3.34.3  NRP Individual Income Tax Returns - Code and Edit, Transcription

3.34.3.1  (10-01-2009)
Introduction

  1. This section of the Internal Revenue Manual (IRM) provides instructions for coding and editing of individual income tax returns, forms and schedules; and input of that information via the NRP IMF Transcription Application.

  2. Instructions in this manual are for return information, supporting forms, and schedules of the Form 1040\///1040A tax return not transcribed or having limited transcription in traditional campus pipeline processing. Originally processed forms and schedules for tax periods ended July 31, 2008 through June 30, 2009 (tax year 2008) will be analyzed and transcribed. While most returns will be for calendar year tax periods, some may be for fiscal year tax periods.

  3. Although these returns will be transcribed more extensively a second time, the return and data will not be processed through the pipeline or to taxpayers’ accounts again. Transcribed data and examination results will be used by IRS research analysts to measure taxpayer compliance with reporting requirements, improve workload identification systems, and support the IRS Strategic Planning process.

  4. Instructions in this section apply to paper filed tax returns.

  5. Following is a list of tax forms and schedules used in the application. These forms will be part of a NRP study case file. They are also listed in the NRP Code and Edit Job Aid.

    • NRP TY-2008: Code and Edit Sheet for Transcription.

    • Form 1040 – U.S. Individual Income Tax Return, Pages 1 and 2

    • Form 1040A – U.S. Individual Income Tax Return, Pages 1 and 2 and Schedule 2.

    • Schedule A – Itemized Deductions

    • Schedules C & C-EZ – Profit or Loss From Business

    • Schedule D – Capital Gains and Losses

    • Schedule E – Supplemental Income and Loss

    • Schedule EIC – Earned income Credit

    • Schedule F – Profit or Loss From Farming

    • Schedule SE – Self Employment Tax

    • Form 1116, Foreign Tax Credit.

    • Form 2441, Child and Dependent Care Expenses.

    • Form 2555 and 2555EZ, Foreign Earned Income.

    • Form 2106 & 2106-EZ – Employee Business Expenses

    • Form 3800 – General Business Credit

    • Form 6251 – Alternative Minimum Tax

  6. Following is a list of limited transcription forms used in conjunction with the edit sheet.

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4136, Credit for Federal Tax Paid on Fuels.

    • Form 5695, Residential Energy Efficient Property Credit.

    • Form 8396, Mortgage Interest Credit.

    • Form 8801, Credit for Prior Year Minimum Tax.

    • Form 8824, Like-Kind Exchanges.

    • Form 8834, Qualified Electric Vehicle Credit.

    • Form 8839, Qualified Adoption Expenses.

    • Form 8859, District of Columbia First-Time Homebuyer Credit.

    • Form 8860, Qualified Zone Academy Bond Credit.

    • Form 8885, Health Coverage Tax Credit.

    • Form 8901, Information on Qualifying Children Who Are Not Dependents.

    • Form 8903, Domestic Production Activities Deduction.

    • Form 8910, Alternative Motor Vehicle Credit.

    • Form 8911, Alternative Fuel Vehicle Refueling Property Credit.

    • Form 8912, Credit for Clean Renewable Energy and Gulf Tax Credit Bonds.

    • Form 8914, Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals.

3.34.3.2  (10-01-2009)
Code and Edit of Form 1040 - Individual Income Tax Returns

  1. This part of the manual provides instructions for NRP-specific Code and Editing guidelines for individual tax returns.

3.34.3.2.1  (10-01-2009)
General Concepts

  1. The following parts of this IRM section provide instructions for analyzing and editing documents to perfect them for entry into the application’s database. To the extent possible, these instructions use the same procedures, rules and techniques as current code and edit operations.

  2. Analysis and editing will be done using original processed tax returns. Your editing will not impact processed data of the original return.

  3. All work received for code and edit will be part of a major case file. Each case file is comprised of Forms 1040/1040A, and the schedules and forms attached to it. Forms for transcription must be identified, counted for use on the NRP IMF Edit Sheet, and then analyzed and perfected.

  4. Instructions in this guide most likely will not cover all situations you encounter. Refer questionable items or conflicts with instructions to your manager or work leader. They will obtain clarification from the NRP Headquarters staff

  5. For the most part, math calculations and verification of taxpayer computations are not part of this process. You will however, perform math calculations for selected lines on Schedules C/C-EZ, D, F, and Forms 2106/2106-EZ.

  6. Some forms and schedules will already have edit marks on them. They should have been edited in "red" .

  7. Do not edit names, entities, and received dates, or tax periods. You won’t need to provide any special processing or condition codes. All this was done during original processing of the return and is not required for this application.

3.34.3.2.2  (10-01-2009)
Editing Concepts

  1. Make all edit marks using a Green pencil/erasable ink pen.

  2. Organizing forms and schedules in proper order.

    1. The return should be left in the order found. Don’t rearrange forms and schedules into a specific order for transcription.

    2. These returns were previously arranged in the order specified for transcription during original pipeline processing. Those not transcribed were moved behind the last page transcribed.

    3. The original code and edit sort order following Forms 1040/1040A is shown in the following table. Forms 2106 and 2106-EZ were not originally transcribed and should follow Form 8913.

    FORM 1040 FORM 1040A
    Schedule A Schedule 1
    Schedule B Schedule 2
    Schedule C/C-EZ Schedule 3
    Schedule D Form 8615
    Schedule E Schedule EIC
    Schedule F Form 8812
    Schedule R Form 8606
    Schedule SE Form 8863
    Form 1116 Form 8880
    Schedule J Form 8888
    Form 2441 Form 8917
    Form 3800  
    Form 4136  
    Form 4137  
    Form 4684  
    Form 4797  
    Form 4972  
    Form 5329  
    Form 6198  
    Form 6251  
    Form 8615  
    Form 4835  
    Form 8839  
    Form 8853  
    Form 8814  
    Schedule EIC  
    Schedule H  
    Form 8812  
    Form 8606  
    Form 8863  
    Form 4952  
    Form 8889  
    Form 8880  
    Form 8888  
    Form 8917  
       

  3. The final order of forms after you have completed your analysis and edit is:

    • Form 1040/1040A return and attachments as received in the case file.

    • NRP IMF Edit Sheet attached to the back of the return facing out.

  4. All forms or schedules require assignment of a sequence number.

    1. Taxpayers may include more than one copy of certain forms or schedules. Each specific form or schedule type should be marked with a sequence number. The forms and schedules possibly needing multiple sequence numbers are:

      Schedule C/C-EZ
      Schedule E
      Schedule F
      Schedule SE
      Form 1116
      Form 2106/2106-EZ
      Form 2555/2555-EZ

    2. The first occurrence of a form or schedule and additional ones will be numbered. Edit a sequence number in the upper right corner of the form or schedule. Using Schedule C as an example, give the first one number 1; and then 2,3,4 etc., depending on the number of them in the case file. Start over with 1 for the next different form or schedule.

    3. If only one of each of the above is in the case file, edit it with a number 1. Thus, each of these must have a sequence number, regardless how many are in the case file.

    4. Note that Schedules C and C-EZ, and Forms 2106, 2106-EZ, 2555 and 2555-EZ are considered to be different form types. If you have one Schedule C and one Schedule C-EZ, they each get edited with number 1.

  5. Many of the forms have decision or yes/no type boxes, or single check boxes for a line. The boxes must be edited for entry. The data input concept for boxes is they are checked or not checked. Edit only those boxes that are checked. Unchecked boxes will not be entered into the application. Edit these with a Circle around the checked box.

    1. Some boxes are yes/no type entries. Generally yes or no will be checked, but its possible taxpayers will check both boxes. If so, edit both.

    2. Circle any box that is checked. The NRP Code and Edit Job Aid show an example of yes/no check box editing.

    3. Other boxes are single check types in which taxpayers check the box only if it applies to them. It may be listed as "Final Return" and will be checked if the return is a final one. If not, it will be left alone. Other boxes may be "multiple choice" and taxpayer may check none, one or all of them. Circle these boxes only if checked.

  6. You may need to correct illegible or missing information such as TINs, numbers, etc. Almost all returns will be prepared and printed using computer software. The occurrence of illegible information should be minimal. However, you may need to correct some returns.

    1. If an SSN is illegible or missing from forms or schedules, check the return to see if you can find the information on another form or schedule. If not, no editing of the number will be done. Transcription will capture it as it appears on the form.

    2. Illegible numbers or money amounts should be corrected. Use your best judgment to determine the correct number and edit it.

    3. Some lines may have two different entries on them. If so, combine the amounts and edit them as one amount to the right of the amount column.

    4. Correction of TINs or missing TINs applies to any TIN on Schedules C/C-EZ, E, F, SE and Forms 1116, 2106/2106-EZ., and 2555/2555-EZ.

  7. Dollars and cents amounts don’t need editing. We want to capture whole dollar amounts. Almost every return you review will use dollars and exclude cents. Transcription will enter whole dollars, and ignore any cents amounts.

  8. Negative numbers.

    1. Some lines of forms are negative by design. They are preprinted on forms and taxpayers normally write in a number. No editing of these lines is required. These lines are listed in the Code and Edit sections for each specific form.

    2. Taxpayers may also provide negative numbers on lines normally considered to be positive. This rarely happens. In those cases, you will bracket the line as part of your editing.

    3. Some lines may be positive or negative depending on income losses or gains and losses on sales of property, etc. If these lines were original pipeline "T" lines, they were bracketed during original processing. The brackets will show up to you as red. You don’t need to edit them. Edit any other negative numbers that need it.

  9. Do not edit dates to a particular format. Transcription will enter dates as mm/dd/yyyy, regardless of how they appear on documents.

  10. There are no percentage amounts to be edited.

  11. If the return has attachments that are substitutes for official forms and schedules, transfer the information that is needed for transcription to a blank form or schedule. Schedules C,D,E,F, and SE are the forms most commonly created under these circumstances.

3.34.3.2.3  (10-01-2009)
Initial Screening of Case Files

  1. Check to ensure you have the correct taxpayer, SSN and year in the case file. Each case file consists of a tax return, its forms and schedules and a NRP Edit Sheet. The edit sheet is stapled to the back of the return, facing outward.

  2. Ensure you are working with a Form 1040/1040A tax return. Other types of returns are not part of this study. Refer them to your manager for further review.

  3. The edit sheet will have basic taxpayer information pre-filled on it. Verify the edit sheet information matches that of the tax return. If not, refer the case to your manager.

  4. Make note of the occurrence of forms or schedules and how many there are in the case file. Use this to prepare the NRP Edit Sheet.

3.34.3.2.4  (10-01-2009)
NRP TY-2008: Code and Edit Sheet for Transcription Preparation

  1. The edit sheet has been redesigned for the TY2008 program. It is now a "landscape" form with three sections: Forms and Schedules, Special Instructions and Miscellaneous Forms. It will assist Transcription in determining what forms and schedules have entries needing to be captured in the application. The tax return’s TIN, name, tax period, case number and return filed (type) are pre-filled on the edit sheet. Complete the Tax Examiner Number block with your number followed by the date you analyze the return.

  2. Remove the edit sheet from the back of the return so you can complete it.

  3. For each schedule or form, write the number of times it appears in the "Number for Transcription" column of the edit sheet. For example, if the taxpayer has one Schedule A, then a 1 goes in that column block.

  4. Most forms and schedules will appear only once. Those that receive a sequence number will appear once or multiple times. For these, the column entry should agree with the last (highest) sequence number you assign to it. If you edit a 4 for Schedule C, then on the edit sheet you should have sequence numbers 1 through 4 on the individual forms.

  5. The right hand side of the edit sheet has special items that may or may not need to be edited. Check the case file for any of the following forms and an amount on the listed line. If found, edit the amount to the edit sheet.

    1. Form 2439, Line 2 – Notice to Shareholder. Edit the dollar amount to the edit sheet. If more than 1 Form 2439 is in the case file, add all Line 2 amounts together and edit the sum to the edit sheet.

    2. Form 4136, Line 17 – Credit for Federal Tax Paid on Fuels credit. Edit the dollar amount to the edit sheet.

    3. Form 5695, Line 27 – Residential Energy Efficient Property Credit. Edit the dollar amount to the edit sheet.

    4. Form 8396, Line 11 – Mortgage Interest Credit. Edit the dollar amount to the edit sheet.

    5. Form 8801, Lines 28 and 30 – Credit for Prior Year Minimum Tax. Edit the dollar amounts to the edit sheet.

    6. Form 8839, Line 18 – Qualified Adoption Expenses. Edit the dollar amount to the edit sheet. If more than one Form 8839 is in the case file, add all Lines 18 and edit that total to the edit sheet.

    7. Form 8859, Line 11 – District of Columbia First-Time Homebuyer Credit. Edit the dollar amount to the edit sheet.

    8. Form 8885, Line 5 – Health Coverage Tax Credit. There may be two of these forms in the case file; one for each spouse. Add both amounts together and edit the sum to the edit sheet.

    9. Form 8901 – Information on Qualifying Children Who Are Not Dependents. Add up all children listed on all Forms 8901 in the case file and edit that total to the edit sheet. If more children are listed on a statement, etc. count them also.

    10. Form 8903, Lines 10, 16, 21 and 22. Domestic Production Activities Deduction. Edit the amounts for any and all of these lines to the matching box on the edit sheet.

    11. Form 8834, Line 7 - Qualified Electric Vehicle Credit. Edit the dollar amount to the edit sheet.

    12. Form 8860, Line 9 – Qualified Zone Academy Bond Credit. Edit the dollar amount to the edit sheet.

    13. Form 8910, Line 18 – Alternative Motor Vehicle Credit. Edit the dollar amount to the edit sheet.

    14. Form 8911, Line 19 – Alternative Fuel Vehicle Refueling Property Credit. Edit the dollar amount to the edit sheet.

    15. Form 8912, Line 17 – Credit for Clean Renewable Energy and Gulf Tax Credit Bonds. Edit the dollar amount to the edit sheet.

    16. Form 8914, Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals. Add the number of persons listed in Line 1(a) and edit the total to the edit sheet amount column. These may not exceed 4 persons.

    17. Form 8824, Like-Kind Exchanges. Edit "Yes" if the form is present even if there are no entries on the form.

  6. The bottom portion of the edit sheet contains special instructions for Form 1040/1040A, Lines 39c and 23c. Edit the computed additional standard deduction amount to the edit sheet. Computation instructions are contained in IRM 3.34.2.5 and IRM 3.34.2.6.

  7. Staple the edit sheet to the back of the return, facing outward.

3.34.3.2.5  (10-01-2009)
Form 1040 - Page 1 and 2

  1. Line 6c (4) has 4 check boxes. Circle any that are checked.

  2. Review Line 6c "No. of Children on 6c" and" Dependents on 6c not entered above" who entries on the right side of the return. Add up all three lines. If the total exceeds 4, the return should have a statement listing the remaining dependents.

    1. Locate the statement, and edit it for transcription (underline First name, last name, etc.)

    2. Edit "more A" in the right margin of Line 6c.

    3. BLUE tab statement with "more A" information to be transcribed.

  3. If Line 6d is empty, count the number of exemptions or add those above it and edit the total number in the box.

  4. Circle any of Lines 13, 39c, 44a and b, 53a-c, 54a-c, 58 a and b, and 68 a-d boxes if checked.

  5. Line 21 has special editing. Taxpayers can list a variety of Other Income amounts. Data Entry will capture only 2 of these income types – Net Operating Loss Deduction (NOLD) and Gambling

    1. If stated separately – by itself – just leave it. Data will pick it up.

    2. If a combined amount is shown, determine the amount for NOLD and edit NOLD on dotted portion of Line 21 along with the amount to be transcribed. You may find this amount either on an attached statement or on Line 10 of Form 6251.

    3. Gambling must be "gross" winnings. If taxpayer report net, locate gross amount and edit to the right on Line 21.

    4. If no NOLD or Gambling is indicated, or the line has "statement " but has no NOLD or Gambling, edit out the word statement and or the Line 21 amount.

    5. Some will be edited out in pipeline because they are moved to other lines or pertain to incomes that belong elsewhere on the return. Ignore them as we want NOLD or gambling only.

    6. Several incomes may be combined into one amount. If combined, determine amounts for NOLD and/or gambling, and edit "NOLD" and/or "Gambling" with associated amount on dotted portion of Line 21.

  6. Edit Lines 40, 42, and 44 if needed.

  7. If a taxpayer checks Box 39c, their Line 40 standard deduction includes real estate taxes and/or a disaster loss in addition to the normal standard deduction. This applies only to the standard deduction and not if the Line 40 amount is from Schedule A, Itemized Deductions. The real estate or disaster loss portions must be separately computed for the edit sheet.

    1. Use the NRP TY 2008 Standard Deduction Worksheet to compute the amounts.

    2. Determine the disaster loss amount and edit it in the second column right of Line 39c of the NRP TY-2008; Code and Edit Sheet for Transcription.

    3. The real estate amount is limited to $500.00, but taxpayers may include more than that amount. Depending on a taxpayer’s filing status, age, etc this amount is based on a "simple" or " complex" computation. Use the worksheet for computation.

    4. Determine the real estate tax amount and edit it in the first column right of Line 39c of the NRP TY- 2008; Code and Edit Sheet for Transcription. Normally this amount will be $500.00 or less; but edit the amount you computed on the worksheet.

3.34.3.2.6  (10-01-2009)
Form 1040A - Page 1 and 2

  1. Line 6c (4) has 6 check boxes. Edit any that are checked.

  2. Review the Line 6c "No. of Children on 6c who" and "Dependents on 6c not entered above" entries on the right side of the return. Add up all three lines. If the total exceeds 6, the return should have a statement listing the remaining dependents.

    1. Locate the statement, and edit it for transcription (underline First name, last name, etc).

    2. Edit "more A" in the right margin of Line 6c.

    3. BLUE tab statement with "more" information to be transcribed.

  3. If Line 6d is empty, count the number of exemptions or add those above it and edit the total number in the box.

  4. Circle Line 32c, if needed.

  5. Edit Lines 24, 26, and 28 if needed.

  6. If a taxpayer checks Box 23c, their Line 24 standard deduction includes real estate taxes (but not disaster losses) in addition to the normal standard deduction. The real estate portion must be computed for the edit sheet.

    1. The real estate amount is limited to $500.00, but taxpayers may include more than that amount. Depending on a taxpayer’s filing status, age, etc. this amount is based on a "simple" or " complex" computation. Use the worksheet for computation.

    2. Determine the simple or complex amount and edit it in the first column right of Line 23c of the NRP TY-2008; Code and Edit Sheet for Transcription. Normally this amount will be $500.00 or less, but edit the amount you computed on the worksheet.

3.34.3.2.7  (10-01-2009)
Form 1040A, Schedule 2

  1. Review the Line 2 a through c (qualifying person, SSN and expenses) entries of the Schedule 2. There is room to list two dependents. If the total exceeds 2, the return should have a statement listing the remaining qualifying persons and required information. The taxpayer is required write " See attached" in the space to the left of Line 3.

  2. Locate the statement, and edit it for transcription (underline First name, last name, etc.).

  3. Edit "more B" in the right margin of Line 2.

3.34.3.2.8  (10-01-2009)
Form 1040, Schedule A

  1. Circle any of Line 29 or 30 boxes if checked.

3.34.3.2.9  (10-01-2009)
Form 1040, Schedule C

  1. Edit the sequence number in the upper right corner for each Schedule C. Note this form is considered a different form type than Schedule C-EZ. Assign sequence numbers for these two separately.

  2. Circle any of Lines F, H, 1, 32, or 33 boxes if checked.

  3. Circle any of the Yes/No boxes on Lines G, 34, 45, 46, 47a or 47b if checked. One of the boxes should be checked. If not, make no edit entries. If both are checked, circle both.

  4. This schedule has computational edit instructions depending on taxpayer entries on selected lines.

    1. If Line 1 is blank, but Line 3 has an amount, add Line 2 and Line 3 amounts, and edit the sum in Line 1.

    2. If Lines 1 through 4 are blank, but Line 5 has an amount, edit Line 5 amount in Lines 1 and 3.

    3. If Lines 1 through 6 are blank, but Line 7 has an amount, edit Line 7 amount in Lines 1, 3 and 5.

    4. If Line 3 is blank, but Lines 1 or 2 have an amount, subtract Line 2 amount from Line 1 amount, and edit the difference in Line 3.

    5. If Line 5 is blank, but Line 3 has an amount, subtract Line 4 amount from Line 3 amount, and edit the difference in Line 5.

    6. If Line 7 is blank, but Lines 5 or 6 has an amount, add Line 5 and Line 6 amounts, and edit the sum in Line 7.

    7. If Line 28 is blank, but any of Lines 8 through 27 have an amount, add the amounts in Lines 8 through 27, and edit the sum in Line 28.

    8. If Line 29 is blank, but Line 31 has an amount, add Line 30 and Line 31 amounts, and edit the difference in Line 29.

    9. If Line 31 is blank, but Line 29 has an amount, subtract Line 30 amount from Line 29 amount, and edit the difference in Line 31.

    10. If Line 40 is blank, but any of Lines 35 through 39 have an amount, add the amounts in Lines 35 through 39, and edit the sum in Line 40.

    11. If Line 42 is blank, but Lines 40 or 41 have and amount, subtract Line 41 amount from Line 40 amount, and edit the difference in Line 42.

    12. If Line 43 has more than 1 date, underline the earliest one.

  5. Do not edit Part V.

3.34.3.2.10  (10-01-2009)
Form 1040, Schedule C-EZ

  1. Edit the sequence number in the upper right corner for each Schedule C-EZ. Note this form is considered a different form type than Schedule C. Assign sequence numbers for these two separately.

  2. Circle the Line 1 box if checked.

  3. Circle any of the Yes/No boxes on Line 6, 7, 8a or 8b if checked. One of the boxes should be checked for each line. If not, make no edit entries. If both are checked, circle both.

  4. This schedule has computational edit instructions depending on taxpayer entries on selected lines.

    1. If Lines 1 and 2 are blank, but Line 3 has an amount, edit Line 3 amount in Line 1.

    2. If Line 3 is blank, but Line 1 or 2 has an amount, subtract Line 2 amount from Line 1 amount, and edit the difference in Line 3.

  5. If Line 4, Part II has more than 1 date, underline the earliest one.

3.34.3.2.11  (10-01-2009)
Form 1040, Schedule D

  1. Do not bracket amounts on Lines 6(f) or 14(f) as they are part of the form design.

  2. This schedule has computational edit instructions depending on taxpayer entries on selected lines.

    1. If Line 3(d) is blank, but Line 1(d) or 2(d) has an amount, add Lines 1(d) and 2(d) and edit the sum in Line 3(d).

    2. If Line 7(f) is blank, but any of Lines 1(f) through 6(f) has an amount, add the amounts in Lines 1(f) through 6(f), and edit the sum in Line 7(f).

    3. If Line 10(d) is blank, but Line 8(d) or 9(d) has an amount, add Lines 8(d) and 9(d) and edit the sum in Line 10(d).

    4. If Line 15(f) is blank, but any of Lines 8(f) through 14(f) has an amount, add the amounts in Lines 8(f) through 14(f), and edit the sum in Line 15(f).

  3. Do not edit page 2.

3.34.3.2.12  (10-01-2009)
Form 1040 - Schedule E

  1. Edit the sequence number in the upper right corner for each Schedule E. If page 2 is the only page present, sequence it. If more than one page 1 is present, place page 2 behind sequence number 1.

  2. Do not bracket amounts on Lines 23 A,B or C, Line 25, Line 31 or Line 36 as they are part of the form design.

  3. Circle any of the Yes/No boxes on Lines 2 and 27 if checked. One of the boxes should be checked for each set. If not, make no edit entries. If both are checked, circle both

  4. Taxpayers may list negative other expenses on Line 18, or make notations "part owner," "prorated expenses" etc. If so, refer this case to your manager. It may be pulled for further review by NRP.

  5. Line 18 may need to be edited. If it contains more than 5 items or has see statement, etc., locate it and attach a BLUE tab to it. Edit " SEE MORE LN 18" in the right margin of Schedule E. Perfect the statement as necessary for data entry (underline all amounts to be transcribed).

  6. Circle any of the checked boxes on any row of Line 28(c) and 28(e).

  7. Line 28(a)-(j) may need to be edited. If it contains more than 4 items or has "see statement" , etc. locate it and attach a BLUE tab to it. Edit "see more LN 28" in the right margin of Schedule E. Perfect the statement as necessary for data entry (underline Name, P or S, EIN, etc.)

3.34.3.2.13  (10-01-2009)
Form 1040 - Schedule EIC

  1. If Line 1 (child’s Name) has a red X to the left of the last name, Circle it. Also, if only the name control is shown edit it to the full last name. Check the front of the return for the child's name.

  2. Circle any of the Yes/No boxes on Lines 4a and 4b if checked. One of the boxes may be checked. If not, make no edit entries. If both are checked, circle both.

3.34.3.2.14  (10-01-2009)
Form 1040 - Schedule F

  1. Edit the sequence number in the upper right corner for each Schedule F.

  2. Circle any of the Cash or Accrual boxes on Line C if checked. One of the boxes should be checked. If not, make no edit entries. If both are checked, circle both.

  3. Circle any of the Yes/No boxes on Line E if checked. One of the boxes should be checked. If not, make no edit entries. If both are checked, circle both.

  4. Circle the Lines 8c, 37a and 37b boxes if checked.

  5. This schedule has computational edit instructions depending on taxpayer entries on selected lines.

    1. If Line 1 is blank, but Line 3 has an amount, add amounts in Lines 2 and 3 and edit the sum in Line 1.

    2. If Line 3 is blank, but Line 1 or Line 2 has an amount, subtract Line 2 amount from Line 1 amount, and edit the difference in Line 3.

    3. If Line 11 is blank, but any of Lines 3, 4, 5b, 6b, 7a, 7c, 8b, 8d, 9, or 10 has an amount, add amounts in these lines and edit the sum in Line 11.

    4. If Line 35 is blank, but any of Lines 12 through 34f has an amount, add amounts in these lines and edit the sum in Line 35.

    5. If Line 45 is blank, but any of Lines 38, 39b, 40b, 41a, 41c, 42, 43 or 44 has an amount, add amounts in these lines and edit the sum in Line 45.

    6. If Line 48 is blank, but Line 46 or Line 47 has an amount, add amounts in Lines 46 and 47 and edit the sum in Line 48.

    7. If Line 50 is blank, but Line 48 or Line 49 has an amount, subtract Line 49 amount from Line 48 amount, and edit the difference in Line 50.

    8. If Line 51 is blank, but Line 45 or Line 50 has an amount, subtract Line 50 amount from Line 45 amount, and edit the difference in Line 51.

  6. Line 34 may need to be edited. If it contains more than 6 items (goes beyond f) or has "see statement," etc., locate it and attach a BLUE tab to it. Edit "SEE MORE LN 34" in the right margin of Schedule F. Perfect the statement as necessary for data entry (underline Expenses and Amounts).

    1. If the statement has 6 or less items, edit the dollar amount of each to Lines 34a through 34f.

    2. Taxpayers may list the expenses and also include a "total " amount on Line 34a or 34F at the bottom. Either way, edit out the word "total" and the money amount for it. The goal is to capture items individually. Refer to statement for additional information to be edited.

    3. If 34F says "other" or "miscellaneous " and there is not an attached statement, leave this information to be transcribed by data entry on line 34F.

3.34.3.2.15  (10-01-2009)
Form 1040 - Schedule SE

  1. Edit the sequence number in the upper right corner for each Schedule SE.

    1. Circle the Section B, Line A box if checked.

    2. During original pipeline processing, multiple Schedules SE for the same taxpayer were combined to one. Transcription will capture the combined form. No special editing is required.

    3. Two dummy Schedule SE documents may have been prepared when both spouses used one. Transcription will capture both separately.

  2. Schedule SE may appear once and have two names and SSN's on it. If so, underline the first name and SSN.

  3. Schedule SE may also appear twice and have two names and SSN's on each. If so, underline the first name and SSN on the first Schedule SE and the second name and SSN on the second Schedule SE.

3.34.3.2.16  (10-01-2009)
Form 1116, Foreign Tax Credit

  1. Edit the sequence number in the upper right corner for each Form 1116.

  2. Circle any of the boxes A through E on the top of the form if checked.

  3. Edit Lines 1a, 7,8, and 12 if needed.

3.34.3.2.17  (10-01-2009)
Form 2106

  1. Edit the sequence number in the upper right corner for each Form 2106. Note this form is considered a different form type than Form 2106-EZ. Assign sequence numbers for these two separately.

  2. This schedule has computational edit instructions depending on taxpayer entries on selected lines.

    1. If Line 6A is blank, but any of Lines 1A through 4A has an amount, add amounts in these lines and edit the sum in Line 6A.

    2. If Line 5B is blank, but Line 6B has an amount, edit the Line 6B amount in Line 5B.

    3. If Line 6B is blank, but Line 5B has an amount, edit the Line 5B amount in Line 6B.

    4. If Line 8A is blank, but Line 6A has an amount, subtract Line 7A amount from Line 6A amount and edit the difference (only if positive) in Line 8A.

    5. If Line 10B is blank, but Line 9A or 9B has an amount, add Line 9A amount to Line 9B amount and edit the sum in Line 10B.

  3. Do not edit page 2.

3.34.3.2.18  (10-01-2009)
Form 2106 - EZ

  1. Edit the sequence number in the upper right corner for each Form 2106-EZ. Note this form is considered a different form type than Form 2106. Assign sequence numbers for these two separately.

  2. This schedule has a computational edit instruction depending on taxpayer entries on selected lines. If Line 1c is blank, but there are amounts on 1a and 1b, enter the sum of these amounts on 1c.

  3. Do not edit Part II.

3.34.3.2.19  (10-01-2009)
From 2441, Child and Dependent Care Expenses

  1. Review the Line 2 a through c (qualifying person, SSN and expenses) entries of the Schedule 2. There is room to list two dependents. If the total exceeds 2, the return should have a statement listing the remaining qualifying persons and required information. The taxpayer is required to write "See attached" in the space to the left of Line 3.

  2. Locate the statement, attach a BLUE tab and edit it for transcription (underline First name, Last name, etc.)

  3. Edit "more C" in the right margin of Line 2.

3.34.3.2.20  (10-01-2009)
Form 2555, Foreign Earned Income

  1. Edit the sequence number in the upper right corner for each Form 2555.

  2. Do not edit any boxes on this form (Pages 1,2 and 3).

  3. Edit Line 26 and 28 if needed.

3.34.3.2.21  (10-01-2009)
Form 2555-EZ Foreign Earned Income

  1. Edit the sequence number in the upper right corner for each Form 2555EZ.

  2. Do not edit any boxes on this form (Pages 1 and 2).

  3. Edit Line 17 if needed.

3.34.3.2.22  (10-01-2009)
Form 3800

  1. There are no special edit instructions for this form.

3.34.3.2.23  (10-01-2009)
Form 6251

  1. Do not bracket amounts on Lines 6, 7, 8, 25, or 28 as they are part of the form design.

3.34.3.3  (10-01-2009)
Transcription of Individual Income Tax Returns, Schedules and Forms

  1. This part of the manual provides instructions for using the NRP IMF Transcription Application and entering data from documents.

3.34.3.3.1  (10-01-2009)
Transcription – General

  1. The NRP IMF Transcription Application is a web-based program that allows input of data from original taxpayer documents to "forms" (screen) that are designed to look like the original document.

  2. All work received for data input will be part of a major case file. The term case refers to a Form 1040 or 1040A and any schedules, forms, etc. for a specific taxpayer with a specific Social Security Number (SSN). Each required input document in a case file should be previously identified and edited.

  3. These instructions will not cover all situations you encounter. Refer questionable items or conflicts with instructions to your manager or work leader.

  4. Math calculations and verification of taxpayer computations will not be part of the transcription process. For the most part, you will enter data as the taxpayer submitted it or as edited in red or blue pen during the original processing of the return or in green pencil by Code & Edit during NRP processing.

  5. The tax forms and schedules to be transcribed are listed in Section 3.34.3.1(5).

3.34.3.3.2  (10-01-2009)
Transcription Guidelines

  1. Under certain circumstances, Code & Edit will mark up taxpayer forms and schedules to assist in transcription. Items such as decision/check boxes, etc will be edited to allow easy and standardized entry of data. Sequence numbers will be applied to all forms/schedules to be transcribed. A NRP Edit Sheet, attached to the back of each case, will indicate the number of each form/schedule that will be transcribed for a case and may also contain line entries for forms that do not require full transcription.

3.34.3.3.2.1  (10-01-2009)
Code and Edit Function

  1. Code and Edit will edit input documents in Green. They will prepare a NRP Edit Sheet that will indicate the number of each form and schedule that require input. In some cases more than one form of the same type must be input. This is limited to Schedules C, C-EZ, E, F, SE; and Forms 1116, 2106, 2106-EZ, 2555 and 2555-EZ.

  2. Code and Edit will leave the return assembled as received by them. The NRP Edit Sheet will be stapled to the back of the case, facing outward. You should ensure that the taxpayer information on the NRP Edit Sheet matches the information on the original taxpayer documents.

  3. You should always have the NRP Edit Sheet and Form 1040 or 1040A. If not refer the case file to your supervisor for further research.

  4. Code and Edit will use a minimal number of edit markings. They will use circles, brackets, vertical lines and underlines on statements. Code and Edit may mark data that should not be edited with an "X" .

3.34.3.3.2.2  (10-01-2009)
Taxpayer Statements

  1. In rare cases, Code and Edit may prepare a "dummy" form or schedule in lieu of a statement. A dummy will be prepared in green and contain only information needed for transcription.

3.34.3.3.2.3  (10-01-2009)
Sequence Numbers

  1. Sequence number will be applied to the upper right corner of all forms and schedules to be transcribed.

  2. Certain forms/schedules may only appear once in a case file. These forms/schedules will have a "1" edited in the upper right corner. This includes Forms 1040, 1040A, 1040A Schedule 2, 6251, 3800, 2441 and Schedules A, D and EIC.

  3. Certain forms/schedules may appear multiple times in a case file. These forms/schedules will have a number starting with " 1" edited in the upper right corner incrementally for each additional instance of the same form/schedule found in the case file. For example, if a case contains five (5) Schedules C, they would be numbered "1" through "5." This includes Forms 1116, 2106, 2106-EZ, 2555, 2555-EZ, and Schedules C, C-EZ, E, F and SE.

3.34.3.3.2.4  (10-01-2009)
Money Amounts

  1. Enter money amounts as whole dollars without cents or other markings including dollar signs, commas or decimals.

    Enter $10,405.85 as 10405
    Enter $2.99 as 2
  2. Enter all amounts as positive unless Code and Edit marks the amount with green brackets <>. An amount with a minus sign in front of it or bracketed by the taxpayer should be input as positive unless Code and Edit brackets it. Lines with brackets on the transcription screen should always be entered as positive amounts.

3.34.3.3.2.5  (10-01-2009)
Decision and Check Boxes

  1. Most forms/schedules require the taxpayer to mark check boxes. These check boxes may be "Yes/No" check boxes or check boxes that must be marked when certain conditions are met. The taxpayer may check one, all or none of these boxes.

  2. Code and Edit will "green circle" only those checked boxes that are marked.

  3. When you encounter a check box that has been "green circled " by Code and Edit, you should mark the box in the NRP Application by clicking on it, or by pressing the space bar or the " 1" key when your cursor is in the field. To unmark a box that has been checked inadvertently, click it again, or press the space bar, or the "0" key while your cursor is in the field.


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