3.22.110  Chapter Three Withholding (CTW) Returns - Form 1042 (Cont. 1)

3.22.110.15 
Section 01 - Form 1042

3.22.110.15.6 
Field 01CCC - Computer Condition Codes (CCC)

3.22.110.15.6.3  (01-01-2015)
CCC F - Final Return

  1. Enter CCC F if there is a clear indication on the return or on an attachment that returns will not be required to be filed for future years.

    Example:

    The block below the City line will usually be checked, but the taxpayer may also notate final, out of business, no longer liable, no longer paying income to Non Resident Alien (NRAs), etc.

    Note:

    If the taxpayer puts not liable but does not indicate final, do not enter CCC F as this may refer only to the current year, not necessarily to future years.

  2. CCC F will delete the 1042 filing requirements from the BMF thus stopping future mailing of returns to the taxpayer.

  3. Refer to CCC E when the taxpayer indicates Final but also indicates credit elect on Line 71.

  4. Error Correction will correspond for the date the final income was paid, if Code and Edit did not previously correspond for the date.

  5. If the taxpayer indicates Final but the date final income paid is for the year following the tax period, Do NOT enter CCC F (delete if present).

3.22.110.15.6.4  (01-01-2015)
CCC G - Amended Return

  1. The Amended Return checkbox is located in the upper right hand corner (URHC) of the return under the pre-printed tax year.

  2. CCC G is entered onto all Form 1042 that are notated:

    • Amended

    • Superseding

    • Duplicate

    • Replacement

    • Any other word or phrase indicating that this is not the original return that is being filed for this tax period.

  3. If there is any doubt about whether a return is amended or not, research BMFOLT for the tax period and look for a TC 150 which indicates that another return was previously filed and that this return is amended.

  4. CCC W and 3 are the only other Computer Condition Codes that can be used with CCC G.

  5. When a return is amended, delete all fields and sections except for the following:

    Field Description
    RMIT Remittance
    01NC Name Control/Check Digits
    01EIN EIN
    01TXP Tax Period
    01CCC Computer Condition Code
    01RCD Received Date
    01CRD Correspondence Received Date
  6. When a return is found not to be amended, delete CCC G and enter all data in Sections 01-08, as appropriate.

    Note:

    If the ROFTL (Line 1-60) has entries on all or most of the lines, do not try to enter the sections onto the register. Error Correction will reject the return and Rejects will re-input the return to be re-transcribed with all data. Be sure to circle-out (delete) CCC G.

3.22.110.15.6.5  (01-01-2015)
CCC J - Reasonable Cause for Failure to make Timely and Sufficient Payments

  1. CCC J is entered when the withholding agent provides reasonable cause for failure to make timely EFTPS payments.

  2. If the withholding agent notates 3121 AGREEMENT on the return, enter CCC J, since taxpayers filing these returns are not required to make FTD payments.

  3. If there is an explanation attached to the return, see IRM 3.22.110.15.6.1 for corrective action to take.

  4. Do not enter CCC J if CCC 7 and/or D is already present.

3.22.110.15.6.6  (01-01-2015)
CCC O - Manual Refund Issued

  1. If CCC "O" is already present on the return when received in Error Correction, then a manual refund was previously issued.

  2. When there is an indication that a manual refund must be prepared and the refund is $500,000 or more or the 180 day interest free period is in jeopardy, then:

    1. Error Correction will reject the return and notate "MANUAL REFUND" on Form 4227.

    2. Rejects will prepare manual refund Form 5792 or Form 3753, as required, and enter CCC O in Field 01CCC, when the refund is issued (there should be a brown O on the return).

    3. If there is any doubt about whether a manual refund was issued, research Com/When the package is returned to SP, the return will be marked with "LB and I revd" action trail, so they don't loop around. and Command Codes BMFOLT or TXMODA for the TC 840 or any notation that the refund was sent (e.g., TC 840 input).

    4. If a copy of a completed Form 5792 or Form 3753 is attached to the return, research Command Code TXMODA for TC 840 before entering a CCC O.

3.22.110.15.6.7  (01-01-2015)
CCC R - Reasonable Cause for Late Filing of Return

  1. CCC R is entered onto a return when the taxpayer provides a reasonable cause explanation for late filing of the return.

    Note:

    See IRM 3.22.110.15.6.1 for the steps to take if the taxpayer attaches a reasonable cause explanation to the return.

  2. All returns with CCC R must have a received date. If missing, follow the instructions under Field 01RCD.

  3. CCC R is not valid with CCC D but is valid with CCC 7.

  4. If required and missing, Error Correction will enter CCC R.

3.22.110.15.6.8  (01-01-2015)
CCC S - Refund Return

  1. Enter CCC "S" when the taxpayer has checked the refund block on Line 71 or has another indication that the overpayment is to be refunded. Also enter a "1" into Field 0771.

    Note:

    If neither box is checked AND YOU ARE CORRESPONDING FOR ANOTHER REASON, ask the taxpayer which block should have been checked.

    Note:

    If both boxes on Line 71 are checked, enter CCC E unless the return is truly a Final, then enter CCC S. However, IF YOU ARE CORRESPONDING FOR ANOTHER REASON, ask the taxpayer which box is correct.

  2. If CCC S is correct, be sure there is a "1" in Field 0771 (refund indicator).

  3. Missing Signature - If YOU ARE CORRESPONDING for ONLY a missing signature, use Action Code 225 or 226 and continue to process the return. Do NOT suspend just for a missing signature.

3.22.110.15.6.9  (01-01-2015)
CCC T - Return Secured as a Result of a Taxpayer Delinquency Investigation (TDI)

  1. The CCC T is entered when the return is identified as having been secured as the result of an IRS Taxpayer Delinquency Investigation (TDI).

  2. Enter CCC T in Field 01CCC if a TC 59X is edited in the left margin of the return

3.22.110.15.6.10  (01-01-2015)
CCC W - Return Cleared by Statutes

  1. The CCC W will by-pass the validity check on returns that are filed two years and ten months (or more) after the due date, if the return has been cleared by the Statutes Unit.

  2. Error Correction will reject any statute criteria return that has not been stamped CLEARED BY STATUTES.

  3. Rejects will attach a BMFOLT print for the tax period to the back of the return and send it to Statutes for clearance.

  4. There will be a red stamp in the left margin of the return indicating this clearance.

  5. The CCC W is also entered when the return is a statute return on which Collections has notated TC 59X in the left margin.

  6. A CLEARED BY STATUTE stamp is not required on the following:

    1. TC 59X in the left margin.

    2. Section 6020(b) is notated (or stamped) on the front of the return.

    3. A return with no money entries that was prepared by Examination.

  7. Do not send the returns in (6) above to Statutes for clearance, just enter CCC W.

3.22.110.15.6.11  (01-01-2015)
CCC X - Refund/Credit Freeze

  1. The CCC X will prevent the release of credits or refunds from the module.

  2. Rejects will enter CCC X when there is No Reply to correspondence and there is an overpayment on the return.

    Note:

    In the event of a no reply and there is a refund desired, CCC S must be in Field 01CCC along with the X.

  3. Error Correction will reject when the taxpayer indicates that part or all of the overpayment is to be transferred to another tax period, return (MFT) or taxpayer.

    1. Rejects will either do the credit transfer or prepare a Form 3465 to request Adjustments to do the transfer (if Rejects cannot do a credit transfer).

      Note:

      Look for an indication (in red) on the return that Code and Edit has already prepared and sent the Form 3465.

    2. If the entire overpayment is to be transferred, enter CCC X

    3. If part of the overpayment is to be transferred, reduce the available credit (Lines 64-66) by the amount to be transferred. Do not enter CCC X.

  4. If there is an amount in Field RMIT that is not for tax (but for penalty and/or interest), and there is no tax in Section 07, enter CCC X. Also enter a 1 into Field 0763C.

3.22.110.15.6.12  (01-01-2015)
CCC 3 - Failure to Reply to Correspondence

  1. CCC 3 will be entered by Rejects when the taxpayer does not reply to correspondence within the 30 or 45 day time frame.

    Note:

    It may also be necessary to enter CCC X in the event of a no reply. See IRM 3.22.110.15.6.11

  2. Code and Edit may have already entered CCC 3 for a failure to reply to its correspondence.

  3. Error Correction will reject with Action Code 351.

  4. Field 01CRD (Correspondence Received Date) can never be entered when CCC 3 is in Field 01CCC.

  5. CCC 3 is valid with CCC G.

3.22.110.15.6.13  (01-01-2015)
CCC 4 - Return Prepared by IRS Under IRC Section 6020(b)

  1. CCC 4 is always entered on returns notated 6020(b).

  2. Collection and Examination employees prepare tax returns when taxpayers fail to do so.

  3. ERS will enter a CCC 3.

    1. The return should be signed by the Revenue Officer/Agent on or near the signature line.

    2. The return must clearly be stamped or notated 6020(b).

3.22.110.15.6.14  (01-01-2015)
CCC 7 - Reasonable Cause Denied

  1. CCC 7 is entered when the withholding agent provides a reason for late filing or incorrect EFTPS payments, but the reason for late filing or incorrect EFTPS payments is not acceptable. See IRM 3.22.110.15.6.1 and/or CCC D, J or R for additional instructions.

  2. CCC 7 will be edited by Code and Edit, but if they do not, ERS/Rejects is responsible.

  3. Do not enter CCC 7 if CCC J is present.

3.22.110.15.7  (01-01-2015)
Field 01RCD - Received Date

  1. Field 01RCD is an 8 position field that must be present.

  2. The valid characters are numeric (0 thru 9) only and must be in YYYYMMDD format.

  3. The received date is transcribed from the RD line in the "For IRS Use Only" box in the URHC of the return. The date may also be stamped on the front of the return.

  4. Invalid Conditions:

    1. The entry is missing or less than 8 numbers in the correct format.

    2. The date is earlier than the last day of the tax year (early-filer).

    3. The day of the month exceeds the number of days for that month, e.g., 20140931 (where September has only 30 days).

    4. The date is later than the current processing date.

  5. Correction Procedures:

    1. Be sure the entry in Field 01RCD was transcribed correctly.

    2. If there is more than one received date present, enter the earliest received date.

    3. If the date is missing, use the postmark date on the envelope attached to the return.

    4. Use the Revenue Officer's date of signature.

    5. Use the taxpayer's date of signature.

    6. Use the Julian date in the DLN less ten days.

    7. If the year in the received date is either prior or future but other data on the return (tax year, postmark date or signature date) indicate that the year should be the current year, enter the current year.

    8. Correct the day of the month accordingly:

      Month Maximum Number of Days
      01, 03, 05, 07, 08, 10 or 12 31
      04, 06, 09 or 11 30
      02 28 (29 in a leap year)
    9. If the date is earlier than the last day of the tax year (e.g., the received date is Oct. 27, 2014 for a 201412 return): ERS will examine the return to be certain the tax year and received date are correct. ERS will reject the return with Action Code 480 and notate early filer on the 4227.

  6. Rejects Correction Procedures: Re-examine any return rejected as an Early-Filer to be sure that it is an early -filed return.

3.22.110.15.8  (01-01-2015)
Field 01CRD - Correspondence Received Date

  1. Field 01CRD is an 8 position field that may or may not be present.

  2. The valid characters are numeric, 0 thru 9 (in YYYYMMDD format) or blank.

  3. The date is found on the CR line in the "For IRS Use Only" block in the URHC of the Form 1042.

  4. Invalid Conditions:

    1. The date is not later than the due date of the return.

    2. It is the same as or earlier than the received date in Field 01RCD.

    3. Computer Condition Code 3 (No Reply) is present in Field 01CCC.

  5. Correction Procedures:

    1. Be sure that the date was transcribed correctly.

      Note:

      The date may be present on the return if Code and Edit previously corresponded and entered the date OR, if Entity assigned an EIN and entered the EIN-assignment date on the return. (The Entity date may not have been entered on the CR line. Look in the margins of the return for the date in the color the Entity Unit uses)

    2. Be sure that the date, if entered by Code and Edit, is correct.

    3. If CCC 3 and the correspondence received date are both present, determine which is correct and delete the other.

      Note:

      Do not enter a date in Field 01CRD if the taxpayer is not at fault and the correspondence was an IRS error.

  6. Rejects Correction Procedures:

    1. The date is entered when a reply is received from a taxpayer in response to IRS correspondence.

    2. Enter the date onto the return on the CR line in the For IRS Use Only block in the URHC of the return.

    3. This reply may be a letter, telephone call or fax.

    4. If the correspondence was sent in error (that is, the taxpayer was not at fault), do not enter a correspondence received date.

    5. Years ago, a No-Reply was indicated by entering 8-9's into this field, if ever seen on an old re-input return, delete and enter CCC 3.

3.22.110.15.9  (01-01-2015)
Field 01PIC - Penalty Interest (P/I) Code

  1. Field 01PIC is a 1 -position field that may or may not be present.

  2. The valid characters are 1 and blank.

  3. The code is transcribed from the "I" line in the "For IRS Use Only" block in the URHC of the return.

  4. The 1 is entered when:

    1. The taxpayer entered an amount for delinquency (FF) penalty and/or interest onto the return (usually near the balance due or refund line) AND

    2. The received date (stamped or improvised) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Invalid Conditions:

    1. The entry is other than 1 or blank.

    2. The received date is not within the ≡ ≡ ≡ ≡ ≡ ≡ .

  6. Correction Procedures:

    1. Be sure that the field was transcribed correctly.

    2. Be sure that the received date was transcribed correctly, even though it may not be invalid.

    3. If the P/I code was entered and the transcribed received date is within the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ delete the code.

    4. If you correct the received date field, look to see if the corrected received date affects the P/I code and correct the code accordingly.

  7. Rejects Correction Procedures: If a return is received in Rejects from the Error Correction unit or any other area and it can be seen that the "1" should have been entered, enter the code on the return and in Field 01PIC.

3.22.110.15.10  (01-01-2015)
Field 01SIC - Schedule Indicator Code (SIC)

  1. Field 01SIC is a 1 position field that may or may not be present.

  2. The valid characters are 1, 2 or blank.

  3. The SIC code is transcribed from the SIC line in the "For IRS Use Only" block in the URHC of the return.

  4. SIC code 1 is entered only when the Record of Federal Tax Liability (ROFTL) (Lines 1-60) is completely blank because it is unnecessary (no tax).

  5. SIC code 2 is only valid on 2010 and prior returns and is entered when any monthly total tax liability (Line 5, 10, 15, etc.) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more AND the weekly tax liabilities for that month are listed.

    Note:

    The 90 percent block (at the end of the second line under the "For IRS USE Only" has been deleted from Form 1042 for Tax Year 2011 and subsequent.

  6. SIC code 2 will be entered if the taxpayer has noted "3121 Agreement" on the return (2010 and prior only) and any monthly tax liability (line 5, 10, 15, etc) is ≡ ≡ ≡ ≡ ≡ or more.

  7. Invalid Conditions:

    1. Any character other than a 1, 2 or blank appears in Field 01SIC.

    2. Although it will not appear invalid, SIC Code 1 must not appear in Field 01SIC if there are any entries at all in the ROFTL (Lines 1-60), Sections 03-06)

  8. Correction Procedures:

    1. If there are no entries on Lines 1-60 and Line 64e is zero or blank, enter 1 in Field 01SIC.

    2. If there are any correct entries on Lines 1 thru 60, and a 1 is present in Field 01SIC, delete the entry.

      Note:

      For 2010 and prior, determine if SIC code 2 should be entered in its place.

    3. Correct any transcription error in the field.

    4. If Code and Edit has corresponded for any missing amounts in the ROFTL for 2010 and prior, look at the reply and determine if SIC 2 should have been entered.

  9. Rejects Correction Procedures:

    1. If corresponding for missing amounts in the ROFTL for 2010 and prior, when the REPLY is received, determine if SIC code 2 should be entered.

    2. Delete SIC code 1, if present, when entering Sections 03 thru 06 after a REPLY is received for missing ROFTL entries.

    3. For 2010 and prior only, enter SIC code 2 if there is NO REPLY for missing monthly errors and the Rejects tax examiner has entered the four weekly amounts (after dividing the monthly total by 4).

    4. For 2010 and prior only, enter SIC 2 if the taxpayer replies with the missing weekly amounts and the total for the month is ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

3.22.110.15.11  (01-01-2015)
Field 01QIN - Qualified/Non-Qualified (QI/NQI) Intermediary Indicator

  1. Field 01QIN is a 1 position field that may or may not be present.

  2. The valid characters are 1, 2 or blank.

    • 1 indicates a valid QI EIN is present.

    • 2 indicates a valid QI EIN is not present (NQI).

  3. The checkbox has been removed for 2014 and this is no longer a transcribed field. The computer automatically checks the EIN to determine if it is in the QI or NQI range and sets the indicater as appropriate.

3.22.110.15.12  (01-01-2015)
Field 01CBI – Designee Checkbox Indicator

  1. Description: The designee checkbox indicator is transcribed from the bottom of Form 1042. The checkbox is used to indicate whether the filer has elected to allow a third party designee to answer questions about the return as it is processed. Data may or may not be present in Field 01CBI.

  2. Valid Condition: Valid entries are "1" and blank.

  3. Invalid Condition: Field 01CBI will generate as an error when the Designee Checkbox Indicator is other than "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Enter a "1" in Field 01CBI on the screen if the "Yes" box is checked.

    3. Delete Field 01CBI if "No" box or both boxes are checked.

    4. If invalid, delete the entry on the screen (DLSEC field and continue processing).

3.22.110.15.13  (01-01-2015)
Field 01CBT – Paid Preparer Telephone Number

  1. Description: The paid preparer telephone number is transcribed from the bottom Form 1042, below the paid preparer EIN. Data may or may not be present in Field 01CBT.

  2. Valid Condition: Field 01CBT must be alpha or numeric or a combination of alpha and numeric characters, not to exceed 10 characters or blank.

  3. Invalid Condition: Field 01CBT will generate as an error when the Paid Preparer Telephone Number is other than 10 alpha/numerics.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. If a telephone number is invalid, delete the entry on the screen (DLSEC field and continue processing).

3.22.110.15.14  (01-01-2015)
Field 01PSN - Paid Preparer PTIN

  1. Field 01PSN is a 9 position field that may be present. It is located below Line 71 to the right of Preparer's Signature.

    Note:

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

  2. Valid conditions are:

    • Entry is blank

    • "P" for the first character followed by eight numeric characters

  3. Invalid condition is one of the following:

    • Field 01PSN is other than a "P" followed by eight digits

    • Contains all zeroes

    • Contains all nines

    • Contains all numeric

  4. Correct Field 01PSN as follows:

    If... Then...
    A valid PTIN is present on the return, but incorrectly transcribed, Enter the correct valid PTIN in Field 01PSN.
    An SSN is present in Field 01PSN, Delete the SSN in Field 01PSN.
    An entry appears in both Field 01PSN and 01PEN, Delete Field 01PEN.
    A valid PTIN is present and an SSN is also present Enter the PTIN in Field 01PSN and delete the SSN.
    A valid PTIN cannot be located Delete the entry in Field 01PSN.

3.22.110.15.15  (01-01-2015)
Field 01PEN - Paid Preparer's EIN

  1. Field 01PEN is an 9-position field that may be present.

    Note:

    The Paid Preparer's EIN is located at the bottom, lower right hand side of the return, below the PTIN.

  2. Valid conditions are:

    • Entry is blank

    • All numeric

  3. Invalid condition is one of the following:

    • Field 01PEN is other than nine numeric digits

    • Contains all zeroes

    • Contains all nines

    • The first two digits are invalid for Field 01EIN, See IRM 3.22.110.15.3.

  4. Correct Field 01PEN as follows:

    If... Then...
    Only a valid EIN is present Enter the EIN in Field 01PEN.
    A valid PTIN is present and an EIN is also present Enter the PTIN in Field 01PSN and delete the entry in Field 01PEN.
    Both an EIN and SSN are present Delete the SSN in Field 01PSN and enter the EIN in Field 01PEN. Make sure the EIN is a valid EIN.
    The EIN is invalid on the return and a valid EIN cannot be located Delete the entry in Field 01PEN.

3.22.110.15.16  (01-01-2015)
Field TPNC - Taxpayer Notice Code (TPNC)

  1. Field TPNC is a 6 position field.

  2. The valid characters are 01, 02, 26, 90 or blank.

  3. This field is never entered or corrected by ERS or Rejects.

  4. This field is where the TPNCs appear after the return has posted.

  5. The list of available Taxpayer Notice Codes is as follows:

    TPNC Notice Text
    01 The balance due, or the amount you overpaid, was not correct.
    02 An error was made when the total tax you owe for the year was figured.
    26 The amount reported as Total Federal Tax Deposits for the year was not correct.
    90 Fill-in narrative

    Reminder:

    TPNC 90 is used when there is a taxpayer error not explained by the above codes (e.g., Negative amounts are not allowed on Lines 1-60, an error was made in totalling the credit amounts on Line 68, an error was made in adding or subtracting the adjustment amount on Line 64a, etc.)

  6. Do not use any other TPNC when sending TPNC 90. If TPNC 01 or 02 is also needed, add the wording from that TPNC to the wording for the error requiring the TPNC 90.

  7. Do not send a TPNC in the following condition:

    1. Fields 0764E and G (total tax liability) underprint ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ AND

    2. The balance due/refund Field 07B/D underprints ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. Correct Field 07B/D using the taxpayer's original amounts.

  8. Correction/Rejects Correction Procedures -

    1. Never correct, add or delete anything in this field.

    2. Do not send a TPNC if there is no underprint in the balance due/refund field (07B/D). If there are underprints in the tax fields (0763A and 0763C) but not in Field 07B/D, look carefully for transcription errors. A taxpayer notice code on the Form 1042 will not be released by the computer if there is no underprint in field 07B/D.

      Note:

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

3.22.110.15.17  (01-01-2015)
Field 01CBP - Third Party Personal Identification Number (PIN)

  1. Field 01CBP is a 9 position field that may or may not have an entry.

    Note:

    There should be only five digits entered by the designee on the return. The field has nine positions, so it will be possible to enter as many as nine numbers and letters.

  2. This field is located at the right side of the Third Party Designee Line (under Line 71).

  3. The designee is instructed to pick any five numbers and insert them into the blocks as a means of identification when IRS calls the designee.

  4. The valid characters are numeric (0 thru 9) and blank.

  5. This number cannot be researched using CFOL command codes.

  6. Correction Procedures:

    1. If the designee enters any invalid or illegible characters, blank the field.

    2. Correct any transcription errors, if possible. If in doubt about what a digit may be, do not guess; blank the field

3.22.110.16  (01-01-2015)
Section 02 - Form 1042

  1. Section 02 Alpha Field Designators (AFD), maximum field lengths, titles and the location on the return follows:

    Alpha Designator Field Length Title Location on Return
    Domestic or U.S. Possession Address Format
    02CON 35 In-Care-of Name Street Address Line
    02FAD 35 Foreign Address Street Address Line
    02ADD 35 Street Address/Post Office Box Street Address Line
    02CTY 22 City City/State/ZIP Line
    02ST 2 State Code City/State/ZIP Line
    02ZIP 12 ZIP Code City/State/ZIP Line
    Foreign Address Format
    02CON 35 In-Care-of Name Street Address Line
    02FAD 35 Foreign Address Street Address Line
    02ADD 35 Street Address/Post Office Box Street Address Line
    02CTY 22 City and Foreign Country City/State/ZIP Line
    02ST 2 Period (.) in first position City/State/ZIP Line (entered by Code and Edit)
    02ZIP 12 Always blank  
  2. The valid characters are alpha (A thru Z), numeric (0 thru 9), dash/hyphen (-), slash (/), period (.) and blank (See instructions for each field for requirements and limitations.)

  3. All fields are variable (positive field breaker only). No field in Section 02 will take a negative field breaker.

  4. There are two different formats used for Section 02: one for U.S. and U.S. possessions addresses and one for foreign addresses.

3.22.110.16.1  (01-01-2015)
Field 02CON - In-Care-of Name

  1. Field 02CON is a 35 position field that may or may not be present.

  2. Valid characters are alpha (A thru Z), numeric (0 thru 9), ampersand (), dash/hyphen (-), percent (%), slash (/) or blank.

    Note:

    A percent (%) is valid in the first position followed by a blank.

  3. Invalid Conditions:

    1. The first position of the field is blank, unless the entire field is blank.

    2. The first position is a percent (%) and second position is not blank.

    3. An entry other than the valid characters is present.

  4. Correction Procedures:

    1. Delete any invalid character.

    2. If the entry exceeds 35 characters, abbreviate where possible.

    3. If it is not possible to determine the in-care-of name, delete the field.

    4. If the first position is blank, line-through and re-enter the entire field.

3.22.110.16.2  (01-01-2015)
♦Field 02FAD - Foreign Address (35 positions) (OSPC Only)♦

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

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

    • Field 02FAD should not be present on a "G" coded return.

  2. Valid Condition: 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. If the foreign address is longer than 35 characters, continue the address in Field 02ADD.

  4. Correction Procedures:

    1. Correct all coding and transcription errors.

      If… Then…
      Field 02FAD is present
      1. GTSEC 02

      2. Ensure Field 02CTY contains a foreign country code and Field 02ST 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. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      .
      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. SeeIRM 3.22.110.16.4
    2. If Form 8822 (Change of Address) is attached to the return, compare the name and address information on the Form 8822 to the return.

      If… Then…
      The information is the same Take no action and continue processing.
      The information is different
      • Enter address shown on Form 8822 in Field 02FAD.

      • Notate 8822 detached on tax return.

      • Detach Form 8822 and route to Entity Control using Form 4227 or follow local procedures.

      • Notate on Form 4227, "CHANGE OF ADDRESS PER FORM 8822" .

      Note:

      The lead tax examiner is required to batch all Forms 8822 daily and hand carry to Entity Control for expedite processing.

3.22.110.16.3  (01-01-2015)
Field 02ADD - Street Address

  1. Field 02ADD is a 35 position field that may or may not be present.

  2. Valid characters are alpha (A thru Z), numeric (0 thru 9), dash/hyphen (-), slash (/) and blank.

  3. Invalid Conditions:

    1. An entry other than the valid characters is present.

      Note:

      A pound sign (#) will be transcribed at the end of 35 spaces if the entry contains more than 35 characters.

    2. The first position of the field is blank, unless the entire field is blank.

  4. Correction Procedures:

    1. Delete any invalid character.

    2. If the entry exceeds 35 characters, abbreviate where possible.

    3. If unable to correct, delete Section 02.

      Note:

      This is not uncommon for foreign addresses.

    4. If the first position is blank, line-thru and re-enter the entire field.

3.22.110.16.4  (01-01-2015)
Field 02CTY - City Field

  1. Description: Field 02CTY is located in the Entity Section of the return.

  2. Valid characters are alpha (a-z) and blank.

  3. Invalid Condition: Field 02CTY will generate as a field error when any of the following conditions are present:

    • The first position is blank.

    • Any character other than blank or alpha is present.

    • Any character follows two consecutive blanks.

    • The Major City Code does not match any of the valid codes in the Major City Code Table.

    • The Foreign Country Code (FCC) does not match any of the valid codes in Document 7475.

  4. Correction Procedures:

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

      Note:

      For a listing of Major City Codes (listed by state) and valid Foreign Country Codes (FCC) see Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries

    If... Then...
    A Major City Code is used Field 02CTY must be present.
    Field 02CTY contains an error Check to see if the Major City Code is correct.
    Field 02CTY is not valid and a Major City Code cannot be determined Input the entire city name.
    A Major City Code is not used and Field 02CTY is present Field 02ST (State) must be present.
    A foreign address is shown on the return Enter the appropriate FCC in Field 02CTY.

    See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries
    Field 02CTY contains an incorrect country code or "XX" Enter appropriate foreign country code in Field 02CTY. If there is no valid FCC, input the entire country name.

    See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries
  5. Special Considerations -

    1. APO/FPO/DPO Address Format:

      APO/FPO/DPO addresses use the following format:
      Line Name EXAMPLE: Applicable Field
      Payee Name PVT. Willard J. Doe 02ADD
      Mailing Address Company F. PSC Box 100 167 Infantry REGT
      Payee City APO, FPO or DPO 02CTY
      Payee State AE, AA, or AP* 02ST
      Payee ZIP Code 09801 02ZIP
      *AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966
    2. Canadian Province Codes:

      Province Code Province
      AB Alberta
      BC British Columbia
      LB Labrador
      MB Manitoba
      NB New Brunswick
      NF Newfoundland
      NS Nova Scotia
      NT Northwest Territories
      NU Nunavut
      ON Ontario
      PE Prince Edward Island
      QC Quebec
      SK Saskatchewan
      YK Yukon

3.22.110.16.5  (01-01-2015)
Field 02ST - State Code

  1. Field 02ST is a 2 position field that may or may not be present.

  2. If Section 02 is present, this field must have an entry unless there is a Major City Code in Field 02ST.

  3. Valid characters are alpha (A thru Z), period (.) and blank.

  4. For domestic addresses, the entry must be one of the state codes shown in the list below.

  5. U.S. Possessions are indicated on the following list, as are their respective state codes. These are entered in the same way as in a domestic address.

  6. For foreign addresses, there will be a period (.) in the first position of the field (the second position must be blank). If not send case to Rejects for correction to DLN.

  7. The list of valid state codes (including U.S. Possessions) is as follows:

    State Code ZIP Code Range
    (First 3 Digits)
    APO/FPO/DPO Miami, FL AA 340
    APO/FPO/DPO Europe AE 090–098
    APO/FPO/DPO Pacific AP 962–966
    Alaska AK 995–999
    Alabama AL 350–369
    American Samoa * AS 967
    Arizona AZ 850–865
    Arkansas AR 716–729
    California CA 900–908, 910–961
    Colorado CO 800–816
    Connecticut CT 060–069
    Delaware DE 197–199
    District of Columbia DC 200–205
    Federated State of Micronesia* FM 969
    Florida FL 320–340, 342, 346, 347, 349
    Georgia GA 300–319, 399
    Guam * GU 969
    Hawaii HI 967–968
    Idaho ID 832–838
    Illinois IL 600–629
    Indiana IN 460–479
    Iowa IA 500–528
    Kansas KS 660–679
    Kentucky KY 400–427
    Louisiana LA 700–714
    Maine ME 039–049
    Mariana Islands * MP 969
    Marshall Islands * MH 969
    Maryland MD 206–219
    Massachusetts MA 010–027, 055
    Michigan MI 480–499
    Minnesota MN 550–567
    Mississippi MS 386–397
    Missouri MO 630–658
    Montana MT 590–599
    Nebraska NE 680–693
    Nevada NV 889–898
    New Hampshire NH 030–038
    New Jersey NJ 070–089
    New Mexico NM 870–884
    New York NY 004, 005, 100–149
    North Carolina NC 270–289
    North Dakota ND 580–588
    Ohio OH 430–459
    Oklahoma OK 730–732, 734–749
    Oregon OR 970–979
    Palau * PW 969
    Pennsylvania PA 150–196
    Puerto Rico * PR 006–007, 009
    Rhode Island RI 028–029
    South Carolina SC 290–299
    South Dakota SD 570–577
    Tennessee TN 370–385
    Texas TX 733, 750–799
    Utah UT 840–847
    Vermont VT 050–054, 056–059
    Virginia VA 220–246
    Virgin Islands * VI 008
    Washington WA 980–994
    West Virginia WV 247–268
    Wisconsin WI 530-549
    Wyoming WY 820–831

    Note:

    Those States marked with an asterisk (*) are actually U.S. Possessions.

  8. Invalid Conditions:

    1. There is a non-alpha (except for period) character present.

    2. The entry is not on the list of valid codes.

    3. The field is blank (unless there is a Major City Code in Field 02CTY).

    4. The period is in the second position (with foreign address).

    5. There is an entry in Field 02ST and a period in Field 02CTY.

    6. The DLN begins with "60" and Field 02ST is other than a period (.) or blank.

  9. Correction/Rejects Correction Procedures:

    1. Be sure that the state code was transcribed correctly.

    2. Correct any invalid entry.

    3. If the state is missing from the line on the return, search any attachments. Research the state from the ZIP Code, if present.

    4. If the state and ZIP Code are both missing and it is impossible to determine them, delete Section 02.

    5. If the DLN begins with "60" and Field 02ST contains a valid state code, suspend the return with Action Code 610 to Rejects to be renumbered.

3.22.110.16.6  (01-01-2015)
Field 02ZIP - ZIP Code

  1. Field 02ZIP is a 12 position field which may or may not be present.

  2. Valid characters are numeric (0 thru 9) and blank.

  3. There must be a minimum of five (5) numbers present.

  4. If there is a state code in Field 02ST there must be a ZIP Code present in Field 02ZIP.

  5. If there is a Major City Code in Field 02CTY, there must be a ZIP Code present in Field 02ZIP

  6. This field must be blank if there is a period in Field 02ADD.

  7. The ZIP Codes of U.S. Possessions are considered U.S. ZIP Codes and are entered into this field.

  8. Invalid Conditions:

    1. The field is blank and there is a state code in Field 02ST or a Major City Code in Field 02CTY.

    2. There is a non-numeric entry in the field.

    3. There are less than five digits in the field.

    4. There is an entry in the field but there is a period in Field 02ST.

      Note:

      A foreign (Non-U.S. Possession) ZIP/Postal Code is never entered into this field. The state code and ZIP Code for U.S. possessions follow the same format as for domestic addresses.

    5. There is a valid ZIP Code in the field but the first position of the field is blank.

    6. There is a discrepancy between the digits of the ZIP Code and the state code. (Each state has a certain range of applicable ZIP Codes).

    7. The ZIP Code is not on the list of valid ZIP Codes of the U.S. Post Office.

  9. Correction/Rejects Correction Procedures:

    1. Be sure that the entry was transcribed correctly.

    2. Perfect any non-numeric characters.

    3. Delete any ZIP/Postal Code belonging to a foreign country, except U.S. Possessions. (Foreign ZIP Codes are sometimes referred to as Postal Codes).

    4. Research any missing or incomplete ZIP Code using the ZIP Code Directory. Also, look on any attachments, especially an envelope.

    5. If the first position of the field is blank, but there is a valid code in the field, line-through and re-enter the entire field.

    6. If the ZIP Code is invalid, be sure that the state code in Field 02ST is correct.

      Note:

      See IRM 3.22.110.16.5 for additional instructions.

      Example:

      Alaska is AK, not AS or AA. These are valid state codes, but they would not match the applicable ZIP Code.

3.22.110.17  (01-01-2015)
Sections 03-06 - Form 1042 - Record of Federal Tax Liability (ROFTL)

  1. Sections 03-06 Alpha Field Designators (AFD), applicable month and location on the return.

    Alpha Field Designator Month Lines on Return
    03A07 January Week 1 1
    03A15 January Week 2 2
    03A22 January Week 3 3
    03A31 January Week 4 4
    03ADJ)   Computer Underprint of Monthly Total
    03B07 February Week 1 6
    03B15 February Week 2 7
    03B22 February Week 3 8
    03B28 February Week 4 9
    03BDJ)   Computer Underprint of Monthly Total
    03C07 March Week 1 11
    03C15 March Week 2 12
    03C22 March Week 3 13
    03C31 March Week 4 14
    03CDJ)   Computer Underprint of Monthly Total
    03QR1> 1st Quarter Total Computer Generated (Lines 5, 10, 15) Underprint of 1st Quarter Total Liability
    Alpha Field Designator Month Lines on Return
    04D07 April Week 1 16
    04D15 April Week 2 17
    04D22 April Week 3 18
    04D30 April Week 4 19
    04DDJ)   Computer Underprint of Monthly Total
    04E07 May Week 1 21
    04E15 May Week 2 22
    04E22 May Week 3 23
    04E31 May Week 4 24
    04EDJ)   Computer Underprint of Monthly Total
    04F07 June Week 1 26
    04F15 June Week 2 27
    04F22 June Week 3 28
    04F30 June Week 4 29
    04FDJ)   Computer Underprint of Monthly Total
    04QR2> 2nd Quarter Total Computer Generated (Lines 20, 25, 30) Underprint of 2nd Quarter Total Liability
    Alpha Field Designator Month Lines on Return
    05G07 July Week 1 31
    05G15 July Week 2 32
    05G22 July Week 3 33
    05G31 July Week 4 34
    05GDJ)   Computer Underprint of Monthly Total
    05H07 August Week 1 36
    05H15 August Week 2 37
    05H22 August Week 3 38
    05H31 August Week 4 39
    05HDJ)   Computer Underprint of Monthly Total
    05I07 September Week 1 41
    05I15 September Week 2 42
    05I22 September Week 3 43
    05I30 September Week 4 44
    05IDJ)   Computer Underprint of Monthly Total
    05QR3> 3rd Quarter Total Computer Generated (Lines 35, 40, 45) Underprint of 3rd Quarter Total Liability
    Alpha Field Designator Month Lines on Return
    06J07 October Week 1 46
    06J15 October Week 2 47
    06J22 October Week 3 48
    06J31 October Week 4 49
    06JDJ)   Computer Underprint of Monthly Total
    06K07 November Week 1 51
    06K15 November Week 2 52
    06K22 November Week 3 53
    06K30 November Week 4 54
    06KDJ)   Computer Underprint of Monthly Total
    06L07 December Week 1 56
    06L15 December Week 2 57
    06L22 December Week 3 58
    06L31 December Week 4 59
    06LDJ)   Computer Underprint of Monthly Total
    06QR4> 4th Quarter Total Computer Generated (Lines 50, 55, 60) Underprint of 4th Quarter Total Liability
  2. The valid characters are numeric (0 thru 9) and blank.

  3. Each section (03-06) is made up of 15 fields.

    • Section 03 contains weekly and monthly entries from January through March.

    • Section 04 contains weekly and monthly entries from April through June.

    • Section 05 contains weekly and monthly entries from July through September.

    • Section 06 contains weekly and monthly entries from October through December.

  4. Each field has 15 positions.

  5. All fields are DOLLARS and CENTS.

    Note:

    You may sometimes see entries where the comma and decimal point is reversed. This is sometimes seen on returns from Europe.
    e.g., 3.146,02 (European) = 3,146.02 (U.S.)
    The amount is usually correct (unless you can see that it is in foreign currency), but the format is reversed.

  6. All four sections will not necessarily appear on all the error screens.

  7. Section 03-06 make up the Record of Federal Tax Liability (ROFTL).

  8. Negative amounts are not allowed by law to appear in section 03-06. If the transcriber attempts to enter a negative field breaker, it will appear as positive on the ERS screen.

  9. The total of the entries in section 03 thru 06 is the Total Tax Liability, including the two percent (2 percent) excise tax reflected on line 64d.

  10. Section 03 thru 06 cannot appear on the error system with CCC G (Amended) in Field 01CCC.

  11. When it is required to enter a large number of fields onto the error system it is permissible to re-input the return and not enter the missing data onto the system. Rejects will be sure all data appears on the return and prepare Form 3893.

    Example:

    Taxpayer replies to our correspondence and provides several money amounts for the ROFTL, thus making it necessary to add the sections; or, when an erroneous CCC G is removed from Field 01CCC.

  12. Invalid Condition: A non-numeric entry is present in the field.

  13. Special Error Conditions:

    1. No negative amount may appear on Lines 1 thru 60. If a negative amount were to be transcribed, it would appear as a positive amount. (The computer will not allow a minus sign).

    2. If there are two entries on one line, neither will be transcribed. There will not be an invalid condition, but the total tax will underprint.

    3. The entries on Lines 1 thru 60 must be in United States dollars and cents. Foreign currency cannot be processed. (See Error Correction procedures.)

    4. If there is a CCC G on the record but it is found that the return is an original, not an amended (this may be seen on an attached Form 3893, a Statute transmittal or from research), then: Circle-out CCC G. If all or nearly all of the lines of the ROFTL (section 03 thru 06) have entries, do not enter all the fields onto the ERS system. Instead, Error Correction will reject it, and Rejects will re-input the return. Be sure that the ROFTL will be able to be transcribed. In Rejects, if the taxpayer replies to correspondence for missing ROFTL entries, and the reply shows a full or a nearly full ROFTL, re-input the return. There is much less chance of an error if the return is re-input rather than transcribing forty or so fields from the ERS system.

  14. Correction Procedures:

    1. There must be at least one entry on the weekly tax lines in the ROFTL (Lines 1-60) whenever there is a tax amount on Line 64e.

    2. If Lines 1 thru 59 are blank and Line 64e (Field 0764E) has an entry that is less ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , but an entry appears in Line 60, enter the amount from Line 60 in Field 06L31(Line 59).

    3. If Line 64e is less ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ enter the amount into Field 06L31 and onto Line 59 of the return.

    4. If Line 64e is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ more, Error Correction will correspond for the weekly tax liabilities information on Lines 1thru 60.

      Note:

      Do not correspond again if Code and Edit already corresponded.

      Exception:

      Do not correspond if "None" is notated on Line 61a, and a "0" has been entered in Field 0761A, this may indicate a procurement only return. These Procurement only type returns should be seen on 2013 and prior. Taxpayer instructions changed for 2014 and there should be an entry in the ROFTL section and a 1042-S attached for 2014 and subsequent.

    5. Do not correspond if the address in the entity area is in Canada. Enter the amount on Line 64e onto Line 59 and into Field 07B/D.

    6. When Field 01QIN contains a "1" then:

      IF... Then...
      The QI entered the total amount of tax withheld on Form 1042, Line 59. DO NOT CORRESPOND, enter the amount in Field 06L31 (if not already transcribed).
      The QI DOES enter amounts of tax withheld on the lines of the ROFTL (lines 1-60, as applicable) The ROFTL entries are subject to the same laws and restrictions as any other withholding agent.
      The QI did not assume primary withholding responsibility, The QI is required to provide only the total amount of tax withheld to the IRS and is not required to complete the individual ROFTL lines (1 thru 60).
      The QI has assumed primary withholding responsibility (QI entered amounts on various ROFTL lines) The QI must complete Lines 1 thru 60 (as applicable).

      Note:

      All the regular rules, restrictions, etc. concerning the completion of the ROFTL apply to the QI.

      Note:

      If the Field 01QIN is blank or "2" , then when corresponding, be sure to notate on the 1791C Letter in addition to any other message:
      "Because you did not provide a valid QI EIN, Lines 1-60 of Form 1042 must be completed, as applicable."

    7. If there are two entries on one line, add them together and enter into the correct field. If one of the amounts is negative, "X" it on the return and enter only the positive amount into the field.

    8. If a taxpayer indicates that the balance due will be paid on March 15th with the return and Lines 1-60 are blank, enter the amount onto Line 59 of the return and into Field 06L31. The taxpayer may state this on the return or in a reply to correspondence for missing ROFTL entries.

    9. Negative amounts are not allowed on Lines 1-60.

    10. If Code and Edit "X'd" out all the negative amounts, send TPNC 90 with the following literal:
      "Negative amounts are not allowed on Lines 1 thru 60. Such amounts are increased to zero and the total tax recomputed accordingly."

    11. If Code and Edit did not "X" the negative amount, delete the negative amounts on Lines 1 thru 60 and send TPNC 90 noted above (the computer will have computed the correct tax).

    12. If only the monthly totals (Lines 5, 10, 15, etc.) are entered, determine if the monthly amount is more or less ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    13. If the monthly total is less ≡ ≡ ≡ ≡ ≡ ≡ ≡ , enter the amount onto the last weekly line for that month on the return and into the corresponding field.

      Example:

      If the total is on Line 5, move the amount to Line 4 and into Field 03A31.

    14. If the monthly total is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ more, Error Correction will correspond for the missing weekly tax liability amounts.

    If.... And... Then....
    Only monthly totals are entered, The totals are less than ≡ ≡ ≡ ≡ Enter the amount onto the last weekly line for that month on the return and into the corresponding field.
    Only monthly totals are entered, The totals are more than ≡ ≡ ≡ Correspond for the missing weekly tax liability amounts. Reply:: Enter the amounts into the proper lines of the return and into the proper fields. If required, enter the correspondence received date. No Reply: Divide the total amount in the monthly total by 4 and input the quotient in the weekly lines

    Example:

    January's monthly total is $4,000, input $1,000 in Fields 03A07, 03A15, 03A22 and 03A31.

         
  15. Rejects Correction Procedures:

    1. When Error Correction corresponded because Lines 1-60 are blank: If the REPLY is sufficient, enter the amounts into the proper lines of the return and into the proper fields (and the correspondence received date, if required). If there is NO REPLY or an insufficient reply, divide the amount on Line 64e by 4 and put the result into Fields 03C31, 04F30, 05I30 and 06L31 and onto Lines 14, 29, 44 and 59 on the return. Also enter CCC 3.

      Note:

      If the taxpayer replies citing a specific section of the IRC or a specific Revenue Ruling or Procedure or stating Consent Dividend, enter the amount from Line 64e to Line 59 and into Field 07B/D.

    2. When Error Correction corresponded because only monthly totals were entered: If the REPLY is sufficient, enter the amounts into the proper lines of the return and into the proper fields (and the correspondence received date, if required). If there is NO REPLY or an insufficient reply, divide the amount on Line 64e by 4 and enter the result onto each of the four monthly lines and into the corresponding fields. Also enter CCC 3.

    3. When Error Correction corresponded because multiple entries in the ROFTL (Lines 1-60) are income, not tax: If the REPLY is sufficient, "X" the amounts of income in the ROFTL and enter the TAX amounts to the left of the line. Also enter the correspondence received date, if required, onto the return and into Field 01CRD.

    4. If the taxpayer files a Form 1042 but shows only the total for the month of December (and not the required weekly entries), we must correspond.

  16. If there is NO REPLY, do the following:

    1. Enter CCC 3 onto the return and into Field 01CCC.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. Add up the calculated amounts of tax to be sure the total equals the amount on Line 64e≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    5. Enter the calculated amounts of tax onto the appropriate lines of the ROFTL and into the fields on the ERS system.

  17. If the taxpayer REPLIES, enter the Correspondence Received Date and the weekly amount supplied by the taxpayer onto Form 1042. Also, enter the amounts into the corresponding fields.

  18. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  19. The computer will generate its own monthly total liability underprint amounts to appear in Section 03, 04, 05 and 06 since the monthly total liability lines are not transcribed. The fields are:

    "Monthly Total AFD Underprint Fields"
    03ADJ) 04DDJ) 05GDJ) 06JDJ)
    03BDJ) 04EDJ) 05HDJ) 06KDJ)
    03CDJ) 04FDJ) 05IDJ) 06LDJ)
  20. The computer will generate Quarterly Total Liability underprint amounts only, to assist the error correction examiner with several error code corrections. In addition, a total quarterly liability amount will be computer generated summarizing all four quarters. The screen displays are:

    • Screen Display 1042 #S03 (Section 03)

    • Screen Display 1042 #S04 (Section 04)

    • Screen Display 1042 #S05 (Section 05)

    • Screen Display 1042 #S06 (Section 06)

    • Screen Display 1042 #S07 (Section 07)

    • Screen Display 1042 #706 (Consistency Error 706)

    • Screen Display 1042 #716 (Math error 716)

    • Screen Display 1042 #720 Math error 720)

    .

    "QUARTERLY Total AFD Computer Generated Fields"
    03QR1> 04QR2> 05QR3> 06QR4> 07TQA>

3.22.110.18  (01-01-2015)
Section 07 - Total Tax, Credits, Balance Due/Refund

  1. Section 07 should always be present, unless CCC G is present. If there are no entries in Section 07 of the return, use Command Code GTSEC to retrieve Section 07 and add a "1" in Field 0761A. Do this even if Sections 03-07 have no entries on the return.

  2. All fields are positive only except for Field 0764A, 0770A, 0770B, and Field 07B/D, which may be positive or negative. Field 07B/D will always be positive for 201412 Form 1042.

  3. All amounts are entered in DOLLARS and CENTS.

  4. Section 07 field designators, maximum field lengths, titles and locations are listed below:

    Designator Field Length Title Location on Return
    0761A 6 Number Filed on Paper (Form 1042-S) Line 61a
    0761B 6 Number Filed Electronically (Form 1042-S) Line 61b
    0762A 15 Total FDAP US Income Amt. Line 62a
    07SSD 15 Total US Dividend Payment Amt. Line 62b(1)
    07SSP 15 Total US Other Payment Amt. Line 62b(2)
    0762C 15 Gross Income Reported Amt. Line 62c
    07TQA> 15 Computed Total Quarterly Amount Computer Underprint
    0762D 15 Gross Income Paid Amt. Line 62d
    0763A 15 Taxes Withheld by Agent Amt. Line 63a
    07POD 15 Taxes Withheld Other than Substitute Dividend Amt. Line 63b(1)
    07SD 15 Taxes Withheld Substitute Dividend Amt. Line 63b(2)
    0763C 15 Reimbursement Amt. Line 63c
    0763D 15 Taxes Assumed by Agent Amt. Line 63d
    0763E 15 Taxes Withheld or Assumed Amt. Line 63e
    0764A 15 Adjustment Amt. Line 64a
    0764B 15 Net Tax Liability Chapter 3 Amt. Line 64b
    0764C 15 Net Tax Liability Chapter 4 Amt. Line 64c
    0764D 15 F1042 Excise Tax Amt. Line 64d
    0764E 15 Total Liability Amt. Line 64e
    0765 15 Total EFT Amt. Line 65
    0766 15 Overpayment Credit Amt. Line 66
    0767A 15 Other (than Substitute Dividend) Payment Amt. Line 67a
    0767B 15 Substitute Dividend Payment Amt. Line 67b
    0768 15 Total Payment Amt. Line 68
    07B/D 15 Balance Due/Overpayment Taxpayer Amt. Line 69
    0770A 15 Overpayment Us Income Foreign Amt. Line 70a
    0770B 15 Overpayment Excise Tax Amt. Line 70b
    0771 1 Applied Refund Indicator Line 71
           
  5. You may sometimes see entries where the comma and decimal point are reversed. This is sometimes seen on returns from Europe.

    Example:

    3.146,02 (European) = 3,146.02 (U.S.)

  6. The amount is usually correct (unless you can see that it is in foreign currency) but the format is reversed.

3.22.110.18.1  (01-01-2015)
Field 0761A - Number of Form 1042-S Filed on Paper (1042 Line 61a)

  1. Field 0761A is a 6 position field which may or may not be present.

  2. Only numeric characters (0 thru 9) are valid.

    Caution:

    The ONLY time "0" is valid in fields 0761A, is for Procurement Returns only reporting the 2% Excise Tax. The taxpayer will have entered "none" on Lines 61a. There will be no 1042T or 1042S attached from which to edit the field. The only entry will be on Line 64d. This should be seen only on 2013 and prior returns, for 2014 taxpayer instructions changed and taxpayers are instructed to make entry in ROFTL section as appropriate and attach a 1042-S.

  3. Field 0761A is Line 61a on Form 1042.

  4. Invalid Conditions:

    • A non-numeric character in the field.

    • The field is blank (if Field 0761B is also blank)

  5. Correction Procedures:

    1. Be sure that the field was transcribed correctly.

    2. If there are no entries on Line 61, correspond for the number of Form 1042-S.

      Note:

      Do not correspond if there is at least one entry on Line 61 (not all lines must have entries) or if Code and Edit previously corresponded. For 2013 and prior, do not correspond if Line 61a and 61b contain "none" instead enter "0" in the field.

      Note:

      If the return is all zero's and/or Line 64e is blank or the taxpayer notates "No Taxable Income" , DO NOT CORRESPOND for Line 61a and 61b, Enter 000001 in Field 0761A. You must enter five zeros and a 1. Fields 0761a and 0761b are 6 position fields.

    Note:

    If Line 61a and 61b are blank and a Form 1042-T is attached, edit the number of Form 1042-S from Line 1b on the Form 1042-T to Line 61a. If only Form 1042-S are attached, count the number of Form 1042-S attached and edit the amount to Line 61a

  6. Rejects Correction Procedures:

    1. If the REPLY is sufficient, enter the amount(s) into the proper lines on the return and into Field 0761A (or 0761B).

    2. If there is NO REPLY or the reply is insufficient, enter "000001" into Field 0761A. Also enter CCC "3" .

3.22.110.18.2  (01-01-2015)
Field 0761B - Number of Form 1042-S Filed Electronically (1042 Line 61b)

  1. Field 0761B is a 6 position field which may or may not be present.

  2. Only numeric characters (0 thru 9) are valid.

  3. Field 0761B is Line 61b on Form 1042.

  4. Invalid Conditions:

    1. A non-numeric character in the field.

    2. The field is blank (if Field 0761A is also blank).

  5. Correction Procedures: Same as Field 0761A (see IRM 3.22.110.18.1)

  6. Rejects Correction Procedures: Same as Field 0761A (see IRM 3.22.110.18.1 ).

3.22.110.18.3  (01-01-2015)
Field 0762A - Total U.S. Source FDAP Income

  1. Field 0762A is a 15 position field that may or may not be present.

  2. The field is found on Line 62a.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A negative amount in the field.

    2. Non-numeric character in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.4  (01-01-2015)
Field 0762SSD - Total U.S. Substitute Dividends Reported

  1. Field 0762SSD is a 15 position field that may or may not be present.

  2. This field will only contain an amount (other than 0) if the withholding agent’s chapter 3 status code is "Qualified Securities Lender" .

  3. The field is found on Line 62b(1).

  4. The valid characters are numeric (0 thru 9) and blank.

  5. The amount must be positive and in DOLLARS and CENTS.

  6. Invalid Conditions:

    1. A negative amount in the field.

    2. Non-numeric character in the field.

  7. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.5  (01-01-2015)
Field 0762SSP - Other Substitute Payments Reported

  1. Field 0762SSP is a 15 position field that may or may not be present.

  2. The field is found on Line 62b(2).

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A negative amount in the field.

    2. Non-numeric character in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.6  (01-01-2015)
Field 0762C - Gross Income Reported

  1. Field 0762C is a 15 position field that may or may not be present.

  2. The field is found on Line 62c.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A negative entry in the field.

    2. A non-numeric character in the field.

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.7  (01-01-2015)
Field 0762D - Gross Income Paid

  1. Field 0762D is a 15 position field that may or may not be present. This field should be filled out unless withholding agent’s status code is a QI, WP, or WT.

  2. The field is found on Line 62d.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. The work income refers to all types of income: wages, interest, capital gains, dividends, etc., from which tax may or may not have been withheld.

  6. This field must have an entry if there is a difference in gross income reported (Line 62c).

  7. There can be an amount of income in Field 0762D without a tax being present on Line 64e (the tax is zero because of treaty provisions).

  8. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative entry in the field.

  9. Correction Procedures:

    1. Correct any coding or transcription errors.

    2. Delete any negative entries.

3.22.110.18.8  (01-01-2015)
Field 0763A - Taxes Withheld by Withholding Agent

  1. Field 0763A is a 15 position field that may or may not be present.

  2. The field is found on Line 63a

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative number in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.9  (01-01-2015)
Field 07POD - Taxes Withheld by Other Withholding Agents, For Payments Other than Substitute Dividend

  1. Field 07POD is a 15 position field that may or may not be present.

  2. The field is found on Line 63b(1)

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative number in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.10  (01-01-2015)
Field 07SD - Taxes Withheld by Other Withholding Agents, For Substitute Dividends

  1. Field 07SD is a 15 position field that may or may not be present.

  2. The field is found on Line 63b(2)

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative number in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.11  (01-01-2015)
Field 0763C - Reimbursements

  1. Field 0763C is a 15 position field that may or may not be present.

  2. The field is found on Line 63c.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be negative and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative number in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.12  (01-01-2015)
Field 0763D - Taxes Assumed by Withholding Agent

  1. Field 0763D is a 15 position field that may or may not be present.

  2. The field is found on Line 63d.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative number in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative entries.

3.22.110.18.13  (01-01-2015)
Field 0763E - Taxes Withheld/Assumed

  1. Field 0763E is a 15 position field that may or may not be present.

  2. This amount is found on Line 63e.

  3. Valid characters are numeric (0 thru 9).

  4. The amount must be positive and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. There is a non-numeric character in the field.

    2. Fields0763A,07POD, 07SD, 0763C, and 0763D are all blank.

      Note:

      If Field 0763E is invalid, then 0763A thru 0763D will also be invalid, whether all of these fields have entries or not.

  6. Correction/Rejects Correction Procedures:

    • Be sure the entry was transcribed correctly.

    • If there is no amount on Line 63e, make no entry on the line or in Field 0763E.

3.22.110.18.14  (01-01-2015)
Field 0764A - Adjustments for Corporate Distributions

  1. Field 0764A is a 15 position field that may or may not be present.

  2. The valid characters are numeric (0 thru 9) and blank.

  3. The field is entered in DOLLARS and CENTS and can be positive or negative.

  4. Invalid Conditions: Non-numeric character in the field.

  5. Correction Procedures:

    1. Be sure that the field was entered correctly. A negative entry requires a - field breaker and the amount on the return must be bracketed.

    2. There must be a statement substantiating any negative adjustment amount. Correspond, if statement is not attached. Do not correspond if Code and Edit has already corresponded.

    3. If Code and Edit did correspond and there was NO REPLY, "X" the amount and blank the field. Send TPNC 90 with #84.
      "The amount of your adjustment on Line 64a was denied because you did not reply to our request for the required statement substantiating the adjustment. "

      Note:

      If Code and Edit corresponded for a statement for a positive amount tax increase, do not delete the adjustment if there was no reply. Be sure that CCC "3" is present.

  6. Rejects Correction Procedures:

    1. Correspond for the statement showing the computation of the negative adjustment, if not already done so by Code and Edit.

    2. If the REPLY is sufficient, allow the adjustment (and enter the correspondence received date, if required).

    3. If there is NO REPLY, or the reply is insufficient, follow the Error Correction no reply procedures above.

3.22.110.18.15  (01-01-2015)
Field 0764B - Net Tax Liability Chapter 3

  1. Field 0764B is a 15 position field that may or may not be present.

  2. The field is located on Line 64b.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive only and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field.

    2. A negative amount in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative amount in the field.

    3. Check for misplaced entry, (Field 01CH3 blank, entry in 01CH4).

3.22.110.18.16  (01-01-2015)
Field 0764C - Net Tax Liability Chapter 4

  1. Field 0764C is a 15 position field that may or may not be present.

  2. The field is located on Line 64c.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive only and in DOLLARS and CENTS.

  5. Invalid Conditions:

    1. A non-numeric character in the field

    2. A negative amount in the field.

  6. Correction Procedures:

    1. Correct any transcription errors.

    2. Delete any negative amount in the field.

    3. Check for misplaced entry, (Field 01CH4 blank, entry in 01CH3).

3.22.110.18.17  (01-01-2015)
Field 0764D - Form 1042 Excise Tax Amount

  1. Field 0764D is a 15 position field that may or may not be present.

  2. This amount is found on Line 64d.

  3. Valid characters are numeric 0 thru 9.

  4. The amount must be positive and in DOLLARS and CENTS.

  5. The 2 percent excise tax paid on specified federal procurement payments reported on line 64d is already included in the ROFTL.

    Note:

    Only federal agencies (Employment Code "F" present in ENMOD) making federal procurement payments to a foreign person or foreign entity are required to pay this excise tax to the IRS via EFTPS.

  6. Invalid Conditions:

    1. There is a non-numeric character in the field.

    2. Field 0764D is a negative amount.

    3. An entry is present in Field 0764D, but Field 0764E is blank.

    4. Employment Code "F" is not present in the ENMOD.

  7. Error/Rejects Correction Procedures:

    1. Be sure the entry was transcribed correctly. Compare the entry on the return to the amount in Section 07, Field 0764D. If different, replace the amount on the ERS system with the correct amount.

    2. If the amount in Field 0764D (Line 64d) is negative, delete the entry in Field 0764D.

    3. For TY2014 and subsequent correspond for Sections 03-06 and Fields 0762D and 0763E, when an amount is present in Field 0764D (Line 64D), but there is no entry in Fields 0762D, 0763E, and/or Field 0764E and the ROFTL (Sections 03-06) is blank.

      If... Then...
      There is NO REPLY,
      1. Enter CCC "3"

      2. Divide the amount in Field 0764D by two percent (.02) and enter the result in Field 0762D.

      3. Enter the amount from Field 0764D in Fields 0763E, 06L31, and 0764E.

      4. Do not enter five zeros and a 1. ("000001" ) in Field 0761A.

    4. Send TPNC 90 with the following literal:
      "You did not correctly complete Form 1042 to report the two-percent excise tax on federal procurement payments to a foreign person or foreign entity."

3.22.110.18.18  (01-01-2015)
Field 0764E - Total Net Tax Liability

  1. Field 0764E is a 15 position field that may or may not be present.

  2. The field is located on Line 64e

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount must be positive only and in DOLLARS and CENTS.

  5. The amount is determined by computing Fields 0764A, 0764B, 0764C and 0764D.

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  7. Invalid Conditions:

    1. There is a non-numeric character in the field.

    2. Field 0764E will be invalid if Field 0762D (income) is either blank or has an amount that is less than Field 07TQA, even if Field 0764E is entered correctly.

    3. Field 0764E will be invalid AND underprint zeros if the entry is greater than zero but sections 03-06 are all missing from the error screens.

  8. Special Error Conditions:

    1. Field 0764E can never have a negative amount. The computer will not accept a negative field breaker (-). (If the amount in Field 0764A (adjustments) exceeds field 07TQA, see table below).

    2. If there is a positive amount on Lines 1-60, there must be an amount in Field 0764E, unless a negative amount in Field 0764A reduces Field 0764E to zero.

    3. If the total of entries on Lines 1-60 (sections 03-06) differs from the total tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ then Fields 0764E will underprint, but will not be invalid.

    4. If Field 0764E underprints but Field 0764A does not, there is probably a transcription error in Field 0764A. (If Field 0764A is negative, the field breaker must be negative.)

  9. Correction Procedures:

    1. If Field 0764E is invalid, be certain that Field 0762D (income) is entered correctly. If not, see instructions under Field 0762D.

    2. Field 0764E must be present if there is an entry in Field 07TQA unless reduced by a negative amount on Line 64a and will underprint if blank or not entered correctly.

    3. The field will underprint if the computer's computation (combining all allowable amounts on Lines 1-60 and Line 64a) differs from the taxpayer's amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Line 64e Underprint Correction Procedures
      1 Run a tape to verify your totals. Be CERTAIN that all amounts are entered correctly.
      2 Assign TPNC 02.

      Note:

      If the difference is caused by a negative amount in the ROFTL, assign TPNC 90 #83.

       
      3 If the taxpayer has computed Line 64e to a negative amount.
      (a) And it is caused by a negative amount on Lines 1-60, assign TPNC 90
      (b) If caused by a negative amount on Line 64a being larger than Field 07TQA, then reduce the adjustment amount on Line 64a so that it is equal to the amount in Field 07TQA (even if zero). Assign TPNC 90 #85, with the following literal:
      "The negative adjustment amount on Line 64a cannot be larger than the total tax liability. We have reduced Line 64a accordingly."
       
       
       

3.22.110.18.19  (01-01-2015)
Field 0765 - Total Paid by EFTPS

  1. Field 0765 is a 15 position field that may or may not be present.

  2. The amount must be positive and in DOLLARS and CENTS.

  3. The valid characters are numeric (0 thru 9) and blank.

  4. The amount on this line can be substantiated by researching BMFOLT for the applicable credit transaction codes and amounts (e.g., TC 650, 660, 670, etc.)

  5. This entry reflects the amounts paid during the tax year by the taxpayer by Electronic Filing.

  6. Invalid Conditions: There is a non-numeric character in the field.

  7. Correction Procedures:

    1. Be sure that the amount is entered correctly.

    2. Do not change the taxpayer's amount unless instructed to do so.

      Note:

      If the taxpayer enters the same amount on Lines 65, 66, 67a and 67b, reject the document so Rejects can determine by research whether Line 65, 67a or 67b applies.

  8. Rejects Correction Procedures:

    1. It may be necessary to change this amount if directed by Unpostables (the amount may not equal the amount on BMFOLT).

      Note:

      If the difference is substantial, it may be necessary to correspond with the taxpayer for clarification (such as prior to issuing a manual refund), depending upon service center procedure.

    2. If the taxpayer entered the same amount on Lines 65 and 67a and 67b, look at the EIN (to see if it is within the valid QI range ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and check BMFOLT to determine on which line the credit belongs. See the instructions under Field 0767A/B.

  9. If Field 0764A is blank, add monthly total lines from the ROFTL area to come up with the correct figure.


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