4.4.11  Entity Changes

4.4.11.1  (06-01-2007)
Introduction

  1. This chapter contains instructions for the preparation and processing of Form 2363, Master File Entity Change, which can be located at http://publish.no.irs.gov/getpdf.cgi?catnum=21650O .

4.4.11.2  (06-01-2007)
Name, Address, and Marital Status Changes

  1. Name or address changes will be requested by the group via Form 2363 as soon as clear and concise notification is received. Form 2363 will be mailed/faxed to the Centralized Case Processing (CCP) site that closes your examination cases. See Exhibit 4.4.11-1 for instructions on completing Form 2363 for name and address changes.

  2. When a change in marital status occurs during an examination (or Surveyed Claim, Disposal Code 34), mail/fax Form 2363 to CCP to change the marital status (filing status code), on the Master File.

4.4.11.2.1  (02-08-1999)
Clear and Concise Notification

  1. Prior to requesting a change to Master File, ensure the change is being made as the result of clear and concise notification in accordance with Revenue Procedure 90–18, dated March 26, 1990. Verbal notification by the taxpayer constitutes clear and concise notification.

4.4.11.2.2  (06-01-2007)
IMF Name Changes

  1. Name line changes are one of the most common entity changes. It is important to ensure the name line is correctly reflected on Master File. The following information will help you correctly establish the proper name line and avoid an unpostable situation.

    1. If all name lines are for a subsequent tax period, prepare Form 2363 to change the name line to the earliest tax period and filing status you are establishing. Never update a prior year name line with current processing year information.

    2. If the name line relating to the year being processed reflects joint filing status and the filing status should be either single or married filing separate, prepare Form 2363 to change the name line. Again, make sure it's equal to or prior to the earliest tax period you are establishing.

    3. If the entity information does not exist, prepare Form 2363 to create an entity reflecting the single or married filing separate status.

    Note:

    Effective 3/2006 you will no longer have to change the entity or name line year if you are generating an SFR on a joint module. The posting of the TC 424 with a Push Code 036 will split the name line, update the filing status to Married Filing Separate (MFS), generate a name line year, generate an SFR and post a TC 424 for the primary SSN. Master File will resequence the TC 424 and generate a TC 013. This will result in a one-cycle delay before the TC 424 and SFR will post. Example: John and Mary Smith have an account at Master File with a name line year of 200312. You want to generate an SFR for John for 200212 or 200412. Input the AM424 with a Push Code 036. No 2363 is required. Master File will generate a single name line for John with a 2002 or 2004 tax period and a filing status of MFS.

  2. When entering a name change to update/correct a joint return filer, it is important to ensure the joint names are in the proper format for the issuance of notices and overpayments.

    Note:

    If the name control on the document is not present as a Social Security Administration name control on INOLES, see IRMSection 4.4.11.2.3

  3. Although the Form 1040 consists of two lines for entering joint names, Master File is limited to ONLY one line for the "Primary Name Line" .

  4. The Name Line field for Master File must never exceed 35 characters/spaces. It is imperative the name line information is contained in the FIRST NAME LINE ONLY.

    Note:

    DO NOT use the second line as a continuation of the name line. CC INCHG's second name line is used to enter taxpayer information and titles such as DECD, Guardian, Custodian, In Care Of, etc.

    Note:

    The absence of TWO BRACKETS around the PRIMARY taxpayer's last name when the SECONDARY taxpayer's name is different will create unnecessary unpostable conditions.

  5. Examples of properly input name changes are shown below. Bold print indicates the primary name control.

    Tax Return Input Format for Joint Filers
    John Doe
    Mary Doe
    John & Mary]Doe
    John Doe
    Mary Smith
    John]Doe]& Mary Smith
    John Doe
    Mary Smith-Doe
    John]Doe]& Mary Smith-Doe
    John D Doe
    Mary Ann Smith-Doe
    John D]Doe]& Mary Ann Smith-Doe
    John D Doe III
    MaryAnn L Smith
    John D]Doe]III& MaryAnn L Smith

    The ampersand (&) indicates to Master File that the information is the Secondary taxpayer's name.
    The brackets ( ]) indicate to Master File that the information contained within is the Primary Taxpayer's surname of the account when a joint name line is entered. IMPORTANT: The bracket is interpreted as a space. Therefore, DO NOT input additional spaces immediately before or after the bracket.
    No blank spaces should be typed between the brackets when entering name line information for a taxpayer filing SINGLE/Head of Household. However, a blank space is always required immediately following the ampersand when entering JOINT filer information.
  6. If the primary and secondary names exceed 35 characters/spaces, see IRM 3.13.5.34 or Document 7071, Name Control Job Aid.

4.4.11.2.3  (06-01-2007)
IMF Name Changes TC 040 and TC 041

  1. Generally TC 040/041 is used when a taxpayer has a name change due to marriage, but has not updated with SSA to display the new name control.

  2. TC 040 is used to change the name and/or TIN of the taxpayer's account that resides on the valid segment of IMF.

  3. TC 041 is used to change the name and/or TIN of the taxpayer's account that resides on the invalid segment of IMF.

  4. TCs 040 and 041 do not go through the weekly update of the Data Master One (DM-1) File validation process which receives information from the Social Security Administration, Individual Taxpayer Identification Number (ITIN) sources and IRS valid processing sources. These TCs should not be used unless IMF established the taxpayer incorrectly; or the taxpayer provides " proof" of their identity through copies of marriage certificates, divorce decrees, legal documents showing a name change, etc.

  5. Before entering a TC 040 or TC 041, thoroughly research the taxpayer's account using INOLES.

  6. Information needed to complete a TC 040 or TC 041 is listed below:

    1. New Name Control

    2. Primary Name Line (All Name Lines for TC 040)

    3. Year Name Line

    4. Filing Status Code

    5. New TIN, if necessary

    6. Description of change in the REMARKS field.

4.4.11.2.4  (02-08-1999)
Address Change for Non-Master File (NMF) Address

  1. Effective 1/1/1999, if the Master File module contains a TC 130, an address change notification will be automatically generated to Accounting in the Campus to update the NMF address.

4.4.11.3  (02-08-1999)
Temporary Address Change

  1. DO NOT process a request for a temporary address change. The IRS must have on file a permanent address for the taxpayer. This official permanent address is known as the "Last Known Address " . A temporary address is not considered the taxpayer’s "Last Known Address" .

4.4.11.4  (02-08-1999)
Multiple Changes

  1. More than one item of entity information may be changed using just one Form 2363. Use the following transaction codes (TC):

    1. TC 000—establish accounts for Master File and Civil Penalty modules

    2. TC 013—name change

    3. TC 014—change of street address, city, state

    4. TC 015—change of ZIP code or location code, Power of Attorney Indicator and establish or change the date of death

  2. Tables showing the minimum data requirements are in Exhibits 4.4.11–2 and 4.4.11–3.

4.4.11.5  (06-01-2007)
Group Responsibilities

  1. It is the group's responsibility to prepare Form 2363 and immediately forward the request for entity changes to CCP.

  2. CCP will retain the Form 2363 to monitor the account for posting to Master File. Form 2363 will not be returned to the group. The group can verify the change was input by accessing the applicable IDRS transaction codes, for example, CC ENMOD,CC INOLES,etc.

  3. Attach Form 3198 to the case file and check the box " Name or Address has been changed from Return" .

4.4.11.6  (06-01-2007)
Centralized Case Processing Responsibilities

  1. Verify the name or address noted on Form 3198 with the entity information on Master File (CC ENMOD or CC INOLES) . If the group did not prepare and forward a Form 2363, input the form to make the appropriate corrections.

  2. Annotate Form 5344 in the Comments section "Entity Change Prepared," type of change (i.e., 013, 014, 015, etc.), and the date the Form 2363 was prepared.

  3. It is not necessary to delay the input of Form 5344 awaiting the posting to Master File of the 2363 transactions. Master File is programmed to sort entity transactions before adjustment transactions, thereby ensuring that notices to the taxpayer are for the correct name and/or address. When Form 2363 is prepared to change the name control on Master File, Form 5344 may be processed, even in the same cycle, using the old name control. Master File is also programmed to match either on the new (as changed via Form 2363) or prior name control. This is true even if the new name control and Form 5344 (with old name control) post in the same cycle.

4.4.11.7  (06-01-2007)
Civil Penalty Name Lines

  1. Establishment of a civil penalty name line (CVPN) applies to MFT 55, 31 and 29 assessments. The CVPN is now created automatically when an account is created and is referred to as the"Primary Taxpayer Name Line " .

4.4.11.7.1  (02-08-1999)
Civil Penalty Prior to First Filed Return

  1. If a civil penalty is to be asserted for a year prior to when the taxpayer first filed a return, a MF name line must be established for the year the penalty is to be assessed using Form 2363, TC 013. The penalty may then be assessed. Master File will automatically extract and establish the penalty name line.

4.4.11.8  (02-08-1999)
No TIN at Master File

  1. If there is no record of the TIN at Master File, then a MF entity must be established using Form 2363, TC 000.

  2. For civil penalties enter a "mail file requirement" of "1" for MFT 55 or zero "0" for MFT 13 for the year of the penalty assessment (the taxpayer’s complete name and address must be input) . The penalty may then be assessed.

4.4.11.9  (06-01-2007)
IRA Entity Changes

  1. For entity changes related to IRA adjustments, see IRM Section 4.4.14 on Individual Retirement Account (IRA) Adjustments.

4.4.11.10  (06-01-2007)
Form 637 Registration Program

  1. The Form 2363 is used when the Form 637 Registration is revoked, cancelled, or suspended. See IRM 4.24.2, Excise Tax Handbook, for information on who can make the determination to revoke, cancel or suspend a Form 637 Registration. A "9" must be entered in the 637 indicator field. This generates a TC 016 which removes the 637 indicator and, thereby, alerts any subsequent inquiry that the entity does not hold a valid Form 637 registration. CC BMFOLE should be utilized to ensure the Form 637 indicator has been removed.

4.4.11.11  (06-01-2007)
Other References

  1. See IRM 3.13.122, IMF Entity Control Unpostables, IRM 3.13.222 BMF Entity Unpostable Correction Procedures,IRM 3.13.5, IMF Account Numbers, andIRM 3.13.2, BMF Account Numbers for more information.

Exhibit 4.4.11-1  (06-01-2007)
Form 2363 Name Change and Address Change Requirements

   
1. Check the appropriate box (IMF/BMF/EPMF).
2. Check the 013 and 014 box.
3. Enter the name control.
4. Check the appropriate box and enter the EIN/SSN without hyphens.
5. New name control (if applicable).
6. Effective "Years Digits" of change. This entry is required for IMF name changes only. If the name change is for multiple tax years, prepare a separate Form 2363 for each year.
7. Date - Enter the current date.
8. First name line - Enter new name data. If IMF, a Filing Status Code is required. See 15.
9. New street address, city and state. Enter all three even if only one is being changed. To delete a street address at Master File, leave the street address field blank. You must enter a city and state.
10. Zip code, if available.
11. Prepared by - Enter the last name of person preparing the form.
12. Organization symbols of person preparing the form.
13. Area Office - Enter your Area Office or Campus number.
14. Prepared From - Enter the form number, DLN, file number or description of source document.
15. Filing Status Code required on all IMF name changes. If the First Name line is present and contains an ampersand (&), the filing status code must be 2 or 7; otherwise it must be 1 or 3–6.
Note: For Civil Penalty name line establishment, the top left corner of Form 2363 must be marked "RF55" . Do not enter a Filing Status Code or Year Digit. RF55 informs the person inputting the document that only a civil penalty name line is being established or changed. Do NOT change the name line of the MFT 30 account.

Exhibit 4.4.11-2  (06-01-2007)
Minimum Data Requirements for Form 2363 — IMF/BMF

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