This section provides instructions for resolving errors made by Form 8752 taxpayers and errors made during campus processing. These instructions apply to the Service Center Replacement System (SCRS).

This section provides procedures for correcting records that are printed on the error registers. Instructions in specific sections take precedence over general section instructions in case of a conflict.

The Restructuring and Reform Act of 1998 (RRA 98), Section 3705 provides identification requirements for all IRS employees working tax-related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax-related matters.

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

Correspondence - All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually-generated and handwritten correspondence must include the following information:

The IDRS number is automatically generated. If it is not generated, or a handwritten note is prepared, the ID card (badge) number must be used. Toll-free employees may also provide their location for identification purposes. Facsimiles (faxes) to taxpayers on tax-related matters, are considered manually-generated correspondence and must include the required information.

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

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

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

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

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

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

Prior to faxing confidential information to the taxpayer, review fax procedures contained in IRM 11.3.1.10, Facsimile Transmission of Tax Information.

During taxpayer contact, if taxpayer mentions hardship or asks to be referred to Taxpayer Advocate Service (TAS), see IRM 3.12.249.1.4.

In compliance with a Chief Counsel opinion issued September 2, 2008, tax examiners will no longer send returns back to the taxpayer when corresponding for missing signature, missing information and supporting schedules and documentation on refund or zero balance returns (with some exceptions). These changes are effective October 5, 2009.

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

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 it to TAS in accordance with your local procedures.

The following section provides information for Taxpayer Advocate Service (TAS) - Service Level Agreement (SLA).

The tax examiners applying these instructions must be familiar with the editing procedures in IRM 3.11.249, Processing Form 8752, and the general procedures in IRM 3.12.38, Error Resolution - BMF General Instructions. The telephone may be used to resolve questions pertaining to returns that are on the error register in lieu of rejecting those returns for subsequent correspondence action.

You are not expected to review or redo the work of the Code & Edit tax examiner. However, if an error or omission made by the tax examiner is noticed while working the error register, enter the correct information on the return and the error register. A complete review of the return is not required. If this section instructs you to do something without telling you how, refer to IRM 3.11.249.

This manual is your main source of information. You may also need to research procedures in the following IRMs:

If an invalid correction is made to an error register, the error will return to be corrected again. When this happens, it is called a Loop Error Register. Error Reason Code "AA" will print on the Loop Error Register. The "AA" is simply for information.

Correct the error register as if no prior attempt at correction has been made.

Only a (10%) ten percent underpayment penalty can be charged on a Form 8752 account.

If a penalty is shown on the return, and the notation, "3465 Prepared," does not appear on the return, prepare a Form 3465, Adjustment Request, to request an assessment of the penalty.

Indicate on the Form 3465 the portion of the remittance which is available for application to the penalty assessment if the return remittance includes an amount applicable to all or part of the penalty. Enter Computer Condition Code (CCC) "X" on the return and on the register to freeze the module from refunding or offsetting, note on the return, "3465 Prepared," and route the Form 3465 to Accounts Management (AM).

For additional information, refer to IRM 20.1.10.26.3 (Assertion/Assessment), in IRM Section 20.1.10, Excise Tax Penalties and Miscellaneous Penalties.

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.

The following is a chart of Tax Class, Document Code, and MFT for Form 8752.

Action Codes (ACs) are used to correct errors on the paper register. Every correction made on an error register or reject register must have an Action Code (AC). The Action Code signifies to the computer what action should be taken. Using Action Codes is similar to correcting an error screen on the computer, though the process is not as instantaneous.

Each Action Code (AC) has a different purpose. Only one AC may be entered at any time. If two different Action Codes are used, the record will loop with no corrections made. If incorrect data is present in addition to non-correctible data, the incorrect data should be corrected first. The error register will then loop, and further actions can be taken at that time. No other AC can be used with Action Codes 0, 1, 2, 3, or 7. If incorrect data is present, it must be corrected with Action Codes 4, 5, or 6, before AC 1 is used. Individual descriptions of the valid Action Codes for most error registers are provided below.

Action Code 0 is used to indicate that the data in the record is correct and that the computer's computations should be disregarded. The taxpayer's figures must be verified before using this action code. This code should never be used unless the correct tax and data are printed in the error register. Action Code "0" will accept a record as transcribed and send the record to MCC (Martinsburg Computing Center). Action Code " 0" is written to the left of Section 01.

Action Code 1 is used in conjunction with Taxpayer Notice Codes (TPNCs), to issue math error notices. When the data in the record is correct, but the taxpayer's computations are incorrect ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , a TPNC will be sent to inform the taxpayer of their error. This code may not be used if an amount field has a transcription error or if a field validity error is present in any field of a section. No other AC may be used in the same correction attempt. All validity errors must be corrected before Action Code 1 can be used; otherwise, the record will loop. Action Code "1" and the correct TPNC are written to the left of Section 01, and a working trail is left in the upper left-hand corner of the document.

Action Code 2 is used to delete a rejected record from processing. It cannot be used on a raw register. Only Rejects will use Action Code "2" . Action Code 2 is written to the left of Section 01.

Action Code 3 is used to reject a record when it is unprocessable. Use of Action Code 3 will force the record to the reject register. It must never be used on a record already in reject status. When using Action Code 3, attach Form 4227, Intra-SC Reject or Routing Slip, or appropriate routing slip, stating why the document is being rejected. Any of the following types of documents can be unprocessable.

Action Code 4 is used to delete a section from a record. This AC is used when information has been erroneously or unnecessarily entered into a section, and the entire section is not needed for processing. Each section is indicated on the register and will appear as the first two digits on the first line of print for each section. All sections cannot be deleted; therefore, a record with only one section cannot have an Action Code "4" correction. It cannot be used on certain sections, such as Section 01, which are required for processing. AC 4 is written to the left of the section to be deleted.

Action Code 5 is used to add a section to a record when the section was not transcribed. The AC is written in the space below the last printed section of the error record. Write in the section number, with AC 5 to the left of it, and write the Alpha Field Designators with their field data and field breaker in the order that they normally appear in the section. Only fields containing data need to be written in.

Action Code 6 is used to change information in a field or fields of a section within the record. The computer identifies each field of a section with an AFD and prints the AFD before the field on the register. The AC is written to the left of the section in which there is a field that requires correction. To correct an invalid field:

Any number of fields may be changed in the section at the same time. AC 6 can also be used more than once; if invalid fields appear in multiple sections, the AC should appear to the left of each section in which there is a field that requires correction. When the name control (a fixed-length field) must be left partially blank, enter the number of spaces to the right in the correct data above the field. This number must be encircled.

Action Code 7 is used to indicate that the data on the register is correct and that no action is necessary. AC 7 may not be used with any other Action Codes. All corrections requiring Action Codes 4, 5, and 6 must be done before Action Code 7 may be used. This AC may be used to clear a record which has been sent to the register for one-time review. If information for a particular section was not input, the section may be generated for review with an asterisk before the section number. Use the AC 7 to clear this item if no error exists.

Action Code 9 is used to re-reject a reject loop register for correspondence or other suspense action. Action Code 9 is written to the left of Section 01.

Enter Action Codes 0, 1, 2, 3, and 7 on the error register to the left of Section 01, and enter Action Codes 4, 5, and 6 to the left of the appropriate section number.

ISRP Error is an error that has been identified by the Integrated Submission and Remittance Processing (ISRP) edit run.

The ISRP Error Indicator is printed to the left of the section number. This error will appear on the error register as shown in the following table:

All fields of a section must be examined when this condition exists. If Section 01 of a return is error coded, also examine the tax base data section for errors to insure the return data is for the taxpayer whose name is in Section 01.

Even though one or more sections of a record are error coded, the validity and consistency checks necessary for the record are made for all sections. Line out each incorrect field, and enter the correct data. Use Action Code 6. If the record is correct as it appears on the error register, enter Action Code 7.

A Terminus Error results when:

When this error is present, two asterisks will appear to the immediate left of the section number.

Correct a Terminus Error as follows:

If data is correct on register, re-enter a field, using Action Code 6 to send the record to good tape.

Field Validity Errors are the most common type of errors.

A Field Validity Error appears with an asterisk (*) to the immediate left of the field that is in error. All fields will be printed on the error register. Some fields must contain data, and if they are blank, they are invalid. The field will be in error if:

Correct a Field Validity Error as follows:

There are some fields which are asterisked (on the raw only) for a cursory review. These may be cleared with Action Code 7 if there are no other errors present.

Taxpayers may send a blank return stating that they are not required to file or don't understand why they are receiving the Form 8752.

Research to ensure that the filer is still on a fiscal year basis. If a fiscal year filer, Form 8752 must be filed unless:

If a fiscal year filer and 2(a) or (b) do not apply, initiate correspondence. Inform the taxpayer that a partnership or S Corporation must file Form 8752 if it made a Section 444 election to file their tax return on a fiscal year basis instead of the required calendar year basis.

If the taxpayer is no longer a fiscal-year filer, do not process the Form 8752. Void the blank return.

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 business include, but are not limited to, the examples in IRM 4.10.12.1.1, Frivolous Argument. Also, see Exhibit 3.12.249-3 , Potential Frivolous Arguments for Examination Review.

Review the return to determine whether it appears to be a frivolous return.

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.

"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.

Follow the instructions below for processing "CIS" returns.

The paper register is the physical representation of the tax document and any errors that have been identified. It is essentially a printed form of the data input from the document, and appears in a standardized format which is used for nearly every type of SCRS program. Data fields are designated with letters of the alphabet. Each section is designated with the section number.

The Error Register contains three sections (Section 01, Section 02, and Section 03 (Address Data)). The money fields (Field 01-A (Remittance), and all fields in Section 02, except Field 02-C (Deferred Ratio)), will be entered as dollars and cents.

Errors appear much differently on paper registers than they do in ERS (error codes). Most errors can be located by an asterisk (*) appearing to the immediate left of the Field Designator. Some are special errors that require unique treatment. Errors can occur anywhere in every section except for the Header Section. Research with Command Codes can be used to correct some Entity errors.

Form 8752 is filed by partnerships (Form 1065, U.S. Partnership Return of Income) and S Corporations (Form 1120S, U.S. Income Tax Return for an S Corporation) who made the Section 444 election to file their income tax on a fiscal year, rather than a calendar year. Partnerships and S Corporations use Form 8752 to figure and report the payment required under IRC Section 7519 to obtain a refund of net prior-year payment(s). A partnership or S Corporation must file Form 8752 if it made a Section 444 election by filing Form 8716, Election To Have A Tax Year Other Than a Required Tax Year, and its election is still in effect for the tax year. Any tax year that a Section 444 election is in effect, including the first tax year the Section 444 is made, is an "applicable election year." Prior to 1991, the Section 444 payment made by these taxpayers was reported on Form 720, Quarterly Federal Excise Tax Return, under Abstract 11.

Taxpayers electing Section 444 are not required to remit a payment until a liability in excess of $500.00 has been incurred. However, taxpayers must file Form 8752 if the taxpayer was required to make a payment in a prior tax year, even if the current required payment is $500.00 or less. Thereafter, the taxpayer must continue to make the required payment even when the amount due is below the $500.00 threshold.

Due Date: For applicable election years beginning in 1990, Form 8752 must be filed and required payment made on or before May 15. See IRM 3.12.249.2.2.8 for additional information.

This section provides field criteria, descriptions, and specifications for correcting Form 8752.

Section 01 fields on the Error Register are shown below: alpha designator, 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.