. Correction Procedures:

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

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

    3. Determine if CCC "G" was input correctly:

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

      2. DLSEC to delete all sections except Section 01.

      3. Delete the invalid entries that are present in Section 01. GTSEC 01, if necessary.

      All information is exactly the same, SSPND 640 and route to Rejects.
      A return is not posted for the tax period and the return is an amended return, Continue processing as an amended return.
      A return is not posted for the tax period and the return is not amended ("G" coded in error),
      1. Enter all data in Sections 02, 03, and 07.

      2. Ensure that the Section 01 fields are correct.

      3. Delete the "G" code in Field 01CCC.

      Note:

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

3.12.213.7.8  (01-01-2014)
♦Error Code 014 - Missing Address Entries♦

  1. Fields Displayed:

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

  2. Invalid Conditions: Error Code 014 will generate when any of the following conditions are present:

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

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

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

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

  3. Correction Procedures:

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

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

    3. Research any of the following for valid address information: Document 7475, or INOLE, NAMEB/NAMEE, ENMOD.

      If ... And ... Then ...
      A Major City Code is present, A street address is not available, 1. Enter the city Name (spelled out, not in Major City Code format) in Field 02CTY.
      2. Enter the state Code in Field 02ST.
      The Major City Code is correct, The state is present, Delete Field 02ST.
      The ZIP code or address cannot be corrected from the information on the return, attachments, or from research,   DLSEC Section 02.

3.12.213.7.9  (01-01-2014)
♦Error Code 015 - Foreign Address/State♦

  1. Fields Displayed:

    Field Designator Field Name Length
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Conditions: Error Code 015 will generate when any of the following conditions are present:

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

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

  3. Correction Procedures:

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

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

      If ... Then ...
      A foreign address is present in Field 02FAD, 1. Field 02ST must contain "." (period/space).
      2. Delete any entry in Field 02ZIP.
      A foreign address is not present in Field 02FAD, Check return for foreign address.
      A foreign address is present on the return, 1. Enter the foreign address in Field 02FAD

      Note:

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


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

      Exception:

      Use the country code based on the province in field 02FAD if the foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.213-4


      3. Field 02ST must contain "." (period/space)
      4. Delete any entry in Field 02ZIP.
      A foreign address is not present on the return, 1. Verify the address on the return is not a foreign address.
      2. SSPND 610
      3. Renumber return with domestic DLN.

3.12.213.7.10  (01-01-2014)
♦Error Code 016 - ZIP Code/State Mismatch♦

  1. Fields Displayed:

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

  2. Invalid Condition:: Error Code 016 will generate when the ZIP code is inconsistent with the Major City Code or state code.

  3. Correction Procedures:

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

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

    3. If Field 02ZIP is present, then 02ADD, 02CTY and 02ST must be present.

    4. Research Document 7475, or INOLES, NAMEB/NAMEE, ENMOD for valid ZIP code information.

      If ... And ... Then ...
      Unable to determine a valid ZIP code from the return or attachments, A valid ZIP code is found through IDRS research Enter the valid ZIP code found in Field 02ZIP.
      Only the first three digits of the ZIP code can be determined,   Enter "01" in the (4th) and (5th) position.
      A ZIP code cannot be determined,   Enter the 3 digits follow by "01" of the first ZIP code listed for the applicable state in Document 7475 (e.g., 99501 for Alaska).
      The address is in a major city, A Major City Code can be determined, Enter Major City Code in Field 02CTY.
      The address is in a major city, A Major City Code cannot be determined, 1. Enter the name of the city in Field 02CTY.
      2. Enter the state Code in Field 02ST.
      The address is not in a major city,   1. Enter the appropriate state abbreviation in Field 02ST.
      2. Enter the ZIP code in Field 02ZIP.

    5. APO/DPO/FPO Addresses - 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, convert to the new state code abbreviation based on the ZIP code. For example, if the old address appears as "APO New York, NY 091XX" , convert to read as "APO AE 091XX" . Refer to the APO/DPO/FPO conversion chart below:

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

3.12.213.7.11  (01-01-2014)
Error Code 026 - Tax Period Underprint

  1. Fields Displayed:

    Field Designator Field Name Length
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    >>>> Tax Period Underprint  
    01CCC Computer Condition Code 10
    01ADC Audit Code 3

  2. Invalid Condition: The Tax Period Underprint is present, the Tax Period does not agree with the Entity Index File and Computer Condition Code "F" is not present.

    Reminder:

    A correction to any displayed entry must be entered and transmitted prior to entering a "C" in the Clear Code. The Clear Code does not permit any other correction to the record.

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 026, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Fiscal Year Month (FYM) have posted to the National Account Profile (NAP).

    2. If Error Code 026 reappears, continue with the remainder of the correction procedures.

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

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

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

    6. The following information pertains to correction procedures for Error Code 026:

      If ... Then ...
      A final return, Enter Computer Condition Code "F" .
      Not a final return and the EIN on the return differs from 01EIN, 1. Change 01EIN to agree with the return.
      2. When the screen returns, enter a "C" in the Clear Code.
      Not a final return and the EINs agree, 1. Research to verify EIN.
      2. Correct 01EIN if different EIN found.
      3. If EIN on the return is correct, compare the tax period on the return with 01TXP.
      The tax period on the return does not agree with 01TXP, Change 01TXP to agree with the return.
      (TXP must be entered as YYYYMM).
      The EIN and tax period on the return agree with 01EIN and 01TXP and are transcribed correctly, 1. Correspond with the taxpayer to determine why the FYM (Fiscal Year Month) is other than 12.
      2. Suspend the return with Action Code 211.

  4. Suspense Correction: The following information pertains to suspense corrections:

    If ... Then ...
    The taxpayer does not reply, Void the DLN, and inform the taxpayer that he/she does not meet the requirements for filing a Form 1066.
    The return was received with remittance, Prepare Form 3244 to remove the remittance before voiding the DLN. Post the remittance to the taxpayer’s account with a Transaction Code "670" .

3.12.213.7.12  (01-01-2014)
Error Code 028 - Condition Codes versus Received Date

  1. Fields Displayed:

    Field Designator Field Name Length
    01RCD Received Date 8
    01CCC Computer Condition Code 10

  2. Invalid Condition: Error Code 028 will generate when either of the following conditions is present:

    • Computer Condition Code "R" , "7" or "D" is present and the Received Date is not present.

    • Error Code 028 is bypassed on a "G" coded return.

  3. Correction Procedures: The following information pertains to the correction procedures for Error Code 028:

    If ... Then ...
    The displayed fields do not match the information on the return, Overlay the screen with the correct information.
    "R" , "D" or "7" is present on the return, Enter the Received Date in 01RCD.
    "R" , "D" or "7" is not on the return, Delete the "R" , "D" , or "7" from 01CCC.
    The return is not a "G" coded return (e.g., no indication that the return is "Amended" , or nothing indicates that this is other than the first return filed), 1. GTSEC 02 and enter the data in the fields for Section 02 and transmit.
    2. When Error Code 010 generates enter the appropriate fields and delete Field 01CCC.
    The return is correctly "G" coded, Enter the Received Date in 01RCD. Determine the date in the order listed below:
    1. Earliest legible U.S. Post Office, foreign, or Private Delivery Service postmarked date.
    2. Service Center Automated Mail Processing System (SCAMPS) digital date.
    3. Revenue Officer's signature date.
    4. Taxpayer's signature date (only if within current year).
    5. Julian control date.

    Exception:

    If the received date is not present on blue/green rockered remittance returns, use DLN control date as in 4 above.

    Note:

    If multiple dates are on the return, use the earliest date as the received date.

3.12.213.7.13  (01-01-2014)
Error Code 034 - Correspondence Received Date Inconsistency

  1. Fields Displayed:

    Field Designator Field Name Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CRD Correspondence Received Date 8
    (Entered by Rejects)

  2. Invalid Conditions: Error Code 034 will generate when either of the following conditions are present:

    • The Correspondence Received Date (Field 01CRD) is earlier or the same as either the Received Date (Field 01RCD), or the Return Due Date

    • The Correspondence Received Date is later than the processing date

      Note:

      An entry in Field 01CRD does not require an entry in Field 01RCD.

  3. Correction Procedures:

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

    2. Please see IRM 3.12.213.4.4, to determine the correct received date.

      Exception:

      If Received Date is not present on blue/green rockered remittance returns, use Julian control date.

    3. A Correspondence Received Date (CRD) will be determined from the date the reply was received in the Submission Processing Campus. Refer to the return for the Correspondence Received Date. It is edited in the Entity section of the return. This can be verified by checking the stamped Received Date on the correspondence attached to the return.

    If ... Then ...
    The Correspondence Received Date is present and earlier than the Return Due Date or later than the processing date, Delete the Correspondence Received Date from Field 01CRD.
    More than one received date is present and earlier than the Return Due Date or later than the processing date, Delete the Correspondence Received Date from Field 01CRD.
    More than one received date is present, Use the earliest date.
    "No Reply" , Enter "3" in Field 01CCC to bypass the consistency check.

3.12.213.7.14  (01-01-2014)
Error Code 042 - Short Period Return not Final

  1. Fields Displayed:

    Field Designator Field Name Length
    01TXP Tax Period 6
    01CCC Computer Condition Code 10

  2. Invalid Condition: The tax period is 198801 or subsequent, the tax period month is other than "12" , and Computer Condition Code "F" is not present.

  3. Correction Procedures: Search the return and attachments for an indication that this is a final return.

    If ... Then ...
    The taxpayer indicates the return is a final return, Enter Computer Condition Code "F" in Field 01CCC.
    Other than a calendar year and determination cannot be made that the return is a final return, 1. Correspond with the taxpayer to determine the correct tax period.
    2. Advise that Form 1066 instructions state that the return must be for a calendar year unless it is a final.
    3. Suspend the return with Action Code "211" .

  4. Suspense Corrections:

    If ... Then ...
    The taxpayer does not reply, Void the DLN, and inform the taxpayer that he/she does not meet the requirements for filing a Form 1066.
    The return was received with remittance, Prepare Form 3244, Payment Posting Voucher, to remove the remittance before voiding the DLN. Post the remittance to the taxpayer’s account with a Transaction Code "670" .

3.12.213.7.15  (01-01-2014)
Error Code 073 - Correspondence Received Date Present with CCC "3"

  1. Fields Displayed:

    Field Designator Field Name Length
    01CCC Computer Condition Code 10
    01CRD Correspondence Received Date 8
    (Entered by Rejects)

  2. Invalid Condition: The error condition will generate if Field 01CCC is "3" and a date was entered in Field 01CRD.

  3. Correction Procedures:

    1. Review the return and attachments for IRS correspondence.

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

    3. If so, circle the CCC "3" edited on the return. Delete CCC "3" .

    4. If no reply is attached, circle the Correspondence Received Date entered on the return and delete the entry in the field 01CRD.

3.12.213.7.16  (01-01-2014)
Error Code 800 - RRPS and No Received Date

  1. Fields Displayed :

    Field Designator Field Name Length
    01RCD Received Date 8

  2. Invalid Conditions: The return was processed through RRPS (Returns Remittance Processing System) and the Received Date is not present.

  3. Correction Procedures: Determine the Received Date using the following the directions in IRM 3.12.213.4.4.

3.12.213.7.17  (01-01-2014)
Error Code 812 - Balance Due/Overpayment Math Verification

  1. Fields Displayed:

    Field Designator Field Name
    NC Notice Codes
    0705A Total Tax
    0706 Tax Paid with Form 7004
    07TTE Telephone Excise Tax Return Refund Amount (previously Line 2b; now dotted portion to the left of Line 4.)
    07TC> Telephone Excise Tax Return (Computer Generated)
    07TRV Telephone Excise Tax Return (Verified Field)
    07B/R Balance Due/Overpayment
    ("ERS input only" Field)

  2. Invalid Condition: The difference between Balance Due/Overpayment Computer and ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. Correction Procedures:

    1. Check for transcription or taxpayer errors. Compare Field 0705A (Total Tax) against the taxpayer’s entry on the return, Line 1, Section II (Tax and Payments), Page 1, Form 1066.

    2. The computer will compute Balance Due/Overpayment Computer field by subtracting Field 0706 (Tax Paid with Form 7004) and Field 07TTE (Telephone Excise Tax Credit) from Field 0705A (Total Tax).

    3. If the return is blank, verify the "Total Tax" amount against the amount on Line 12, Part IV (Total Tax) Schedule J.

    4. If Schedule J, Part IV, Line 12 is blank, but there are items on Schedule J under Part I (Tax on Net Income From Prohibited Transactions), Part II (Tax on Net Income From Foreclosure Property), and/or Part III (Tax on Contributions After the Startup Day), math verify each of the following items as described below:

    If ... Then ...
    Tax on Net Income From Prohibited Transactions (Schedule J, Part I, Line 4) is being verified, 1. Line 2 (Total Income) must equal the sum of Lines 1a, 1b, 1c, and 1d.
    2. Line 4 must equal Line 2 minus Line 3.
    Tax on Net Income From Foreclosure Property (Schedule J, Part II, Line 10) is being verified, Math verify the following:
    1. Line 7 (Total Income from Foreclosure of Property) must equal the sum of Line 5 plus Line 6.
    2. Line 9 must equal Line 7 minus Line 8.
    3. Line 10 must equal 35% of Line 9.
    Total Tax (Schedule J Part IV, Line 12) is being verified, 1. Add Lines 4, 10 and 11, Schedule J.
    2. Enter the sum on Schedule J, Part IV, Line 12, and on Page 1, Section II, Line 1 (Form 1066).
    3. If correct as transcribed, attach an adding machine tape verifying Schedule J.
    4. Enter the total in Field 0705A.
    5. Correct Schedule J, Part IV, Line 12, and Page 1, Section II, Line 1 (Form 1066) on the return, if different.
    6. Compare Field 0706 (Tax Paid with Form 8736/8800) against the taxpayer’s entry on the return (Line 2, Section II) (Tax and Payments), Page 1, Form 1066.
    7. Correct the screen display if different.
    All corrections are made and there is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Send appropriate TPNC.
    CCC "4" is present, 1. Enter the amount from the verified total (Balance Due/Overpayment Computer) in Field 07B/R (the "ERS input only" field).
    2. This will clear Error Code 812 from the screen display.
    No corrections are needed to Fields 0705A, 0706, and/or 07TTE,

    Caution:

    Do not attempt to correct Field 07TTE. Correspond to verify taxpayer entry.

    Send the appropriate TPNC. See IRM 3.12.213.7.17.1, Taxpayer Notice Codes.

    Note:

    Field 07TC> is the computer generated total from Form 8913, Credit for Federal Telephone Excise Tax Refund. Field 07TRV is the Telephone Excise Tax Return Verified Field.

3.12.213.7.17.1  (01-01-2014)
Taxpayer Notice Codes

  1. The allowable Taxpayer Notice Codes (TPNC) are provided as follows:

    Taxpayer Notice Code (TPNC) Definition
    01 We found an error in the computation of your total income from prohibited transactions.
    05 We found an error in the computation of tax on net income from prohibited transactions.
    10 We found an error in the computation of tax due or overpayment amount.
    20 We found an error in the computation of tax on net income from foreclosure property.
    25 We found an error in the computation of tax on contributions after the startup day.
    90 Blank Notice - 10 blank lines are available on the notice for whatever statement is needed.

3.12.213.7.18  (01-01-2014)
Error Code 999 - End of Year Conversion

  1. Fields Displayed - The field displayed for Error Code 999 is:

    Field Designator Field Name Length
    01TXP Tax Period 6

  2. Invalid Condition: Error Code 999 will be generated for all returns that are in error status at the end of the processing year.

  3. Correction Procedures: Since the system will revalidate the record and set validity checks based on next processing year's programming, the only correction procedure required for Error Code 999 is for the tax examiner to transmit.

Exhibit 3.12.213-1 
Form 1066 - U.S. Real Estate Mortgage Investment Conduit Income Tax Return

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Exhibit 3.12.213-2 
♦Action Codes♦

Action Code Description Workday Suspense Period Function Used In
001 Input Document 0 GEN
  Correspondence
210 EPMF Correspondence 60 ES, S
211 First Taxpayer Correspondence 40 CE, EC, S
212 Second Taxpayer Correspondence 25 CE, EC, S
213 Correspondence to Other Than Taxpayer 40 CE, EC, S
215 International Correspondence 45 CE, EC, S
225 Taxpayer Correspondence (Signature Only) Domestic 40 CE, EC, S
226 Taxpayer Correspondence (Signature Only) International 40 CE, EC, S
  In-House Research
300 Examination (Fuel Tax Credit) 10 CE, EC, S
310 Statute Control 10 CE, EC, S
320 Entity Control 10 CE, EC, S
  Criminal Investigation Division
331 Frivolous Review 3 CE, EC
332 QRDT Review 3 CE, EC
333 Prompt Audit 10 CE, EC, S
334 Joint Committee 10 CE, EC, S
335 Frivolous Case 10 CE, EC, S
336 QRDT Case 10 CE, EC, S
337 Other CID (Criminal Investigation Division) 10 CE, EC, S
  Accounting
341 Manual Refund 10 CE, EC, S
342 Credit Verification 10 CE, EC, S
343 Black Liquor 10 CE, EC, S
344 Manual Refund - ERS 0 EC
  MFTRA Research
351 TIN Research 0 EC, S
352 Name Research 3 CE, EC, S
353 Address Research 3 CE, EC, S
354 Filing Requirements Research 3 CE, EC, S
355 Other MFTRA Research 5 CE, EC, S
360 Other In-House Research 10 CE, EC, S
370 Examination 10 CE, EC, S
  Management Suspense
410 Assistance Needed 0 EC
420 2006 tax return with Form 8913 credit (TETR) 5 CE, EC, S
430 Management Suspense B 10 CE, EC, S
440 Management Suspense C 15 CE, EC, S
450 Management Suspense D 20 CE, EC, S
460 Management Suspense E 25 CE, EC, S
470 Complex Error Codes 0 EC
480 Early Filed Suspense 150 CE, EC, S
490 System Problem 5 CE, EC, S
  Missing Document
510 Missing Document 0 CE
511 Missing Document - 1st Suspense 25 EC, S
512 Missing Document - 2nd Suspense 20 S
513 Missing Document - 3rd Suspense 20 S
515 Missing Document - Short Term 5 EC, S
  Rejects
550 Magnetic Tape Return - Check for Attachments 0 CE
551 Magnetic Tape - Inconsistent Data 0 CE
610 Renumber - Non-Remit 0 CE, EC
611 Renumber - Remit 0 CE, EC
620 NMF/Non-ADP 0 CE, EC, S
630 Reinput 0 EC, S
640 Void 0 CE, EC, S
650 International (ACI) 0 CE, EC, S
660 Data Control Delete (TEP Delete) 0 S
670 Rejected Missing Document 0 S
700 Duplicate Block DLN 0 GEN
711 Duplicate Document DLN from Code & Edit 0 GEN
712 Duplicate Document DLN from Error Correction 0 GEN
713 Duplicate Document DLN from Unpostables 0 GEN
714 Duplicate Document DLN from Unworkable Suspense 0 GEN
715 Duplicate Document DLN from Workable Suspense 0 GEN
800 NAP Linkage Problem 2 EC, S
900 Unpostable Record 0 GEN
CE = Code & Edit
EC = Error Correction
S = Suspense Correction
GEN = Computer Generated

Exhibit 3.12.213-3 
♦U.S. Possessions/Territories State Abbreviations and ZIP Codes♦

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

Exhibit 3.12.213-4 
♦Province/Country Code - Canada Only♦

Canadian Province Province Abbreviation Country Code
(Field 02CTY)
Alberta AB XA
British Columbia BC XB
Manitoba MB XM
New Brunswick NB XN
Newfoundland and Labrador NL XL
Northwest Territories NT XT
Nova Scotia NS XS
Nunavut NU XV
Ontario ON XO
Prince Edward Island PE XP
Quebec QC XQ
Saskatchewan SK XW
Yukon YT XY

Exhibit 3.12.213-5 
♦Province, State and Territory Abbreviations♦

Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Esperito Santo ES
Goias GO
Maranhao MA
Mato Grosso MT
Mato Grosso do Sul MS
Minas Gerais MG
Parana PR
Paraiba PB
Para PA
Pernambuco PE
Piaui PI
Rio Grande do Norte RN
Rio Grande do Sul RS
Rio de Janeiro RJ
Rondonia RO
Roraima RR
Santa Catarina SC
Sergipe SE
Sao Paulo SP
Tocantins TO
Canada Province/Territory Abbreviation
Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT
Cuba Provincias Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad di La Habana CH
Gramma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matazas MT
Municipio Especial Isla de la Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
Italy Provincia Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Bari BA
Belluna BL
Beneveto BN
Bergamo BG
Biella BI
Bologna BO
BolozanoBolzen BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanisetta CL
Campobasso CB
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CZ
Crotone KR
Cuneo CN
Enna EN
Ferrara FE
Firenze FI
Foggia FG
Forli FO
Frosinone FR
Genova GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova MN
Massa-Carrara MS
Matera MT
Messina ME
Milano MI
Modena MO
Napoli NA
Novara NO
Nuoro NU
Oristano OR
Padova PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Pavenna RA
Peggio de Calabria RC
Reggio nell'Emilia RE
Rieti RI
Rimini RN
Roma RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino TO
Trapani TO
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia VE
Verbania VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vincenza VI
Viterbo VT
Mexico State Abbreviation
Aguascalientes AGS
Baja California Norte BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana ROO QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Lemburg LB
North Brabant NB
North Holland NH
Overijssel OV
South Holland ZH
Utrecht UT
Zeeland SLD

Exhibit 3.12.213-6 
♦Potential Frivolous Returns♦

Potential Frivolous Arguments for Examination Review
Alleged Churches/First Amendment Income from non-religious sources and may claim a vow of poverty.
Altered Form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/UCC 1-207 Return contains income and deductions but the jurat has been altered or stricken. May include reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 843 Claim Amended return or a Form 843 filed to obtain a total refund of all taxes paid in prior years, based on a tax avoidance argument.
C-Filings This frivolous position includes the following four categories:
a) Files a return claiming various types of deductions, credits or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.
b) Files a return containing the filers identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.
c) Files a return with various types of rambling dialogue and/or crazy arguments that no one could reasonably view as a good faith attempt to comply with the law.
d) Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying information for the Service to either determine the identity of the taxpayer or correspondent or return address.
Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, privacy act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named
Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due" , making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.
Form 1099-OID
(Original Issue Discount)
An individual files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and all of them claim a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID (Original Issue Discount) attached and some have Forms 1096. Other false financial instruments may be filed in the place of or in addition to the Forms 1099-OID such as Form 2439, promissory notes, bonds, sight drafts, etc.
IRC 861 Business
Employment Tax (BMF 861)
Argument targets employers and advises them that wages are exempt from withholding. Based on 26 CFR Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a "new world order" .
Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC Section 7701(a)(14).
Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "straw man" and any tax obligations are exclusively those of the "straw man" .
Taxes are Voluntary/Law Does Not Require Submits a return, amended return or correspondence that argues income taxes are voluntary.
U.S. v. Long Submits a return with zero money amounts. To explain the zeros inserted on the form, the individual references "U.S. vs. Long" .
Unsigned Returns The individual completes a return but fails to sign, a statement indicating disagreement with the tax system is attached or added to the return.
Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC §861, Forms 2439, OID and other BMF filings that claim no income and request refunds). See Revenue Ruling 2004-34. A statement is attached claiming there is no section of the Internal Revenue Code that established an income tax liability. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

Note:

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

Other All others including those listed in Notice 2008-14 or any subsequent superseding Notice. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.

Note:

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


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