3.49.5  Statistical Editing of Individual Income Tax Returns

Manual Transmittal

June 19, 2014

Purpose

(1) This transmits revised IRM 3.49.5, Statistics of Income Processing, Statistical Editing of Individual Income Tax Returns

Material Changes

(1) This section of the Internal Revenue Manual (IRM) is revised due to changes in the program procedures and requirements in the Statistics of Income 2013 Program.

Effect on Other Documents

IRM 3.49.5, dated 10/25/2013 is obsolete.

Audience

Intended audience is SOI tax examiners at the Austin, Cincinnati, Fresno, and Kansas City Submission Processing Centers

Effective Date

(06-19-2014)

Barry Johnson
Acting Director
Statistics of Income Division

3.49.5.1  (06-19-2014)
General Instructions

  1. This subsection contains general instructions for editing Individual Income Tax returns for the Statistics of Income (SOI) Program.

3.49.5.1.1  (06-19-2014)
Purpose

  1. This Chapter provides instructions for the correction and additional editing of data from Individual Income Tax returns for use in the 2013 Statistics of Income Program (Processing Year 2014).

  2. The error resolution instructions in Exhibits 1 through 79 that can be found at http://soi.soi.irs.gov/docs/indiv/2013_Editmanual_Exhibits.pdf serve as the primary processing instructions. Additional information is provided in Exhibits 80 through 104 that can also be found at http://soi.soi.irs.gov/docs/indiv/2013_Editmanual_Exhibits.pdf

  3. The data produced by the Individual SOl Program are based on a sample of returns and these statistics are used in producing aggregate tax estimates. Although most of the data processed by SOI are subjected to regular Revenue Processing functions, some of the data may require additional careful review of the entire return to verify and reconcile specific entries. In many cases, the consistency test routines will identify sources of error. In other cases, certain errors can only be identified indirectly through failure of tests on related fields. The editing instructions provide uniform explanations of error resolution procedures. Nevertheless, there will be some processing issues that will require the interpretation of a Lead Editor or National Office Staff. As the SOl Division identifies these processing issues as common to several submission processing centers, appropriate instructions are incorporated into an edit update and into updating the edit manual for the following year.

3.49.5.1.1.1  (06-19-2014)
General Editing Guidelines

  1. Editors receive batches of work containing returns and associated Forms 4251 grouped under Shipment Control sheets. Editors should verify that the "Primary SSN" , "Service Center" , "Cycle" and "Page/Line Count" that display on the bottom of the SOl Individual Main Menu screen when entering a return agree with the information on the Return Charge-Out to confirm that the correct return record is being accessed for processing.

  2. Screens have been developed for each form for the editing of data on-line. The screens follow the format of tax returns but include only lines used in SOI processing. On-line consistency tests are run screen by screen. Messages (i.e., error, help, and information) that are triggered by running consistency tests will display at the top of the screen. In a couple of cases, tests will be run on more than one screen at a time (e.g., Form 1040, Screens 2-3). The consistency tests are explained in Exhibits 1 through 79( http://soi.soi.irs.gov/docs/indiv/2013_Editmanual_Exhibits.pdf ) in order to show the nature of the error and the lines that are involved. There is no need for the editor to perform the computation since the computer has already done so.

  3. There are a series of HELP MESSAGES that are not numbered. There are no instructions contained within the editing or error resolution instructions for these messages. This is because no further description is needed than what is stated in the HELP MESSAGE. If an unnumbered HELP MESSAGE appears, follow the instructions as they appear in the message. Error Resolution instructions are provided and should be used for each numbered HELP MESSAGE .

  4. Validity Tests and ranges of acceptable values have also been incorporated into the on-line system. For instance, if the values in a field should be 0, 1, or 2, a Help Message will indicate this and will not allow further editing until an acceptable value is input. Additionally, the positive and negative characteristics of a field have been programmed so that if, for example, a field can be positive or negative, the system will accept both types of numbers. In general, fields can be changed or skipped over if no data are present, but in certain instances, entries are required before the cursor will advance to the next field.

  5. Enter all money amounts in rounded dollars (GT 49¢ round up, LT 50¢ round down). In addition, the program will round results of computations within the consistency tests.

  6. If an Amended Return is attached to an Original, process as one return. Use original and amended data as appropriate.

  7. Do not make any marks on the return or attachments, except the "E" (to show that it has been edited).

  8. Throughout the editing and error resolution instructions, references to a line from the taxpayer’s form or schedule itself will take the form (form or schedule number or letter):(line number). Examples would be 1040:36, SE:4a. References to a line from the PRISM screen have the line number following the word "line." Examples would be Form 1040 line 36, or Schedule SE line 4a. It is important to keep this distinction in mind throughout the editing process.

  9. Editing of Prior Year forms will require the editor to compare the prior year line descriptions with current year line descriptions. Equivalent line numbers for prior year forms have not been included in each section due to the volume of changes over the past several years.

  10. Most forms processed through the form editing sequence utilize a zero-balanced approach. This means that consistency tests are performed to make certain that the data exactly balance. However, on certain forms consistency tests are written to compare the sum of the detail to a total and, if the absolute value of the difference is less than or equal to $10, the cursor will then move to the largest field. Once the editor has verified amounts, a function key can be pressed to adjust the largest field by the difference (DIFF). Other routines that are more specific to a form are described in the appropriate editing instructions. Examples include having the system adjust the largest Schedule C or Schedule F Net Profit/Loss, Income, and Expenses when the absolute value of DIFF between the Schedule C or Schedule F sum and the Form 1040 amount is less than or equal to $10. PRISM will also identify the largest Income or Loss amount on a Rental or Royalty Worksheet to balance to "Total Rent and Royalty Income" , for instance.

  11. The error resolution instructions for each form address how Revenue Processing and taxpayer figures are to be reconciled. The general approach is to accept Revenue Processing changes as long as they are correct and the data are internally consistent. If Revenue Processing figures appear to be incorrect, you should generally go back to taxpayer figures. If taxpayer and Revenue Processing figures are incorrect, perform computations to arrive at the correct figures. Error resolution instructions for each form are generally the same for a paper return as for an electronically filed return. However, in cases where the error resolution instructions are different then the instructions will specifically reference either ‘electronically filed returns’ or MeF returns. The two terms both mean the same thing.

  12. When examining the tax return as directed by the error correction instructions in Exhibits 1 through 79( http://soi.soi.irs.gov/docs/indiv/2013_Editmanual_Exhibits.pdf ), editors must be alert to non-official forms and schedules.

  13. "Substitute for Returns" (SFR’S), will be ‘Rejected’ if they have no money amounts. Refer the return to the lead editor to be rejected.

  14. It is necessary to make comparisons between the return and the screen in order to assist in determining the source of error. Be aware that many amounts on screens are generated in the load program or come from the SCRS tape. Generally, once a value is changed, the original amount is lost. If it is necessary to see what a value was before it was changed (and the value had originally come from SCRS), use the Display SCRS function under the Editor GUI Menu Bar option. In addition, certain fields are identified within the editing instructions where the original SCRS value can be accessed to assist you with your editing. The SCRS value for these fields can generally be accessed by pressing [SHIFT]+[F2] when the cursor is positioned on one of the identified lines.

  15. A significant number of Revenue Processing errors may be identified on returns with "no tax consequence" (i.e., Tentative Tax equals zero). You should be particularly aware of Revenue Processing and taxpayer errors on these returns in SOl processing. Verify the data between the return and the screen in each case and make corrections through the use of the instructions in this manual. National Office should be contacted if further guidelines are needed.

  16. After the entire return has been edited, enter an "E" in the top right corner on the front of the return.

  17. Generally, amounts may be moved among lines of data not affecting a form’s bottom line when it is clear to the editor that taxpayer wording on the form or attachment is a close enough match to the wording on the form’s line to justify moving the amount.

3.49.5.1.1.2  (06-19-2014)
Processing High Income Nontaxable Returns and Large Returns

  1. Any return that becomes a High Income Nontaxable (Hint), or goes from HINT to non-HINT status, or has tax-exempt interest being a high proportion of expanded income, as a result of editing, will be identified via a consistency test and will be listed on Report H, PRISM Photocopy Report, the day after it is completely edited. A HINT return is characterized as follows:

    1. Adjusted Gross Income (Line 37) or Expanded Income greater than $199,999

    2. Income Tax After Credits (Line 55) is blank;

    3. Identified as a HINT return in consistency tests.
      A return that goes from HINT to non-HINT status will have a sample code GT 100 and LT 131 but not meet the conditions in (a) through (b) above.

  2. Photocopying and shipment of HINT returns are described in IRM 1.13.3, Document Management.

3.49.5.1.1.3  (06-19-2014)
Problem Referrals to National Office

  1. To refer problem returns or questions in editing to National Office, managers and lead tax examiners can use the Communication Log. The log helps provide timely feedback on editing issues and ensures that all Processing Centers have the same information at the same time. Further processing instructions from National Office and responses from National Office to those problem cases or questions will also be handled via this log. All Processing Service Centers will have access to logs from other Service Centers and the responses given by National Office.

3.49.5.1.1.4  (06-19-2014)
Problem Referrals to Adjustments

  1. Any returns forwarded to Adjustments within the Processing Center due to Revenue Processing errors detected during SOl processing are to be accompanied by Form 3465, "Adjustment Request" . An example of a referral would be an erroneous refund or a case in which the balance due has been incorrectly increased. Photocopy the return and complete all SOI processing for the return. Forwarding of the return should be done in accordance with ‘STARTS’ procedures and utilize Form 2275, "Records Request, Charge, and Recharge," if necessary.

3.49.5.1.1.5  (06-19-2014)
Work Reporting

  1. Direct time expended on this study by Document Perfection Branch personnel should be charged to Function 220 and Program 25000. Control time expended on this study by Document Perfection Branch personnel should be charged to Function 550 and Program 25000. Control time expended by the Files Branch for this study should be charged to Function 550 and Program 25000.

3.49.5.1.2  (06-19-2014)
Instructions for Using the Suggestion Log

  1. To enter the Suggestion Log, click on the Logs heading of the GUI Menu Bar and choose Suggestion Logs. This will bring you to the last suggestion entered. The "Up Arrow" key can be used to scroll toward earlier logs and the "Down Arrow" key to scroll back to the more recent logs. To bring up a specific Log press [F7], enter the Log number, and then press [F8]. The system will find that Log for you. The [F7]/[F8] feature can also be used to bring up a group of logs, for example all logs dealing with the Form 6251. Press [F7], and then enter FORM 6251 in the Form field on the Suggestion Log screen and press [F8].

  2. Editors will only have access to suggestion logs that they have entered, while leads and managers will have access to all logs.

3.49.5.1.2.1  (06-19-2014)
Making a Suggestion

  1. To make a suggestion, press [F6] from the Suggestion Log screen. This will take you to a new log with the cursor positioned on the "Project" field. Enter 1 to make a PRISM suggestion or enter 2 to make a SOCA suggestion. Pressing [SHIFT]+[F2] will automatically put in your name, date, Service Center and telephone number. You cannot change the name, so if you want to have the correct name attached to a suggestion, you must enter the suggestion from your own work station. The [SHIFT]+[F2] key will take you directly to the "Problem Type" field. Here you can put in something general, such as "Wasted Keystrokes" or "Test or Help Message Needed" , or something more specific, or just leave it blank. The next field is "Test Number" , only fill in this field if you have a suggestion related to a specific test.

  2. Next, enter the name of the form in the "Form" field. This must be typed in correctly or the editor will not be allowed to go to the next field. To get the Help Window listing all the possible forms, press [SHIFT]+[F1] from the "Form" field. The editor can find the correct response by using the "Up" and "Down" arrow keys to scroll through the list or by clicking on the desired entry. Click [OK] or press [Enter] to commit. Further, if the editor knows what form but not necessarily the terminology that we use for this log, they can find the form by typing, for example, 1040 in the "Find" field of the Help Window and then clicking on [FIND]. This will then list any of the form types that have 1040 in their name (Form 1040A, Form 1040(A)—meaning Form 1040, Screen 1, etc.). Scroll though the list to find the desired selection and then press [Enter] to bring it over to the "Form" field. The "Form" field must have an entry.

  3. The next field is "Description of Suggestion" . The suggestion can be typed in directly, or [F2] can be pressed to display a Pop-Up Window for entering the suggestion (up to 5,000 characters). If the "Description of Suggestion" was entered by pressing [F2] and using the Pop-up Window then you must press [OK] to commit the description of the suggestion. Once you are finished entering the information you want, press the [F10] key to commit the entire suggestion log. If you have never committed your suggestion and you hit [Esc] for any reason, the system will query you as to whether or not you want to commit your suggestion.

  4. From here you can enter another suggestion (press [F6]), scroll through other suggestions, or leave the Suggestion Logs by pressing [Esc].

3.49.5.1.2.2  (06-19-2014)
Lead Editor Response

  1. If you find a log that you wish to answer (or you want to view the Service Center responses), press [F9]. Only Lead Editors and Managers will be able to do this. This will take you to the Lead Response screen. To enter a response, press the [F6] key, and the cursor will move to the "Response By" field. At the "Response By" field, press the [SHIFT]+[F2] key. This will automatically put in your name, Service Center, and the response date. If you wish, you can change the latter two fields by typing over the information. However, just like when you make a suggestion, you cannot change the name. The "Response" field works exactly like the "Description of the Suggestion" field. Your response can be typed in directly or [F2] can be pressed to display a Pop-UP Window in which to enter the response (up to 5,000 characters). If you entered your response through the Pop-up Window, then you must press [OK] to commit the response field. After you commit the "Response" field, press the [F10] key to commit your entire response.

  2. The screen displays 5 responses, if there is more than 5 responses then use the arrow keys to scroll between them. To return to the original suggestion press [Esc]. From here, you can scroll through other suggestions, enter your own suggestion, or leave the Suggestion Logs by pressing [Esc].

3.49.5.1.2.3  (06-19-2014)
General Guidelines

  1. Once a suggestion has been made, we ask that each Service Center respond to it within two weeks. It is up to the individual centers how they do this. However, we recommend, that the Lead Editors print out the suggestions and share them with the Unit Managers and the other editors. A meeting time can be set up to go over these once a week. When a consensus is arrived upon, the Lead Editor will then respond to the suggestion. If there is a difference of opinions among the editors, a particular center can respond more than once to a suggestion (there will be no limit set to the number of responses you wish to give). Also, if there is more than one shift, each Lead Editor can respond for his or her shift. Boxes in the header of the suggestion log will record the service center abbreviation for those that have responded, so that the individual making the suggestion can track how close the National Office is to hearing from all of the centers. After each of the Service Centers has responded to a suggestion, the National Office will then respond to the suggestion. National Office will record an acceptance date if the suggestion is to be adopted.

3.49.5.2  (06-19-2014)
PRISM User's Guide

  1. This subsection contains general instructions, for tax examiners, on utilizing the PRISM system.

3.49.5.2.1  (06-19-2014)
General Editing Information

  1. The numeric keypad is operational to ease data input. Money amounts are entered in whole dollars only (rounded, .50+ round up, and .49- round down); fields accommodate up to 13 digits. Certain fields require an entry from the tax examiner before advancing to the next field, while others are unchangeable. Specifications of all elements may be found in the Data Element Reference List (DERL).

  2. Each return record has a unique REC_ID that is used to link taxpayers’ information within PRISM, SOCA, and STARTS. STARTS displays the REC_ID for each return record on the charge-out.

  3. Tax examiners have two options to access return records from the Individual SOI Main Menu. The first option requires the input of the record identification number (REC_ID), and the Social Security Number (SSN) of the return record. Tax examiners will perform taxpayer verification by acknowledging the correct Service Center (SC), Cycle, and Page Number Line Count (PNLC) for the return record. The second option requires tax examiners to enter the Social Security Number (SSN), Service Center (SC), CYCLE, and Page Number Line Count (PNLC) for the return record. These four fields, also referred to as the "key entry" fields, are unique for any return record, and are located on the Charge Out Sheet. Lead tax examiners will access return records by entering the REC_ID only. In addition, they will verify the SSN, SC, CYCLE, and PNLC before advancing to the next screen.

  4. Identification fields are displayed at the top of every screen. These fields are the SSN, Tax Period (TXPD), REC_ID, Cycle and Service Center (SC). Displaying these fields on each screen allows the tax examiner to verify that they are editing the correct return.

  5. Navigation throughout the PRISM and SOCA system can be performed by use of the keyboard or the mouse. The selection of menu options, and GUI Menu bar options, can also be performed by use of the keyboard or the mouse. Execution of the consistency tests can only be performed by use of the keyboard.

3.49.5.2.2  (06-19-2014)
GUI MENU BAR

  1. The GUI MENU BAR is displayed at the top of all screens, and is operational from all screens. The available GUI Menu Bar options are Editor, Calculator, Logs, Browse PY,Print, Edit, Help, Quality, Reports, and N.O. Tools. Options are available based on the tax examiner’s edit code. Options that are unavailable are displayed in gray and are therefore non-functional. The available GUI Menu Bar options can be accessed by using the mouse, or by pressing ALT + the Underlined letter in GUI Menu Bar.

3.49.5.2.2.1  (06-19-2014)
Options

  1. EDITOR: Press ALT+E, or the mouse to access

    1. Calendar: Choose this option to view your own production calendar as a regular tax examiner or to view the production calendar for any or all tax examiners in your service center as a manager or lead. There are separate calendars for PRISM and SOCA editing. Use the up and down arrows to move between months. The first number for the day shows the number of returns with RSI = 5 or 6, and the second number shows the number of forms and schedules associated with the first number. The third number shows the number of returns with RSI = 6 for second edit. Follow the screen prompts, which appear as a manager or lead. Pressing return at the ‘editor’ and ‘unit’ prompts will generate totals for all editors in all units. Pressing return at the ‘editor’ prompt, and entering a unit number will generate totals for all editors in that unit. Entering a specific editor ID will generate totals for that editor.

    2. Color: Press ALT+O, or the mouse to access. Change background color of the screen.

    3. Display Error: Displays additional information about an Oracle error. Only use this option when directed by a programmer or a National Office analyst.

    4. Display SCRS: Displays SCRS values (if they exist) while in a form or schedule. Consistency tests are not activated while the SCRS values are displayed, and the tax examiner cannot change the data. In addition, system fields, i.e. fsi, rsi, etc. are not changed. This feature is for information purposes only.

    5. Return from SCRS: Tax examiners are returned back to the form, or schedule, from where they activated the ‘Display SCRS’ option, and are to continue editing.

    6. Editor Counts: Tax examiners use this option to view 'edited' paper and ELF returns. Tax examiners can only view returns they edited.

    7. Notice Codes: Display taxpayer notice codes at the bottom of the screen.

    8. Previous Form: Tax examiners are returned to the previously closed form/schedule, via the editing sequence, within a return record. The previous form/schedule is opened, and will require re-editing.

    9. Place Edit Window: Allows the editing system to be displayed on either the right or left side of the computer screen.

    10. Return Profile: Lead tax examiners can view the profile for each return record (EXHIBIT 98). The profile includes essential information from STARTS, PRISM, ISI, SOCA, and SOCA Quality. The information will show the return’s life cycle beginning with STARTS, then proceeding with PRISM, lSl, SOCA, and SOCA Quality. This option will assist lead tax examiners in monitoring the life cycle for each return.

    11. Return Comment: Displays the PRISM Return Comment NOTES screen (Exhibit 102). A lead or regular tax examiner can use this feature to attach and/or view a comment that is associated with a particular record id.

    12. Show Keys: Display a list of keys, and the functions associated with the keys.

  2. Calculator: Press ALT+C, or the mouse to access the standard and/or optional calculators. See Exhibit 94( http://soi.soi.irs.gov/docs/indiv/2013_Editmanual_Exhibits.pdf).

    1. Standard Calculator: Access the standard calculator.

    2. Optional Calculator: Access the optional calculator.

  3. LOGS: Allow tax examiners to communicate problems, or to make suggestions, to National Office analysts. Also allows tax examiners to go to the Log's Report Menu and review the reports for the logs. Press ALT+L, or the mouse to access.

    1. Comm Log: The communication log is a subsystem of the Individual SOI system with the purpose of helping tax examiners communicate questions or problems in the editing of a return record to National Office employees. The tax examiner records vital information, including form name, tax examiner’s name, date, ssn, cycle, pnlc, svcctr and a description of the problem is recorded by the tax examiner. Each entry will have a unique log number when created. National Office employees will respond with a solution or, if it’s a technical problem, forward it to the programming staff at the Cincinnati Service Center (CSC). Lead tax examiners from all four processing centers have access to all entries, regardless of which service center created the log.

    2. Comm Log Report: This option takes the tax examiner to the Communication Log Report Menu. They can generate a report from the system to show all communication logs that still have to be answered by the National Office support staff.

    3. Suggestion Log: When utilizing this option, tax examiners make suggestions on ways to improve PRISM and SOCA. Tax examiners only have access to suggestions they have entered in the Suggestion Log. Lead tax examiners from the four processing centers have the responsibility to provide a response to the suggestions in order to assist National Office analysts in evaluating implementation. The tax examiner who made the original suggestion will receive a response from a National Office analyst after all centers have responded. Service center abbreviations in the header of the suggestion log will appear to track which service centers have responded.

    4. Suggestion Log Report: This option displays the Suggestion Log Range Report Screen.

  4. Browse

    1. Browse PY: Press ALT+B, or the mouse to access. This option gives the user the ability to browse last year’s tax return (if it exists on our system) for the same SSN currently being edited. In certain situations, this information could be helpful in editing the current year tax return. When choosing this option, if the last year’s return exists then the system will display a browse menu for that return. Choose the form or schedule to be browsed from the browse menu. Use the ESC button to get back to the current return.

    2. MEF Browse Return: Press ALT+M, or the mouse to access. This option gives the user the ability to browse the entire tax record for the current record, or any record that exists in the SOI sample, which was processed through the Modernized Tax Return Database (MTRDB), for Electronically filed tax returns.

  5. Print Screen: Press ALT+P, or the mouse to access. Prints the screen currently being displayed. The print screen function allows most screens to be printed to a default printer. The default printer is assigned to the network printer in your unit. To access the print window, (1) press the [ALT+P] key and press P, or (2) use the mouse and select the "Print" option from the GUI Menu Bar, then select print.

  6. Edit: Press ALT+D, or the mouse to access. Windows feature used to Cut, Copy, Paste and Clear.

  7. Help: Press ALT+H, or the mouse to access. Used to access various on-line edit manuals.

    1. Edit Manual: Access the edit manual section related to the PRISM or SOCA form/schedule currently being edited.

    2. Edit Manual Menu: Displays a numbered lists of all PRISM/SOCA forms. From this list, the edit manual section for any PRISM or SOCA form can be accessed.

    3. NAICS Manual:Access the NAICS Manual.

    4. Form 8283 Code Help:Access the Form 8283 code help screen.

    5. Asset Code Manual:Access the SOCA Asset Code Manual.

    6. REIT/MUTUAL/TICKER: Access the REIT Utility, the SOCA Mutual Fund Utility, and the SOCA Abbreviations and Ticker Symbol Utilities.

    7. SOCA QR Function Keys: List of keys used for SOCA QR.

  8. Quality: Access to this menu is limited to managers and lead tax examiners. This option references both the Individual Systematic Improvement System (ISI) and the SOCA Quality System. Codes for differences found. Press ALT + Q, or the mouse to access.

    1. SOCA QR Menu: Go to SOCA QR Menu. See the SOCA User’s Guide for information on the SOCA Quality System

    2. ISI Main Menu: Go to ISI Main Menu. See lSl User’s Guide for information about the ISI Main Menu.

    3. ISI 1st Edit Regular Browse: Browse the 1st edit of the Form/Schedule of the ISI QR Screen. This option is only available from the ISI Perform Review function.

    4. ISI 2nd Edit Regular Browse: Browse the 2nd edit for Form/Schedule of the ISI QR Screen. This option is only available from the ISI Perform Review function.

    5. ISI 1st Edit Selective Browse: Go to 1st Edit Browse Selection Menu. This option is only available from the ISI Perform Review function.

    6. ISI 2nd Edit Selective Browse: Go to 2nd Edit Browse Selection Menu. This option is only available from the ISI Perform Review function.

  9. Reports Menu: Press ALT+R, or the mouse to access.

    1. PRISM: Takes the operator to the Prism Reports Menu (Exhibit 100). From this menu, the various Prism reports can be generated if necessary and either viewed or printed. Descriptions and instructions for the following Prism reports are located in Exhibit 93: Records Sampled (A), Rejected Returns (B), Cleared and Open (C), Depreciations (D), Number Edited by Editor (E), Open Records (F.1 and F.1 All), Open Panel (F.2 and F.2 All), Keyfield diff by workgroup (G), Key Field Diff - All (G), Photocopy (H), NAICS = 999999 (I), Incomplete (L), Workgroup Status (W), Asset Code 22, and Cleared and Open (C.1).

    2. ISI: Go to the lSl Reports Menu. See ISI User’s Guide for information about the lSI Reports Menu.

    3. SOCA Management: Go to the SOCA Management Reports Menu. See the SOCA User’s Guide for further information.

    4. SOCA Quality: Go to the SOCA Quality Review Reports Menu. See the SOCA User’s Guide for further information.

  10. N.O. Tools Menu: Access is limited to National Office personnel only.

3.49.5.2.3  (06-19-2014)
Function Keys

  1. Function keys (Exhibit 87) are used to ease the editing of return records. The [F11] key moves the cursor to the field where the consistency tests are executed. The consistency tests are executed by pressing the [ENTER] key.

  2. Function keys are used to create Worksheets when editing certain forms and schedules within the return record. Schedule E, Form 4562, and Form 4835 use worksheets to enter taxpayers’ amounts for Rents, Royalties, Partnerships and S corporations, depreciable property, and farm rental income and expenses respectively. In addition, tax examiners can create worksheets for editing Schedule C, Schedule F, and Form W2. Function keys are used to create asset coding and balancing transaction worksheets for Form 2439, Form 4797, Form 6252, Form 6781, Form 8283, Form 8824, and the Schedule D. In addition, tax examiners will use function keys to view the Mutual Fund Asset Coding Utility and the Abbreviations and Ticker Symbol Utility for the Schedule D. Instructions for editing the Schedule D worksheet are described in the Schedule D editing instructions.

  3. Navigational keys are used to allow the tax examiner to navigate through a screen more efficiently. The [Page Down] and [Page Up] keys are the two main navigational keys. Some screens are divided into two or more parts as are the actual tax forms. The [Page Down] key moves the tax examiner to the next field designated with a (N). This will allow the tax examiner to skip parts where no editing is required. The [Page Up] key allows the tax examiner to move to the previous field designated with a (N). [Page Up] and [Page Down] can be activated from any field on the screen. If the [Page Down] key is pressed to move the tax examiner to the next screen of a form, the consistency tests for the current screen are executed before the next screen is displayed. Tax examiners can advance to the next enterable field by pressing the [ENTER] key, or go back to the previous enterable field by pressing the [F12] key.

3.49.5.2.4  (06-19-2014)
Consistency Tests Overview

  1. Fields are validity tested as the tax examiner enters the data, or through the execution of the consistency test routines. Help messages are displayed at the bottom of the screen to indicate all valid entries for code fields. This will assist tax examiners in selecting the correct value for the code.

  2. Data is consistency tested on a screen by screen basis. The [F11] key is used to move the cursor to the field (generally the last field of a screen) where the consistency tests are executed. After the [Enter] key is pressed to execute the tests, sequential errors are displayed. When a test fails, the cursor will move to the field that may help identify the point of error on the screen. An error message is displayed at the top of the screen. If the tax examiner cannot resolve the error, the tax examiner may refer the return to the lead tax examiner for review.

  3. Fields are verified and corrected on all forms and schedules for internal consistency. This verification and correction process is also performed between the active form and all supporting forms and schedules, to ensure consistency within the return record (i.e. Form 1040 and Schedule A). Errors are identified by the consistency tests, or through the tax examiners’ examination of all data on the return record. A tax examiner may go back to prior screens to correct data, but is unable to move to the next screen until the consistency tests for that screen have been executed, and are error-free.

3.49.5.2.5  (06-19-2014)
Return Processing (RP) Amounts

  1. All supporting forms and schedules are edited prior to editing the Form 1040, or Form 1040A (EXHIBIT 88). This ensures consistency testing of data between supporting forms and schedules, and the Form 1040, or Form 1040A. We retain Revenue Processing’s (RP) computed amounts from these supporting forms and schedules for comparison with the edited amounts. These RP amounts are located on the Returns Data File (RDF), which is processed at the Martinsburg Computing Center (MCC). The RP amounts and the edited amounts are compared after editing the supporting form or schedule. When the amounts are equal (usually within a $10 tolerance), the system will move the edited amount to the Form 1040 or 1040A, where it is unchangeable.

  2. When the edited amount from the supporting form or schedule does not equal the saved amount from RP, a warning message appears. This warning message states that the bottom line amount from the supporting schedule does not equal the amount from RP. The first time this screen appears, the tax examiner is sent back to the first field on the form to verify all line amounts, and make appropriate changes. After the initial re-edit, if the two amounts are still out of balance, the tax examiner has the option to re edit the form again, exit to the main menu, or accept the amount and go to the next form in the return record.

  3. Edited amounts from some forms/schedules are carried over to supporting forms/schedule after editing. See the Editing Instructions for each form/schedule to see what amounts are carried over from a supporting form or schedule.

  4. Certain line items that contain original RP amounts are displayed to assist tax examiners in editing. [Shift + F2] can be pressed to display the RP amount. See the Editing Instructions for each form/schedule to see what RP amounts are displayed.

3.49.5.2.6  (06-19-2014)
Multiple Forms and Schedules

  1. The frequency of the forms and schedules is listed below. In the case of "multiples" , except for Form 8606 and Schedule SE, the system assigns a sequence number to each occurrence within the multiple form. For example, sequence = 1 for the first Schedule C, sequence = 2 for the second Schedule C, etc. For the Form 8606 and Schedule SE, an indicator is set to differentiate between the primary and secondary taxpayer.

    Form/Schedule Number of Multiples
    Schedule C 3+
    Schedule F 2+
    Schedule SE 2
    Form 2106 2
    Form 5329 2
    Form 5405 2
    Form 8606 2
    Form 8814 3
    Form 8829 3+
    Form 8889 2
    Form 8941 2
  2. The multiples for these forms can be added after editing the first sequence for the form. A "pop-up" window will instruct the tax examiner on how to add another sequence, re-edit the current sequence, or go to the next form in the editing sequence. If there are more multiples attached than allowed, combine the excess multiples into the last sequence by following the editing instructions.

  3. Schedule C worksheets are created when editing a Schedule C that contains more than 3 occurrences. Editing instructions for the worksheets can be found in ‘Editing Instructions for Schedule C Profit or Loss from Business’ (EXHIBIT 4).

  4. Schedule F worksheets are created when editing a Schedule F that contains more than 2 occurrences. Editing instructions for the worksheets can be found in ‘Editing Instructions for Schedule F, Profit or Loss from Farming’ (EXHIBIT 6).

3.49.5.2.7  (06-19-2014)
The Individual SOI Main Menu

  1. When a tax examiner enters the system, the Individual SOI Main Menu (EXHIBIT 95) appears. The options available on this menu are: edit a return, lead tax examiner menu, ISI second edit, browse a return, create return, and Edit SOCA return. Press the [ESC] key to exit the Individual SOI Main Menu. Use mouse to select an option, or enter the option number. Options that are unavailable are displayed in gray, and are non-functional.

3.49.5.2.7.1  (06-19-2014)
SOI Main Menu Options

  1. Edit A Return

    1. After selecting ‘edit return’, the tax examiner must enter the REC_ID and Social Security Number for the return record, or the key entry fields to access the return record. Validation is performed to determine if the return record exists. If the return exists, the PRISM Form 1040 Selection Menu (EXHIBIT 96) appears. If the return is not found, an error message is displayed stating that the return record does not exist. If this happens, tax examiners must notify the lead tax examiner, who must then notify National Office.

    2. The PRISM Form 1040 Selection Menu appears after the Individual SOI Main Menu. The menu displays which forms are present according to the form sequence number (EXHIBIT 89). The PRISM Form Status Indicator (FSI) (EXHIBIT 90) is located next to each form.

    3. When a return record is loaded to the database from the RDF, the form is marked present (FSI = "P" ). In the case of multiple forms (i.e. Schedule C), only one "P" is required. While the Form 1040 Selection Menu is displayed, the tax examiner must carefully look through the entire return and identify any PRISM and SOCA forms that are present, but do not have a FSI of "P" . This will typically be forms that were not processed by Revenue Processing (RP). The ‘option’ field on this screen is initially set to an "A" for tax examiners to add forms that were not processed by RP. Enter the form sequence number that is adjacent to the form on the Form 1040 Selection Menu. The system will mark the form present on the menu. However, do not add a form that has Alternative Minimum Tax (AMT) printed at the top of the form. Continue this process until all PRISM and SOCA forms are added. After all required forms are added, select option "N" to begin editing the first form in the editing sequence.

    4. Tax examiners can add forms, via the Form 1040 Selection Menu, anytime during the editing of a return record. They can delete forms, which are not present from SCRS, anytime during the editing of a return record. In most cases, tax examiners cannot delete forms present from SCRS. If a SCRS form needs to be deleted, and the examiner is unable to delete it, they need to refer the return to the lead tax examiner.

    5. When the return record is initially accessed, the system will access the first form that is present in the editing sequence (FSI = P). The editing sequence for a return record differs from the order of forms and schedules, which are displayed on the PRISM Form 1040 Selection Menu (EXHIBIT 96). The editing sequence breaks the 1040 and 1040A into multiple parts. The Form 1040 is accessed five different times, the Form 1040A is accessed three different times, and the Form 1040EZ is accessed once.

    6. After editing the first occurrence of a multiple form, tax examiners are prompted with the option to create subsequent form(s). For each subsequent form created, editing is completed, and the tax examiner is prompted again until they reach the limit of multiples for that form. If no subsequent form(s) are created, the FSI for the form is set to a "C" . Before editing begins on added forms distinguished as primary or secondary, tax examiners are prompted to create either the primary, or the secondary.

    7. When re-entering a return record for further editing, the system searches for the first form in the editing sequence with a FSI of I or P and takes the tax examiner to that form or schedule.

    8. A non-interactive batch program is ran immediately after each cycle is loaded to the database. It subjects all electronically filed Form 1040A, Form 1040EZ, and certain Form 1040 return records to the consistency tests. Any return record that fails one of the consistency tests is subjected to the on-line PRISM processing via the Individual SOI Main Menu. STARTS will generate charge-outs for these returns. All paper return records require on-line editing, via the Individual SOI Main Menu.

    9. Tax examiners can reopen return records that are closed, and have successfully completed the quality process. Rejected and locked returns (see 3.49.5.2.10) cannot be reopened. When the tax examiner reopens a return, a message is displayed informing them that the RSI has been cleared. In addition, the SOCA Return Status Indicator (SRSI) (EXHIBIT 101) is cleared for SOCA returns. If the return was selected for ISI, it can only be reopened after the completion of the ISI process. Likewise, if the return was selected for SOCA Quality, it can only be reopened after the completion of the Quality process. When a previously closed return is reopened, the FSI for the last screen of the return (1040, Screens 6 & 7; 1040A, Screens 4-5; 1040EZ) is set to an I, and the tax examiner has to re-edit the screen(s). If the tax examiner chooses to re-edit, add, or delete a specific form or schedule, all subsequent forms, via form editing sequence, are set to an I. All forms with a FSI equal to an I require re-editing

  2. Lead Tax Examiner Menu

    Access to the Lead Tax Examiner Menu (EXHIBIT 97) is restricted by the editor’s identification number. The Lead Tax Examiner Menu options include: browse a return, set reject code, PRISM form edit menu, SOCA form edit menu, change filing period, convert form type, convert SOCA, and image display size.

  3. ISI Second Edit

    This option represents the "double-edit" system, where a sample of edited PRISM returns are selected and edited a second time. The data from the second edit is stored on Quality Review tables that are identical to their Original Entry counterparts. These second edit returns are compared to the first edit through a batch program. Differences are examined by a Quality Reviewer through a "reconciliation" process. Discrepancies found in the reconciliation process must be corrected, and a menu driven report system will generate reports from the Individual Systematic Improvement System (ISI).

  4. Browse A Return

    Tax examiners can browse return records by selecting the browse option. They are given the option of browsing either the first or second edit of a return record. The Browse Form Selection Menu, (EXHIBIT 99), allows the tax examiner to select the form/schedule they want to browse. Consistency tests are not activated in browse, and the tax examiner is not able to change the data. System fields, i.e. fsi, rsi, etc., are not changed while the tax examiner is in browse mode.

  5. Create Return

    This option is used to edit an individual tax return that was NOT posted to the Masterfile at MCC, but was selected for the SOI sample. i.e., a return with large money amounts. Before the tax examiner creates the return, they must get National Office approval. All money amounts, the primary and secondary SSNs, and the filing period are entered via PRISM.

  6. Edit SOCA Return

    Tax examiners use this option to edit additional data for return records identified in the SOCA panel. See the SOCA User’s Guide for further instructions.

3.49.5.2.8  (06-19-2014)
Lead Tax Examiner Menu

  1. The lead tax examiner mode is designed for the review of data by the lead tax examiner. The editing of 1040, 1040A, and 1040EZ return records should take place through the regular tax examiner mode, via the Individual SOl Main Menu. The editor’s identification number restricts access to the Lead Tax Examiner Menu. Use mouse or type in number, to select an option, options include browse a return, set reject code, PRISM form edit menu, SOCA form edit menu, change filing period, convert form type, convert SOCA, and image display size.

3.49.5.2.8.1  (06-19-2014)
Lead Tax Examiner Menu Options

  1. Browse A Return

    Tax examiners can browse return records by selecting the browse option. They are given the option of browsing either the first or second edit of a return record. The Browse Form Selection Menu, (EXHIBIT 99), allows the tax examiner to select the form/schedule they want to browse. Consistency tests are not activated in browse, and the tax examiner is not able to change the data. System fields, i.e. fsi, rsi, etc., are not changed while the tax examiner is in browse mode.

  2. Set Reject Code

    Lead tax examiners can reject a return by setting the Reject Code to a valid value (EXHIBIT 92), if the reject code and PRISM Return Status Indicator (RSI) (EXHIBIT 91) are null. To reject a return, the lead must input the key entry fields for the return record, and then the system will prompt the lead to enter the appropriate value. The message, "Reject Code Has Been Set" is displayed after the return is rejected. When a return is rejected, the RSI is set to a "7", and if the return is part of the SOCA panel, the SRSI (EXHIBIT 101) is set to a 7". Rejected returns are closed, and cannot be reopened. In addition, rejected returns are not subjected to the Individual Systematic Improvement System (ISI) or the Backend PRISM Process.

  3. Reserved

  4. PRISM Form Edit Menu

    1. This option is identical to option 1 off the Individual SOl Main Menu. After entering the rec_id, or the key entry fields for a return record, the Form Selection Menu for the Form 1040, or Form 1040A/EZ appears. This menu is identical to the Form Selection Menus that are accessed by regular tax examiner. The Form Status Indicators (FSI) are displayed on the menu to show which forms are available for editing, and their status. If a form does not exist in the system for the return record (FSI_form_name = "null" ), but a paper form exists, lead tax examiners can add the form to the return. If the added form is a multiple, the system automatically creates the first occurrence. After editing the first occurrence, lead tax examiners are prompted with the option to create any subsequent form(s). For each subsequent form they create, editing is completed and they are prompted again until they reach the limit of multiples for that form. Before editing begins on added forms distinguished as primary or secondary, lead tax examiners are prompted to add either the primary, or the secondary. Lead tax examiners have the ability to edit return records, where the editing is forced to adhere to the form editing sequence. Upon the completion of the editing process, the return record is closed.

    2. When a form/schedule is selected for editing, adding or deleting in the lead tax examiner mode, all subsequent forms, via the form editing sequence, are set to an "I" and require re-editing.

    3. If the RSI is set for a return, and this option is selected, the RSI is set to null. A message is displayed at the bottom of screen stating this action.

    4. Form 1040, Form 1040A, and Form 1040EZ cannot be added or deleted. All supporting forms and schedules created at MCC can be deleted except Form 1040/1040A/1040EZ, and the Schedule D. All forms that were added, via Forms Selection Menu, may be deleted. To delete a form, the form number, and the Sequence Number or Prim/Sec Status, when applicable, must be entered.

    5. Lead tax examiners can reopen PRISM returns selected for ISI upon the completion of the ISI process, and SOCA returns upon the completion of the SOCA Quality process.

  5. SOCA Form Edit Menu:

    See SOCA User’s Guide for further instructions.

  6. Change Filing Period

    When Revenue Processing creates an incorrect filing period, lead tax examiners have the option of changing the filing period for the return. When the filing period is changed, all FSI’s for a return record are set to "I" . This necessitates a complete re-editing of the return record.

  7. Convert Form Type

    When a return record has an incorrect form type, based on the internal revenue code criteria, the lead tax examiner can convert the return record to its appropriate form type. The two available options are converting a Form 1040A to a Form 1040, and converting a Form 1040EZ to a Form 1040A.

  8. Convert SOCA

    Tax returns that were initially identified as "simple" SOCAs, are converted to traditional SOCAs, where the editing of SOCA worksheets is performed through the full SOCA edit. See the SOCA User’s Guide for further instructions.

  9. Image Display Size

    Allows lead tax examiners to set the magnifying level preference for each tax examiner, for viewing MeF tax return images. The default is 75% magnification.

3.49.5.2.9  (06-19-2014)
Closing a Return Record

  1. The Individual SOl system automatically closes a return record after the FSI for all forms and schedules equal "C" . A closed PRISM return has a RSI = 5 or 6, and a closed SOCA return has a SRSI = 6. Closed returns are subjected to ISI and the Backend PRISM Process (see IRM 3.49.5.2.10). PRISM returns are then exported to National Office for further processing. Setting the reject code also closes a return record. Rejected returns are not subjected to ISI or Backend PRISM Process.

3.49.5.2.10  (06-19-2014)
Backend PRISM Process

  1. The Backend PRISM Process is a batch process that subjects PRISM return records to a series of balancing routines. This process is referred to as ‘PERP’ processing. Return records that are edited (RSI = 5, 6), missing (RSI = Null), or forced (RSI = Null) are subjected to this process. Return records with imbalance conditions are reviewed by National Office analysts, and are subsequently "locked" (see IRM 3.49.5.2.11). Upon completion of this process, return records are sent to National Office for additional processing, and to create the Advanced Data/Final Closeout data files.

3.49.5.2.11  (06-19-2014)
Locking a Return Record

  1. A "locked" PRISM return record has a RSI = 5 or 6, and is currently being processed by either the Backend PRISM Process or the National Office process. A SOCA return record is locked when the data has been extracted to National Office, or when the tax return has been released back to the originating files unit. Tax examiners are restricted from reopening locked PRISM and SOCA return records.

3.49.5.2.12  (06-19-2014)
Electronically Filed Returns (ELF)

  1. ELF returns are not immediately accessible to the tax examiners for editing. ELF returns reside on the Individual SOI database with a RSI of "M", and will not be available for editing until a later date. ELF data is retrieved from the Modernized E*File (MeF) system. The tax examiners can edit the return after the electronic data are retrieved.


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