3.12.249  Processing Form 8752 (Cont. 1)

3.12.249.2 
Processing Form 8752, Required Payment or Refund Under Section 7519

3.12.249.2.2 
Section 01 Fields and Correction Procedures

3.12.249.2.2.6 
Field 01-E, Computer Condition Code (CCC)

3.12.249.2.2.6.5  (01-01-2014)
CCC "W" - Cleared by Statute

  1. CCC "W" is no longer edited by Code and Edit. This does not apply to Form 8752 processing. Statute of Limitations processing does not apply to Form 8752 because the form is considered a required deposit by the taxpayer and not a payment of tax due.

  2. If the tax period is in error due to a Statute issue, correct with Action Code 0.

3.12.249.2.2.6.6  (01-01-2014)
CCC "X" - Return Settlement Frozen

  1. Enter CCC "X" when taxpayer indicates excess remittance with return or overpayment be applied to another account. Enter CCC "X" in Field 01-E with Action Code 6.

3.12.249.2.2.6.7  (01-01-2014)
Field 01-E (CCC) Correction Procedures

  1. To correct Field 01-E (CCC), compare the CCC with the code entered on the Form 8752. If it is a transcription error, correct it by lining out the code in Field 01-E (CCC) and writing the correct code above it.

  2. If Form 8752 is coded incorrectly, determine the correct code by referring to the Computer Condition Codes information. Correct the return by lining out the code in Field 01-E, writing the correct code above it, and entering Action Code 6 on the error register.

  3. The field is invalid if Field 01-E contains a "G" and;

    1. There are entries past Field 01-F (Received Date), or

    2. If Field 01-F is blank, or

    3. If Field 01-E (CCC) contains entries other than "G" or "U" (on raw input only).

  4. To correct, determine if the return is an amended return.

  5. If the return is amended:

    1. Delete all fields in Section 01 past Field 01-F (Received Date).

    2. Delete all CCCs except "G" in Field 01-E (CCC).

    3. If Field 01-F (Received Date) is blank, enter the correct received date. See IRM 3.12.249.2.2.7, Field 01-F, Received Date.

    4. Enter Action Code 6 to the left of Section 01.

    5. Delete Section 02 (except Field 02-C (Deferral Ratio)) using Action Code 6.

  6. If the return is not amended:

    1. Line through the "G" code in Field 01-E (CCC) and enter Action Code 6 to the left of Section 01.

    2. Verify the remaining fields for correct data, enter any missing data and correct any erroneous data.

  7. To correct, refer to the tax period, computer condition codes, and received date on the return.

    1. Correct all coding errors and transcription errors in Field 01-E (CCC).

    2. Verify that the return is delinquent. If the return is delinquent (e.g., May 24, 2014), enter the received date (in YYYYMMDD format) in Field 01-F. (For example, enter May 23, 2014, as "20140524" .)

  8. The field is invalid if CCC "U" is present on correction processing. The "U" code is used by Code and Edit when a return must be rejected. If it is necessary to reject a return in Error Correction, use Action Code 3.

3.12.249.2.2.7  (01-01-2014)
Field 01-F, Received Date

  1. Field 01-F (Received Date) is invalid if any one of the following conditions are present:

    1. The month (fifth and sixth digits) is other than 01 through 12; or

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

    3. The received date is later than the processing date.

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

    5. The received date is blank with a CCC "G" , "D" , or "R" .

    6. It is blank and the processing date is greater than the year-month of the tax period by more than six months. This condition is valid on the correction run.

    7. It is blank and remittance is significant.

    8. It is blank and the Penalty and Interest Code is NOT blank.

    9. The received date is in a format other than YYYYMMDD.

    10. The received date is earlier than the tax period.

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

  3. If Field 01-F (Received Date) is invalid, refer to the return to determine the correct received date. Use Action Code 6, line out the received date on the error register and enter the correct date above the lined-out date.

    If Then
    There are multiple received dates on the return, Use the earliest received date in Field 01-F (Received Date).
    The tax period is correct and there is no remittance, Delete the received date.
    The tax period is correct and there is a remittance amount, Change the received date to the first day of the month following the tax period (e.g., 20XX0101).
    A remittance amount is present in Field 01-A (Remittance), then the received date must be present. If a remittance amount is not present, Determine the received date based on the instructions in (4) below.
  4. Determine the received date using the following priority when one is needed but is not stamped on the return or a valid handwritten received date is not present:

    1. The earliest legible postmark date (U.S. Postal Service, foreign or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service (USPS) postmark or foreign postmark date are as follows:

      If Then
      An envelope is not attached, Use the postmark date stamped on the face of the return.

      Note:

      When there are multiple returns in one envelope, the envelope is attached to one return and the postmark date is stamped on the other returns.

      The postmark is missing and the envelope is certified, Look for an "USPS.com Track & Confirm" record that has been attached to the return (should be before the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal procedures. See Exhibit 3.12.249-7, USPS.com Track & Confirm.
      If the "USPS.com Track & Confirm" record is not attached, no action is required.
      An envelope has both a USPS and private metered postmark, Use the USPS postmark.
      An envelope has a foreign and private metered postmark, Use the foreign postmark.
      An envelope has two private metered postmarks, Use the latest private postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.

      Note:

      A private metered postmark is to be considered timely if received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Service Center Automated Mail Processing System (SCAMPS) Digital Date

    3. Revenue Officer's or other IRS official’s signature date

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

    5. Document Locator Number (DLN) Julian date minus 10 days

    6. Current date minus 10 days

3.12.249.2.2.8  (01-01-2014)
Field 01-G, Penalty and Interest (P/I) Code

  1. Invalid Condition - Field 01-G (Penalty and Interest (P/I) Code) is invalid if any one of the following conditions are present:

    1. It is other than blank or "1,"

    2. It contains a "1" and the received date is not present, or

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

  2. Correction Procedures - Refer to the received date and tax period on the return to determine if the received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Blank the field if the taxpayer has not computed penalty, interest and/or the received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8752 must be filed and the required payment made to the Service on or before May 15th (of the year following the applicable election year). Therefore, Form 8752 for applicable election years beginning in ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ following the due date of the return, so the return is delinquent if received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Enter a "1" if the taxpayer has computed penalty and interest and the received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter the received date in Field 01-F (Received Date) if it is not present.

3.12.249.2.2.9  (01-01-2014)
Field 01-H, Partnership/S Corporation Indicator

  1. ISRP transcribes a "1" (Partnership) or "2" (S Corporation) based on the box checked by the taxpayer. If one of the boxes is checked, and Field 01-H (Partnership/S Corporation Indicator) is blank, enter the appropriate code on the error register. If both boxes or neither box is checked, blank the field.

    1. "1" - Partnership box is checked.

    2. "2" - S Corporation box is checked.

3.12.249.2.2.10  (01-01-2014)
Field 01-I, Centralized Authorization File (CAF) Indicator

  1. Field 01-I (Centralized Authorization File (CAF) Indicator) is invalid if it is not one of the following numbers: 1, 2, 3, 4, 7, or blank.

  2. If Code and Edit entered an invalid number, enter one of the following codes in the lower right corner of Form 8752 and correct with Action Code 6:

    Code Description
    1 The attached POA is for this return and states that one person receives notices and no one receives refunds.
    2 The attached POA/TIA is for this return and states that two people receive notices and no one receives refunds.
    3 The attached POA/TIA is for this return and states that one person receives notices and one person receives refunds.
    4 The attached POA/TIA is for this return and states that two people receive notices and one person receives refunds.
    7 The attached POA/TIA is for this return and states that one person can receive refunds but no one can receive notices.

  3. If the POA does not authorize refunds or notices, a code is not necessary on the return.

3.12.249.2.2.11  (01-01-2014)
Field 01-J, First Tax Year Box

  1. This box (Box B) is checked for the first applicable year the election under Section 444 is in effect. No payment is due the first year. When this box is checked, there should not be any amounts in Lines 1 through 10 and a blank or zero on Line 11. Any error indicator will appear when Field 01-J (First Tax Year Box) equals "1" and there is an amount on any other line.

  2. If Field 01-J (First Tax Year Box) was erroneously coded "1," cross out the "1" and correct with Action Code 6.

  3. If amounts were erroneously keystroked into Section 02 fields, delete Section 02 with Action Code 4.

  4. If the box is checked, and there are amounts in Lines 1 through 11, research IDRS (e.g., CC BMFOL or other applicable command code) for a previously filed return. If research indicates a previously filed return, cross out the 1 in Field 01-J (First Tax Year Box) and correct with Action Code 6. If research does not indicate a previously filed return, correspond (e.g., Letter 118C, Letter 3463C, Letter 3064C, etc.) with the taxpayer to determine if this return represents the first applicable year or not. Send Letter 118C (or other appropriate letter) with the following suggested language: "You checked Box B on your Form 8752, indicating that this is the entity’s first tax year. If that is the case, Lines 1 through 10 should be blank and Line 11 should contain a zero. Please inform us as to whether Box B was checked in error, or Lines 1 through 12 were completed in error and we will adjust your return accordingly."

    1. If the taxpayer's response indicates that this is the first applicable year, delete Section 02 (except Field 02-C (Deferral Ratio)) with Action Code 6.

    2. If the taxpayer's response indicates that this is not the first applicable year, cross out the "1" in Field 01-J (First Tax Year Box) and correct with Action Code 6.

    3. If the taxpayer does not respond to correspondence, cross out the "1" in Field 01-J (First Tax Year Box) and correct with Action Code 6.

3.12.249.2.2.12  (01-01-2014)
Field 01-K, Terminating Event Box

  1. This box (Box C) is used the year the Section 444 election is terminated. If checked, CCC "F" must be present.

  2. If Field 01-K (Terminating Event Box) was erroneously coded "1," cross out the "1" and correct with Action Code 6.

  3. If Field 01-K (Terminating Event Box) was correctly coded, enter Computer Condition Code "F" in Field 01-E (CCC) and correct with Action Code 6.

3.12.249.2.2.13  (01-01-2014)
Field 01-L, Short Base Year Box

  1. Field 01-L (Short Base Year Box) currently is not used for validity or consistency checks.

3.12.249.2.2.14  (01-01-2014)
Field 01-M, Entity Underprint Code

  1. In all cases where there is an underprint of the name control, the record will not go to good tape until the applicable code is in Field 01-M (Entity Underprint Code), or the name control has been corrected to match the underprint.

  2. The underprint in Field 01-B (Name Control/Check Digit), will not clear until either an Entity Underprint Code is entered in Field 01-M or until the name control matches the underprint.

  3. Enter Code "1" if the name control is underprinting and the transcribed name control is correct.

  4. If there is no name control underprint, leave the field blank.

3.12.249.2.2.15  (01-01-2014)
Field 01-N, Taxpayer Notice Code (TPNC)

  1. Taxpayer Notice Codes (TPNCs) can be input only as correction data, using Action Code 1. Put the correct tax to the left of taxpayer’s figures and TPNC in upper left margin of the return (near the Name area).

  2. All invalid conditions must be corrected before Action Code 1 is used.

  3. The codes will appear in this field on the loop (correction run) when another error existed. When this occurs, correct any other invalid condition, but not this field. The use of another Action Code will cause this field to be blanked on the next loop. Correct by using Action Code 1 and the proper TPNC.

  4. The valid TPNCs are as follows:

    TPNC Explanation
    01 The amount shown on Line 4 was not computed correctly.
    02 The amount shown on Line 5 was not computed correctly.
    03 The wrong percentage figure for this tax year was used in computing Line 9a.
    04 The amount shown on Line 9a or Line 9b was not computed correctly.
    05 The amount shown on Line 11 or Line 12 was not computed correctly.
    90 Blank/open paragraph to attach a math error explanation to the return. The notice will have a space for "Notice Review" to type in the explanation you provide with the exact wording to be printed on the notice.

3.12.249.2.3  (01-01-2014)
Section 02 Fields and Correction Procedures

  1. Section 02 is transcribed in dollars and cents for the applicable fields. All fields (except Field 02-L (Payment Due/Refund Amount)) contain positive (+) amounts only. If the taxpayer listed negative (-) amounts on Fields 02-A, 02-B, and /or 02-D through Field 02-K, delete with Action Code 6. The computer checked fields in this section will underprint if the taxpayer and computer ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Do not bring up the underprint. Send the appropriate TPNC.

  2. Section 02 fields on the Error Register are shown below: Alpha Field Designator (AFD), Title, Field Length, and Location on the Return. See Exhibit 3.12.249-1, Form 8752, Required Payment or Refund Under Section 7519, for additional information. See Exhibit 3.12.249-2, Error Register for Form 8752, for additional information.

    Section 02
    AFD Title Field Length Location on the Return
    A Net Income Amount 15 Line 1
    B Applicable Payment Base Year Amount 15 Line 2
    C Deferral Ratio 3 Line 3
    D Line 1 - Deferred Amount
    Line 1 - Deferred Amount
    (Computer)
    15 Line 4
    E Line 2 - Deferred Amount
    Line 2 - Deferred Amount
    (Computer)
    15 Line 5
    F Applicable Payment Deferral Amount 15 Line 6
    G 12 Month or Short Year Amount 15 Line 7
    H Net Base Year Income Amount 15 Line 8
    I Net Base Year Percentage Amount
    Net Base Year Percentage Amount (Computer)
    15 Line 9a
    J Required Payment Amount
    Required Payment Amount (Computer)
    15 Line 9b
    K Net Required Payment Balance 15 Line 10
    L Payment Due or Refund Amount
    Payment Due or Refund Amount
    (Computer)
    15 Line 11 or Line 12
    M Preparer Tax Identification Number (PTIN) 9 Bottom of Form 8752
    N Firm's Employer Identification Number (EIN) 9 Bottom of Form 8752
    O Preparer Phone Number 10 Bottom of Form 8752

  3. This section is required unless Field 01-E (Computer Condition Code) contains a "G" , or if Box B is checked. All fields in this section are transcribed from Page 1. Math verification will not be done if the Field 01-D (Tax Period) is invalid.

3.12.249.2.3.1  (01-01-2014)
Field 02-A, Net Income Amount

  1. This field is transcribed from Line 1. Check for transcription or transfer errors in Field 02-A (Net Income Amount) and correct with Action Code 6.

3.12.249.2.3.2  (01-01-2014)
Field 02-B, Applicable Payment Base Year Amount

  1. This field is transcribed from Line 2. Check for transcription or transfer errors in Field 02-B (Applicable Payment Base Year Amount) and correct with Action Code 6.

3.12.249.2.3.3  (01-01-2014)
Field 02-C, Deferral Ratio

  1. This field is transcribed from Line 3. The "Deferral Ratio" is the three-digit code representing the allowable deferral percentage for the taxpayer’s elected deferral period. The term "Deferral Period" means the number of months that occur between the last day of the elected tax year and the last day of the required tax year.

    Example:

    If the taxpayer elected a tax year ending on September 30 and his/her required tax year is the calendar year, the deferral period would be three months (the number of months between September 30 and December 31 (e.g., deferral ratio to enter is 250)). Using the same example (e.g., if the required tax year is the calendar year), the deferral period would be two months for an elected tax year ending in October (e.g., Deferral Ratio to enter is 167), while the deferral period would be one month for an elected tax year ending in November (e.g., Deferral Ratio to enter is 083).

    Note:

    The Tax Reform Act of 1986 required S Corporations and partnerships to use the tax year of their owners. However, S Corporations and partnerships that were in existence prior to the 1986 Act were permitted to retain their taxable year under Section 444.

  2. The "Deferral Ratio" is the three-digit code representing the allowable deferral percentage for the taxpayer’s elected deferral period. The term "Deferral Period" means the number of months that occur between the last day of the elected tax year and the last day of the required tax year. There are eleven codes. These codes represent deferrals of one to eleven months and are shown in the chart below.

    Ending Month of
    Elected Tax Year
    Deferral Period
    (Number of Months)
    Deferral Ratio
    (Three-Digit Code)
    November 1 083
    October 2 167
    September 3 250
    August 4 333
    July 5 417
    June 6 500
    May 7 583
    April 8 667
    March 9 750
    February 10 833
    January 11 917

    Note:

    Do not put a decimal in front of the deferral ratio number.

  3. Check for transcription errors in Field 02-C (Deferral Ratio).

  4. Code and Edit is responsible for editing the correct number. If they did not edit the number, or edited it incorrectly, follow these instructions:

    1. Enter the three-digit code for the percentage in Field 02-C (Deferral Ratio). Refer to the Deferral Ratio chart above. If missing or incorrect, edit the same three-digit code on the dotted portion of Line 3 (to the left of the taxpayer’s entry).

    2. Generally, the deferral percentage will not exceed 25% (percent). However, entities with 1986 taxable years could make the Section 444 elections and retain that taxable year even if the deferral period was more than 3 months. If the taxpayer claims an amount greater than 25%, but less than 91.7%, accept taxpayer’s amount. If the taxpayer claims more than 91.7%, allow only 91.7%.

      Note:

      Before you lower the rate, multiply Line 1 by the amount shown on Line 3 to make sure the taxpayer actually used that rate. For instance, if a taxpayer put $1,000 on Line 1 and 83 percent on Line 3, but $1,000 on Line 1 and 83 percent on Line 3, came up with an amount of $83.00, he/she did not multiply by 83% (percent), but rather, 8.3%. In this case, you would enter 083. IMPORTANT: Deferral Ratio - must have an entry as listed above. This field cannot be zero (even if Lines 1 or 2 have a "0" (zero) amount).

    3. The taxpayer may either round the percentage (e.g., put down 8% or 17% or 67% rather than 8.3% or 16.7%), or carry the percentage to multiple places (8.33% or 16.67% or 66.67%). In either case, you will enter "083" or "167" or "667" .

  5. If the taxpayer enters a percentage that does not approximate the allowable percentages, enter the acceptable code that is:

    1. Lower than the percentage claimed, and,

    2. Closest to the percentage claimed.

    Example:

    If the taxpayer put down 12%, you would edit "083" . If the taxpayer put down 21%, you would edit "167" .

    Exception:

    If the taxpayer puts down an amount that is less than six percent (6%), correspond with the taxpayer to ask what his/her deferral period is. Enter the appropriate code based on the taxpayer’s answer. If there is no response, enter "083" .

  6. If the taxpayer shows a deferral ratio in the form of a decimal rather than a percentage, convert to a percentage.

    1. Example 1: If the taxpayer enters .17 as the deferral ratio, enter "167" .

    2. Example 2: If the taxpayer enters .08 as the deferral ratio, enter "083" .

3.12.249.2.3.4  (01-01-2014)
Field 02-D, Line 1 - Deferred Amount

  1. This field is transcribed from Line 4. It is computed by multiplying the deferral rate (Line 3, Field 02-C) by the amount shown for the net income amount (Line 1, Field 02-A).

  2. Check for transcription errors in Field 02-A (Net Income Amount), Field 02-C (Deferral Ratio), and Field 02-D (Line 1 - Deferred Amount) and correct with Action Code 6.

    Note:

    If Field 02-C (Deferral Ratio) is changed to one of the valid ones, Do not change the taxpayer’s figures on any transcription (T) lines.

  3. If the error in Field 02-D (Line 1 - Deferred Amount) causes an underprint in that field, send TPNC 01 using Action Code 1. If this field underprints to rounding of the percent, correct with Action Code 7.

3.12.249.2.3.5  (01-01-2014)
Field 02-E, Line 2 - Deferred Amount

  1. This field is transcribed from Line 5. It is computed by multiplying the deferral rate (Field 02-C, Line 3) by the amount shown for the applicable payment made during the base year (Field 02-B, Line 2).

  2. Check for transcription errors in Field 02-B (Applicable Payment Base Year Amount), Field 02-C (Deferral Ratio), and Field 02-E (Line 2 - Deferred Amount) and correct with Action Code 6.

  3. If the error in Field 02-E (Line 2 - Deferred Amount) causes an underprint in that field, send TPNC 02 (or other appropriate TPNC) using Action Code 1. If this field underprints to rounding of the percent, correct with Action Code 7.

3.12.249.2.3.6  (01-01-2014)
Field 02-F, Applicable Payment Deferral Amount

  1. This field is transcribed from Line 6.

  2. Check for transcription or transfer errors in Field 02-F (Applicable Payment Deferral Amount) and correct with Action Code 6.

3.12.249.2.3.7  (01-01-2014)
Field 02-G, 12 Month or Short Year Amount

  1. This field is transcribed from Line 7.

  2. Check for transcription or transfer errors in Field 02-G (12 Month or Short Year Amount). If a negative amount is shown, enter $0. Correct with Action Code 6.

3.12.249.2.3.8  (01-01-2014)
Field 02-H, Net Base Year Income Amount

  1. This field is transcribed from Line 8.

  2. Check for transcription or transfer errors in Field 02-H (Net Base Year Income Amount) and correct with Action Code 6.

    Note:

    Unless this is a transcription error, Do not correct this field-accept the taxpayer’s figure.

3.12.249.2.3.9  (01-01-2014)
Field 02-I, Net Base Year Percentage Amount

  1. This field is transcribed from Line 9a. It is computed by multiplying Line 8, Field 02-H (Net Base Year Income Amount), by the tax rate applicable for that period.

  2. The tax rates are as follows:

    Tax Year Tax Rate
    2013 40.6% (percent)
    2003 through 2012 36%
    2002 39.6%
    2001 40.1%
    1993 through 2000 40.6%
    1991 and 1992 32%
    1990 29%

  3. Check for transcription errors in Field 02-H (Net Base Year Income Amount) and Field 02-I (Net Base Year Percentage Amount) and correct with Action Code 6.

  4. If Field 02-I (Net Base Year Percentage Amount) is blank and there is an underprint, edit Line 9a with the amount of the underprint. Bring up the underprint from Field 02-I (Net Base Year Percentage Amount) and correct with Action Code 6.

  5. If Field 02-I (Net Base Year Percentage Amount) is not blank and there is an underprint, send TPNC 03 using Action Code 1.

  6. If the taxpayer filed a return for the current year on a prior year revision of Form 8752, but did not enter the correct "Net Base Year Percentage Amount" (Line 9a), Field 02-I will underprint.

    Note:

    The computer is programmed to compute the correct Net Base Year Percentage Amount.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Instead, send TPNC 03 using Action Code 1.

3.12.249.2.3.10  (01-01-2014)
Field 02-J, Required Payment Amount

  1. This field is transcribed from Line 9b. Depending on the prior payment history of the organization, it should be either the amount shown on Line 9a or $0.

  2. Check for transcription errors in Field 02-J (Required Payment Amount) and correct with Action Code 6.

  3. See Field 02-J (Required Payment Amount) procedures below:

    If And Then
    Field 02-J (Required Payment Amount) is not blank Differs from the underprint in Field 02-I (Net Base Year Percentage Amount), Send TPNC 04 using Action Code 1.
    If Field 02-J (Required Payment Amount) is blank and Field 02-I (Net Base Year Income Amount) has an entry The underprint of Field 02-J ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send TPNC 04 using Action Code 1.
    If Field 02-J (Required Payment Amount) is blank and Field 02-I (Net Base Year Income Amount) has an entry The underprint of Field 02-J ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Accept with Action Code 0.
    See IRM 3.12.249.2.3.12, Field 02-L, Payment Due or Refund Amount, for additional information.

  4. The Form 8752 is used to remit the required payment. The required payment is intended to represent the value of the tax deferral by the owners of those entities through the use of a taxable year other than the required year. Generally, the tax year must be a FY ending in September, October, or November. The required payment is considered a deposit.

3.12.249.2.3.11  (01-01-2014)
Field 02-K, Net Required Payment Balance

  1. This field is transcribed from Line 10.

  2. Check for transcription or transfer errors in Field 02-K (Net Required Payment Balance) and correct with Action Code 6.

3.12.249.2.3.12  (01-01-2014)
Field 02-L, Payment Due or Refund Amount

  1. This field is transcribed from Lines 11 or 12. The computer will underprint with a positive amount for a balance due (Line 11) and a negative amount for an overpayment (Line 12). Field 02-L (Payment Due or Refund Amount) will asterisk if the taxpayer's figure differs from the computer figure ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Line 11 (Required Payment Due) is computed by subtracting Line 10 (Field 02-K) from Line 9b (Field 02-J). Line 12 (Refund of Net Prior year payments) is computed by subtracting Line 9b (Field 02-J) from Line 10 (Field 02-K).

  3. Check for transcription errors in Field 02-L (Payment Due or Refund Amount) and correct with Action Code 6.

  4. See Field 02-L (Payment Due or Refund Amount) procedures below:

    If And Then
    Field 02-J (Required Payment Amount) and Field 02-L (Payment Due or Refund Amount) are correct as transcribed (or blank), Field 02-K (Net Required Payment Balance) is blank Calculate the sum of or difference between Fields 02-J and 02-L and enter the amount in Field 02-K (Net Required Payment Balance).
    If Field 02-L (Payment Due or Refund Amount) is zero, blank, dash or none, A balance due or refund is underprinting,
    1. Research IDRS (e.g., Command Code (CC) BMFOLT (or other appropriate command code) and verify Field 02-K.

    2. Correct Field 02-K or Field 02-L, accordingly.

    3. If a math error exists, send TPNC 05 (or other appropriate TPNC) using Action Code 1.

    If Field 02-L (Payment Due or Refund Amount) is underprinting and Field 02-J (Required Payment Amount) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Research (e.g., CC BMFOLT) indicates there are no payments ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for any prior tax year, Field 02-L is correct as transcribed, accept with Action Code 0.

    Note:

    If Field 02-L is still calculated wrong, send TPNC 05 using Action Code 1.

    Research (e.g., CC BMFOLT) indicates a payment for any preceding year ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send TPNC 90 using Action Code 1.

    Note:

    Suggested language for TPNC 90: "Since your previously required payments exceeded $500.00, you must make a payment even though your required payment for this year is less than $500.00."

    If Field 02-L (Payment Due or Refund Amount) is underprinting No corrections are needed to Fields 02-J, 02-K and 02-L but a math error exists, Send TPNC 05 using Action Code 1.

  5. If taxpayer requests a "credit elect" or in some way asks that the refund be posted to the next tax period:

    1. Prepare Form 3465, requesting Accounts Management (AM) to transfer the referenced credits to the appropriate module and to release the "X" freeze.

    2. Notate on the return "Form 3465 to AM" and make copy of Page 1 of the return (mark as "Copy - Do Not Process" ).

    3. On the error register, enter CCC "X" using Action Code 6 (to freeze the module from refunding or offsetting) and to correct Field 02-L (Payment Due or Refund Amount) by bringing up the underprint.

    4. Route Form 3465 with a copy of return to Accounts Management.

  6. Any penalty or interest included by the taxpayer in Field 02-L (Payment Due or Refund Amount) should be subtracted from the amount on Lines 11 or 12 and the difference entered in Field 02-L. Also, X Lines 11 or 12 and edit the difference to the left of the X. If the taxpayer has made a math error, send TPNC 05 using Action Code 1.

  7. Field 02-L (Payment Due or Refund Amount) will asterisk if either of the following conditions are present:

    If Then
    The taxpayer’s figure (money amount) exceeds the length of the field,
    1. Enter all nines (9s) in that field.

    2. Prepare Form 4227 (or other appropriate routing slip) and route to Accounts Management (AM).

    3. Notate reason for sending to AM (e.g., "Money amount exceeds field length" ).

    The refund amount equals $10 million or more and the Computer Condition Code "O" is not present in Field 01-E (CCC), Follow instructions in IRM 3.12.249.2.3.12(8) and/or (9), below.

    Note:

    See IRM 3.12.249.1.18, Criminal Investigation (CI) "Funny Box" , for additional information.

  8. Enter CCC "O" if a completed Form 3753, Manual Refund Posting Voucher, is attached to the return. This indicates that a pre-settlement manual refund was made.

    Note:

    The freeze is released by posting Transaction Code (TC) 840.

  9. No refund will be made before the later of: (a) April 15 following a current year Form 8752 calendar year ending, or (b) 90 days after a prior year Form 8752 is filed per IRC 7519(c)(3). No interest will be paid on the amount refunded (per Treasury Regulation 1.7519-2T(a)(6)(iii), interest is not allowed with respect to any refund of a required payment claimed on Form 8752). If you have a refund of $10 million or more and Form 3753 is not attached:

    1. Correct with Action Code 3 and route to Rejects with Form 4227 (or other appropriate routing slip). Notate "Manual Refund" on Form 4227.

      Note:

      If the required date, per IRC 7519(c)(3)(A), on which a refund becomes payable has not arrived, hold the return until such date. When the refund becomes payable, follow procedures in IRM 3.12.38, BMF General Instructions, for issuing manual refunds.

    2. And Form 8302, Application for Electronic Funds Transfer (EFT) of $1 Million or More, is attached, follow the instructions in a. above, but Do not detach Form 8302.

  10. Credit interest will not generate on any Form 8752 refund of any amount at any time. Per Treasury Regulation 1.7519-2T(a)(6)(iii), interest is not allowed with respect to any refund of a required payment claimed on Form 8752. Credit interest cannot be input under any circumstance, including where IRS actions have delayed the issuance of the refund.

    Note:

    The 45 Day Jeopardy rules do not apply to Form 8752.

  11. A manual refund on a Form 8752 will only be done if the refund is for $10 million or more.

    Note:

    See IRM 3.12.249.1.18, Criminal Investigation (CI) "Funny Box" , for additional information.

3.12.249.2.3.13  (01-01-2014)
Field 02-M, Preparer Tax Identification Number (PTIN)

  1. The Small Business and Work Opportunity Tax Act of 2007 provides a bridge to impose a penalty on a paid tax preparer who fails to sign the returns they prepare. In order for Compliance to determine whether a penalty should be assessed, the legislation requires Submission Processing, during the initial processing of the return to capture certain paid preparer information. Additional information can be found in Work Request WSP082292OTH - Forms 706NA and 8752 ISRP Capture of Paid Preparer Information.

  2. The Preparer Tax Identification Number (PTIN) is located at the bottom of Form 8752 (Preparer's SSN or PTIN box for 2009 and prior). Data may or may not be present in Field 02-M (PTIN).

    Note:

    If the Preparer information is present, either Field 02-M (PTIN) or Field 02-N (EIN) should have an entry. Only one of these fields is required. Follow the Correction Procedures below.

  3. Valid Condition - Field 02-M (PTIN) can be blank or numeric. If numeric, it cannot be all zeros and it cannot be all nines.

    Note:

    The first position can be a "P," followed by eight numbers. These numbers cannot be all zeros or all nines.

  4. Invalid Condition - This field is invalid if any of the following conditions are present:

    1. All zeros, or

    2. All nines, or

    3. Less than nine positions.

  5. Correction Procedures:

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

    2. If unable to determine a valid entry, delete Field 02-M (PTIN).

3.12.249.2.3.14  (01-01-2014)
Field 02-N, Firm's Employer Identification Number (EIN)

  1. The Small Business and Work Opportunity Tax Act of 2007 provides a bridge to impose a penalty on a paid tax preparer who fails to sign the returns they prepare. In order for Compliance to determine whether a penalty should be assessed, the legislation requires Submission Processing, during the initial processing of the return to capture certain paid preparer information.

  2. The Firm's EIN (EIN for 2009 and prior) is located at the bottom of Form 8752 below the PTIN box (Preparer's SSN or PTIN box for 2009 and prior).

    Note:

    If the Preparer information is present, either Field 02-M (PTIN) or Field 02-N (EIN) should have an entry. Only one of these fields is required. Follow the Correction Procedures below.

  3. Valid Condition - This field can be blank or numeric. It cannot be all zeros or all nines.

  4. Invalid Condition - This field is invalid if any of the following conditions are present:

    1. All zeros, or

    2. All nines, or

    3. Less than nine characters.

  5. Correction Procedures:

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

    2. If unable to determine a valid entry, delete Field 02-N (EIN).

3.12.249.2.3.15  (01-01-2014)
Field 02-O, Preparer Phone Number

  1. The Small Business and Work Opportunity Tax Act of 2007 provides a bridge to impose a penalty on a paid tax preparer who fails to sign the returns they prepare. In order for Compliance to determine whether a penalty should be assessed, the legislation requires Submission Processing, during the initial processing of the return to capture certain paid preparer information.

  2. The Preparer Phone Number is located at the bottom of Form 8752 below the Firm's EIN (EIN for 2009 and prior) towards the bottom right hand corner.

  3. Valid Condition - Field 02-O must be alpha or numeric or a combination of alpha, numeric and/or blank characters, not to exceed 10 characters.

  4. Invalid Condition - Field 02-O is invalid if other than 10 alpha/ numerics and/or blank.

  5. Correction Procedures:

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

    2. If a telephone number is invalid, delete Field 02-O (Preparer Phone Number) and continue processing.

3.12.249.2.4  (01-01-2014)
Section 03 Fields and Correction Procedures

  1. Section 03 contains address information. Section 03 on Form 8752 with a foreign address are processed at the Ogden Submission Processing Campus (OSPC). Army Post Office (APO), Diplomatic Post Office (DPO) and Fleet Post Office (FPO) are not considered foreign addresses.

  2. Section 03 on Form 8752 will be present when a change of address has been entered.

  3. Fields 03-A through 03-F are variable length and it is not necessary to account for every position allotted.

  4. This section will not be present on G-coded returns.

  5. Action Codes 4, 5, and 6 are valid.

  6. If a return has a street, Post Office (PO) Box number, city, state, or ZIP Code change, this section should be present.

  7. If a foreign address is present, see IRM 3.12.249.2.4.2, Foreign Address.

  8. Correction of address change validity errors are explained in the subsequent subsections (IRM 3.12.249.2.4.2 through IRM 3.12.249.2.4.5).

  9. Section 03 fields on the Error Register are shown below: Alpha Field Designator (AFD), Title, Field Sign, and Field Length. See Exhibit 3.12.249-1, Form 8752, Required Payment or Refund Under Section 7519, for additional information. See Exhibit 3.12.249-2, Error Register for Form 8752, for additional information.

    Section 03
    AFD Title Field Sign Field Length
    A "In-Care-Of" Name + 35
    B Foreign Address + 35
    C Street Address + 35
    D City + 22
    E State + 2
    F ZIP Code + 12

3.12.249.2.4.1  (01-01-2014)
Field 03-A, "In-Care-Of" Name

  1. Field 03-A ("In-Care-Of" Name) is located in the Entity section of Form 8752.

  2. Valid Condition - Field 03-A ("In-Care-Of" Name) 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 03-A ("In-Care-Of" Name) 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 position is not alpha or numeric, or

    • There are two consecutive blanks between significant characters

  4. Correction Procedures:

    1. Correct all coding errors and transcription errors.

    If Then
    A % (percent) is in the first position, 1. Line through Field 03-A ("In-Care-Of" Name).
    2. Enter the "In-Care-Of" Name beginning with an alpha or numeric in Field 03-A ("In-Care-Of" Name).
    A blank is in the first position, 1. Line through Field 03-A ("In-Care-Of" Name).
    2. Enter the "In-Care-Of" Name beginning with an alpha or numeric in Field 03-A ("In-Care-Of" Name).
    The first position is not alpha or numeric, 1. Verify in-care-of name on the return.
    2. Line through Field 03-A ("In-Care-Of" Name).
    3. Enter the "In-Care-Of" Name beginning with an alpha or numeric in Field 03-A ("In-Care-Of" Name).
    Two consecutive blanks present between significant characters, 1. Line through Field 03-A ("In-Care-Of" Name).
    2. Enter the "In-Care-Of" Name beginning with an alpha or numeric in Field 03-A ("In-Care-Of" Name).

3.12.249.2.4.2  (01-01-2014)
Field 03-B, Foreign Address

  1. Field 03-B (Foreign Address) is located in the Entity section of Form 8752.

  2. Form 8752 with a foreign address are processed at the Ogden Submission Processing Campus (OSPC).

    1. Route any returns with foreign addresses to the OSPC for processing.

    2. Prepare Letter 86C to inform the taxpayer that the return has been sent to OSPC.

  3. Valid Condition - Field 03-B (Foreign Address) has 35 characters and the valid characters are alpha, numeric and special characters.

  4. Invalid Condition - Field 03-B (Foreign Address) is invalid if any of the following conditions are present:

    • The first position is blank

    • There are two consecutive blanks followed by valid characters

    • 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.

  5. Correct all coding errors and transcription errors.

    If Then
    Field 03-B (Foreign Address) is present, Ensure Field 03-D (City) contains a foreign country code and Field 03-E (State) contains a (. ) (period/space). 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 03-D (City) if the foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.249-4, Province and Country Code - Canada.

    A province abbreviation is not present for Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands but a province name is present, Enter the province abbreviation in Field 03-B (Foreign Address). See Exhibit 3.12.249-5, Province, State and Territory Abbreviations.
    A foreign address is not present on the return, 1. Reject with Action Code 3.
    2. Attach Form 4227 (or other appropriate routing slip) indicating to renumber the return with a domestic DLN.

    Reminder:

    The period/space (. ) in Field 03-E (State) must be deleted if this is NOT a foreign address.

  6. If Form 8822, Change of Address, (or Form 8822-B, Change of Address or Responsible Party - Business), is attached to the return, compare the name and address information on the Form 8822 (or Form 8822-B) to the return.

    Note:

    A business may have two addresses. One is the mailing address and the other is the location address or physical location of the business.

    Caution:

    These instructions will apply to Error Resolution only if Document Perfection has not detached and sent the Form 8822 (or Form 8822-B) to Entity Control following local procedures.

    If And Then
    Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, Mailing address information is the same and no location address is listed on Form 8822/Form 8822-B, Line 7 Take no action and continue processing.
    Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, Mailing address information is different and/or a location address is listed on Form 8822/Form 8822-B, Line 7
    1. Enter address shown on Form 8822 (or Form 8822-B) in Field 03-C (Street Address).

    2. Notate "Form 8822 (or Form 8822-B) detached" on tax return.

    3. Detach Form 8822 (or Form 8822-B) and route to Entity Control following local procedures (e.g., using Form 4227 (or other appropriate routing slip)).

      Note:

      Notate on Form 4227, "Change of Address per Form 8822 (or Form 8822-B)" .

    Note:

    The lead tax examiner is required to batch all Forms 8822 (or Form 8822-B) daily and hand carry to Entity Control for expedited processing.

3.12.249.2.4.3  (01-01-2014)
Field 03-C, Street Address

  1. Field 03-C (Street Address) is located in the Entity section of Form 8752.

  2. Valid Condition - Field 03-C (Street Address) has 35 characters and the valid characters are alpha, numeric and special characters.

  3. Invalid Condition - Field 03-C (Street Address) is invalid if any of the following conditions are present:

    • The first position is blank

    • Any characters are not alpha, numeric, blank, hyphen (-) or slash (/)

    • There are two consecutive blanks followed by valid characters

  4. Correct all coding errors and transcription errors.

    If Then
    If the address on the return is illegible, Refer to the envelope and attachments to determine the taxpayer’s correct address.
    If Field 03-D (City) contains a Major City Code (MCC), A street address must be present.
    If a Major City Code (MCC) is used and no address is present, Enter the city in "city format," not in MCC format.
    If the address cannot be perfected, Delete the address section on the error register with Action Code 4.

  5. Field 03-C (Street Address) is invalid if a Major City Code (MCC) is present in Field 03-D (City) and a street address is not present.

    If Then
    If the MCC is correct and valid and the street address is present and legible on the return, Enter the street address in Field 03-C (Street Address).
    If there is not a valid MCC for the city on the return, Enter the full name of the city in Field 03-D (City).

    Note:

    Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to verify the MCC.

  6. If Form 8822, Change of Address, (or Form 8822-B, Change of Address or Responsible Party - Business), is attached to the return, compare the name and address information on the Form 8822 (or Form 8822-B) to the return.

    Note:

    A business may have two addresses. One is the mailing address and the other is the location address or physical location of the business.

    Caution:

    These instructions will apply to Error Resolution only if Document Perfection has not detached and sent the Form 8822 (or Form 8822-B) to Entity Control following local procedures.

    If And Then
    Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, Mailing address information is the same and no location address is listed on Form 8822/Form 8822-B, Line 7 Take no action and continue processing.
    Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, Mailing address information is different and/or a location address is listed on Form 8822/Form 8822-B, Line 7
    1. Enter address shown on Form 8822 (or Form 8822-B) in Field 03-C (Street Address).

    2. Notate “Form 8822 (or Form 8822-B) detached” on tax return.

    3. Detach Form 8822 (or Form 8822-B) and route to Entity Control following local procedures (e.g., using Form 4227 (or other appropriate routing slip)).

      Note:

      Notate on Form 4227, "Change of Address per Form 8822 (or Form 8822-B)" .

    Note:

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

3.12.249.2.4.4  (01-01-2014)
Field 03-D, City

  1. Field 03-D (City) is located in the Entity section of Form 8752.

  2. Valid Condition - Field 03-D (City) has a maximum of 22 characters.

  3. Invalid Condition - Field 03-D (City) is invalid if any of the following conditions are present:

    1. The first position is blank.

    2. A character follows the first two adjoining blanks.

    3. Any character is not alpha or blank.

    4. It is blank.

  4. Correction Procedures - Refer to the city shown on the return.

    1. Correct all coding errors and transcription errors.

    2. If the city on the return is illegible, refer to the envelope and attachments to determine the correct city.

    3. If the city cannot be perfected, delete the address section on the error register with Action Code 4.

  5. Field 03-D (City) and Field 03-E (State) are invalid if a Major City Code (MCC) is present and a state code is also present in Field 03-E (State).

  6. To correct, refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to verify the MCC.

  7. If the MCC is correct, delete the state code entered in Field 03-E (State).

  8. If the MCC is not correct:

    1. Line through the MCC and enter the full name of the city in Field 03-D (City),

    2. Verify that the state code entered in Field 03-E (State) is correct, and

    3. Enter Action Code 6 to the left of the address section.

  9. Field 03-D (City) and Field 03-F (ZIP Code) are invalid if a MCC is present and the ZIP Code is not valid for the city.

  10. To correct, refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the correct MCC and ZIP Code.

    1. Correct all coding errors and transcription errors.

    2. If the ZIP Code and MCC were transcribed correctly and the ZIP Code is invalid for the city, refer to the envelope and attachments to locate a valid ZIP Code. If one is located, enter in Field 03-F (ZIP Code).

    3. If the correct ZIP Code is not available on the taxpayer’s submission, look up the ZIP Code and enter in Field 03-F (ZIP Code).

  11. Field 03-D (City) is invalid if the MCC is not valid.

  12. To correct, refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to verify the MCC.

    1. Correct all coding errors and transcription errors.

    2. Search for a valid MCC for the city on the return. If one is found, line through the entry in Field 03-D (City) and enter the correct code above it.

    3. If the city on the return does not have a valid MCC, line through the code in Field 03-D and enter the full name of the city.

  13. See Exhibit 3.12.249-6, U.S. Possessions/Territories and ZIP Codes, for use with address corrections.

3.12.249.2.4.5  (01-01-2014)
Field 03-E, State

  1. Field 03-E (State) is located in the Entity section of Form 8752.

  2. Valid Condition - Field 03-E (State) contains two alpha characters.

  3. Invalid Condition - Field 03-E (State) is invalid if the following conditions are present:

    1. It is blank and a MCC is not present in Field 03-D (City).

    2. It contains other than a valid state code.

  4. Refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the correct state code.

    1. Correct all coding errors and transcription errors.

    2. Determine the correct state code from Document 7475 and enter it in Field 03-E (State).

    3. If the state cannot be perfected, delete the address section of the error register.

  5. Field 03-E (State) and Field 03-F (ZIP Code) are invalid if the ZIP Code is not valid for the state.

  6. To correct, refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to verify the state and ZIP Codes on the error register.

    1. Correct all coding errors and transcription errors.

    2. If the state code is incorrect, determine the correct code and enter it in Field 03-E (State).

    3. If the ZIP Code is not valid for the state, refer to the envelope and attachments to obtain a valid code.

    4. If a valid ZIP Code cannot be found on the taxpayer’s submission, look up the correct code and enter it in Field 03-F (ZIP Code).

  7. Returns with foreign address changes and the following American possession address changes can be input via Integrated Submission and Remittance Processing (ISRP) with the return, the same as domestic address changes.

    U.S. Possessions/Territory Abbreviation
    American Samoa AS
    Federated States of Micronesia FM
    Guam GU
    Northern Mariana Islands MH
    Marshall Islands MP
    Palau PW
    Puerto Rico PR
    Virgin Islands VI

    Note:

    Route any returns with foreign or American Possession addresses to the Ogden Submission Processing Campus (OSPC) for processing. Prepare Letter 86C to inform the taxpayer that the return has been sent to OSPC.

3.12.249.2.4.6  (01-01-2014)
Field 03-F, ZIP Code

  1. Field 03-F (ZIP Code) is located in the Entity section of Form 8752.

  2. Valid Condition - Field 03-F (ZIP Code) can contain 5, 9, or 12 numeric characters.

  3. Invalid Condition - Field 03-F (ZIP Code) is invalid if any of the following conditions are present:

    1. It is not all numeric or blank.

    2. There are not 5, 9, or 12 numeric characters.

  4. Correction Procedures - Refer to the return and attachments to determine the correct ZIP Code.

    1. Correct all coding errors and transcription errors.

    2. Compare the register fields with the return. If incorrect, correct information.

    3. Research any of the following for valid ZIP Code information: Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, or IDRS Command Code (CC) INOLES, CC NAMEB, CC NAMEE or CC ENMOD.

    4. If only the first three digits of the ZIP Code can be determined, enter “01” in the fourth (4th) and fifth (5th) positions.

      If And Then
      Unable to determine a valid ZIP Code from the return or attachments,   Enter the valid ZIP Code found through research in Field 03-F (ZIP Code).
      The address is in a major city, A Major City Code can be determined, Enter Major City Code in Field 03-D (City).
      The address is in a major city, A Major City Code cannot be determined, 1. Enter the name of the city in Field 03-D (City).
      2. Enter the State Code in Field 03-E (State).
      The address is not in a major city,   1. Enter the appropriate state abbreviation in Field 03-E (State).
      2. Enter the ZIP Code in Field 03-F (ZIP Code).

  5. See Exhibit 3.12.249-6, U.S. Possessions/Territories and ZIP Codes, for a valid ZIP Code.

  6. The U.S. Postal Service (USPS) established new address requirements for Army Post Office (APO), Diplomatic Post Office (DPO) and Fleet Post Office (FPO) addresses. If the old address appears (e.g., APO New York, NY 091XX), convert to the new state code abbreviation based on the ZIP code (e.g., the previous example would be converted to APO AE 091XX). APO/DPO/FPO addresses are considered domestic addresses. Refer to conversion chart below:

    Address State Code Abbreviation ZIP Code
    APO/DPO/FPO AA 340XX
    APO/DPO/FPO AE 090XX - 098XX
    APO/DPO/FPO AP 962XX - 966XX

Exhibit 3.12.249-1 
Form 8752, Required Payment or Refund Under Section 7519

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Exhibit 3.12.249-2 
Error Register for Form 8752

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Exhibit 3.12.249-3 
Potential Frivolous Arguments Criteria

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

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

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

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

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

Note:

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

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

Note:

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

Exhibit 3.12.249-4 
Province and Country Code - Canada

Canadian Province/Territory Province/Territory Abbreviation Postal Code Beginning

Note:

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

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

Exhibit 3.12.249-5 
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
Para PA
Paraiba PB
Parana PR
Pernambuco PE
Piaui PI
Rio de Janeiro RJ
Rio Grande do Norte RN
Rio Grande do Sul RS
Rondonia RO
Roraima RR
Santa Catarina SC
Sergipe SE
Sao Paulo SP
Tocantins TO
Canada Province/Territory Canadian Postal Code

Note:

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

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

Exhibit 3.12.249-6 
U.S. Possessions/Territories and ZIP Codes

City ZIP Code   City ZIP Code
American Samoa (AS)
Faga'itua 96799   Olosega Manua' 96799
Leone 96799 Pago Pago 96799
Federated States of Micronesia (FM)
Chuuk 96942   Pohnpei 96941
Kosrae 96944 Yap 96943
Guam (GU)
Agana 96910   Tamuning 96931
Inarajan 96917 Umatac 96915
Merizo 96916 Yona 96915
Marshall Islands (MH)
Ebeye 96970   Majuro 96960
Northern Mariana Islands (MP)
Capitol Hill 96950   Saipan 96950
Rota 96951 Tinian 96952
Palau (PW)
Koror 96940   Palau 96940
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
Virgin Islands - U.S. (VI)
Charlotte Amalie 00802   Saint Croix 00820
Christiansted 00820 Saint John 00830
Cruz Bay 00830 Saint Thomas 00805
Downtown 00840 Sunny Isle 00850
Frederiksted 00840 Veterans Annex 00820
Kingshill 00850    

Exhibit 3.12.249-7 
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