- 3.12.213.1 Purpose and Scope
- 3.12.213.2 ♦BMF Consistency♦
- 3.12.213.3 Section 01 - Correction Procedures General Information
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Error Resolution System for Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, corrects errors made by taxpayers as well as those made by submission processing campus operations.
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Records will be placed in the Error Inventory or the Workable Suspense Inventory for correction. Once the Error Resolution tax examiner accesses the record and it is displayed on the screen, it must either be fully corrected, placed in suspense for additional information, or rejected from pipeline processing. Corrections will include correcting errors in editing or transcription and correction of math errors.
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This manual is your main source of information in correcting the record on the screen and the related return. You will also find procedures in the following Internal Revenue Manuals:
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IRM 3.12.38, Error Resolution–Business Master File (BMF) General Instructions, containing instructions for correcting records on the screen, document control, inventories and management reports.
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IRM 3.11.213, Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, Returns and Document Analysis, which provides instructions for coding and editing of Form 1066.
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The Restructuring and Reform Act of 1998, Section 3705, provides identification requirements for all IRS employees working tax related matters.
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IRS employees are required to give their title, last name, and unique identification number, Integrated Data Retrieval System (IDRS) number or badge number, during taxpayer telephone, face to face, and written contact. In addition, a telephone number is required on all taxpayer correspondence.
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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 the taxpayer may have about the correspondence or the employee is asking the taxpayer to provide additional case-related information.
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Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.
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 11.3.1.10 (Facsimile Transmission of Tax Information) must be reviewed prior to faxing confidential information to the taxpayer.
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Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, TAS Case Criteria) and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS in accordance with your local procedures.
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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), Criminal Investigation (CI), Appeals and Large & Mid-Size Business (LMSB), 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).
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The SLAs are located at http//tas.web.irs.gov under the heading "Policy/Procedures/Guidance" .
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The following forms are referenced in this section. The chart below shows the form number, form title and use:
Form Title Use 3465 Adjustment Request To request transfer of credits. 3696 Correspondence Action Sheet To initiate correspondence to the taxpayer through the Suspense Unit. 4227 Intra–SC Reject or Routing Slip To identify the reason for using the Action Code. 8161 Error Resolution System (ERS) Return Charge-out To charge out returns on the new Suspense List, Rejected Records List and Duplicate DLN Register. Input Perfection will also use as a routing slip and history item.
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Each day the Error Inventory Report will be furnished showing the blocks by the block control number and block Document Locator Number (DLN) in DLN order.
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Each batch will be on separate pages. Blocks received from Blocks out of Balance (BOB) will also be on separate pages.
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A copy of the Error Inventory Report can be placed on the carts of documents and used as a charge-out. This will help to determine when a cart is completed.
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The first line of the Error Inventory report will show the number of working days the records on that page have been in the Error Inventory. This will enable work left from a previous day to have priority.
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Each day the Workable Suspense Inventory Report will be furnished showing the records by program in DLN order for each status. Separate pages for each program with totals will be provided.
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The report will show the number of working days that the records have been in the Workable Suspense Inventory. This is the first line of the report. This will allow priority to be given to the older work.
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The Error Resolution System (ERS) will identify errors according to type and priority. The record heading will show the type of error.
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This IRM will furnish the solution for the displays of the errors. There may be records where the examiner finds that programming has not furnished a section that is needed to solve an error. In this event, the tax examiner can use Command Code GTSEC. This should be reported to the National Office for correction of the display.
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Action Code Error (Priority I);
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Section Error (Priority II) - includes terminus error and Integrated Submission and Remittance Processing (ISRP) problem code;
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Validity Error (Priority III);
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Math/Consistency Error (Priority IV).
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Records for the documents in the Error Resolution System (ERS) are controlled by Status Codes. The status is updated when the record is placed in a specific inventory.
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Below is a list of the status codes and a brief explanation:
Status Code Description Status 100 1. Error awaiting correction.
2. Records are in the Error Inventory.Status 2XX 1. Record awaiting information.
2. Records are in the Unworkable Suspense Inventory.Status 3XX 1. Suspense period expired - no response.
2. Records are in the Workable Suspense Inventory.Status 4XX 1. Record with information, awaiting correction.
2. Records are in the Workable Suspense Inventory.Status 900 Record is on the Unselected Inventory. -
The final two positions of the Status Code will consist of the first two positions of the Action Code. This will put similar work together on the Workable Suspense Inventory. For example: 321 - Suspense period expired, no response to taxpayer correspondence. If a record has been selected to be held for Quality Review, the positions 2 and 3 will be "QA" .
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Records for which the suspense period has expired before being activated are automatically moved from Status 2XX to Status 3XX.
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The Command Codes needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below.
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These are explained in IRM 3.12.38, BMF General Instructions and IRM 2.3, IDRS Terminal Responses. Any Command Code permitted by the Employee Security File will be available.
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Used to access the first error record in an ERS error block or access a specific record in the Workable Suspense Inventory.
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Used to enter a correction. CRECT will be valid only after an error has been displayed in response to the GTREC command. The Remittance field in a record is not correctable with the Command Code CRECT.
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Used to obtain the display of any data section within the record in progress. The response will be the display of all correctable fields of the requested section, including blank fields. No computer generated fields or error indicators will be shown. If no data is present in the specified section, the format of the requested section will be displayed.
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Used to recover an ERS data record that was already worked. This Command Code can be used at any time on the same processing day. If an error is discovered on a subsequent day, the record must be corrected using Notice Review and Adjustment procedures.
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Used with an ERS Action Code to place a record into suspense status. SSPND is valid for Error Correction and Suspense Correction.
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Used to transfer an Unworkable Suspense record to the Workable Inventory.
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The ERS Action Code indicates that specific information is missing or that the record is to be rejected from processing. The code will have sufficient detail to indicate if correspondence is to be sent to the taxpayer or specific in-house research or action is required.
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Document Perfection tax examiners will assign a three digit code to numbered returns when they determine that the document is unprocessable in its present form either because additional information is needed or some manual intervention is required. This code will be edited in the lower left margin of page 1 preceded by 10-. See Exhibit 3.12.213-2 for a listing of the Action Codes.
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Form 3696, Correspondence Action Sheets, used for initiating correspondence, will be attached by Document Perfection. For routing within the campus (In-House Research) an explanation concerning the missing information will need to be attached to the return.
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The Action Code assigned to Document Perfection will be transcribed into the record of the Form 1066.
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The presence of a valid Action Code other than 001, will place the record in the Suspense Inventory, either Workable or Unworkable.
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If the Action Code assigned by Document Perfection is invalid or incomplete, the record will be assigned to the Error Inventory for correction or deletion of the code.
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Only one Action Code may be assigned at one time to a record. The priority of the Action Codes will be:
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310
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320
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6XX
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4XX
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3XX
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2XX
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An ERS tax examiner may enter an Action Code on a record, delete or correct an invalid code or may overlay the present Action Code with another to either re-suspend or reject from ERS. This is done by entering a valid Action Code with a Command Code SSPND, RJECT or NWDLN. See IRM 3.12.38, BMF General Instructions, for explanations of these codes.
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An ERS tax examiner entering a valid Action Code with the SSPND Command Code will be clearing the record from the screen and placing the record in either Workable Suspense or Unworkable Suspense.
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An ERS tax examiner entering a valid Action Code with the RJECT Command Code will be rejecting the record from ERS. Generally, the Service Center Control File (SCCF) will be automatically updated for the rejected records.
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Computer Condition Codes are used to identify a special condition or computation for the computer. The valid Computer Condition Codes are B, D, F, G, L, O, Q, R, W, X, 3, 4 and 7.
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The Codes are edited to the dotted portion of Section 1, Line 1.
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Below is a chart showing the Condition Codes, their definitions, and the checks.
Code Definition Error Checks B Electing out of installment sales D Reasonable cause for failure to pay taxes timely Must have a received date (Error Code 028) F Final Return Cannot be coded "G" (field error) G Amended Return (1) No other codes allowed except "W" or "3" (field error)
(2) Must have received date (Error Code 028)
(3) All fields must be blank, except RMIT, 01CCC, 01NC, 01EIN, 01TXP and 01RCD (Error Code 010)L Treaty Based Positions O Module Freeze Manual Refund Q Telephone Excise Tax Refund (TETR) Used to indicate that the return was filed for the TETR Refund only (i.e., no other money amounts are on Form 1066). R Reasonable cause for delinquency Must have a received date (Error Code 028) W Return cleared by Statute Must be present on Statute Cases (Error Code 001) X Refund Freeze Code 3 No reply received for correspondence sent to taxpayer, suppress credit interest. Must not contain Correspondence Received Date (Error Code 073) 4 Return prepared under IRC Section 6020(b) 7 Reasonable cause for delinquency or late payment considered and denied. Must have a received date (Error Code 028)
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The letter "C" is used as Clear Code on an Error Code where the error condition is such that the resolution does not require a change or correction to the record as displayed. The display will include a clear field labeled "CL" to indicate the possible need of a Clear Code. Command Code CRECT is used to enter the "C" .
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Error Codes indicating the possible need of a Clear Code are cleared by either correcting the condition or entering a "C" to indicate no correction is needed.
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Code "C" is also used for clearing the Action Code from the screen after corrections for the Action Code are completed, or, as with 410, the Action Codes must be cleared initially, so other errors in the record can be resolved. The presence of the "C" with Priority I Error indicates that you have made the corrections to the Action Code and now wish to have any other errors on the record displayed (allowing for suspense correction only).
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The "000" is also used as a Clear Code when deleting Action Codes. It will only be used for invalid or erroneous Action Codes after you have determined there is no reason to suspend the record.
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Programming erases all "C" Clear Codes for Error Codes when a record is suspended with Command Code SSPND.
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Programming erases all "C" Clear Codes for Error Codes and Action Codes for the new day’s Error Inventory and Workable Suspense Inventory. Unfinished records from the previous day will contain none of the "C " Clear Codes that were assigned to a record that was not completely worked.
Note:
The "C" Clear Code will prevent any other corrections to the record. If a correction must be entered and transmitted, it must be done prior to transmitting the "C" Clear Code.
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If a return is unprocessable because of missing information that can be provided through research, then perform in-house research or, if necessary, refer the document to another area of the campus for resolution.
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Unprocessable condition can be resolved with correspondence.
If... Then... Perfection of a return is not possible and it is necessary to correspond for missing signature or attachments, Initiate correspondence by using Form 3696, Correspondence Action Sheet, to request missing information. See IRM 3.12.213.1.12.1.2, Use of Fax for Taxpayer Submissions. Note:
Do not correspond for a signature on "CIS" returns that have a Form 13596attached. See IRM 3.12.213.1.12.1.1, Correspondence Imaging System, for processing instructions.
It is necessary to suspend the unprocessable record, Enter the Command Code SSPND followed by the appropriate Action Code. The condition is a new suspense item, A charge-out (Form 8161) will be computer generated. The charge-out will be used for pulling documents as well as routing and controlling documents while the record is being held in suspense and for use in associating the document with the Workable Suspense Inventory when the record becomes workable. A record appears on the Workable Suspense Inventory, with the Action Code as first priority, The tax examiners will add the information received to the record or follow the IRM instructions for the "no reply" and clear the Action Code by entering the letter "C" in the Clear Field and transmitting. Once the Action Code is cleared, any Validity, Section or Math/Consistency errors will be displayed for correction. Records are unprocessable and again require suspension for additional information, A charge-out will not be generated for suspended items. The charge-out should be notated in the appropriate block by entering the Action Code and date.
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Correspondence Imaging System (CIS) is an inventory system for scanning all Accounts Management (AM) receipts into digital images and working the cases from those images.
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"CIS" returns are identified with "CIS Image-Do not correspond for Signature" stamped below the signature line or "CIS" annotated on the front of the return.
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Follow the instructions below for processing"CIS" returns:
If... And... Then... The "CIS" return has a Form 13596 attached, Note:
If there is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), do not route return to Accounts Management. Continue processing return.
The return is not complete (e.g., missing signature, schedules or forms), -
Remove the return from the batch.
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Void the DLN.
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Attach Form 4227 to the return and route to Accounts Management to secure missing information.
Note:
Do not correspond for missing information on "CIS" reprocessable/re-input returns.
The "CIS" return does not have a Form 13596 attached, The return is not complete (e.g., missing signature, schedules or forms), Follow normal correspondence procedures. -
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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.
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Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.
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 11.3.1.10 (Facsimile Transmission of Tax Information) must be reviewed prior to faxing confidential information to the taxpayer.
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Code & Edit examiners will indicate the fax paragraph on the Form 3696, Correspondence Action Sheet, to advise taxpayers of the option to fax their response.
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Some unprocessable conditions can be corrected without correspondence.
If... Then... Perfection may be possible but the record may require renumbering, 1. Uncorrectable fields, such as the DLN, may need correcting and the record will require rejecting for re-entry.
2. Reject the record by entering the Command code RJECT followed by the Action Code 630.A new DLN is to be assigned, Use Command Code NWDLN, with the appropriate Action Code, the new DLN, and new Master File System ID Code, if required.
Note: A charge-out will be generated for all Rejected Records. The charge-out will remain in the Files function for future reference.The DLN was transcribed incorrectly and is incorrect on the screen. The DLN appearing on the charge-out is erroneous, The correct DLN must be noted on the charge-out for use in pulling the document. Inform your supervisor of the block involved, and the physical location of the document. Perfection is not possible, The record may be rejected from ERS and action initiated to have the DLN voided. Remittance is involved, Transfer the remittance. If you cannot determine where to transfer the remittance, transfer it to the "Unidentified Remittance File" . -
ERS will automatically control most of the adjustments to SCCF. When manual adjustment is required, Form 4028, Service Center Control File Adjustment Record (SCCF Form Code 216), will be used for ERS. Preparation of Form 4028 is explained in IRM 3.12.38, BMF General Instructions.
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Any return that has a processing date equal to or greater than two years and 9 months after the return due date (for "G" coded returns) or the later of the return due date or the received date (for non "G" coded returns) is a statute control document and will appear on the screen with Error Code 001, unless Computer Condition Code "W" is present on the record. The "W" indicates the record has been cleared by the Statute Unit.
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The due date for Form 1066 is the 15th day of the fourth month after the tax period ending.
If... Then... Return secured by Compliance (e.g., 6020(b)) or a substitute return prepared by Examination (SFR in top margin) with Form 13133, Expedite Processing Cycle, attached, Enter Computer Condition Code "W" in 01CCC and on the dotted portion of Section 1, Line 1 and continue processing.
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Document Perfection is responsible for identifying refunds and for initiating requests for manual refunds.
Note:
Expeditious processing of refund returns is critical if the 45-day period is about to expire.
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Action Code 341 should be input by Code & Edit to show that a manual refund is needed.
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If these are not identified in Code & Edit, ERS examiners need to be aware of the following criteria:
If... Then... The processing date is more than 20 days after received date or the return due date (whichever is later) and the 45-day interest free period is in jeopardy and the refund amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Note:
Refund in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other periods.
1. Input AC 341.
2. Route to Accounting for manual refund.The refund is $1,000,000 or more, 1. Input AC 341.
2. Route to Accounting for manual refund.
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Any return hand walked by a Wage & Investment (W&I) Submission Processing (SP) liaison for TAS as a manual refund should be processed by a lead tax examiner or designated tax examiner using the following procedures in the order listed:
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CCC "O" should be edited on the return and entered in Field 01CCC.
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Delete the CCC "Y" from Field 01CCC.
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Continue the process of the return according to Error Code processing.
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Correspondence–If the return requires correspondence for missing or incomplete information, then do the following:
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Complete the appropriate correspondence request form and request all information that is missing or incomplete.
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Inform the W&I SP liaison of all information that is being requested.
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Suspense (SSPND) with appropriate suspense code and give the return back to the W&I SP liaison.
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The W&I SP liaison will contact the Taxpayer Advocate to obtain the required information needed to complete the processing of the return.
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Other Suspense Action–If the return requires other suspense action, then do the following:
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Initiate suspense (SSPND) action according to the Error Code procedures.
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Inform the W&I SP liaison the reason of the action taken.
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Give the return back to the W&I SP liaison.
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The W&I SP liaison will contact the Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return.
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Assigning Taxpayer Notice Codes (TPNC)/Math Error–When a math error is identified, do the following:
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Assign the TPNC in accordance to the Error Code procedures.
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After all TPNCs have been assigned, inform the W&I SP liaison of the TPNCs issued.
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Suspend (SSPND) with appropriate code (suspense should be done at the generated error code) and give the return to the W&I SP liaison.
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The W&I SP liaison will contact the Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return.
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When Balance Due/Overpayment Math Error Code generates do the following:
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Make a screen print of the Error Code Screen Display, highlight the Computer Generated Refund amount, and attach the print to the front of the return with the entity portion of the return visible.
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Enter the amount the taxpayer claimed as the amount they requested to be refunded back into Field 07B/R.
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If Balance Due/Overpayment Math Error Code regenerates because the taxpayer made a math error when computing their refund, then do the following:
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Make a screen print of the Error Code Screen Display and highlight the Computer Generated Refund Amount.
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Attach the print to the front of the return with the entity portion of the return visible.
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Assign the appropriate TPNC.
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Once return processing is complete, give the return, Form 12412 (Operations Assistance Request), and the ERS screen print to the W&I SP liaison.
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Rejects Suspense–Manual refunds that are hand walked by a W&I SP liaison that have been suspended should be processed as follows:
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Follow the specific instruction given by the W&I SP liaison in regards to correspondence issues and the assignment of the TPNCs.
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Refer to instructions shown above.
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A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 4.10.12 (Frivolous Return Program) shown in Exhibit 3.12.213-6.
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Review of the return to determine whether it appears to be a frivolous return.
If... Then... The return meets any of the conditions identified as a frivolous return, (see Exhibit 3.12.213-6). Caution:
If the return shows Action Code 440 (Ogden Submission Processing Center (OSPC)) or 331 (Cincinnati Submission Processing Center (CSPC)), and has a Form 4227 attached with the remarks, "Refer to Exam FRP for audit after processing" , continue to next procedure.
Remove the return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review. Note:
IRM 4.10.12.1.3.3 (Campus FRP Coordinators) requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two (2) business days. If a determination is not made within the allowed timeframe, the Examination examiner will edit Action Code 440 (OSPC) or 331 (CSPC) in the lower left margin of Form 1066.
Examination has selected the return as frivolous, e.g., indicated by an Action Code 440, (OSPC) or 331, (CSPC), and a Form 4227 with the remarks "Refer to Exam FRP for audit after processing" , but sends the return for processing, Continue processing the return using the procedures in IRM 3.12.213. However, do not circle or void the Action Code indicating a frivolous return. Note:
Returns having only zeros, no entries, are blank or indicate "None" , "Not Liable" , etc., with no evidence of a frivolous argument are not to be considered as frivolous returns.
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The following information pertains to taxpayer correspondence.
If... Then... Unrelated, unanswered taxpayer correspondence is attached and no action has been taken, Detach and route to Accounts Management. Unanswered taxpayer correspondence related to the Form 1066 is attached, Make a photocopy of the attachment and forward it to the appropriate area. Installment Agreement request or Form 9465, Detach and send to Collections. Attachment or photocopy of an attachment is to be routed elsewhere, Be sure that the attachment contains name, address, EIN and received date.
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The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) processing IRMs.
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Topics for BMF Consistency have been identified and developed as a coordinated effort between CSPC, OSPC, and Paper Processing Branch, BMF Code & Edit/ERS Section.
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BMF Consistency subsections are identified by a "♦ " (diamond) before and after the title.
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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.
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Section 01 contains the entity data and codes for returns. See Exhibit 3.12.213-1 for location of field designators on Form 1066.
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The field designator, maximum length for each entry, title and location where the entry can be found are listed below.
Field Designator Max Field Length Title Location 01NC 4 Name Control/Check Digits Pg. 1, Name Line preprinted label >>>> Name Control Underprint 01EIN 9 Employer Identification Number Pg. 1, Box A, or label 01TXP 6 Tax Period Pg. 1, Form 1066 (upper right corner) >>>> Tax Period Underprint 01RCD 8 Received Date Pg. 1, Form 1066 (face of return) 01CCC 10 Computer Condition Code Dotted portion of Section 1, Line 1 01DOB 6 Date REMIC Started Page 1, Box B 01NOR 6 Number of Residual Holders Left margin of the "Deductions" section preceded by " 3-" 01TEF 1 TEFRA Left margin of the "Deductions" section preceded by " 4-" 01MSC 4 Missing Schedule Code Left margin of the "Deductions" section preceded by " 5-" 01CRD 8 Correspondence Rec’d Date N/A, no longer edited by Code & Edit 01CAF 1 CAF indicator No longer edited 01ADC 3 Audit Code Left margin of the "Deductions" section preceded by " 8-" 01ISI 1 Installment Sale Indicator Left margin of the "Deductions" section preceded by " 9-" 01CBI 1 Paid Preparer Checkbox Indicator Pg. 1, Form 1066, checkbox in bottom right corner 01PSN 9 Paid Preparer SSN or PTIN Pg. 1, Form 1066, below checkbox. 01PEN 9 Paid Preparer EIN Pg. 1, Form 1066, below checkbox. 01PTN 10 Paid Preparer Phone Number Pg. 1, Form 1066, below checkbox.
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The Name Control is located on Page 1, entity area, first name line, or on the preprinted label.
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01NC has four positions and the valid characters are alpha, numeric, hyphen (-), ampersand (&), and blank.
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The Name Control field is invalid if any of the following situations occur:
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The first position is not alpha or numeric.
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The first position is blank or there are intervening blanks between characters.
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The second, third, and fourth positions are not alpha, numeric, ampersand, hyphen or blank.
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This field is located in the Entity Section of the return on a preprinted label. This is also a four-position field.
IMPORTANT: There must be blanks in the first two positions and a letter of the alphabet in the third and fourth positions.
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Check the field with the return-
If... Then... The data was transcribed incorrectly, 1. To determine the correct name control, see Document 7071-A, Name Control Job Aid.
2. Check digits have priority over the name control.
3. If name control is unavailable, research using Command Code ENMOD or INOLE to secure the name control.Name control is found, Enter the correct name control in Field 01NC and on the return. Unable to determine the name control, 1. Suspend the record with Action Code 320.
2. Route to Entity Control.
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The data for this entry is located in Box A on the return or on the preprinted label.
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The entry must contain nine numeric digits and cannot begin with 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.
If... Then... The EIN has any of the numbers shown above in the first two positions, or is other than nine numeric characters, Compare 01EIN with the EIN on the return and correct any transcription errors. The EIN was transcribed correctly, 1. Search the return and attachments and IDRS for another EIN. If one is found, enter it on the return and on the screen.
2. If the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return. Continue processing the return.Note:
Do not send Letter 3875C if three or less digits of the EIN are transposed, different or missing or when INOLES indicates the account has been "merged to" or "merged from" .
There is no record of an EIN, Suspend the record with Action Code 320 and route to Entity Control for an EIN to be assigned. Entity Control has found the correct EIN, Enter it in Field 01EIN. Entity Control has assigned an EIN, Enter it in Field 01EIN. Enter the entity assignment date, found in the lower left hand corner of the return in Field 01CRD if it is after the due date of the return.
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The tax period is printed in year (YYYY), month (MM) format (e.g., December 31, 2008 will be displayed as 200812). The tax period is located above the first name line, to the right on the return.
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The tax period must be present and contain six numeric digits.
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The last two digits must be 12, unless the Form 1066 is a final return. Valid entries for tax period month on final returns are 01 through 12.
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The year (first four digits) must not be greater than the current year.
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The tax period cannot be earlier than 198712.
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The following information pertains to correction procedures for the tax period:
If... Then... The correct tax period cannot be determined from the return, Process for the current year. Multiple tax periods are on the return, Correspond with the taxpayer and suspend the record with Action Code 21X.
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The received date appears on return in MMDDYY format, but will be displayed in YYYYMMDD format. It must be eight numerics. The fifth and sixth digits (month) must be 01-12, and the seventh and eighth digits (day) must be 01-31.
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The received date must be equal to or greater than the tax period ending date and equal to or earlier than the current date.
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The following information pertains to correction procedures for received date.
If... Then... The received date was transcribed incorrectly, Enter the date from the return. The received date was edited incorrectly, Enter the date as determined in the following order of priority:
1. Earliest legible postmark date (U.S. Post Office, or Private Delivery Service postmark. If both present, use USPS postmark.)
2. Revenue Officer’s signature date.
3. Taxpayer’s signature date (only if within current year).
4. Julian control date.
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The valid computer condition codes are B, D, F, G, L, O, Q, R, W, X, 3, 4 and 7.
Computer Condition Code Definition "B" The REMIC has made an election out of the installment sale method notated on the margin of Form 4797 or Schedule D. "D" The taxpayer has established reasonable cause for failure to pay taxes timely. "F" Final Return. "G" Amended or superseding return - Computer Condition Code "G" is invalid if any other Computer Condition Code is present except "W" or "3" is present. "L" "Section 6114 Election or Treaty- Based Position Returns" - Taxpayer writes either "Section 6114" or "Section 6114 Election" on the return, or Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to the return. "O" "Module Freeze" - Form 3753 (Manual Refund Posting Voucher) is attached or a duplicate copy of Form 4466 (Corporation Application for Quick Refund of Estimated Tax) is attached. "Q" Used to indicate that the Form 1066 was filed for the Telephone Excise Tax Refund only. "R" The REMIC has established reasonable cause for filing a delinquent return. "W" Record cleared by Statute Control Unit. "X" Refund Freeze code. "3" No reply received for correspondence sent to taxpayer. Editing "CCC 3" suppresses computation of credit interest. "4" Return was prepared under IRC Section 6020(b). "7" Reasonable cause for filing a delinquent return or late payment of taxes was examined and denied.
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The following information pertains to 01CCC correction procedures.
If... Then... 01CCC was transcribed incorrectly, Enter the correct Computer Condition Code from the dotted portion of Section 1, Line 1. . 01CCC was transcribed correctly, Determine the correct code.
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The date REMIC started appears as YYYYMM format. The first four digits are the year and the last two digits are the month.
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Field 01DOB must be all numerics or all blanks.
If... Then... 01DOB was transcribed incorrectly, Enter the correct date from Page 1, Box B. Either the year or month is not present in Box B, Do not enter in 01DOB. The taxpayer enters a future date as the date business started, Do not enter in 01DOB.
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If other than 1 through 999,999, then the entry is invalid.
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This entry should reflect the Number of Residual Holders shown on Page 4, Question F.
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The following information pertains to the number of residual holders:
If... Then... 01NOR was transcribed incorrectly, Enter the correct Number of Residual Holders from the left margin of the "Deductions" section preceded by "3-" . The Number of Residual Holders was coded incorrectly, 1. Enter the Number of Residual Holders from Form 1066, Page 4, Question F.
2. Correct the number edited in the left margin of the "Deductions " section preceded by "3-" .Question F, Page 4, is blank and the Number of Residual Holders cannot be determined, 1. Use Action Code 211 to suspend the return.
2. Correspond for the correct Number of Residual Holders.Question E, Page 4, was checked "Partnership" by the taxpayer, This entry cannot be "0" or "1." The taxpayer’s entry is lower than "2" , 1. Use Action Code 211 to suspend the return.
2. Correspond for the correct Type of Entity and Number of Residual Holders.Taxpayer does not reply to correspondence, 1. Enter a "1" in field 01NOR and in the left margin of the "Deductions" section preceded by "3- " . Exception:
If Question E, Page 4, was checked "Partnership" enter a "2" .
Taxpayer’s figure exceeds 999,999, Enter "999999" (six 9s).
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Valid entries are 1 or blank.
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The following information provides correction procedures for Field 01TEF:
If... Then... 01TEF was transcribed incorrectly, Enter the correct code in the left margin of the Deductions section preceded by 4-. The incorrect code was edited, Determine the correct entry from the taxpayer's response to question G, Page 4, Form 1066 as follows:
1. Question G Box checked - Code 1.
2. All other instances, leave the entry blank.
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The valid entries for the Missing Schedule Code fields are 32, 35 and blank.
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Code "32" is used if Form 1066, Page 1, Section I, Line 3 ("Capital gain or loss" ), contains an entry, but Page 2, Schedule D (Capital Gains and Losses), is not attached or is blank.
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Code "35" is used if Form 1066, Page 1, Section I, Line 4 ("Ordinary gain or loss" ), contains an entry, but Form 4797, Sales of Business Property vs. Supplemental Schedule of Gains and Losses, is not attached or is blank.
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This field contains four (4) positions. It is possible that both codes may appear in this field. However, the field will not accept duplicate codes, and the data must be entered from left to right.
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The first position cannot be blank if the 2nd, 3rd or 4th position contains a Missing Schedule Code.
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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.