3.21.261  Foreign Investment in Real Property Tax Act (FIRPTA)

Manual Transmittal

October 29, 2014

Purpose

(1) This transmits revised Internal Revenue Manual (IRM) 3.21.261, International Returns and Document Analysis - Foreign Investment in Real Property Tax Act (FIRPTA).

Material Changes

(1) IRM 3.21.261.11 -- Inserted instructions to cross reference in IDRS database.

(2) IRM 3.21.261.17.2(4) -- Clarified language on editing transferee address.

(3) IRM 3.21.261.18.1 -- Converted Example paragraph to new numbered paragraph.

(4) IRM 3.21.261.18.3(7) -- Inserted reminder to attach Form 4227.

(5) IRM 3.21.261.18.3.1(3) -- Clarified "0" (zero) editing instruction.

(6) IRM 3.21.261.18.4 -- Clarified editing instructions to circle out other buyers.

(7) IRM 3.21.261.18.7 -- Inserted clarified research instruction.

(8) IRM 3.21.261.18.8 -- Inserted instruction that the date of transfer will be the date of payment.

(9) IRM 3.21.261.18.9 -- Clarified line 4 editing instructions.

(10) IRM 3.21.261.18.13(5) -- Clarified language and expanded research instruction.

(11) IRM 3.21.261.18.13(7) -- Clarified language and expanded research instruction.

(12) IRM 3.21.261.19(3) -- Updated instructions for input to INTL WEB Apps.IRM 3.21.261.19(4) -- Changed the Ogden AM Planning & Analysis Analyst extension number from 5214 to 5249.

(13) Various editorial corrections have been made throughout this IRM.

Effect on Other Documents

This IRM supersedes IRM 3.21.261 dated October 26, 2013 (effective January 1, 2014).

Audience

Wage and Investment Code and Edit employees at Ogden Submission Processing Campus (OSPC)

Effective Date

(01-01-2015)

Paul J. Mamo
Director, Submission Processing
Wage and Investment Division

3.21.261.1  (01-01-2015)
Overview

  1. This Internal Revenue Manual (IRM) provides Code and Edit instructions for processing Form 8288, "U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests" to the Business Master File (BMF), with a Date of Transfer (DOT) of 12/13/2005 or later.

  2. Another related resource is IRM 3.21.25 -- Miscellaneous Tax Returns, which is used for processing Form 8288-A -- Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests to the International Web Application (INTL WebApps) Database (Db) and verifying FIRPTA credits.

  3. Form 8288 is processed to the BMF under:

    • File Location Code (FLC) 60 Ogden Submission Processing Campus (OSPC) or 98 Philadelphia Submission Processing Campus (PSPC)

    • Tax Class 1

    • Document Code 40

    • Blocking Series 000-999

    • Master File Tax (MFT) Code 17

    • Program Code 1133X

    • Function 210

  4. If the DOT on Form 8288 is 12/12/2005 or prior, transship the return to the Cincinnati Submission Processing Campus (CSPC), Non-Master File (NMF) Accounting Section for processing to the Automated Non-Master File (ANMF) system. These returns will be assigned a "17641 Document Locator Number (DLN)" and processed as a NMF return.

  5. There is no official extension form for Form 8288.

  6. The Return Due Date (RDD) for Form 8288 is 20 days after the Date of Transfer (DOT), or 20 days from the withholding certificate date (if applicable).

  7. All Form 8288 returns with a DOT of 12/13/2005 or later will be processed at the Ogden Submission Processing Campus (OSPC) as a "Non-Remittance " return.

    Caution:

    Form 8288 will still have a "green rocker" placed under the payment amount. The payments will be processed with a separate Document Locator Number (DLN) with Doc Code 17, 19, 70, or 76 and assigned a Trace Identification (ID) and Transaction Sequence Number. These numbers will be posted to Master File. A local agreement has been made to place a green check mark next to the tax amount paid.

3.21.261.1.1  (01-01-2015)
Form 8288 Background

  1. The Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 was amended by the Deficit Reduction Act of 1984. This amendment added Section 1445 to Chapter 3, Subchapter A, of the Internal Revenue Code of 1954. Section 1445 requires the withholding of tax on dispositions of certain U.S. Real Property Interests (USRPI) by a foreign seller.

  2. IRC § 897 of the Code (enacted under the 1980 FIRPTA legislation) provides rules for the taxation of nonresident alien individuals and foreign corporations on sales or other dispositions of U.S. real property interests (including installment sales, exchanges, foreclosures, and deeds in lieu of foreclosure of U.S. real property interests). In addition, Regulated Investment Companies (RICs) and Real Estate Investment Trusts (REIT) with foreign investors are also subject to the FIRPTA rules under IRC § 1445 and IRC § 897.

  3. FIRPTA applies to what it defines as a U.S. real property interest under IRC § 897(c), which includes:

    • Any interest in real property located in the United States or the Virgin Islands (including an interest in land or improvements thereon, a mine, well, or other natural deposit).

    • Certain personal property associated with the use of real property.

    • Any interest, other than solely as a creditor, in any domestic corporation, unless the taxpayer can show that the corporation was not a U.S. real property holding corporation during the previous 5 years (or during the period in which the transferor (seller) held the interest, if shorter).

  4. Duty to withhold - Under IRC § 1445(a) transferees (buyers) of a USRPI from a transferor (foreign seller) is required to deduct and withhold tax. A transferee can be a Domestic or Foreign person or entity, or multiple individuals. If the transferee fails to withhold, then the transferee will be held liable for:

    • The payment of the tax, and

    • The payment of any applicable penalties and interest.

  5. Agents have a duty to provide notice of false certifications under IRC § 1445(d).They are not liable for the withholding tax under IRC § 1445(a).

  6. The withholding agent must withhold and remit to the IRS 10 percent of the amount indicated in Box 5, Part 1, or Line 5b, Part 2 of Form 8288, ,r or 35 percent of the amount indicated on Line 5a, Part 2 of Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests.

    Note:

    The transferee can pay a lesser amount if they received an approved Withholding Certificate (W/H Cert) from the Internal Revenue Service (IRS). A copy of the W/H Cert must be attached to Form 8288, and an entry must be present on either Line 6b, Part 1 or Line 5c, Part 2. Otherwise, the tax must be 10 percent or 35 percent.

  7. The duty to withhold under an IRC § 1445(e) distribution may lie with either the:

    • Foreign Corporation

    • Domestic Corporation

    • Domestic or Foreign Partnership

    • Trustee of Domestic or Foreign Trust

    • Executor of Domestic or Foreign Estate

  8. The Internal Revenue Service issued Treasury Decision (TD) 9082 on August 5, 2003, revising the Income Tax Regulations under IRC § 897,IRC § 1445, and IRC § 6109to require the use of a Taxpayer Identifying Number on the submission of FIRPTA documents under IRC § 897 and IRC § 1445. TD 9082 became effective August 5, 2003.

  9. Form 8288 is due on or before the 20th day from the Date of Transfer (DOT). There is no official extension form for Form 8288. However, if a withholding certificate is issued to the transferor (seller) reducing the amount of FIRPTA tax owed, then Form 8288 is due on or before the 20th day from the date on the withholding certificate. This date must be documented on Line 3 of Form 8288 as the new Date of Transfer (DOT). If the principal purpose for filing the application for a withholding certificate was to delay paying the IRS the amount withheld, interest and penalties will apply from the original Date of Transfer (DOT).

    Reminder:

    If you correct the Date of Transfer (DOT) on Form 8288, then you must also correct the Date of Transfer (DOT) on Form 8288-A.

  10. If two or more persons are joint transferees, each is obligated to withhold. However, the obligation of each will be met if one of the joint transferees withholds and transmits the required amount to the Internal Revenue Service (IRS). In the event that two or more returns are filed, then each return must report and pay their share of the amount realized and the withholding.

    If... Then...
    The transferee wrote the total amount realized and withholding on the forms, Edit the amount on each form by equally dividing the amount realized and withholding.
    All the transferees names appear on each Form 8288, Circle the names of all but one transferee, whose name matches the listed Taxpayer Identification Number (TIN).
    More than one TIN is listed, Circle out the remaining TIN that does not match the listed transferee.

    Note:

    Cases like this will generally be resolved by the Cincinnati and Ogden Accounts Management area via correspondence and duplicate filing condition processing.

3.21.261.1.2  (01-01-2015)
Form 8288-A Background

  1. Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests, are filed on a transaction by transaction basis, and attached to Form 8288. Two copies (Copy A and B) of Form 8288-A are to be attached to Form 8288 for each transferor (seller).

    Note:

    In general, a foreign person is a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate, but not a resident alien individual.

  2. Prior to Integrated Submission and Remittance Processing (ISRP), Numbering will forward the Batch work to the FIRPTA unit. The FIRPTA unit will:

    1. Stamp the incoming Batch work (Form 2345, Batch Transmittal ) with their "FIRPTA" stamp.

    2. Assign the Batch work to a FIRPTA tax examiner who will populate the Form 8288-A FIRPTA database with each foreign transferor(s) (seller) Copy A information, which will be used at a later date to perform the credit verification using Form 13698,International Credit(s) Verification Slip.

      Note:

      Refer to IRM 3.21.25 -- Miscellaneous Tax Returns for instructions on recording Form 8288-A to the Form 8288-A Information Return Master File (IRMF) FIRPTA Database, even if the Form 8288-A is not attached because a record must be entered prior to releasing the batch work to ISRP.

      Example:

      Form 1120-F (U.S. Income Tax Return of a Foreign Corporation), Form 8804, (Annual Return for Partnership Withholding Tax (Section 1446) or Form 1040-NR Fiduciary with a Form 8288-A needs to be credit verified.

    3. Stamp and mail "Copy B of Form 8288-A" to the foreign transferor (seller) or correspond for a Taxpayer Identifying Number (TIN).

    4. Stamp Form 8288 with the FIRPTA date stamp to show that they have processed Copy A of Form 8288 to the FIRPTA database.

    5. Release the Batch work (Form 8288 and Copy A of Form 8288-A) to the ISRP clerical function for pipeline processing.

  3. In general, a copy of Form 8288-A stamped by the IRS must be attached to the transferor's (seller's) return to establish the amount withheld under IRC § 1445(a) which is available as a credit. In situations where the tax has been withheld but the purchaser does not pay over the amount withheld to the IRS, the transferor (seller) will not receive a stamped copy of Form 8288-A from the IRS. Nonetheless, the transferor (seller) can establish the amount of tax withheld by the transferee (purchaser/buyer) by attaching to its tax return substantial evidence (e.g., closing documents) of the amount of tax withheld.

3.21.261.2  (01-01-2015)
♦BMF Consistency♦

  1. The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit processing IRMs.

  2. Topics for the BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and Paper Processing Branch BMF Code and Edit/ERS.

  3. BMF Consistency Subsections are identified by a ♦ (diamond) before and after the title.

  4. Text in normal print is the common processes for BMF returns. The text in BOLD print is form specific and applies to this IRM only.

3.21.261.2.1  (01-01-2015)
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3.21.261.2.2  (01-01-2015)
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3.21.261.3  (01-01-2015)
♦Restructuring and Reform Act of 1998, Section 3705(a) - IRS Employee Contacts♦

  1. Background: The Restructuring and Reform Act of 1998, Section 3705 provides identification requirements for all IRS employees working tax related matters.

  2. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face, and written contact.

    Note:

    "As a general rule, do not give out another employee's name or telephone number. If the taxpayer or representative needs to speak to another employee or manager, offer to take the taxpayer's/representative's number and have the requested employee call them back."

  3. Contact Procedures are contained in the following eight paragraphs.

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

    • Your title (e.g., Mr., Mrs., Ms., Miss)

    • Your last name

    • Your Identification Card (badge) Number

  5. All correspondence must include a telephone number where the taxpayer’s question can be answered. In addition, manually generated and handwritten correspondence must include:

    • Your title (e.g., Mr., Mrs., Ms., Miss)

    • Your last name

    • IDRS, letter system, or ID card (badge) number

  6. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the ID card (badge) number must be used.

  7. When a taxpayer requests to speak with a specific employee who previously handled the 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.

  8. 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.

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

  10. It is not necessary to repeat the ID card number (badge) 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 telephone or in-person) their ID card (badge) number on the first contact.

  11. When contacting taxpayers by telephone, you must be sure you are speaking with the taxpayer or authorized representative before disclosing tax information. See IRM 21.1.3.2.3, Required Taxpayer Authentication and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving a message on a taxpayer’s answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail.

3.21.261.4  (01-01-2015)
♦Taxpayer Advocate Service (TAS)♦

  1. Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7.2, TAS Case Criteria) or has Form 911 attached 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 the taxpayer makes the request to be transferred to TAS. Refer to IRM 13.1.7.4, Same Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), and forward to TAS in accordance with your local procedures.

    Note:

    Before referring potential cases to TAS, the following guidelines will be applied:
    A case meeting TAS criteria may be retained in the general program area when the problem has been corrected or will be resolved immediately (within 24 hours) to the taxpayer's satisfaction.

    Exception:

    The Taxpayer Advocate Service (TAS) organization is not a point of filing and TAS employees have not been delegated the authority to accept returns for filing. Treat all TAS Received Dates as invalid by circling them and edit the received date according to instructions.

3.21.261.4.1  (01-01-2015)
♦TAS Service Level Agreements (SLA)♦

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business Self-Employed (SB/SE) Division, Tax Exempt and Government Entities (TE/GE) Division, Criminal Investigation (CI), Appeals and Large Business and International (LB&I) Division, that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

  2. The SLAs are located athttp://tas.web.irs.gov/policy/sla/default.aspx .

3.21.261.5  (01-01-2015)
♦Use of FAX for Taxpayer Submissions♦

  1. Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable.

  2. Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.

  3. Code and Edit examiners will indicate the fax paragraph on the approved Correspondence Action Sheet to advise taxpayers of the option to fax their response.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3, "Required Taxpayer Authentication " and IRM 21.1.3.2.4,"Additional Taxpayer Authentication." Also, before leaving any messages on a taxpayer’s answering machine, review IRM 11.3.2.6.1," Leaving Information on Answering Machines/Voicemail." Fax procedures contained in IRM 11.3.1.11 ,"Facsimile Transmission of Tax Information" , must be reviewed prior to faxing confidential information to the taxpayer.

3.21.261.6  (01-01-2015)
♦General Disclosure Guidelines♦

  1. IRC § 6103 establishes the taxpayer's (T/P's) right to privacy of tax information. You must be sure that you provide correct information to the correct T/P or authorized representative (check IDRS CC CFINK for Power of Attorney - POA).

  2. Taxpayer returns and return information must remain confidential as provided for in IRC § 6103,Confidentiality and disclosure of returns and return information . IRC § 7431 provides civil damages for unauthorized disclosure of returns and return information. IRC § 7213 and IRC § 7213A provides criminal penalties for unauthorized disclosure or unauthorized inspection of returns and return information and requires employees be discharged from duty if charged and convicted of these offenses.

  3. For more information on General Disclosure Guidelines refer to IRM 21.1.3,Operational Guidelines Overview, and for full discussions refer to IRM 11.3.1 through IRM 11.3.40,Disclosure of Official Information.

3.21.261.7  (01-01-2015)
♦Statute of Limitations♦

  1. Any return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute control return. A Statute return must be routed to the Statute Control Unit daily or more often if needed.

    Note:

    The Form 8288 return is considered unprocessable until it has been cleared by Statute Control.

    Exception:

    If the return has already been cleared by statute, edit Computer Condition Code (CCC) "W" and continue processing. However, if the statute clearance date shows a date cleared more than 90 days earlier, send return back to Statute function for clearance.

  2. Do not route to the Statute Control Unit for clearance if any of the following conditions are present:

    • Compliance Section 6020(b) returns.

    • Returns with "TC 59X" or Integrated Collection System ("ICS" ) notated on the face of the return.

    • Returns that are substitute returns prepared by Examination Substitute For Return ("SFR" ) in top margin of the return.

    • Returns with a stamp indicating a previous clearance by Statute Control within the last ninety days.

  3. Statute returns are unprocessable until they are cleared by Statute Control.

    If... Then...
    The return is numbered,
    1. Edit CCC "U" .

    2. Leave the return in the batch and continue processing.

    The return is unnumbered,
    1. Do not continue processing and edit CCC "U" .

    2. Pull the return from the batch.

    3. Attach Form 4227 (lntra-SC Reject or Routing Slip) and route to Statute Control Unit.

  4. Once the document is returned by Statute, and it has been cleared by Statute, edit CCC "W."

    Note:

    Statute will stamp or indicate clearance on the front of the return.

  5. The Internal Revenue Code (IRC) states that the Internal Revenue Service (IRS) will assess, refund credit, and collect taxes within specific time limits. These limits are known as Periods of Limitations. When they expire, the IRS can no longer assess additional tax, allow a claim for refund by the taxpayer, nor take collection action. There are different periods of limitations for Assessment, Refund, and Collection Statutes. The expiration of these periods is tracked separately.

  6. The different periods of limitations expiration dates that are tracked are:

    • Assessment Statute Expiration Date (ASED): Return filed early - 3 years from the Return Due Date (RDD) or 3 years from approved extended date; Returns filed late - 3 years after the return was filed; No return filed - assessment may occur at anytime. See IRC § 6501(a) and (c)(3).

    • Refund Statute Expiration Date (RSED): 3 years from the time the return was filed or, if later, 2 years from the date after the tax was paid. See IRC § 6511(a) and IRC § 6511(b)(2)(A).

    • Collection Statute Expiration Date (CSED) is generally 10 years from the 23-C date or 10 years from the date of the Transaction Code (TC) 29X or 30X adjustment. See IRC § 6502(a).

    Note:

    Exceptions may apply to change the periods of limitations.

  7. There are several conditions that may change the general Assessment Statute Expiration Date (ASED). They include:

    • IRC § 6501 (c) (1) -- False Return

    • IRC § 6501 (c) (4) -- Extensions by Agreement

    • IRC § 6501 (b) (3) -- Substitute for Return by Authority of IRC § 6020(b)

      Caution:

      IRC § 6020(b) is not a tax return that triggers the period of limitations on assessment under IRC § 6501(a). If the taxpayer subsequently files a return reporting an additional liability, that return constitutes an original tax return allowing for the assessment of any additional amount not already assessed under the Substitute for Return program and triggering the running of the period of limitations on assessment for the tax year.

    • IRC § 6501 (d) -- Is request for Prompt Assessments, which shortens the Assessment Period

    • IRC § 6501 (e) -- Substantial Understatement (in excess of 25 percent) Omission of Income provides for a 6 year period of limitations.

    • IRC § 6503 (a) -- Issuance of Statutory Notice of Deficiency (90-day Letter, which suspends the running of the period of limitations.)

    • IRC § 6503 (h) -- Bankruptcy

    • IRC § 6229(a) through IRC § 6229(h) Partnership Items

  8. In the case of a partnership subject to the unified partnership audit and litigation procedures of IRC § 6221 - 6234, the issuance of a notice of final partnership administrative adjustment suspends the statute under IRC § 6229 (d). The partnership can also extend its statute through a Form 872 signed by a general partner on behalf of the partnership, or through a Form 872-P signed by the tax matters partner.

  9. Once a partnership issues Form 8805 (Foreign Partner's Information Statement of Section 1446 Withholding Tax) to its partners, the partnership may not claim a refund for any amount of tax shown on the Form 8805s as paid on behalf of the partners per Treasury Regulation Section 1.1446-3(d)(2)(iv).

  10. If a partnership subject to the unified partnership audit and litigation procedures of IRC § 6221 - 6234 is entitled to a refund, it must file a refund request (Request for Administrative Adjustment - (RAA)) within 3 years of the filing of the partnership return. Under IRC § 6227(a), the RAA must be filed using a Form 8082 (Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR). If a Form 872-P (Consent to Extend the Time to Assess Tax Attributable to Partnership Items) or Form 872 statute extension is secured from the partnership, the RAA can be filed within this extended period according to IRC § 6227.

  11. Refer to IRM 25.6, Statute of Limitations for additional Statute instructions.

3.21.261.7.1  (01-01-2015)
♦Protective Claims♦

  1. Returns marked as "Protective Claim," "Protective Refund," "Protective Claim for Refund," or similar statement will be removed from the batch and routed to Accounts Management. Forward to the BMF International Accounts Management Department for action.
    Internal Revenue Service
    Attn: BMF INTL AM Dept. - 3-L08.154
    2970 Market St.
    Philadelphia, PA 19104


    Notate "Protective Claim" in the remarks box of Form 4227.

    Exception:

    If the Form 8288 return is amended, do not remove from batch and do not edit Computer Condition Code "G." Follow normal processing procedures.

3.21.261.8  (01-01-2015)
Delinquent Returns

  1. A return is normally delinquent if it is not received on or before the Return Due Date (RDD). However, accept the return as timely filed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . See IRM 3.10.72,Receiving, Extracting and Sorting and IRM 3.10.73,Batching and Numbering.

  2. Accept a return as timely if:

    1. The return was mailed in time to reach the Service through normal handling within the legal period but,

    2. Through no fault of the taxpayer, it was not delivered.

  3. Consider a return timely if it appears that the Post Office might have sent it to another government agency in error, or if the original envelope bears a timely postmark or a timely date stamp by that agency. However, if the return was erroneously addressed to another agency, it will be date stamped with the current date when the IRS received it.

  4. The Return Due Date (RDD) for Form 8288 is the 20th day after the Date of Transfer (DOT), or the 20th day from the date on the withholding certificate, whether it is approved or denied.

  5. If a return is delivered to the IRS after the date prescribed for filing, consider the following:

    • The postmark date stamped on the envelope as the date of delivery.

      Note:

      If the postmark date falls on or before the prescribed date for filing the return, then consider the return timely and edit the timely postmark date in MMDDYYYY format.

  6. If the return is truly delinquent, check the return for attachments for an explanation of late filing. If the taxpayer attaches correspondence with a reasonable cause explanation for failure to file, then take the following steps:

    1. Detach the reasonable cause explanation correspondence from the return.

    2. Complete Form 3499, "Informational Transmittal," and forward to Philadelphia Accounts Management Campus (PAMC), BMF INT'L unit, Building Locator Number (BLN) 3-L08.154. In the remarks area write "Process attached Reasonable Cause Correspondence."

    3. Prepare correspondence action sheet for IDRS Letter 1382C ( Penalty Removal Request Incomplete) (use paragraphs "A, N and V" ) and assign it to a clerk for input to IDRS, or follow local procedures. It may or may not include the Rejects function.

      Note:

      Do not edit CCC "7, U or R" on the return. PAMC will address the taxpayers reasonable cause letter.

    4. Continue processing Form 8288. Do not attach the correspondence action sheet 1382C to the return.

3.21.261.8.1  (01-01-2015)
♦Compliance Secured/Prepared Returns♦

  1. Compliance functions secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

    1. Prepared tax returns are notated with "6020(b)" or "SFR" (Substitute for Return).

    2. Secured tax returns are notated with "TC 59X" or "ICS" (Integrated Collection System) or notated "Process as Original" with an attached Form 13133, Expedite Processing Cycle IRM Ref. 4.4.9. The "Delinquent Return" box on Form 13133 should be checked. If Form 13133 is attached, edit the Computer Condition Codes (CCC) that are checked on the form.

      Note:

      Edit CCC "R" when there is an indication on the return, such as "DO NOT ASSESS FAILURE TO FILE PENALTY" and the appropriate checkbox is not marked.

      Note:

      If "RD" is notated on the front of the return and not circled, remove from the batch and route to Collections.

3.21.261.8.2  (01-01-2015)
♦IRC § 6020(b) - Prepared by Collection♦

  1. When the taxpayer fails to file a required return, IRC § 6020(b) is the authority for the IRS to prepare the return.

  2. These returns are identified by the notation: "PREPARED AND SIGNED UNDER THE AUTHORITY OF SECTION 6020(b) OF THE INTERNAL REVENUE CODE" which is located in the center bottom of Page 1 of the return.

    1. Returns must have a Received Date. If no Received Date is present per the Compliance Function, follow the normal procedures for editing the Received Date.

    2. Returns must be signed by Compliance Function representative. If not signed, route to Compliance using Form 4227.

    3. Edit CCC "4" .

      Note:

      CCC "R" should not be used with CCC "4" .

    4. Do Not correspond with the taxpayer for unprocessable conditions. If the return is completely unprocessable, edit CCC "3" and continue processing.

    5. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do Not send the return to Statute Control.

3.21.261.8.3  (01-01-2015)
♦Collection Secured♦

  1. These returns are identified by the notations: "TC 59X" or "ICS" .

    1. Do Not edit CCC "G" on these returns.

    2. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

    3. Edit CCC "W" if the received date is more than 2 years and 9 months after the Return Due Date (RDD). Do Not send the return to Statute Control.

3.21.261.8.4  (01-01-2015)
♦Examination Prepared♦

  1. These returns are identified by the notation: "SFR" or "SUBSTITUTE FOR RETURN" on Page 1.

    1. Return must have a Received Date. If no Received Date is present, follow the normal procedures for editing the Received Date.

    2. Do Not correspond with the taxpayer for unprocessable conditions. If the return is completely unprocessable, use No Reply procedures and edit CCC "3" and continue processing.

    3. If Form 13133 is attached, edit the Computer Condition Codes that are checked on the form.

      Note:

      CCC "R" should not be used with a CCC "4" .

    4. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do Not send the return to Statute Control.

3.21.261.8.5  (01-01-2015)
♦Examination Secured♦

  1. These returns are identified by the notation: "Process as Original" on Page 1 of the return and a Form 13133, Expedite Processing Request, attached with the "Delinquent Return" box checked.

    1. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

    2. Edit the Computer Condition Codes that are checked on Form 13133.

      Note:

      CCC "X" (Hold Credits on Module) is valid for Form 8288.

    3. Edit CCC "W" if the received date is more than 2 years 9 months after the Return Due Date. Do Not send to Statute Control function.

3.21.261.8.6  (01-01-2015)
♦Frivolous Argument♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 4.10.12.1.1, Frivolous Arguments.

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

    If... Then...
    The return meets any of the conditions identified as a frivolous return, (e.g., indicated by CCC "U" or an Action Code 331) and a Form 4227 attached with the remarks, "Refer to Exam, Frivolous Return Processing (FRP) for audit after processing," continue to next procedure. Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing for review.

    Note:

    IRM 4.10.12.1.3.3, Campus Frivolous Return Processing (FRP) Coordinators, requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two (2) business days.


    If a determination is not made within the allowed time frame, the Examination examiner will edit Action Code 331 in the lower left margin of the form.
    Examination has selected the return as frivolous, (e.g., indicated by CCC "U" or an Action Code 331) and a Form 4227 with the remarks, "Refer to Exam FRP for audit after processing," but sends the return for processing, Continue processing the return using procedures in IRM 3.21.261 (Foreign Investment in Real Property Tax Act (FIRPTA)) . However, do not circle or void the Action Code indicating a frivolous return.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ See Exhibit 3.21.261-6

3.21.261.9  (01-01-2015)
♦Correspondence♦

  1. Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable.

    Exception:

    Do not correspond on returns prepared by Collections, Section 6020(b) or by Examination, "Substitute for Return (SFR)" .

  2. Examine the return so that all of the conditions can be included in the same correspondence. See "Reminder" in IRM 3.21.261.18.6 for additional instructions.

    If... And... Then...
    Correspondence is needed Requires a response,
    1. Complete an approved Correspondence Action Sheet indicating the Letter number (86C, 854C, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required to enter, such as, tax period, form number, DLN, etc.

    2. Attach the Correspondence Action Sheet to the front of the return below the Entity area.

    3. Edit CCC "U."

    4. Continue editing the return.

    5. Leave the return in the batch.

    Correspondence is needed Does not require a response,
    1. Complete an approved Correspondence Action Sheet indicating the Letter number (86C, 854C, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required to enter, such as, tax period, form number, DLN, etc.

    2. Photocopy and attach the Correspondence Action Sheet below the Entity area on the front of the return. Be sure the name and address shows clearly above the approved Correspondence Action Sheet.

    3. Forward the copy to the Correspondence area.

    4. Finish editing the return and leave in batch.

    Note:

    There may be additional letters that are exclusive to the tax examiner's campus. These letters are for specific forms or conditions where it was deemed necessary for processing. The tax examiner should go to his or her lead or manager for copies of these letters to facilitate processing.

  3. Prepare Form 4442 (Referral Inquiry) (Exhibit 3.21.261-7 Form 4442) when you receive a call from the transferor (seller) or transferee (buyer) requesting assistance in obtaining their ITIN number. Once you complete Form 4442 have your manager review it and sign it. Once the manager has signed Form 4442, FAX it to PAMC at 267-941-1025.

3.21.261.9.1  (01-01-2015)
♦Correspondence Imaging System (CIS) Returns♦

  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Account Management (AM) receipts into digital images and working the cases from those images.

  2. "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.

  3. Verify all edit marks on a "CIS" return.

    If... Then...
    The edit marks are black, Underline the edit mark if correct, circle the edit mark if incorrect, and make any corrections.
    The edit marks are red or green, Circle if incorrect and make any corrections.
  4. Follow these instructions when you receive a Form 8288"CIS" return for processing:

    If... And... Then...
    You receive an 8288 CIS return from AM   Research the INTL WebApps database to see if it was previously processed.
    1. Processed

    2. IDRS shows Form 8288 posted

    1. Found in the INTL WebApps database,

    2. it is in the correct tax period,

      Note:

      If it is not in the correct tax period, then place a Form 3465 (Adjustment Request) on the 8288 CIS return and return it to PAMC with a note saying "Resolve mixed tax period"

    1. Research IDRS for posting of the document.

    2. Make a print of the IDRS screen to attach to the front of the 8288 CIS return for association with the original return in files. However, prior to making the print, type the word "ATTACHMENT" on the IDRS screen. After printing, highlight the word "ATTACHMENT" along with the DLN receiving the attachment and send it on its way to files.

    1. Not previously processed to the INTL WebApps database,

    2. Not previously processed to the INTL WebApps database,

    1. It is not posted on IDRS,

    2. It is posted on IDRS,

    1. Continue with normal processing, which includes processing the 8288-A record in the INTL WebApps database.

    2. Process the 8288-A record in the INTL WebApps database (Refer to IRM 3.21.25, International Returns and Documents Analysis - Miscellaneous Tax Returns for instructions). In addition, make a print of the IDRS screen to attach to the front of the 8288 CIS return for association with the original return in files. However, prior to making the print, type the word "ATTACHMENT" on the IDRS screen. After printing, highlight the word "ATTACHMENT" along with the DLN receiving the attachment and send it on its way to files.

      Note:

      If Form 8288-A is not attached, correspond for the documents using IDRS letter 3104C (FIRPTA and Foreign PartnershipWithholding Tax Return Processing and Unsubstantiated Refundable Cr) .

    The "CIS" return has a Form 13596 attached

    Note:

    If there is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), do not route the return to Accounts Management. Continue processing the return.

    The return is not complete (e.g., missing signature, schedules or forms) Remove the return from the batch and route to Accounts Management. Edit CCC "U" and attach Form 4227.

    Note:

    Do not correspond for missing information on "CIS" reprocessable or reinput returns.

    The "CIS" return does not have a Form 13596 (Reprocessing Returns) attached The return is not complete (e.g., missing signature, schedules or forms) Follow normal correspondence procedures.

3.21.261.10  (01-01-2015)
♦General Editing Guidelines♦

  1. The following general information can be used when editing Form 8288 returns.

  2. General instructions eliminate repetition of the same instructions for each return. If the general instructions and the specific instructions conflict, follow the specific instructions.

  3. All money amounts must be entered in dollars and cents.

  4. Money amounts are positive.

  5. Do not bracket negative amounts.

  6. Beginning with Tax Year Ending 12/31/2005 Form 8288 are processed as BMF Returns (Programs 11330 and 11338).

  7. If a Form 8288 with a date of transfer of 12/12/2005 and prior is submitted by the taxpayer, do not process it through the BMF.

    Rejection Action:

    1. Edit CCC "U."

    2. Prepare Form 4227, Intra-SC Reject or Routing Slip with the following reason in the remarks area; "NMF 8288 return DOT 12/12/2005 and prior - Transship to CSPC" and staple it to the face of the document.

    3. Continue editing the entire return, but do not enter Form 8288-A in the database.

    Note:

    Rejects or Unpostables will transship the return to CSPC.

3.21.261.10.1  (01-01-2015)
♦Edit Marks♦

  1. Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through Integrated Submission and Remittance Processing (ISRP). The editing can be entered in brown, red, orange, purple or green pencil or pen.

  2. The only items edited on the return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

  3. The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

  4. For a description of specific edit marks, see the table below:

    Edit Mark Description
    "X" The "X" is used to delete tax data or to indicate that an item is not to be transcribed.
    "/" A "/" can be used when deleting a form or schedule not being transcribed.
    "//$" The "//$" is used in the entity area to identify the beginning and ending of a foreign country code. For example, "/EI/$" is edited for "Ireland" or "/GM/$" is edited for "Germany" .
    "c/o" or "%" Indicates an "in-care of" name for transcription.
    Circle Indicates that an entry is not to be transcribed. Also used to delete Entity data or a Received Date.

    Reminder:

    Always circle out a name.

    Note:

    If the taxpayer circles an entry, edit the entry.

    Underline Indicates that an entry is to be transcribed (e.g., Name Control, Tax Period and a Received Date that is other than an IRS stamped date).
    Arrow Indicates the correct placement of a misplaced entry. An arrow may be used if the misplaced item is close to the correct line and there is no question where the entry belongs.

    Note:

    A double arrow may be used if the same figure is to be transcribed in two different places (along with any required transcription data between the two arrows).

    Check Mark Indicates that an entry has been manually math verified and is correct.
    Bracket/Parenthesis Indicates a negative numerical amount.

    Note:

    Code and Edit (C&E) is no longer required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets (-) sign. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (i.e., computing and entering a line entry, entering a missing line entry, etc.)

    Vertical Line or Decimal Point Indicates the separation of dollars and cents if no distinction has been made by the taxpayer.
    Zero, Dash or None "ZERO" , "DASH" or "NONE" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions Edit marks entered by other areas, such as Collection or Accounts Management, are not to be reedited except to place the marks in the correct area.

    Exception:

    Reedit a name that has green edit marks, if applicable.

    Green Check Mark Indicates the amount paid when placed next to the tax amount on Form 8288 line 7.

3.21.261.10.2  (01-01-2015)
♦Action Codes♦

  1. Action Codes are used to indicate whether correspondence, research or some other action is needed. The Action Code will set the suspense period to be assigned to the return and place the return in the workable or unworkable suspense inventory.

    Note:

    Computer Condition Codes (CCC) are used in lieu of Action Codes in processing Form 8288.

  2. When necessary, a three-digit Action Code will be assigned by the tax examiner.

  3. Edit the Action Code in the bottom left margin of the return.

  4. Assign Action Codes in the following priority:

    1. Action Code 310 (Statute Control).

    2. Action Code 320 (Entity Control)

    3. Action Code 4XX.

    4. Action Code 6XX

    5. Action Code 3XX.

    6. Action Code 2XX (Correspondence)

      Exception:

      Use Action Code 215 or Action Code 226 before Action Code 341 to ensure the return is complete before a manual refund is issued.

  5. Attach Form 4227 when more than one Action Code is needed. Edit the second Action Code on Form 4227.

  6. If more than one Action Code of the same priority is required (e.g., 215 and 226) edit the Action Code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition.

  7. Edit the following Action Codes when a return cannot be perfected from the information present:

    Action Code Description
    215 (First Correspondence)
    • Return is so illegible, incomplete or contradictory that it is not acceptable for computer processing.

    • The Taxpayer notates on the return or attachment that they are reporting tax for more than one Tax Period or for more than one type of tax.

    226 (Missing Signature International Correspondence) Unsigned foreign return (only issue for correspondence).
    480 (Early Filed-Suspense) The return is an early-filed return.
    610 (Renumbered non-remittance) or 611 (Renumbered with-remittance) A return mis-blocked (e.g., Form 1065 is found in an 1120 batch of work).
    650 (International) The return is an international return and must be forwarded to OSPC.
    640 (Void) To delete the assigned DLN on the return (e.g., Re-entry Returns).
  8. Continue perfecting the return after editing the Action Codes.

  9. Valid Action Codes are listed below:

    Action Code Description Workday Suspense Period
    211 First Taxpayer Correspondence 40
    212 Second Correspondence 25
    215 International Correspondence "70"
    225 Taxpayer Correspondence (Signature Only) 40
    226 International Correspondence (Signature Only) "70"
    310 Statute Control 10
    320 Entity Control 10
    331 Frivolous Review 10
    341 Manual Refund 10
    342 Credit Verification 10
    352 Name Research 3
    360 Other-in-House Research 10
    440 Managers Suspense 15
    480 Early Filed Suspense 150
    610 Renumber - Non-remit 0
    611 Renumber – Remit 0
    640 Void 0
    650 International 0

3.21.261.11  (01-01-2015)
Amended Returns

  1. Computer Condition Code "G" is not valid for the Form 8288 program. Never edit CCC "G" on Form 8288. Process every Form 8288 return as an original return. An amended return may be identified by such words as "CORRECTED" or "SUPPLEMENTAL." Filing a "Copy" of a return is not sufficient reason to label a return "Amended" unless accompanied by a positive statement from the taxpayer.

    Note:

    Research International Web Apps and IDRS when there is an indication that the Form is amended or corrected or may have already been processed.

3.21.261.12  (01-01-2015)
Form 8288 Attachments

  1. Examine all attachments to the return being processed and take action as required by the attachment.

    Note:

    Form 8288 is also used to transmit Form 8288-A to the IRS. Form 8288-A must be recorded in the International Web Application (INTL WebApps) Database by the FIRPTA unit. Therefore, if the attached Form 8288-A does not contain the FIRPTA stamp "Copy B Mailed" on it, then most likely Form 8288-A has not been recorded in the INTL WebApps Data Base.

  2. When an attachment has an effect on the document being processed leave it attached, unless a specific instruction requires that it be detached.

    Example:

    If Form 8822,Change of Address is attached to Form 8288, follow the instructions in the "Routing Guide for Attachments."

    Reminder:

    Before routing Form 8822 verify that the change of address on Form 8822 appear on Form 8288, Line 1, and on the set of Forms 8288-A. If not, then edit the correct address on Form 8288 and/or Forms 8288-A.

  3. Withholding Certificate:

    • This document will only be attached to Form 8288 when the transferee (buyer) withholds less than the required 10 or 35 percent FIRPTA tax. The taxpayer must also check either Line 6b of Part I, or have a significant entry (greater than Zero) on Line 5c, Part II of Form 8288 to indicate reduced withholding.

    • The withholding certificate is to remain attached to Form 8288. See IRM 3.21.261.18.11.

  4. Again, Do not detach from Form 8288:

    • any Form 8288-A (unless it is a Copy B) document, or

    • any withholding certificate, appearing in the table below.

      Withholding Certificate Letter Numbers for Transferee/Buyer
      3309 (Zero/Exempt - Generic)
      3310 (Reduced MTAXL - Generic)
      3312 (Reduced Installments)
      3313 (Rejected - RFMI not Recd)
      3314 (Rejected - MTAXL >10 percent)
      3316 (Rejected - Generic)
      3497 (Reduced - Generic)
      3793 (No TIN – 8288-B)

    Note:

    If line 7 (Part I) or Line 6 (Part II) is less than 10 percent of line 5 (I) or 5b (II), and an approved withholding certificate is attached, but line 6b (I) or 5c (II) has not been checked/completed, then edit/check line 6b (I) or 5c (II) and assign the reduced withholding and bypass indicator.

  5. Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests. This document is not supposed to be attached to Form 8288.

    If Then
    Form 8288-B is attached, Detach Form 8288-B and forward it to the Ogden Accounts Management Branch, Large Corp unit, along with any supporting documentation for processing.

    Form W-7 or Form W-7 (SP), Application for IRS Individual Taxpayer Identification Number. This document may or may not be attached to Form 8288.

    If Then
    Form 8288 has a Form W-7 or Form W-7 (SP) attached to it, Forward Form W-7 or Form W-7 (SP) with all associated documentation and a copy of Form 8288 and Form 8288-A to the Austin Submission Processing Campus (AUSPC).
    Forward it to the Internal Revenue Service Campus, Attn.: Individual Taxpayer Identification Number (ITIN) Unit, Austin, TX 73301-0002.

    Note:

    Once the ITIN is assigned, AUSPC will notate ITIN # on the copy of Form 8288 and fax or mail the ITIN edited Form 8288 back to OSPC for continued processing.

    Form W-7 is attached to Form 8288-A Forward a copy of Form 8288-A to the AUSPC.
    Forward it to the Internal Revenue Service Campus, Attn.: Individual Taxpayer Identification Number (ITIN) Unit, Austin, TX 73301-0002.
    Enter the following remarks on the transshipping transmittal. Edit the assigned ITIN number on Form 8288-A and FAX it to the originator at the OSPC Code and Edit unit for document processing.
    A Form W-7 and Form 8288-B are attached to Form 8288, Forward the Form W-7 and Form 8288-B to AUSPC. Forward it to the Internal Revenue Service Campus, Attn.: ITIN Unit, Austin, TX 73301-0002. Enter the following remarks on the transshipping transmittal; Edit the assigned ITIN number on Form 8288-B and return it to the originator (transship it back to Ogden Accounts Management (AM) Dept.) for document processing.

3.21.261.12.1  (01-01-2015)
Unrelated Attachments

  1. Requests for adjustment of another return:

    1. Remove any attachment requesting an adjustment (Automated Data Processing (ADP) or non-ADP).

    2. Forward to the BMF International Philadelphia Accounts Management (PAM) Department for action.
      Internal Revenue Service
      Attn: BMF INTL AM Dept. - 3-L08.154
      2970 Market St.
      Philadelphia, PA 19104

    3. lMPORTANT: Leave an "Action Trail" on the Form 8288, notating the attachments removed from the Form 8288.

  2. If the attachment does not include the taxpayer's name, address or TIN, enter this information on the attachment.

  3. If the taxpayer writes a question or requests assistance on the return itself, check with your manager.

  4. If a tax authorization is attached to correspondence (Form 2848 or Form 8821), review the correspondence to determine if other requests are involved:

    1. If other requests are involved, photocopy the correspondence and send the copy to PAM (See IRM 3.21.261.12.1 (1b)) for action, and send the original Form 2848 or Form 8821 to Ogden's Centralized Authorization File (CAF) function for processing.

    2. If other requests are not involved, send the original correspondence and the authorization to the Campus CAF function for processing.

  5. Other Unrelated Attachments:

    1. Remove other unrelated attachments (such as other returns, acknowledgments, requests for tax forms, etc.) from the document being processed, and

    2. Route to the proper function for necessary action.

  6. Always include the following information when forwarding documents to other functions:

    • Name and address of the taxpayer

    • Taxpayer Identification Number

    • Received Date

    • Tax Period and type of document from which detached

    • Action required to be taken

  7. If an attachment is removed because the majority of the information is unrelated to the Form 8288 being processed:

    1. Photocopy the attachment.

    2. Attach it to the Form 8288

    3. Leave an "Action Trail "

    4. Route the attachment to the appropriate function.

3.21.261.12.2  (01-01-2015)
♦Routing Guide for Attachments♦

  1. All attachments to the return must be reviewed before the return can be considered processable.

    1. Attachments should only be detached when specifically instructed.

    2. Edit Action Trail(s) (e.g., 2848 DETACHED) in the lower left corner going vertically up the side of the return.

  2. Follow the general guidelines below for each attachment. The table contains routing instructions for specific forms and/or documents attached to Form 8288:

    DOCUMENT/FORM DETACH ACTION
    A General Power of Attorney or a Durable Power of Attorney or Tax Information Authority is submitted on any document other than Form 2848 or Form 8821 NO Take no action. Leave the Power of Attorney or Tax Authorization attached to the return. Do not route to the Centralized Authorization File (CAF) function.
    Closing Agreement NO Leave attached
    TD F 90-22.1, Report of Foreign Banks and Financial Accounts YES Transship to:
    U.S. Department of the Treasury
    P. O. Box 32621
    Detroit, MI. 48232-0621
    CP 259, CP 515-518 NO Route notice and return to Collections.

    Exception:

    Do not route to Collections if "599" is notated.

    Includes tax liability for Multiple Tax Periods or Types of Tax NO
    • Numbered returns route to Rejects

    • Unnumbered returns, prepare a dummy return if possible: otherwise correspond

    Other Tax Returns (original signature) YES
    1. Edit received date to the detached return.

    2. Route to appropriate function unless specifically directed otherwise.

      Exception:

      Returns attached to a consolidated return will NOT be detached.

    State Tax Returns, original or copy, with an original signature YES Route to Receipt and Control.
    State Tax Returns (Photocopy, facsimile or no signature) NO Leave attached.
    Statement establishing Reasonable Cause for delinquent filing YES
    1. Issue Letter 1382C. (See IRM 3.21.261.8 (6)).

    2. Continue editing the return.

    Remittance found NO Immediately hand carry return and remittance to supervisor.
    Request for Acknowledgements NO No Action Required
    Request for information or inquiries YES
    1. Photocopy any data necessary to process the return

    2. Attach the photocopy to the return.

    3. Route original attachment to the proper office for necessary action.

    Request for money transfer YES Correspondence notates transfer of money to the return you are working:
    1. Prepare Form 3465 to route the request to Rejects Unit.

    2. Hold the return for 2 cycles before processing.



    Correspondence notates transfer of money from the return you are working:
    1. Prepare Form 3465 to route the request to Philadelphia Automated Management (PAM). See IRM 3.21.261.12.1 (1b).

    2. Edit CCC "X" to freeze any overpayment. (Do not edit on Form).

    3. Continue processing the return.

    Request for Forms or Schedules NO If requesting current year forms:
    1. Prepare Form 4190 (Order Tax Forms and Publications).

    2. Forward to National Distribution Center (NDC) for processing.



    If requesting prior year forms:
    1. Prepare Form 6112 (Order for Prior Year Tax Forms).

    2. Forward to National Distribution Center (NDC) for processing.

      Note:

      Forms 4190 and Form 6112 are generally used for IMF requests. Therefore, enter all BMF requests for forms and/or schedules in the "WRITE-IN" portions of the forms.

    Form 2678 -Employer/Payer Appointment of Agent NO Leave attached
    Form 2848 -- Power of Attorney and Declaration of Representative YES
    • Edit taxpayer name and TIN on Form 2848 if missing.

    • Edit received date on Form 2848.

    • Route Form 2848 to CAF function.

    • Edit action trail on tax return.

    Form 5471 (Information Return of U.S. Persons With Respect To Certain Foreign Corporations) or Form 5472 (Information Return of a 25 percent Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business) YES Route to Receipt and Control for rebatch (form will be scanned for LB&I purposes).
    Form 5495, Request for Discharge from Personal Liability Under Internal Revenue Code Section 2204 or 6905 NO Leave attached
    Form 8233 --Exemption From Withholding on Compensation for Independent (and certain Dependent) Personal Service of a Nonresident Alien Individual YES Transship to:
    Department of Treasury
    Internal Revenue Service
    Philadelphia PA 19255-0725
    Form 8288 --, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests -- with original signature YES, If attached to another return being edited Send to be processed
    Form 8288 -- U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests -- Copy of return NO "X" -out Form 8288 and leave attached.
    Form 8288-A -- Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests NO Leave attached However, if it is a Copy B, detach it and follow the instructions in IRM 3.21.25
    Form 8288-B -- Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests YES Route to Ogden Accounts Management (AM) department
    Form 8821 -- Tax Information Authorization YES
    • Edit taxpayer name and EIN on Form 8821 if missing.

    • Edit received date on Form 8821.

    • Route Form 8821 to CAF function.

    • Edit action trail on tax return.

    Form 8822 -- Change of Address YES Route to Entity Control if the address is different than what is on the forms entity, and edit the new address on Form 8288
    Form SS-4 --Application for Employer Identification Number YES Route to EIN Operations
    Stop 532G (Cincinnati Accounts Management)
    Form W-7 -- Application for IRS Individual Taxpayer Identification Number YES

    Note:

    Along with all of the documentation attached to it (i.e., passport, birth certificate, etc...)

    Reminder:

    Also annotate the number of forms that were detached.

    Transship to:
    Internal Revenue Service
    ITIN Operation
    P.O. Box 149342
    Austin, TX 78714-9342
    Form W-8 BEN --Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding YES Route to Receipt and Control and notate RETURN TO TAXPAYER. (Taxpayers are not required to send this in to the IRS)
    Section 108(i) Election NO Leave attached

3.21.261.13  (01-01-2015)
Unprocessable Conditions

  1. A return must contain the following specific items before it is considered processable. If they are not present and cannot be found on the return or its attachments, then edit CCC "U" to send case to Rejects. Rejects will research IDRS, to locate the information in order to make the return processable.

    • An Employer Identification Number (EIN), Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN) or Internal Revenue Service Number (IRSN). See IRM 3.21.261.17.3 and IRM 3.21.261.18.3 for additional information.

    • A legible name (for the Name Control).

    • A valid Tax Period (200512 and subsequent).

  2. Conditions which make a document unprocessable and will require Rejects to correspond with the taxpayer:

    • The name is so illegible or incomplete that the Name Control cannot be determined.

    • The EIN contains other than nine numeric characters and cannot be perfected from information on the return or attachments.

    • The document has more than one ElN.

    • The filer has stated that they have combined information for more than one tax period or more than one type of return.

    • Data entries are so incomplete or illegible that they cannot be perfected or transcribed.

    • The document has been mis-blocked.

    • The return is unsigned.

    • The return has only entity data and no other statements or attachments from the taxpayer.

    • Any condition set forth as unprocessable in the sections on processing specific documents.

  3. Correspond with the taxpayer for the required information using IDRS Letter 3104C when Form 8288 is numbered and unprocessable, plus edit CCC "U" . Complete Form 3696 with appropriate Letter 3104C paragraphs, then attach Form 3696 (Correspondence Action Sheet) to Form 8288 and continue editing (leave return in pack of work).

3.21.261.13.1  (01-01-2015)
Pre-Master File Processing of Form 8288

  1. Numbered Form 8288: Reject any numbered Form 8288 return which has a Date of Transfer (DOT) of 12/12/2005 or prior.

    Rejection Action:

    1. Edit CCC "U."

    2. Prepare Form 4227, Intra-SC Reject or Routing Slip with the following reason in the remarks area; "NMF 8288 return DOT 12/12/2005 and prior" . Transship to Cincinnati Submission Processing Campus (CSPC) Non-Master File (NMF) Accounting, Stop 21 Team 104, and staple it to the face of the document.

    3. Continue editing the entire return, but do not enter Form 8288-A into the INTL WebApps.

      Note:

      Rejects or Unpostables will transship the return to CSPC.

  2. Unnumbered Form 8288: Transship all unnumbered Form 8288 returns with a Date of Transfer (DOT) of 12/12/2005 to CSPC NMF.

    Transshipping Action:

    1. Prepare Form 3210, Document Transmittal and write "NMF 8288 return DOT 12/12/2005 and prior" in the remarks section of the transmittal. Address the document transmittal to:

      Internal Revenue Service
      Attn: CSPC - NMF Section Stop 21 Team 104
      201 West Rivercenter Blvd.
      Covington, KY 41019

    2. Also, prepare Form 4227, Intra-SC Reject or Routing Slip with the following reason in the remarks area; "NMF 8288 return DOT 12/12/2005 and prior" and staple it to the face of the document.

3.21.261.14  (01-01-2015)
♦Re-Entry Document Procedures♦

  1. A return posted to the wrong account or module or attempting to post must be reprocessed to post to the proper account or module.

    A Re-entry document is referred to as:

    • A Re-input return (a return that has not posted to the master file, e.g. unpostable).

    • A Re-processable return (a return that has posted to the master file, e.g. return posted to the wrong account or module).

  2. Some re-entry returns may have originally been filed electronically (E-File). These returns may be identified by the presence of Mod E-File printouts in lieu of the actual return. Do not correspond for missing signatures on these documents.

  3. Each re-entry return must have a Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, attached.

    • Form 3893 is used to reinput documents that have not posted to an account or module.

    • Form 13596 is used to reprocess documents to the correct account or module that had previously posted to the wrong account or module.

  4. Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.

  5. Examine Form 3893 or Form 13596 to determine the action needed to make the return processable.

    If... Then...
    Form 3893 or 13596 is missing
    1. Edit CCC "U" on return.

    2. Route to Receipt and Control using Form 4227.

    3. Use local procedures for routing.

    Form 3893 or 13596 is attached Determine if the return was edited according to current processing instructions.

    Caution:

    If the Received Date is 2 years and 9 months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return.

  6. If additional information is needed to make the return processable, prepare Form 3696 or follow local correspondence procedures.

    1. Enter CCC "U" (Unprocessable) on the return.

    2. Forward Form 3696 to Typing and Suspense to issue letter and filing in the "Hold File" or follow local correspondence procedures.

3.21.261.14.1  (01-01-2015)
♦Form 3893 - Re-Entry Document Control♦

  1. Form 3893, Re-entry Document Control, is used to reinput a return that has not posted to an account or module.

  2. If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control no.), edit all returns using current processing instructions and keep all returns clipped together.

  3. Circle the CCC "G" if present.

  4. Do not edit CCC "G" on amended returns.

  5. Do not send Letter 1382C if a request for reasonable cause is attached, because this responsibility belongs to the customer service representative initiating the re-entry document.

  6. If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

  7. If the return was edited according to current processing instruction, ensure that the information from Form 3893 is edited on the return.

    Form 3893 Action Taken
    Box 14 (Remarks) Ensure that the information is edited to the return.
    Box 15 (Process as)
    1. Circle out any green rockered or green checked money amounts and edit marks that may indicate a receipt of remittance.

    2. Do not change any tax due amounts.

  8. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection Edit the same correction in red to the appropriate area.
    Taxpayer error Leave the entries as shown on the document.
  9. A received date must be present on all Re-input returns:

    If... Then...
    Received date is not present Edit a received date on Form 8288, Line 2 bottom row on the right.
    Multiple received dates are present Circle out all but the earliest date.
  10. When additional information is still needed to make the return processable, prepare Form 3696(or other approved Correspondence Action Sheet) or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

  11. When perfection is not possible, attach Form 4227 noting, "PERFECTION NOT POSSIBLE" and return to initiator.

3.21.261.14.2  (01-01-2015)
♦Form 13596 - Reprocessing Returns♦

  1. Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module that had previously posted to the wrong account or module.

  2. Circle CCC "G" if present.

  3. Do not edit CCC "G" on amended returns.

  4. Do not send Letter 1382C if a request for reasonable cause is attached, because this responsibility belongs to the customer service representative initiating the re-entry document.

  5. If the return was edited according to current processing instructions, ensure that the information from Form 13596 is edited on the return.

    Form 13596 Action Taken
    TIN correction Edit correct TIN on return.
    Tax period correction Edit correct tax period ending on return.
    Reasonable Cause Edit appropriate computer condition code:
    1. Edit CCC "R" if the "FTF" box is checked.

    2. Edit CCC "D" if the "FTP" box is checked.

  6. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection Edit the same correction in red/green (per local procedure) to the appropriate area.
    Taxpayer error Leave the entries as shown on the document.
  7. A received date must be present on all reprocessed returns:

    If... Then...
    Received date is not present Edit a received date on Form 8288, Line 2 bottom row on the right.
    Multiple received dates are present Circle out all but the earliest date.
  8. Circle out the green rocker or green check and edit marks that may indicate a receipt of remittance.

3.21.261.15  (01-01-2015)
♦Received Date♦

  1. The date a document is received in the Campus or IRS Office is the date stamped as the "IRS Received Date."

  2. A Received Date is required on all Form 8288 returns. Use the chart below to perfect the received date.

    If... Then...
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . The return is considered timely.
    The due date falls on a weekend or legal holiday, The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date. Edit the IRS Received Date to agree with the postmark date or shipment date.
  3. The IRS Received Date may or may not be stamped on the face of the return.

  4. A valid Received Date Stamp consists of the following (MMDDYYYY):

    • The word "Received"

    • Month (alpha or numeric)

    • Day (numeric 01-31)

      Example:

      "1" or "01"

    • Year (numeric) - four digits

    • "Area Office" , Campus, "Field Office" , "Taxpayer Assistance (TAC)" Site plus the "City" location or a functional area within one of these sites (e.g. Compliance Services Collection Operations (CSCO), Exam, ICT, Collection Information System (CIS), AM, etc.)

      Caution:

      The Taxpayer Advocate Service (TAS) organization is not a point of filing and TAS employees have not been delegated the authority to accept returns for filing. Treat all TAS Received Dates as invalid by circling them and edit the Received Date according to instructions.

  5. If the IRS Received Date stamp is not present or the date is illegible or invalid, edit the IRS Received Date on Line 2, last dotted line, in MMDDYYYY format. Edit the IRS Received Date according to the following priority:

    Figure 3.21.261-1

    This image is too large to be displayed in the current screen. Please click the link to view the image.
    1. The earliest legible Postmark Date (U.S. Postal Service, foreign postmark or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service Postmark (USPS) or foreign postmark date are as follows:

      If... Then...
      An envelope is not attached Use the postmark date stamped on the face of the return.
      An envelope has a USPS and private metered postmark Always use the USPS postmark.
      An envelope has a foreign and private metered postmark Always use the foreign postmark.
      An envelope has two private metered postmarks Use the latest private metered postmark.
      An envelope has only one private metered postmark Use the private metered postmark.

      Note:

      A private metered postmark is to be considered timely ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal due date.

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

    3. Revenue Officer's signature date.

    4. Signature date (only if within current year).

      Exception:

      Use the signature date on prior returns only when it is signed in the current year. DO NOT use the signature date stamp to determine the received date for replies to correspondence.

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  6. Edit the Received Date as follows:

    If Then
    A timely IRS Received Date is the only received date stamped on the return, No editing is required.
    Two or more dates stamped on the return.
    1. Use the earliest IRS Received Date stamped on the return.

    2. Circle out all other dates.

    A Federal return is addressed to the IRS but delivered to a State agency, Use the Postmark Date as the IRS Received date.
    A Federal return is addressed to a State agency, Use the IRS Received Date stamp as the IRS Received Date.
    The only Received Date on the return is a TAS Received Date, Edit the IRS Received Date according to instructions.

    Reminder:

    If an envelope is attached to the return, check the envelope for remittance. If found, hand carry remittance to manager.


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