3.12.251  Corporation Income Tax Returns (Cont. 1)

3.12.251.3 
Error Resolution System (ERS) General Correction Procedures

3.12.251.3.23  (01-01-2015)
Working Trails

  1. It is important to leave a legible "Working Trail" for those who may work with the return later. If your campus has written "In-house Agreements" which vary from the instructions below, you may follow them. However, the following procedures have been coordinated with Headquarters.

  2. Enter all Taxpayer Notice Codes on the front of the return in the upper left corner.

  3. "X" and enter corrected money amounts to the left of each original point(s) of error for each new Taxpayer Notice Code that is transmitted.

  4. Place an "X" beside the point of error (incorrect data) and write the correct data to the left of the "X" . Money amounts are to be written in dollars only or dollars and cents, as applicable. Arrowing is allowed for money amounts when there are no intervening entries between the arrow and the line to which the money is to be entered.

  5. If the taxpayer entered incorrect data on the return, "X" the area that is incorrect and enter the correct data to the left of the "X" . Circle out incorrect Received Dates, Employee Identification Numbers (EIN), and Name Controls.

  6. Edit the following items when transcribed and making a change to the return:

    • Employee Identification Number

    • Name Control

    • Tax Period

    • Computer Condition Codes

    • Received Date—The Earliest

    • Correspondence Received Date

  7. In left margin on the first page of the return, edit the preparation of any letter sent and Form 2275 if applicable.

3.12.251.3.24  (01-01-2015)
Conversion of Form 1120S to 1120

  1. If a taxpayer had filed Form 1120S and the Entity Control Unpostable Unit has determined the taxpayer does not have a valid Form 2553, Small Business Election on file, the Form 1120S must be converted to Form 1120 in order to be processed.

  2. Code-and-Edit must ensure that only the name control, CCC "3" (if applicable), Received Date, North American Industry Classification System Code (NAICS), Tax Period and Audit Code 4 are edited to the Form 1120.

  3. If a field other than those mentioned above has been entered, delete it.

  4. Do not enter any tax data on the "blank" Form 1120. No conversion to a Form 1120 should be attempted.

  5. If the converted form displays with Error Code 026 and there is an indication that Entity has taken action to resolve the tax period, clear the error code. If there is no indication that Entity has taken action on the tax period follow instructions for Error Code 026.

  6. When reprocessing an original efiled (MeF) Form 1120S as Form 1120, ensure that the received date is properly edited on the return. The received date is the same as the original DLN Julian date. Do not subtract ten days.

3.12.251.3.25  (01-01-2015)
Homeowners Association Filing on Form 1120

  1. Homeowners Associations may file on Form 1120. When they do so, they are to be taxed at the normal corporate tax rate.

  2. If the taxpayer indicates Section 277 or states "minimum amount of tax" when there is no amount for taxable income present, accept the taxpayer's figures by using one or more verified fields.

3.12.251.4  (01-01-2015)
Form 1120 Sections and Fields

  1. Form 1120 contains Sections 01 through 12, 14 through 18 and 20 through 25.

  2. Information related to ERS screen displays, invalid conditions and correction procedures are included in each section description.

3.12.251.5  (01-01-2015)
Section 01 Data - Form 1120

  1. This section provides instructions for correcting Section 01 Field Errors.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 01 contains Remittance, Received Date, processing codes, entity data, and miscellaneous information.

3.12.251.5.1  (01-01-2015)
Section 01 Field Errors

  1. Correctable Section 01 fields are listed below:

    Field
    Designator
    Maximum
    Length
    Field
    Title

    Location
    01NC 4 Name Control First Name Line
    01EIN 9 Employer Identification Number EIN Block
    01TXP 6 Tax Period (Ending) Upper Right Corner Page (Pg) 1
    01RCD 8 Received Date Center of Pg 1
    01CCC 10 Computer Condition Code Dotted Portion of lines 1–11 Pg 1
    01NAI 6 NAICS Code Form 1120
    Page 3, Schedule K, line 2a
    01CBI 1 Preparer Checkbox Indicator Paid Preparer Use Only section
    01CRD 8 Correspondence Received Date ERS only field
    01PSN 9 Preparer SSN Paid Preparer Use Only section
    01PEN 9 Preparer EIN Paid Preparer Use Only section
    01PTN 9 Preparer phone number Paid Preparer Use Only section

3.12.251.5.2  (01-01-2015)
Field 01NC - Name Control (XREF EC 002 or 003)

  1. This field is transcribed from the name line in the entity portion of the return. The field is used for the name control (the first four significant characters of the corporation's name).

  2. Invalid Condition - Field 01NC is invalid if:

    1. Name Control is present and the first position is not alpha or numeric, or

    2. Name Control 2nd, 3rd and 4th positions are not alpha, numeric, ampersand, hyphen, or blank, or

    3. There are any intervening blanks between characters, or

  3. Correction Procedures:

    1. If the Name Control is invalid initiate research.

    2. If the Name Control has been transcribed incorrectly, enter the correct Name Control.

    3. If the Name Control is missing and cannot be determined, initiate research using local campus procedures.

    4. If found, enter the correct Name Control in Field 01NC and on the return.

    5. If you are still unable to determine the Name Control, SSPND the record with Action Code "320."

3.12.251.5.3  (01-01-2015)
Field 01EIN - Employer Identification Number (XREF EC 004)

  1. The EIN is a number assigned by IRS for identification of a business tax account. The field is located in the EIN block on page 1 of the return or on the IRS preprinted label.

  2. Invalid Condition - Field 01EIN is invalid if:

    • Less than 9 digits are present,

    • EIN is not all numerics,

    • EIN is all zeros or nines, or

    • The first two digits are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 69, 70, 78, 79, 89, and 96.

  3. Correction Procedures:

    If Then
    The EIN was transcribed incorrectly or is missing Check the return and attachments for a valid EIN.
    If found, enter in Field 01EIN and the EIN box on the return.
    Entity Control has assigned an EIN Enter it in Field 01EIN and on the return.
    GTSEC 01 and enter the entity assignment date in Field 01CRD if it is after the Received Date (Field 01RCD).
    A correct EIN cannot be found Research using Command Code NAMEB for the correct EIN.
    If found, enter EIN in Field 01EIN and the EIN box on the return.
    If a correct EIN cannot be found using Command Code NAMEB Research using Command Code NAMEE for the correct EIN. If found, enter in Field 01EIN and the EIN box on the return.
    More than one EIN is found, or if unable to determine a valid EIN SSPND "320" and notate on routing slip "Multiple EIN" or "No Match Found" .
    A remittance return with an EIN change SSPND with Action Code "351." Rejects will research via IDRS to determine if the payment has posted correctly.
    Research is not possible because IDRS is down SSPND with Action Code "351."

3.12.251.5.4  (01-01-2015)
Field 01TXP - Tax Period (XREF EC 007 or 026)

  1. The tax period is located in the upper right corner of the return. It is the ending month and year of the tax period covering the return. If the tax period is not the current calendar year, it is edited in year/month (YYYYMM) format. For example, December 31, 2014 is edited as "201412. "

  2. Invalid Condition - Field 01TXP is invalid if:

    1. It is not all numeric,

    2. The last two digits (month) are not 01 through 12,

    3. The tax period is equal to or after the current year and month,

    4. The tax period is blank.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Check the upper right corner of page one of the return for a correct tax period.

      If Then
      Tax period is later than the current year/month by four months or more
      1. SSPND 211

      2. Attach Form 3696 or other approved Correspondence Action Sheet and request confirmation of the tax period ending.

      Note:

      When confirmed, the return will be processed after the end of that tax period.

      Not more than one month, or
      taxpayer indicates inactive, or
      no income or deductions are present
      SSPND with Action Code "480" and attach Form 4227 noting that the return should be held and processed after the end of the tax period.
      More than one month but less than one year on non-Final returns Correspond for confirmation of the tax period.
      Final returns Change the tax period to the month preceding the Received Date.
    3. 52-53 Week Rule. Corporations may elect to file a 52–53 week year end return under Treasury Regulation 1.441-2T(a).

      Examples
      52–53 week tax year that ends on the last Friday of the month can end as much as 6 days before the last day of the month. Tax year ends August 25, 2014.
      tax period should be 201408.
      52–53 week tax year that ends on the Friday that is nearest to the last day of the month can end as much as 3 days before, or 3 days after, the last day of the month. Tax year ends June 2, 2012.
      tax period should be 201205.
    If Tax Period Then
    Covers more than 12 months Correspond for clarification. If no reply, follow instructions in IRM 3.12.38, BMF Error Resolution - General Instructions.
    Does not fall under the 52-53 week rule and does not end on the last day of the month Continue processing
    Cannot be determined by researching the attachments Follow local research procedures to obtain the correct tax period (the latest year without a return).
    Can be found through research Enter it in Field 01TXP and on the return.

    Note:

    If research indicates no filing requirement, SSPND with Action Code "320" to Entity Control.

3.12.251.5.5  (01-01-2015)
Field 01RCD - Received Date (XREF EC 007)

  1. The Received Date is edited in YYYYMMDD format. The Received Date must be present on all Forms 1120. This field will show on the return in MMDDYY format. On the ERS Screen it will display as YYYYMMDD.

  2. Invalid Condition - Field 01RCD is invalid if:

    1. Received Date is not present.

    2. Received Date is not all numerics.

    3. Month is not 01 through 12.

    4. Day is not valid for the month.

    5. Received Date is later than the current processing date.

    6. Received Date is not in YYYYMMDD format.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Field 01RCD is transcribed from the stamped or edited date in the center of page 1 of the return.

      If Then
      The Received Date stamp is invalid (i.e. 20090115 in lieu of 20100115) Change the Received Date year to the current year.
      The Received Date is illegible or missing Determine the correct Received Date in the following priority:
      1. U.S. or Foreign Country postmark date on envelope or a postmark established by an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting and Sorting, for more details.

      2. Service Center Automated Mail Processing System (SCAMPS) digital date.

      3. Revenue Officer's signature date

      4. Signature date unless information indicates it is not valid or the return is for a prior year.

      5. DLN Julian Date minus 10 days

      6. Current date minus 10 days.

3.12.251.5.6  (01-01-2015)
Field 01CBI - Checkbox Indicator

  1. The Paid Preparer Checkbox is located next to the Signature area of the return. The Paid Preparer Checkbox is used to indicate whether or not the taxpayer has elected to allow the preparer shown on the return to discuss the return with the IRS. C&E will enter a "1" in the margin to the right of the box if the "Yes" box is checked.

  2. Invalid Condition: Field 01CBI is invalid if other than "1" or blank.

  3. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

      If Then
      The "Yes" box is checked Enter a 1 in Field 01CBI
      The "No" box is checked, neither box is checked, or both boxes are checked Delete entry in Field 01CBI

3.12.251.5.7  (01-01-2015)
Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172)

  1. The Computer Condition Code (CCC) is transcribed from the dotted portion of the Income section of the return. Computer Condition Codes are used to notate a specific condition, attachment, or computation and will post to the Master File.

  2. Invalid Condition for Form 1120:

    If Then
    CCCs "D" , "R" , are both present Field 01CCC is invalid.
    Field 01CCC is not blank and an entry is other than A, B, F, G, I, K, L, N, O, P, Q, S, T, V, W, X, Y, Z, 3, 5, 8 or 9 Field 01CCC is invalid
    More than 10 present Field 01CCC is invalid
  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. When the code(s) entered on the return are illegible or invalid, examine the return and refer to the Computer Condition Code Chart below.

    3. Determine the correct code(s) and enter on the screen.

    4. For tax years 200912 and subsequent C&E will enter a CCC "C" if the taxpayer has claimed certain credits in error. This will allow all of these accounts to fall out in ERS/Rejects. For accounts falling out due to CCC "C" follow procedures below:

      If Then
      Form 8834 (Field 08ASE) is present and the vehicle was placed into service prior to 02/17/2009 Disallow the credit. GTSEC section 08 and adjust Field 08ASE and line 5b, Schedule J, accordingly. Delete CCC "C" and write Letter 105C
      Form 8910 (Field 08AMV) is present and the vehicle was placed in service prior to 02/17/2009 Disallow the credit. GTSEC section 08 and adjust Field 08AMV accordingly. Delete CCC "C" and write Letter 105C
      Form 8936 is present and the vehicle was placed in service prior to 01/01/2009 Disallow the credit. GTSEC 08 and adjust Field 08GBC accordingly. Delete CCC "C" and write Letter 105C.
      CCC "C" was entered in error Delete CCC "C" .

      Note:

      Write Letter 105C, Claim Disallowed, using the open paragraph. Tell the taxpayer the applicable claim for Form (8834, 8910 and/or 8936) credit was disallowed because the vehicle was placed in to service prior to (02/17/2009 For Form 8834 or Form 8910 and/or 01/01/2009 for Form 8936 as applicable.)

    5. When CCC "Y" is needed you may also need to GTSEC 07 and put the verified tax amount in Field 07MCT. If tax is zero enter .01 in Field 07MCT

    6. Computer Condition Code Chart:

      Code Edited if: Indicates
      A Tax year beginning was prior to December 31, 1987 and non-penalty Form 2220 is present Waiver of the Estimated Tax penalty.
      B Tax Period 2004 or later Form 1120 and
      • Page 1, Box A(4) is checked, or

      • Schedule M-3 is attached

      Form 1120 with Schedule M-3 attached
      F The taxpayer checks the "Final Return" box on Page 1 of the return, or there is any other indication that the taxpayer is not liable for future returns Final return
      G An amended return is identified per IRM 3.11.16, Corporate Income Tax Returns

      Note:

      No other Computer Condition Codes are allowed, except CCC "W" , "S" , "T" or "3."

      Amended return
      H A Form 1042–S is attached to Form 1120–F with Withholding being claimed on it Form 1120–F only. Form 1042–S Recipient's Copy is attached and withholding is being claimed from the 1042–S.
      I Form 6781 is attached Tax Straddles and Regulated Futures Contract claimed are attached to Form 1120, 1120–C, 1120–F, 1120–L and 1120PC
      K Form 8697 is attached and shows a balance due in Part I, line 10 and/or Part II, line 11

      Note:

      The tax will be claimed on line 9, Schedule J, Form 1120.

      Form 8697 tax is claimed
      L Form 8833 is attached to the return, or "Section 6114 Election" The treaty based position statement is not made in accordance with IRC Section 6114 but is subsequently claimed on the return.
      N Joint Committee Case condition is applicable Form 1120 Joint Committee Case
      O Module Freeze condition is applicable Manual Refund
      P The number "77" does appear in the title area of Forms 1120, 1120-F or 1120S. Do not input if return is final, amended or is for a prior tax period. Continue regular mail out. Taxpayer (TP) is using form mailed to them
      Q Form 8913 (TETR) is only figure on complete income tax return for 2006 (no other entries) line 32g (Form 1120) 2010 revision and prior
      line 23g (Form 1120-H)
      line 5i (Form 1120-F)
      line 29g (Form 1120-C)
      S Form 8883, Asset Allocation statement under section 338 is attached Form 8883 attached to a Form 1120, 1120–C, 1120–F, 1120–L, 1120–PC, 1120–REIT and 1120–RIC
      T Form 8886, Reportable Transaction Disclosure Statement, Form 8886 attached to a Form 1120, 1120–C, 1120–F, 1120–H, 1120–L, 1120–PC, 1120–REIT and 1120–RIC
      V Form 3800 Line 1A or 4A is significant and Form 3468 Line 8 has an entry. Although this credit expired at the end of TY 2010 fiscal filers may qualify for Tax Year 2011 Qualifying Therapeutic Discovery Project Credit is being claimed
      W Return has been "cleared by Statute" Cleared by the Statute Control Group
      X Refund/Settlement freeze condition is indicated Return settlement is frozen
      Y Short period return for change of accounting period is indicated Return must be manually verified. Master File will accept return as submitted. Updates the entity fiscal month.
      Z Schedule UTP is attached to Form 1120, 1120-F, 1120-L or 1120-PC for Tax Year 2011 Uncertain Tax Position Statement with assets that equal or exceed $100 million.
      1 Form 8824 is attached Generated if attached.
      3 The taxpayer either fails to respond to correspondence or the correspondence is returned undeliverable Account will not receive credit interest
      5 Bank Holding Co. Tax Act Special installment status
      8
      1. Annualized income is computed on Form 1125–A, Pages 3 and/or 4 of Form 2220, or
        Form 2220, Part II Box 6 or Box 7 (prior year Part I, Box 1 or Box 2) is checked.

      2. Section 847 Special Estimated Tax Payments are identified on Form 1120, Page 3, Schedule J, Part II, Line 13 (with notation such as SETP or 8816); and/or Form 1120-L, Page 1, Lines 29b and/or 29d; and/or Form 1120-PC, Page 1, Lines 14b and/or 14d.

      1. Waiver of the Estimated tax penalty

      2. Section 847 Deduction, Special Estimated Tax Payments

      9 Low-income Housing Credit is indicated The Low-income Housing Credit is claimed
    7. If CCC "G" is present and:

      If Then
      Return is not an amended return Delete CCC "G" and leave other codes. Input all information from the return.
      Return is an amended return Delete CCCs other than "G," "W" , "S" , "T" and "3."
    8. If more than 10 codes are present, retain codes in the following priority: F, N, O, Y and others (up to 10 codes).

3.12.251.5.8  (01-01-2015)
Field 01NAI - North American Industry Classification System Code (NAICS Code)

  1. The North American Industry Classification System Code (NAICS) is transcribed from Form 1120, Schedule K, line 2a.

  2. Invalid Condition - Field 01NAI is invalid if:

    1. It is not present (except G-Coded returns), or

    2. It is other than 000001 through 999000

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Make necessary changes.

      If Then
      Form 1120 and not an amended return
      1. If the NAICS Code is located on schedule K, line 2a, enter the code in Field 01NAI.

      2. If you can determine the business is some kind of service, enter 899000 in 01NAI.

      3. If you cannot make a determination, enter 999000 in Field 01NAI.

      Form 1120 is amended return Delete any entry in Field 01NAI.
      GTSEC 01 and input CCC "G."

3.12.251.5.9  (01-01-2015)
Field 01CRD - Correspondence Received Date (XREF EC 034 and EC 073)

  1. Field 01CRD is the date stamped on the reply to correspondence and is an ERS Input Only field.

    1. The 45 day interest free period for processing refund returns does not begin until after the return is in a processable format. Therefore, if we correspond for missing information, the Correspondence Received Date must be input to the Master File for the purpose of computing credit interest.

    2. This field will show on any correspondence in MMDDYY format. On the ERS Screen it will display as YYYYMMDD.

      Note:

      Code-and-Edit no longer edits the Correspondence Received Date.

  2. Invalid Condition - Field 01CRD is invalid if:

    1. Correspondence Received Date is present and it is not all numeric,

    2. The format is not YYYYMMDD,

    3. The month is not 01 through 12, or

    4. The day is not valid for a particular month.

  3. Correction Procedures:

    1. The Correspondence Received Date may not be required.

      If Then
      • Correspondence was required because of an IRS processing error, such as a request for a return or schedule that we lost during processing,

      • We failed to ask for all of the required information, or

      • The correspondence reply is received prior to the return due date.

      Delete Field 01CRD if any of these conditions are present.
    2. If the Correspondence Received Date is applicable, use the date the correspondence reply was received in the Submission Processing campus.

      If Then
      The reply was not date stamped Use the postmark date on the envelope attached to the reply.
      Enter the Correspondence Received Date in Field 01CRD.
      No reply or the correspondence was undeliverable GTSEC 01 and enter a CCC "3" on the return and in Field 01CCC.

      Note:

      The CCC "3" suppresses the credit interest.

      There is an indication that Entity Control has assigned an EIN to the return Enter the entity assignment date found in the lower left-hand corner in Field 01CRD if it is later than the Received Date.
      More than one CRD is present Use the earliest CRD.

3.12.251.5.10  (01-01-2015)
Field 01PSN - Preparer SSN

  1. The Preparer SSN is transcribed from the "Preparer's SSN or PTIN" , Preparer Tax Identification Number (PTIN) box in the "Paid Preparer Use Only" section of the return.

    1. Field 01PSN can be blank, or it can be all numeric, or

    2. The field may contain a "P" followed by eight numbers.

    Note:

    If the Paid Preparer's information is present, either Field 01PSN or 01PEN should have an entry. Only one of these fields is required.

  2. Invalid Condition - Field 01PSN is invalid if:

    • Preparer SSN is present and it is all zeros or all nines,

    • An entry is less than nine characters, or

    • A non-numeric entry is other than "P" followed by eight numbers. These numbers cannot be eight zeros or eight nines.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the Preparer SSN on the return is invalid, do not attempt to correct the taxpayers information. Delete Field 01PSN.

3.12.251.5.11  (01-01-2015)
Field 01PEN - Preparer EIN

  1. The Preparer EIN is transcribed from the "EIN" box in the "Paid Preparer Use Only" section of the return. Field 01PEN can be blank, or it can be all numeric.

    Note:

    If the Paid Preparer's information is present, either Field 01PEN or Field 01PSN should have an entry. Only one of these fields is required.

  2. Invalid Condition - Field 01PEN is invalid if:

    • Preparer EIN is present and it is all zeros or all nines,

    • An entry is less than nine characters, or

    • A non-numeric character is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the Preparer EIN on the return is invalid, do not attempt to correct the taxpayer's information. Delete Field 01PEN.

3.12.251.5.12  (01-01-2015)
Field 01PTN -Paid Preparer Phone Number

  1. The paid preparer phone number is transcribed from the bottom right hand corner of page 1, in the Paid Preparer Use Only area of the return. If present, the entry in Field 01PTN. If present, the entry in Field 01PTN must be alpha, numeric or a combination of alpha and numeric characters not to exceed 10 positions.

    Note:

    If the taxpayer checked Yes in the Paid Preparer Checkbox, a telephone number for the Paid Preparer should be entered to allow contact. However, this field is not required and may be left blank.

  2. Invalid Condition: Field 01PTN is invalid if other than blank, alpha, numeric or a combination alpha and numeric characters.

  3. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

    • If invalid characters are present, or if the Paid Preparer Phone Number on the return is invalid, do not attempt to correct the taxpayer's information. Delete Field 01PTN.

3.12.251.6  (01-01-2015)
Section 02 Data - Form 1120 Address Information

  1. This section provides instructions for correcting Form 1120 Section 02 Field Errors.

  2. Section 02 contains address information. It will be present when a change of address has been entered.

  3. This section must not be present on a G-coded return.

3.12.251.6.1  (01-01-2015)
Section 02 Field Errors

  1. The fields listed below are in Section 02, Form 1120. From left to right are the field designator, maximum field length, title of field and the location where the data is obtained from the return.

    Field
    Designator
    Maximum
    Length
    Field
    Title


    Location
    02CON 35 "In-Care-of" Name Entity Section of the return
    02FAD 35 Foreign Address Entity Section of the return
    02ADD 35 Address Street address line, or corrected entry on preaddressed label
    02CTY 22 City City, state, zip line or corrected entry on preaddressed label
    02ST 2 State City, state, zip line or corrected entry on preaddressed label
    02ZIP 12 Zip Code City, state, zip line or corrected entry on preaddressed label

3.12.251.6.2  (01-01-2015)
♦Field 02CON - "In-Care-of" Name (XREF EC 002, 014, 016)♦

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

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

    Note:

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

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

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

    2. The first position is blank, or

    3. The first character of the "In-Care-of" name is not alpha or numeric, or

    4. There are two consecutive blanks between significant characters.

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      A % (percent) is in the first position,
      1. Verify there is a blank in the second position.

      2. If not blank, enter a blank followed by the "in-care-of" name, beginning with an alpha or numeric in Field 02CON.

      A blank is in the first position,
      1. Delete blank.

      2. Enter the "in-care-of" name, beginning with an alpha or numeric in Field 02CON.

      The first character of the "in-care-of" name is not alpha or numeric,
      1. Verify "in-care-of" name on the return.

      2. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.

      Two consecutive blanks are present between significant characters,
      1. Delete any unnecessary blanks in Field 02CON.

3.12.251.6.3  (01-01-2015)
♦Field 02FAD - Foreign Address♦

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

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

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

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

  3. Invalid Condition: Field 02FAD will generate as an error when any of the following conditions are present:

    • The first position is blank.

    • Any character follows two consecutive blanks.

    • There are more than 35 characters present in the field.

      Note:

      ISRP is instructed to input a pound sign (#) as the 35th character if there are more than 35 characters present for this field on the return.

  4. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

      If Then
      Field 02FAD is present 1. GTSEC 02
      2. Ensure Field 02CTY contains a foreign country code and Field 02ST (State) contains a "," period/space. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.
      Exception: Use the Country Code based on the Province in Field 02CTY if the foreign address is from Canada and the address contains a province name or abbreviation
      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 the appropriate position in Field 02FAD.
      A foreign address is not present on the return
      1. SSPND 610

      2. Renumber return with domestic DLN.

    • 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, 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.

      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/Form 8822-B into Field 02FAD

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

      3. Detach Form 8822/Form 8822-B and route to Entity Control using Form 4227 or follow local procedures.

      4. 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 Forms 8822-B daily and hand carry them to Entity Control for expedited processing.

3.12.251.6.4  (01-01-2015)
Field 02ADD - Street Address (XREF EC 002, 014, 015, 016)

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

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

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

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

    3. Any character follows two consecutive blanks, or

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

      Note:

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

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

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

    3. If unable to correct, DLSEC 02.

3.12.251.6.5  (01-01-2015)
Field 02CTY - City (XREF EC 002, 014, 015, 016)

  1. This field is transcribed from the City, State, Zip line of the entity portion, on page 1 of the return.

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

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

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

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

    1. City is present and the first position is blank

    2. Any character other than alpha or blank is present

    3. Any character follows two consecutive blanks

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

    5. Foreign country code is not valid or Field 02CTY contains "XX"

    Note:

    If the address is a foreign address, defined as not within the 50 states or the District of Columbia, SSPND with Action Code "650" and attach a Form 4227 with a notation to forward to the Ogden Submission Processing Campus. Skip this procedure if you are in Ogden Submission Processing Campus.

    Note:

    An APO, DPO or FPO address is not considered a foreign address, but an address in an American possession.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a valid city is not available from the return or envelope, take any of the following steps. Research using INOLES or ENMOD, refer to Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, or if Foreign address is shown on the return, enter appropriate Foreign code.

    3. Follow local procedures.

      Note:

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

    4. If unable to correct, DLSEC 02.

3.12.251.6.6  (01-01-2015)
Field 02ST - State (XREF EC 002, 014, 015, 016)

  1. This field is transcribed from the City, State, Zip Code line of the entity portion of the return.

  2. If the address is a foreign address, defined as not within the 50 states or the District of Columbia, SSPND with Action Code "650" and attach a Form 4227 with a notation to forward to the Ogden Submission Processing Campus.

    Note:

    Skip this procedure if you are in Ogden Submission Processing Campus.

    Note:

    An Army Post Office (APO) Diplomatic Post Office (DPO) or Fleet Post Office (FPO) address is not considered a foreign address, but an address in an American possession.

  3. Invalid Condition - Field 02ST is invalid if the entry is not a state code that is listed in the State Code Table in Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a valid State Code is not available from the return or envelope, take any of the following steps: Research using INOLES or ENMOD to determine state, refer to Document 7475, or follow local procedures to determine state.

      Note:

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

    3. If unable to correct, DLSEC 02.

3.12.251.6.7  (01-01-2015)
Field 02ZIP - ZIP Code (XREF EC 002, 014, 015, 016)

  1. This field is transcribed from the City, State, Zip line of the entity portion of the return.

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

    • Zip Code is present and the first 5 positions are not numeric,

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

    • Positions 4 and 5 are "00"

      Exception:

      Zip Code 20500

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a valid zip code is not available from the return or envelope, research using any of the following to determine the zip code: INOLES or ENMOD, Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

3.12.251.7  (01-01-2015)
Section 03 Data - Form 1120

  1. This section contains instructions for correcting Section 03 Field Errors on Form 1120.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 03 contains codes and indicators relating to attachments and information on the return.

3.12.251.7.1  (01-01-2015)
Section 03 Field Errors

  1. Correctable Section 03 fields are listed below:

    Field
    Designator
    Field
    Length


    Title


    Location
    03ABL 3 ABLM Code Pg 1, upper left margin by item A
    03CGC 1 Control Group Personal Service Code Form 1120, Pg 3, line 1, Sch J.
    03IRC 1 Initial Return Code Pg 1, upper right margin
    Form 1120
    03MIC 2 Missing Schedule Code The margin to the left of “Deductions” section of the return following “3-”.
    03PIC 1 Penalty and Interest Code The margin to the left of “Deductions” section of the return following “4-”.
    03RVC 1 Reserve Code The margin to the left of “Deductions” section of the return following “5-”.
    03SDC 1 Special Deduction Code Form 1120, Pg 1, right margin by line 29c
    03K04 1 Affiliated Group Code Form 1120, Pg 3, Sch.K, line 3
    03PNC 4 Parent Name Control Form 1120, Pg 3, Sch K, dotted portion of line 3
    03PIN 9 Parent EIN Form 1120, Pg 3, Sch K, dotted portion of line 3
    03FCC 2 Foreign Country Code Form 1120, Pg 4, Sch K, line 7(b)(ii)
    03ADC 9 Audit Code The margin to the left of “Deductions” section of the return following “2-”.
    03ISI 1 Installment Sales Indicator The margin to the left of “Deductions” section of the return following “6-”.
    03AMC 1 Accounting Method Code Form 1120, Sch. K, Left margin line 1
    03K12 12 NOL Carryover Amount Form 1120, Pg 4, Sch K, line 12
    03K7C 3 Number of Forms 5472 attached Form 1120, Pg 4, Sch K, line 7
    03Q16 1 80 percent or more question Form 1120, Pg 4, Sch K, line 16
    03Q17 1 Disposal question Form 1120, Pg 4, Sch K, line 17
    03Q18 1 Section 351 transfer question Form 1120, Pg 4, Sch K, line 18

3.12.251.7.2  (01-01-2015)
Field 03ABL - ABLM Code

  1. The ABLM Code is determined from the box in the upper left corner of the return. If the document code (4th and 5th positions in the DLN) is "10" , Field 03ABL must be blank.

  2. Invalid Condition - Field 03ABL is invalid if:

    1. It is other than 001, 010, 400 or blank.

    2. The doc code is 09 and 03ABL is other than blank or 400.

    3. The doc code is 10 and 03ABL is other than blank.

    4. The doc code is 11 and 03ABL is other than 001, 010, or 400.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Check the return to see if it was given the correct document code.

      If Then
      Form 1120 with box (1), (2), or (3) in upper left corner of the return is checked Doc Code is 11.
      Form 1120 with none of the boxes mentioned above is checked Doc Code is 10.
      Doc Code is 11, however should be 10 Reprocess return to correct the DLN. If TP caused the error (checked box in error) correct received date to reflect the date the correspondence was received.
    3. If the return was misblocked, reject with Action Code 610 and notate "misblocked return"

    4. If the document code is correct, and:

      If Then
      Doc Code is 09
      1. Refer to the chart below for ABLM Codes.

      2. If ABLM Code 400 does not apply, delete Field 03ABL.

      Doc Code is 10 Delete Field 03ABL.
      Doc Code is 11
      1. Refer to the chart below for ABLM Codes.

      2. If ABLM Code 400, 010, or 001 does not apply, delete Field 03ABL.

    5. ABLM Codes are:

      ABLM Code Explanation
      001 Box A(2) is checked on page 1 of the return, or
      Form 1120-PH is attached, or
      Schedule J, line 8 contains an amount
      010 Box A(1) on page 1 of Form 1120 is checked, or
      Form 851 or 1122 is present, subsidiaries are listed on Form 7004.
      If the consolidated return has mixed component members (Example: taxpayer attempts to consolidate an 1120-L with an 1120) and minimum edit or math verification is impossible, then see Audit Code "3" instructions.
      400 Box A(3) on page 1 of Form 1120 is checked, or
      Box on Form 1120, Page 3, Schedule J, Line 2 is checked

      Note:

      ABLM Code 400 has precedence over 010 or 001.

3.12.251.7.3  (01-01-2015)
Field 03CGC - Controlled Group Personal Service Code (XREF EC 114)

  1. The Control Group Code is edited on the dotted portion of line 1, Schedule J, Page 3, Form 1120.

  2. Invalid Condition - Field 03CGC is invalid if it is other than blank, "2" or "1" .

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. For additional guidance on this field IRM 3.12.251.24.34.

    3. Valid codes and explanations are listed below:

      If Then
      • Schedule O is attached or Question 1, Schedule J, page 3 is checked; or

      • Statement of an apportionment schedule under "Section 1561" is attached; or

      • On a consolidated return (Field 03ABL is 010) only when the box on line 1 is checked and Taxable Income Bracket amounts or Controlled Group Additional Tax amounts greater than zero are present.

      Enter "1" in Field 03CGC.
      Form 1120 only

      Caution:

      If "4" is edited by C&E refer to the Controlled Group" 4" instructions below.

      Tax Period began after 12/31/87 and
      • The box on line 2, Schedule J, page 3 is checked (line 3 2005 and prior), or

      • The taxpayer has not checked the box but has computed the tax at a flat rate of 35 percent

      Enter "2" in Field 03CGC.

      Note:

      Code "2" takes priority over codes "4" and "1."

      Coded "4" by Code-and-Edit when the Taxable Income of the Controlled Group is $100,000.00 or more Refer to the Controlled Group Code" 4" instructions below.
    4. If Controlled Group Code is "4" and

    If Then
    The taxpayer has paid the maximum amount of tax (Additional Tax) in regards to the total taxable income Do not correspond.
    Replace Controlled Group Code "4" with "1."
    The taxpayer has correctly computed the additional tax according to the apportionment plan, Replace Controlled Group Code "4" with "1."
    The taxpayer has not computed the additional tax, or
    The taxpayer has incorrectly computed the additional tax.
    Check the return for the apportionment plan or Schedule O.
    If a plan or schedule is present, compute the taxpayer's share of additional tax according to the apportionment plan.

    Example:

    TP indicates allocation on attachments as "Allocation/Apportionment plan" , "Consent to apportionment," "Controlled Group apportionment plan" , "Surtax apportionment plan" or "allocation schedule."


    GTSEC 04 and enter the taxpayers share of additional tax in Field 04AT1 and send TPNC 05 if EC 174 generates.
    Replace Controlled Group Code "4" with "1."
    If no attachment is found, SSPND "211" and correspond with Letter 118C.
    The taxpayer replies and provides the supporting information Compute the additional tax according to the apportionment plan.
    Enter the amount in Field 04AT1 and Field 04AT2.
    Replace Controlled Group Code "4" with Controlled Group Code "1."
    No reply is received from the taxpayer Manually compute the tax using the additional 5 percent of taxable income over $100,000 (not to exceed $11,750).
    Enter the amount in Field 04AT1.
    Replace Controlled Group Code "4" with "1."
    Also manually compute 3 percent of taxable income over $15,000,000 (not to exceed $100,000).
    Enter the amount in Field 04AT2.
    Replace Controlled Group Code "4" with "1."
    When Error Code 174 is displayed assign TPNC 40.
    .
    TP replies and indicates they checked the box in error and are not a control group Reprocess the return after editing out any indication form is for a control group. If TP caused error, change the received date on the return to the received date of the correspondence.

3.12.251.7.4  (01-01-2015)
Field 03IRC - Initial Return Code

  1. The Initial Return Code is transcribed from the right of Box C page 1. The valid codes are 2 or blank.

  2. Invalid Condition - Field 03IRC is invalid if it is other than blank or "2" .

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Enter "2" in Field 03IRC if: the initial box is checked or the date of incorporation is within 12 months of the tax period ending, or there is any indication of initial filing written on the return or the incorporation date is within 24 months (or is not shown) and the beginning balance sheet is blank or all zeroes.

3.12.251.7.5  (01-01-2015)
Field 03MIC - Missing Schedule Codes

  1. The Missing Schedule Code is edited to and transcribed from the margin to the left of “Deductions” section of the return following “3-”. Below is a list of valid codes and an explanation of each.

    Code Explanation
    29 Field 08FTC is present and Form 1118 is not attached.
    30 Field 03ABL is 001 and Schedule 1120-PH is not attached.
    31 Investment Credit claimed and Form 3468 is not attached.
    32 Field 0508 is present and Schedule D is not attached.
    33 Field 08TRI is present and Form 4255 is not attached.
    34 Field 08AMT is present and Form 4626 is not attached.
    35 Field 0509 is present and Form 4797 is not attached.
    37 Field 08ASE has an entry and Form 5735 is not attached (TY2006–2009 only).
    38 Work Opportunity Credit claimed and Form 5884 is not attached.
    39 Field 08AFT is present and Form 6478 is not attached.
    40 Field 08RES has an entry and Form 6765 is not attached.
    42 Field 2401H has an entry of $500 or more and Form 8820 is not attached.
    Exception:

    If an EIN is present on Form 3800, Page 3, Column (b), do not edit MSC or correspond. The credit is from a pass-through entity and the form is not required.
    44 Field 08LIH has an entry and Forms 8586 has an entry of $500 or more.
    Exception: If an EIN is present on Form 3800, Page 3, Column (b), do not correspond. The credit is from a passthrough entity and the form is not required.
    45 Field 08RLI has and entry and Form 8611 is not attached.
    46 Field 08PYM is present and Form 8801 or 8827 is not attached.
    47 Field 23O1E has an entry and Form 8826 is not attached.
    49 Field 08ASE is present and Form 8834 is not attached.
    50 Field 08EPC is present and Form 8835 is not attached.
    51 Field 2401G has an entry and Form 8845 is not attached.
    52 Field 2504F has an entry and Form 8846 is not attached.
    53 Field 08CDC has an entry and Form 8847 is not attached.
    55 Field 08WTW has an entry and Form 8861 is not attached.
    56 Field 08QZA has an entry and Form 8860 is not attached.
    57 Field 08NMC has an entry and Form 8874 is not attached.
    58 Field 2401J has an entry and Form 8881 is not attached.
    59 Field 2401K has an entry and Form 8882 is not attached.
    61 Field 08BFC has an entry and Form 8864 is not attached.
    62 Field 08LSP has an entry and Form 8896 is not attached.
    63 Field 2401/2504G has an entry and Form 8900 is not attached.
    65 Field 2401N has an entry and Form 8906 is not attached.
    66 Field 08NSF has an entry and Form 8907 is not attached.
    67 Field 08EEH has an entry and Form 8908 is not attached.
    68 Field 2401R has an entry and Form 8910 is not attached.
    69 Field 08AFV has an entry and Form 8911 is not attached.
    70 Field 08ERC has an entry and Form 5884-A is not attached.
    71 Field 08EEA has an entry and Form 8909 is not attached.
    72 Field 08CEB is present and Form 8912 is not attached.
    73 Field 2401V has an entry and Form 8931 is not attached.
    74 Field 2401W has an entry and Form 8932 is not attached.
    75 Field 251AA has an entry and Form 5884–B is not attached.
    76 Field 2504H has an entry and Form 8941 is not attached.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Invalid Condition - Field 03MIC is invalid if:

    1. Other than blank or one of the codes listed in the chart above.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Make necessary corrections.

      If And Then
      The corresponding credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   Delete the Missing Schedule Code.
      More than one Missing Schedule Code is needed
      (At least two credits where each is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ )
      There is no indication on the return that Code-and-Edit has requested the appropriate forms or documents to support the credits Delete Field 03MIC and initiate the appropriate correspondence letter (C-letter).
      Correspondence is needed (more than one Missing Schedule Code)   Indicate all missing forms and/or schedules. This is important where substantiation of credit is necessary.
      Notate on the return that correspondence has been initiated and circle the Missing Schedule Code on the return, if present.
      Use Action Code 21X and follow the Reply/No Reply procedures for these correspondence cases.

3.12.251.7.6  (01-01-2015)
Field 03PIC - Penalty and Interest Code (XREF EC 030)

  1. The Penalty and Interest Code is edited to and transcribed from the margin to the left of “Deductions” section of the return following “4-”. Field 03PIC should be coded "≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and an amount for precomputed penalty and interest is shown on the return. See IRM 3.12.251.24.13, for more information.

  2. Invalid Condition - Field 03PIC is invalid if it is other than blank or "1."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

3.12.251.7.7  (01-01-2015)
Field 03RVC - Reserve Code (XREF EC 164)

  1. The Reserve Code is transcribed from the margin to the left of “Deductions” section of the return following “5-”. Valid codes are "1" and "4."

  2. Invalid Condition - Field 03RVC is invalid if other than blank, "1" or "4."

    Note:

    Reserve Code "3" is generated if a valid amount for Orphan Drug Credit is present (Form 1120 only). It causes Error Code 164 to generate.

  3. Correction Procedures:

    1. Code "1" will be used by Error Correction when a manual refund has been issued.

    2. Code "4" will be used if Form 2220 is attached and the taxpayer has checked the box on line 8, Part II, Form 2220, "Large Corporations."

3.12.251.7.8  (01-01-2015)
Field 03SDC - Special Deduction Code (XREF EC 168 or 170)

  1. The Special Deduction Code is used by Error Correction only. It will be used only when Special Deductions or Excess Contributions are present with certain waiver conditions.

  2. Invalid Condition - Field 03SDC is invalid if it is other than blank, "1," "2," or "3."

  3. Correction Procedures:

    1. Check to see if any of the conditions listed below exist.

      If Then
      Excess Special Deductions are present with the waiver conditions that are identified in the Error Code 170 instructions Enter "1" in Field 03SDC
      Excess Contributions are present with the waiver conditions that are identified in the Error Code 168 instructions, or
      The return is a short period due to "Initial," "Final" or "Change in Accounting Period"
      Enter "2" in Field 03SDC
      Domestic Production activities are reported on line 25, Form 1120 Enter "2" in Field 03SDC
      If the conditions for Codes "1" and "2" are present Enter "3" in Field 03SDC
      If none of the conditions listed above is present Delete Field 03SDC

3.12.251.7.9  (01-01-2015)
Field 03K04 - Affiliated Group Code (XREF EC 130)

  1. The Affiliated Group Code is transcribed from line 3, Schedule K.

  2. Invalid Condition - Field 03K04 is invalid if:

    1. It is other than blank, 1, 2 or 3 for Form 1120

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      A statement or Form 851 affiliations schedule shows the parent EIN to be the same as the EIN on the return (Field 01EIN) Delete Field 03K04
      The "yes" box is checked in response to the question on line 3, Schedule K Enter "1" in Field 03K04
      The "no" box is checked in response to the question on line 3, Schedule K Enter "2" in Field 03K04
      Both the "yes" and "no" boxes are checked in response to the question on line 3, Schedule K Enter "3" in Field 03K04
      No box is checked in response to the question on line 3, Schedule K Delete Field 03K04

3.12.251.7.10  (01-01-2015)
Field 03PNC - Parent Name Control (XREF 130)

  1. The Parent Name Control is transcribed from the underlined name control on line 3, Schedule K.

  2. Invalid Condition - Field 03PNC is invalid if:

    1. Present and the first position is not alpha or numeric

    2. The 2nd, 3rd and 4th positions are not alpha, numeric, ampersand, hyphen, or blank

    3. There are any intervening blanks between characters.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If it appears the EIN is the same as Field 01EIN, GTSEC 03 and delete Field 03K04.

    3. If unable to determine a valid Parent Name Control, enter "XXXX" in Field 03PNC.

3.12.251.7.11  (01-01-2015)
Field 03PIN - Parent EIN (XREF EC 130)

  1. The Parent EIN is transcribed from the underlined EIN on line 3, Schedule K.

  2. Invalid Condition - Field 03PIN is invalid if:

    1. Parent EIN is not all numeric

    2. Less than 9 digits

    3. All zeros or all nines

    4. The same as the EIN on the return (Field 01EIN)

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a statement or Form 851 affiliations schedule shows the parent EIN to be the same as the EIN on the return (Field 01EIN), GTSEC 03 and delete Field 03K04.

    3. If unable to find a valid Parent EIN, enter "129999999" in Field 03PIN.

3.12.251.7.12  (01-01-2015)
Field 03FCC - Foreign Country Code

  1. The Foreign Country Code is transcribed from page 4, right margin of question 7b, Form 1120. (For 1999 – page 3, right margin of question 10b, Form 1120)

  2. Invalid Condition - Field 03FCC is invalid if the code is not contained in the Foreign Country Code Table.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. See Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart or your job aid book for a list of valid country codes.

3.12.251.7.13  (01-01-2015)
Field 03ADC - Audit Code

  1. The Audit Code is transcribed from the margin to the left of “Deductions” section of the return following “2-”.

  2. The valid codes are blank or 1 through 4 and 6 through 8.

  3. Invalid Conditions - Field 03ADC is invalid if:

    1. Any code is other than blank or 1-4 or 6–8 for Form 1120.

    2. Any code is repeated.

    3. Any code follows a blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the following chart. Nine codes may be entered. There no longer is any priority numbering for audit codes.

      Audit Code Explanation
      1 Disclosure Statement, Inconsistent Treatment, or Joint Committee Case
      • Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) is attached.

      • Form 8275 or Form 8275-R, Disclosure Statement is attached, or a statement referring specifically to IRC Section 6662 (Disclosure).

      • Form 8886, Reportable Transaction Disclosure Statement, is attached.

      • Joint Committee Case ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      2 International Income or Credit
      • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      • Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached or Schedule N, line 4a is marked "Yes" , or schedule N, line 4b has an entry.

      • Form 5472, Information Return of a Foreign Owned Corporation is attached.

      • Form 926, Return by a U.S. Transferrer of Property to a Foreign Corporation, Foreign Estate or Trust, or Foreign Partnership, is attached.

      • Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and Part V, Distributions Form and Dispositions of Stock of a Section 1291, Lines 15a through 16f, have an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . *(Part IV, Lines 10a through 11f for 2011 and prior)

      • Form 1116, Foreign Tax Credit is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      • Form 1118, Foreign Tax Credit, Corporations is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and reported on line 5a, Schedule J.

      • Form 1120, Schedule M-3 is attached and any entry on Part II, Column (c) lines 2-5 or 10 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
        Any entry Part III, Column (c), lines 5-7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
        The sum of Columns (b) plus (c), lines 9, 23, 24 or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 1120, Schedule N, is attached and any box other than question 6 is checked "yes"

      • Form 3520 or 3520-A, is attached.

      • Form 5713, International Boycott Report is attached and both questions on line 7(f) are answered "yes" .

      • Form 8621 is attached and any line in Part V, Distributions Form and Dispositions of Stock of a Section 1291, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . *(Part IV, Lines 10a through 11f for 2011 and prior)

      • Form 8832 is attached and either box 6(d), (e), or (f) is checked (Box 2(d), (e) or (f) for 2006 and earlier)

      • Form 8833 is attached

      • Form 8865 is attached

      • Form 8902 is attached.

      3 Examination Classification Criteria
      • Form 8283, Noncash Charitable Contributions, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8283, Noncash Charitable Contributions, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8883, Asset Allocation statement under section 338, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8594, Asset Acquisition Statement, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

        Note:

        Attach Form 4227 indicating the condition

      4 A Form 1120S without a valid election is processed as a Form 1120
      5 Reserved
      6 Form 3115 Application for Change in Accounting Method is attached
      7 Form 1120 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on page 2, Schedule C lines 3, 6, 7, 8, or 12-16
      Form 1116 is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credits on Part IV, line 33.
      Form 1118 is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credits on Form 1120, Schedule J, line 5(a).
      Schedule M-3 is attached and any entry on Part II Column (c) lines 2-5 or 10 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , any entry on Part III Column (c) lines 5-7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the sum of Columns (b) plus (c), of any of lines 9, 23, 24 or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
      Form 1120, Schedule N is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      Form 5713 is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ "
      Form 8621 is attached and Part V, Distributions Form and Dispositions of Stock of a Section 1291, Lines 15a through 16f have an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . *(Part IV, Lines 10a through 11f for 2011 and prior)
      8 Form M-3 Entry of greater than ≡ ≡ ≡ on any line.
      9 Reserved
    3. If no code applies, delete Field 03ADC.

3.12.251.7.14  (01-01-2015)
Field 03ISI - Installment Sales Indicator

  1. The Installment Sales Indicator Code is transcribed from the margin to the left of “Deductions” section of the return following “6-”. The valid codes are "0," "1," "2," "3" or blank. The codes are based on the taxpayer's response to question 3, Form 6252, Installment Sales.

  2. Invalid Condition - Field 03ISI is invalid if it is other than blank, "0," "1," "2" or "3"

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the chart below:

      If Then
      The "yes" box is checked in response to question 3, Form 6252 Enter "1" in Field 03ISI
      The "no" box is checked in response to question 3, Form 6252 Enter "2" in Field 03ISI
      Form 6252 is present and neither box is checked in response to question 3 Enter "3" in Field 03ISI
      None of the above Delete Field 03ISI

      Note:

      Code "0" is input by ISRP when no Installment Sales Code is present.

3.12.251.7.15  (01-01-2015)
Field 03AMC - Accounting Method Code

  1. The Accounting Method Code is transcribed from the left margin of line 1, Schedule K. This field will not post to the Master File.

  2. Invalid Condition - Field 03AMC is invalid if it is other than "0," "1," "2" or "3."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the chart below:

      If Then
      Schedule K, question 1, box "a" is checked Enter "1" in Field 03AMC
      Schedule K, question 1, box "b" is checked Enter "2" in Field 03AMC
      Schedule K, question 1, box "c" is checked Enter "3" in Field 03AMC
      No or multiple boxes are checked Enter "0" in Field 03AMC

3.12.251.7.16  (01-01-2015)
Field 03K12 - NOL Carryover Amount

  1. Field 03K12 is transcribed from the Form 1120, Schedule K, line 12. This is a POSITIVE only and DOLLARS only field.

  2. Invalid Condition - Field 03K12 is invalid if:

    1. Form 1120 amount exceeds the maximum length (12)

  3. Correction Procedure - Correct coding and transcription errors and misplaced entries.

3.12.251.7.17  (01-01-2015)
Field 03K7C-Number of Forms 5472 attached

  1. Field 03K7C is transcribed from the Form 1120, Pg 4, Sch K, line 7. This is a numeric only fields that can contain only 3 characters.

  2. Invalid Condition- Field 03K7C is invalid if:

    1. The edited entry is greater than 3 characters

    2. Any entry is non numeric

  3. Correction Procedure-Correct coding and transcription errors and misplaced entries.

3.12.251.7.18  (01-01-2015)
Field 03Q16-80 percent or more question

  1. Field 03Q16 is transcribed from Form 1120, Pg 4, Sch K, line 16.

  2. Invalid Condition-Field 03Q16 is invalid if:

    1. An entry other than blank or "1" is present.

  3. Correction Procedure

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Sch K question 16, enter a "1" in Field 03Q16. Otherwise, blank the field.

3.12.251.7.19  (01-01-2015)
Field 03Q17-Disposal question

  1. Field 03Q17 is transcribed from Form 1120, Pg 4, Sch K, line 17.

  2. Invalid Condition-Field 03Q17 is invalid if:

    1. An entry other than blank or "1" is present.

  3. Correction Procedure

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Sch K question 16, enter a "1" in Field 03Q16. Otherwise, blank the field.

3.12.251.7.20  (01-01-2015)
Field 03Q18-Section 351 transfer question

  1. Field 03Q18 is transcribed from Form 1120, Pg 4, Sch K, line 18.

  2. Invalid Condition-Field 03Q18 is invalid if:

    1. An entry other than blank or "1" is present.

  3. Correction Procedure

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Sch K question 16, enter a "1" in Field 03Q16. Otherwise, blank the field.

3.12.251.8  (01-01-2015)
Section 04 Data - Form 1120

  1. This section contains instructions for correcting Section 04 Field Errors.

  2. Section 04 contains the taxable income bracket amounts, and several other money amounts.

  3. Fields 04TAE, 04A01, 04A06, and 04A07 are transcribed in dollars only. The remaining fields are transcribed in dollars and cents.

  4. Field 04TAE may be positive or negative. All other fields in this section must be positive only.

3.12.251.8.1  (01-01-2015)
Section 04 Field Errors

  1. Correctable Section 04 fields are listed below:

    Field
    Designator
    Maximum
    Length
    Valid Entry Field
    Title
    Location XREF EC
    04TAE 15 Dollars only
    Positive or Negative
    Total Assets Ending Box D right of entity F1120 150
    04A06 11 Dollars only
    Positive
    Total Cost of Sales Pg 2, Form 1125-A, line 6 F1120  
    04TB1 7 Dollars & cents
    Positive
    1st Taxable Income Bracket
    (For 1988 and prior year tax returns only)
    Pg 3, Sch. J, line 2a(i) F1120 (tax period 198805 and prior-entered by ERS) 116
    04TB2 7 Dollars & cents
    Positive
    2nd Taxable Income Bracket
    (For 1988 and prior year tax returns only)
    Pg 3, Sch. J, line 2a(ii) F1120 116
    04TB3 7 Dollars & cents
    Positive
    3rd Taxable Income Bracket
    (For 1988 and prior year tax returns only)
    Pg 3, Sch J, line 2a (iii) F1120 116
    04TB4 7 Dollars & cents
    Positive
    4th Taxable Income Bracket
    (For 1988 and prior year tax returns only)
    Pg 3, Sch J, line 2a(iv) F1120 116
    04TB5 7 Dollars & cents
    Positive
    5th Taxable Income Bracket Schedule O (Form 1120), Part II, line 1, Column (c) 118, 174
    04TB6 7 Dollars & cents
    Positive
    6th Taxable Income Bracket Schedule O (Form 1120), Part II, line 1, Column (d) 118, 174
    04TB7 9 Dollars & cents
    Positive
    7th Taxable Income Bracket Schedule O (Form 1120), Part II, line 1, Column (e) 118, 174
    04A01 11 Dollars only
    Positive
    Inventory at Beginning of year Page 2, Form 1125-A, line 1, F1120  
    04A07 11 Dollars only
    Positive
    Inventory End amount Page 2, Form 1125-A, line 7, F1120  
    04AT1 7 Dollars & cents
    Positive
    Control Group Additional 5 percent Tax Schedule O (Form 1120), Part III, line 1, Column (f) 114, 174
    04AT2 8 Dollars & cents
    Positive
    Control Group Additional 3 percent Tax Schedule O (Form 1120), Part III, line 1, Column (g) 114, 174
  2. Invalid Condition - Section 04 field errors will display if:

    1. A field is not all numeric

    2. An entry exceeds the maximum field length

    3. A "positive only" field is negative

    4. Field 04AT1 is greater than $11,750

    5. Field 04AT2 is greater than $100,000

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

    3. If the taxpayer has reported more than $11,750 for Field 04AT1, reduce the amount to $11,750, and correct the return.

    4. If the taxpayer has reported more than $100,000 for Field 04AT2, reduce the amount to $100,000, and correct the return.

3.12.251.9  (01-01-2015)
Section 05 Data - Form 1120

  1. This section contains instructions for correcting Section 05 Field Errors.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 05 contains the income information. It must contain money amounts only.

  4. All fields in Section 05 are transcribed in dollars only.

  5. Fields 0502, 0509, 0510, and 0511 may be positive or negative. All other Section 05 fields are positive only.

  6. If the income or deductions amount is blank, or if lines 10 and 11 or 26 and 27 constitute the only entries, C&E should enter the appropriate transcription lines. Exception: If the return does not require a transcription of the Balance Sheet (Section 11), editing may be restricted to lines 10, 11, 26, 27, Form 1120 (refer to C&E IRM 3.11.16, Corporate Income Tax Returns, for Minimum Edit guidelines).

3.12.251.9.1  (01-01-2015)
Section 05 Field Errors

  1. Correctable Section 05 fields are listed below:

    Field
    Designator
    Field
    Length
    Valid Entry

    Title


    Location
    0501A 15 Dollars only
    Positive
    Gross Receipts line 1(a), page 1
    0501B 15 Dollars only
    Positive
    Returns and Allowances line 1(b), page 1
    0502 15 Dollars only
    Positive or Negative
    Cost of Goods Sold line 2, page 1
    0504 15 Dollars only
    Positive
    Dividends line 4, page 1
    0505 13 Dollars only
    Positive
    Interest line 5, page 1
    0506 15 Dollars only
    Positive
    Gross Rents line 6, page 1
    0507 15 Dollars only
    Positive
    Gross Royalties line 7, page 1
    0508 15 Dollars only
    Positive
    Capital Gain Net Income line 8, page 1
    0509 15 Dollars only
    Positive or Negative
    Net Gain/Loss line 9, page 1
    0510 15 Dollars only
    Positive or Negative
    Other Income line 10, page 1
    0511 15 Dollars only
    Positive or Negative
    Total Income line 11, page 1
    05MCV 15   Merchant Card Payments Verified line 1(a), page 1 TY 2011 ONLY
  2. Invalid Condition - Section 05 field errors will display if:

    1. A field is not all numeric

    2. A "positive only" field is negative

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field. GTSEC 05 and include the "deleted amount" in Field 0510 (Other Income).

      Note:

      If a negative amount is present for Field 0508, delete.

    3. See IRM 3.12.251.24.1, Documents With Overfilled Money Fields, If any money amount exceeds the maximum field length allowable.

3.12.251.10  (01-01-2015)
Section 06 Data - Form 1120

  1. This section contains instructions for correcting Section 06 Field Errors.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 06 contains the deduction amounts. All fields in this section are money amounts and dollars only.

  4. Fields 06BD, 06OTH, and 06TOT can be positive or negative. All other fields must be positive only.

3.12.251.10.1  (01-01-2015)
Section 06 Field Errors

  1. Correctable Section 06 fields are listed below:

    Field
    Designator
    Field
    Length
    Valid Entries

    Title


    Location


    XREF EC
    06COF 15 Dollars only
    Positive
    Compensation Of Officers line 12, page 1 160
    06SAW 15 Dollars only
    Positive
    Salaries and Wages line 13, page 1 160
    06REP 15 Dollars only
    Positive
    Repairs and Maintenance Deduction line 14, page 1  
    06BD 15 Dollars only
    Positive or Negative
    Bad Debts Deduction line 15, page 1  
    06REN 15 Dollars only
    Positive
    Rents Deduction line 16, page 1  
    06TAX 15 Dollars only
    Positive
    Taxes and Licenses Deduction line 17, page 1  
    06INT 15 Dollars only
    Positive
    Interest Deduction line 18, page 1  
    06CHR 15 Dollars only
    Positive
    Charitable Contributions line 19, page 1 168
    06DPR 15 Dollars only
    Positive
    Depreciation Deduction line 20, page 1  
    06DPL 15 Dollars only
    Positive
    Depletion Deduction line 21, page 1 160
    06ADV 15 Dollars only
    Positive
    Advertising Deduction line 22, page 1 160
    06PEN 15 Dollars only
    Positive
    Pension Plans Deduction line 23, page 1 160
    06CON 15 Dollars only
    Positive
    Employee Benefit Plans line 24, page 1 160
    06DOM 15 Dollars only
    Positive
    Domestic Production Activities line 25, page 1 160
    06OTH 15 Dollars only
    Positive or Negative
    Other Deductions line 26, page 1 160
    06TOT 15 Dollars only
    Positive or Negative
    Total Deductions line 27, page 1 160
    06NOL 15 Dollars only
    Positive
    Net Operating Loss Deduction line 29a, page 1 160
    06SPD 15 Dollars only
    Positive
    Special Deductions line 29b, page 1 170
  2. Invalid Condition - Section 06 field errors will display if:

    1. A field is not all numeric

    2. A "positive only" field is negative

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field. GTSEC 06 and include the "deleted amount" in Field 06OTH (Other Deductions)

3.12.251.11  (01-01-2015)
Section 07 Data - Form 1120

  1. This section contains instructions for correcting Section 07 Field Errors.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 07 contains the tax, credits and payments section of Form 1120.

  4. All fields in this section are to be transcribed in dollars and cents.

  5. Field 07B/R can be either positive or negative, while all other fields must be positive.

  6. Consolidated return procedures are below:

    If And Then
    Prepaid credits are claimed on a consolidated return on any of lines 19a through 19d of Form 1120 The total amount of Form 851 (Affiliation Schedule) line 1, does not agree with the sum of lines 19a through 19d,
    or
    Credits are claimed on lines 2 through 10 of Form 851
    1. The return is unprocessable

    2. SSPND with Action Code "342" if Code-and-Edit has not already done so, and

    3. Prepare Form 4227 with an explanation for routing to Accounting Branch

3.12.251.11.1  (01-01-2015)
Section 07 Field Errors

  1. Correctable Section 07 fields are listed below:

    Field
    Designator
    Field
    Length
    Valid Entry

    Title


    Location


    XREF EC
    07TTX 15 Dollars & cents
    Positive
    Total Tax Taxpayer line 31 page 1 186
    07TPC 15 Dollars & cents
    Positive
    Total Payments and Refundable Credits line 32 page 1  
    07FTE 15 Dollars and cents Positive Federal Telephone Excise Tax Refund (TETR) line 32 page 1(2006 only) 074
    188
    07TRV 15 Dollars and cents Positive Telephone Excise Tax Refund Verified Field (TETR) Corrected TETR amount based on correspondence reply 074
    188
    07FIR 15 Dollars & cents
    Positive
    Foreign Investors Real Property Tax Act (FIRPTA) Bottom Center Margin (from Form 8288-A) 188
    07ESP 15 Dollars & cents
    Positive
    Estimated Tax Penalty line 33 page 1 188
    07B/R 15 Dollars & cents
    Positive or Negative
    Balance Due/Over payment lines 34/35 page 1  
    07CRE 15 Dollars & cents
    Positive
    Credit Elect Amount line 36 page 1 192
    07GIT 15 Dollars & cents
    Positive
    Gross Income Tax Sch. J, line 2, page 3 174
    07MCT 15 Dollars & cents
    Positive
    Manually Corrected Total Tax Manually computed amount of Total Tax and is a correction only field 186
    07GVT 15 Dollars & cents
    Positive
    Gross Verified Tax Manually computed amount of Gross Tax and is a correction only field 174
    1. Field 07TRV - This Field is not transcribed. It will be used to enter the corrected amount of "Telephone Excise Tax Refund" by the ERS Tax Examiner.

    2. Field 07FIR - Any Form 1120 with this credit must be transferred to OSPC.

    3. Field 07GVT - This Field is not transcribed. It will be used to enter the manually computed amount of "Gross Verified Tax" by the ERS Tax Examiner.

    4. Field 07MCT - This Field is not transcribed. It will be used to enter the manually computed amount of "Manually Corrected Total Tax" by the ERS Tax Examiner.

  2. Invalid Condition - Section 07 field errors will display if:

    1. A field is not all numeric

    2. A "positive only" field is negative

    3. Entries are present in both Fields 07B/R (with a minus sign behind it) and 0819c

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

    3. ) Suspend return with Action Code 470, attach a special, colored Form 4227 to the front of the return and leave the return in the pack of work, when no other error is present

3.12.251.12  (01-01-2015)
Section 08 Data - Form 1120

  1. This section contains instructions for correcting Section 08 Field Errors.

  2. Computer generated fields are described under the appropriate Error Code(s).

  3. Section 08 contains the statutory credits and other taxes. The information is transcribed from

    • The Form 3800, or

    • Form 1120, page 3, Schedule J,

  4. Fields 08AMT, 08FTC, 08GBC, 08TSC, 08SCV, 08PYM, 08PHC, 08TRI, 08ENV, 08ASE, 08CEB, 08RIC, 08RLI, 08ULB, 08IFM, 08QSA, 08OTH, 08EST, 08EXT, 08WTH, 0819A, 0819C and 0819D are transcribed in dollars and cents. All other Section 08 fields are dollars only.

  5. All fields are positive only.


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