4.119.4  BMF Underreporter (BMF-AUR) Program

Manual Transmittal

October 01, 2013

Purpose

(1) This transmits revised IRM 4.119.4 BMF Liability Determination, BMF Underreporter (BMF-AUR) Program.

Background

IRM 4.119.4 contains information for Tax Examiners on their responsibilities relating to the BMF-AUR process.

Scope

IRM 4.119.4 effective October 1, 2013 should be used for BMF Underreporter Program for Tax Year 2012.

Material Changes

(1) Made editorial changes throughout the document.

(2) Made formatting changes for clarity and consistency.

(3) Included applicable IRM changes made 012/03/2012 through 05/16/2013.

(4) Throughout the IRM, money amounts have been changed to reflect TY 2012 amounts.

(5) Throughout the IRM, form line/column numbers have been updated to reflect TY 2012 line numbers.

(6) Throughout the IRM, changed dates to reflect TY 2012.

(7) Throughout the IRM changes to reflect Tax examiners to consult with Lead before TCO.

(8) Throughout the IRM changes to reflect system enhancements or changes.

(9) Changed all references to Merchant Card Payments to Payment Card Transactions throughout.

(10) P-21-3 (formally P6-12) has been updated throughout the IRM.

(11) IRM 4.119.4.2.5 Archived Cases (1) add note for clarification of instruction.

(12) IRM 4.119.4.3.4.1 Power of Attorney (POA) (4) remove IRM reference to POA.

(13) IRM 4.119.4.3.4.2 Freeze Codes (1) to include instructions for manual interest on a TC 846 and TC 776 presence.

(14) IRM 4.119.4.3.4.3 Transaction Codes Reflecting Tax Liability:

  1. (5) c) corrected instruction to say TC 766/767 without a Credit Reference Number (CRN) and the TC 290 for .00.

  2. (6) clarification of instruction on how to see a CIS document.

  3. (8) a) add Using process code 4210.

(15) IRM 4.119.4.3.4.5 Correspondence Imaging System (CIS) Documents (3) 5) Changed to indicate the need to click on the view images link.

(16) IRM 4.119.4.7.1.1 Gross Receipts or Sales (Bartering/Payment Card Transactions/Attorney's Proceeds/Fishing Proceeds/Medical Payments/Nonemployee Compensation) - Analyzation Deleted (6) and renumbered.

(17) IRM 4.119.4.7.7 Aggregate Profit Or Loss On Contracts - General added new tridoc for "Aggregate Profit Or Loss On Contracts" renumbered remaining tridocs.

(18) IRM 4.119.4.7.7.1 Aggregate Profit Or Loss On Contracts - Analyzation added new subsection for "Aggregate Profit Or Loss On Contracts."

(19) IRM 4.119.4.7.7.2 Aggregate Profit Or Loss On Contracts - Miscellaneous added new subsection for "Aggregate Profit Or Loss On Contracts."

(20) IRM 4.119.4.14.7 Limited Penalties (2) changed IRM 21.1 to IRM 20.1, Penalty Handbook.

(21) IRM 4.119.4.14.9 Manually Computed Interest for the CP 2030 (2) added c) to include instructions for manual interest on a TC 846 and TC 776 presence.

(22) IRM 4.119.4.16.5 CP 2030, CP 2531 History Screens:

  1. (2) Changed wording for system updates.

  2. Delete (3) and renumber.

.

(23) IRM 4.119.4.17.1 No Response BT 843, 845, and 848 (2) c) changed instruction to add MeF as applicable.

(24) IRM 4.119.4.18.1.6 Address Updates (1) Deleted reminder.

(25) IRM 4.119.4.18.1.7 Adjustment Cases Relating to BMF-AUR (2) b) changed instruction to add MeF as applicable.

(26) IRM 4.119.4.18.1.13 Amended Return (5) added information for change to TXI.

(27) IRM 4.119.4.18.1.15 Letters From a Third Party and Authorization From a Valid Power of Attorney (POA) (11) added instructions to mail reqwuests to POA if not related to BMF-AUR.

(28) IRM 4.119.4.18.2 Telephone Responses:

  1. (1) Deleted Not.

  2. New (2) added a new (2) giving more instructions for Hearing-impaired callers and speaking through a relay operator. added a Caution about oral consent renumber.

(29) IRM 4.119.4.18.2.1 Answering the Telephone (3) Note added "unless the caller specifically requests not to be placed on hold."

(30) IRM 4.119.4.18.2.2 Disclosure:

  1. (1) Deleted last sentence.

  2. (3) b) Deleted the Note.

  3. (4) b) Deleted reference to IRM.

(31) IRM 4.119.4.18.2.3 General Inquiries:

  1. (1) c) Updated phone number.

  2. (1) d) corrected instruction.

  3. (1) e) corrected instruction.

(32) IRM 4.119.4.18.2.4 Case Specific Inquiries:

  1. (6) Removed the example.

  2. (7) Removed the example.

  3. (11) Revised to include information if weeks have not passed.

(33) IRM 4.119.4.18.2.4.1.1 Out Calls - Calling the Taxpayer:

  1. (3) Changed wording for system updates.

  2. (7) Added or signature.

(34) IRM 4.119.4.18.3.6 Cancellation of Debt (5) d) Part of (5) separated and made into a new Note.

(35) IRM 4.119.4.18.3.7 Securities Sales and Cost Basis:

  1. (1) Rewrite to include the Form 8949 and line numbers.

  2. (2) Rewrite to include the Form 8949 and line numbers.

(36) IRM 4.119.4.18.3.9 Qualified Personal Service Corporation (QPSC) Tax Rate (2) Added OVERRIDE for system consistency.

(37) IRM 4.119.4.18.3.10 Medical Payments (1) Revised to change statement to Special Paragraph.

(38) IRM 4.119.4.18.7.1 added to give directions for Discovered remittance renumbering remaining tridocs.

(39) IRM 4.119.4.18.7.2 Extension Requests (1) added Telephone Response chart.

(40) IRM 4.119.4.18.7.7 Prior and/or Subsequent Year Impact added exception to clarify instructions.

(41) IRM 4.119.4.21. BMF-AUR Reconsideration Cases Note changed to include information about new tridoc 4.119.4.21.1 Prior Appeals Closures.

(42) IRM 4.119.4.21.1 Prior Appeals Closures added new tridoc renumbering remaining tridocs.

(43) IRM 4.119.4.21.5.2 Partial Adjustment Determinations (1) 5) add example.

(44) IRM 4.119.4.21.5.3 No Adjustment Determinations:

  1. (1) 1) add example.

  2. (1) 2) add with the appropriate blocking series.

(45) IRM 4.119.4.21.5.6 Taxpayer Contact for Additional Information (1) a) add by telephone or letter 916C.

(46) IRM 4.119.4.21.5.7 Payer Contact (2) 3) add interim

(47) IRM 4.119.4.22 Unpostable BMF-AUR Transactions (2) change IDRS number from SC890 to SC898.

(48) Exhibit 4.119.4-3 BMF-AUR Category Code Descriptions:

  1. Various All Descriptions have been verified and updated for accuracy.

  2. Subfile Key Descriptions Chart X Deleted OR Total Deductions exceeds Total Income by 80% or more.

  3. Subfile Key Descriptions Chart M changed Merchant Card to Payment Card Transactions.

  4. Subfile Key Descriptions Chart C Added "O" to Sch.

(49) Exhibit 4.119.4-5 BMF-AUR Process Codes (PC) 4980 added definition.

(50) Exhibit 4.119.4-6 BMF-AUR Process Code Action Chart updated for system changes.

(51) Exhibit 4.119.4-8 Batch Types added definition for 940 and 980.

(52) Exhibit 4.119.4-9 CP PARAGRAPHS added new AGGREGATE PROFIT OR LOSS ON CONTRACTS.

Effect on Other Documents

IRM 4.119.4 dated October 1, 2012 is superseded. The following IPUs issued from 12/04/2012 through 5/17/2013, have been incorporated in to this IRM: Serp IPU 12U1902, 12U0517, 13U0650, 13U0866, 13U0938

Audience

BMF-AUR tax examiners at the Small Business and Self-Employed site.

Effective Date

(10-01-2013)

/s/ Scott B. Prentky
Director
Campus Reporting Compliance SE:S:CCS:CRC
Small Business Self-Employed

4.119.4.1  (10-01-2013)
Overview of Business Underreporter (BMF-AUR)

  1. This manual provides instructions for the Business Underreporter (BMF-AUR), the automated analysis and processing of potential underreported (U/R) issues identified through information return (IR) matching.

  2. Avoid AUDITING RETURNS. All returns in the BMF-AUR inventory were previously screened for unallowable items and audit potential. They were not selected for action in either event.

    1. When evaluating a taxpayer's (TP) explanation for underreported income, it is not always necessary to verify what they say. As a general rule, the issue of questionable items (those not clearly allowable) will not be raised.

    2. The taxpayer's explanation will generally be taken at face value, including schedules of expenses submitted by the taxpayer to offset unreported income. The tax examiner should consider the reasonableness of the explanation. It may be necessary to consult with the Lead Tax Examiner. Your Lead Tax Examiner will then make the determination if the case should be transferred to the Tax Compliance Officer (TCO) for further action.

    3. If other Exam issues are discovered during BMF-AUR processing, consult with the Team Leader. Then, if necessary, consult with an Exam representative to decide the appropriate actions(s) to take.

  3. BMF-AUR cases are built from two primary sources:

    • The Business Master File (BMF) which contains information reported to the IRS by taxpayers

    • The Information Return Master File (IRMF) which contains information submitted by payers

  4. The BMF file contains information reported on Form 1120, U.S. Corporation Income Tax Return.

  5. The IRMF information is matched with the BMF information to verify all income is reported. A BMF-AUR case results when computer analysis detects a discrepancy between the two data sources. Examples (not all inclusive) of the information in the IRMF are:

    • Form 1099-MISC, Miscellaneous Income

    • Form 1099-PATR, Taxable Distributions Received From Cooperatives

    • Schedule K-1, Shareholder's Share of Income, Deduction, Credits, etc.

    • Form 1099-DIV, Dividends and Distributions

    • Form 1099-INT, Interest Income

  6. Discrepant cases are then categorized by type ( Gross Receipts, Other Income, Interest, Dividends, etc.) and underreported range. These categories provide a logical system of criteria to select cases from available inventory.

  7. After cases are selected from the inventory, they are worked according to procedures in this IRM.

  8. BMF-AUR Operations, located at the Ogden Campus, compile and control selected cases.

    1. Enterprise Computing Center (ECC) sends information from the IRMF, Return Transaction File (RTF), Taxpayer Information File (TIF), and Payer Agent file. See IRM 4.119.4.5, Payer Agent, for additional information on the Payer Agent file. This information downloads to the BMF-AUR system.

      Note:

      Data from the TIF and Payer Agent file is updated weekly.

    2. Form 4251 (Return Charge-Out) data prints on a Campus printer. Each Form 4251, contains a Taxpayer Identification Number (TIN), tax year, and other case identification information, represented in a bar code and numeric format.

    3. Federal Records Center (FRC) pulls and forwards returns to the Campus Files function for routing to Underreporter.

    4. Returns are controlled into the BMF-AUR system by scanning the bar code.

  9. The tax examiner (TE) performs an in-depth analysis of each case. The TE determines if the income/deductions in question is satisfactorily identified on the tax return. If so, close the case. If reasonable doubt remains that the income/deductions are included on the return, send taxpayer either:

    • A CP 2030 , Initial Notice Issued to Request Verification for Unreported Income, Deductions, Payments and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents or

    • A CP 2531, Initial Contact for Potential Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents

  10. Process Codes (PC) are used to provide an audit trail for BMF-AUR case processing. Integrated Data Retrieval System (IDRS) reflects PCs as pending actions until they post to the Master File:

    1. PC 4030 and PC 4090 are computer generated to designate how the case has been selected. PC 4090 establishes an IDRS control base and reflects CP 2030 interest as pending.

    2. PC 4300 updates cases on the IDRS control base whenever a CP 2531 is generated.

    3. PC 4500 updates an IDRS control base when a CP 2030 is generated. An amended CP 2030 Notice also updates the existing IDRS control base.

    4. PC 4700 and 4720 updates the IDRS control base when a Statutory Notice of Deficiency (CP 3219B) and Form 4089, Notice of Deficiency - Waiver, is issued/generated.

  11. Internal Processing Codes (IPC) are codes used in BMF-AUR processing and do not post to IDRS. See Exhibit 4.119.4-4, BMF-AUR Internal Process Codes.

  12. See Exhibit 4.119.4-1, Abbreviations and Exhibit 4.119.4-2, Glossary, for a list of abbreviations and definitions used in BMF-AUR processing.

4.119.4.1.1  (10-01-2012)
Taxpayer Advocate Service (TAS)

  1. Even though the IRS strives to improve its systems and provide better service, some taxpayers still have difficulty in getting solutions to their problems or appropriate responses to their inquiries. The purpose of the Taxpayer Advocate Service (TAS) is to give taxpayers someone to speak for them within the Service - an Advocate. TAS is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.

  2. TAS and SB/SE have a Service Level Agreement (SLA) between them that outlines the procedures and responsibilities for the processing of TAS cases whenever the statutory or delegated authority to complete case transactions rests outside of TAS. The SB/SE SLA covers the BMF-AUR operation. An Addendum to the SLA lists contacts from various Operations in the Ogden Service Center. Visit the Service Level Agreement (SLA) at http://tas.web.irs.gov/policy/sla/default.aspx.

  3. Refer taxpayers to the Taxpayer Advocate Service (TAS), when the contact meets TAS criteria see IRM 13.1.7, Taxpayer Advocate Service Case Criteria and you can not resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. Same day cases include cases you can completely resolve within 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issues. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4 , Procedures -Same-Day Resolution by Operations.

    Caution:

    All potential TAS referrals must be approved by the BMF-AUR TAS Liaison.

  4. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order) . Forward the Form 911 to TAS. The TE is responsible for assuring that Sections I, II and III of the Form 911 are complete. The taxpayer's problem and the taxpayer's relief sought must be clear and specific in Items 12a and 12b of Section I. The TE is also required to document the reason why the relief action was not taken.

    Note:

    It is important that all IRS employees handle cases with the taxpayer's best interest in mind.

4.119.4.1.1.1  (10-01-2012)
Operations Assistance Request (OAR), Form 12412

  1. A Form 12412, Operations Assistance Request is sent by TAS for cases when there is an issue that they do not have the authority to resolve. An OAR can be received by fax, mail or E-mail and will have a Form 3210, Document Transmittal, attached.

  2. The Form 12412 will contain the name, telephone, and fax number of the TAS employee making the request. An OAR package will also include an explanation of what is being requested and any documentation obtained by the TAS employee.

  3. Form 12412 is to be acknowledged within 1 day for expedited cases or 3 days for all other cases. The acknowledgement on the Form 3210 sent with the OAR, and will include the name and phone number of the assigned person (or team/manager).

  4. The following are addressed when working an OAR:

    1. An expedited Form 12412 has three days to be completed.

    2. After the period: for a non-expedited Form 12412, the SB/SE employee assigned the OAR will negotiate with the TAS employee a reasonable timeframe for OAR resolution.

    3. Sections V and VI of Form 12412 must be completely filled out by a BMF-AUR employee, including any actions taken and the reasons behind those actions.

    4. A file copy of the OAR is kept by BMF-AUR for 6 months.

    5. The completed OAR package is returned to the TAS employee.

4.119.4.1.2  (10-01-2012)
Statute Awareness Program

  1. The Statute Awareness Program was created to minimize barred assessments and erroneous abatements. Because of the time lag involved in the processing of BMF-AUR issues, BMF-AUR employees must be particularly watchful for conditions that may indicate statute imminent cases.

  2. Although a report will generate by the system to alert management to statutes in danger of expiring, employees must be personally knowledgeable of the rules that govern the Assessment Statute Expiration Date (ASED). These rules are outlined in IRM 25.6, Statute of Limitations.

    Note:

    The ASED can be found in the STATUTE EXP DATE field on the Tax Account Screen, but the date should be verified.

  3. Each functional area should ensure that an adequate number of "Statute Specialists" are assigned.

  4. On a quarterly basis, verification that the Operation has completed the required search for cases that are statute imminent is sent to the Planning and Analysis (P&A) Staff. The P&A staff forwards a consolidated Campus report to the Headquarters Statute Analyst.

4.119.4.1.3  (10-01-2012)
Related IRM's and Publications

  1. Before disclosing any tax information, you must be sure that you are speaking with the taxpayer or their authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3, Required Taxpayer Authentication or IRM 21.1.3.2, General Disclosure Guidelines, for further information.

    • See IRM 11.3.2.6.1, Leaving Information on Answering Machine/Voice Mail, for proper disclosure protocols before leaving messages on a taxpayer's answering machine

    • See IRM 11.3.1.11, Facsimile Transmission of Tax Information, for proper disclosure protocols before faxing confidential information to the taxpayer

  2. The following additional IRM's and publications/documents are listed as a convenience when BMF-AUR determines that in-depth research is required to resolve unusual technical issues not covered in this IRM. When reference to one of the related IRM's is required for BMF-AUR processing, the complete IRM reference will be stated in this IRM:

    Note:

    Technical issues that occur frequently should be brought to the attention of the IRM 4.119.4 Business Underreporter, author for consideration for inclusion in this IRM.

    • IRM 2.3, IDRS Terminal Responses

    • IRM 2.4, IDRS Terminal Input

    • IRM 3.13.62, Campus Document Services - Media Transport and Control

    • IRM 3.42.4, IRS e-file for Business Tax Returns

    • IRM 4.10.12, Examination of Returns - Frivolous Return Program

    • IRM 4.13.1, Audit Reconsiderations, Introduction

    • IRM 4.19.3, IMF Automated Underreporter

    • IRM 4.119.1, Business Underreporter (BMF-AUR) Control

    • IRM 5.9, Bankruptcy and Other Insolvencies

    • IRM 8.20, Appeals Case Processing Manual

    • IRM 10.5, Privacy, Information Protection and Data Security (PIPDS)

    • IRM 11.3, Disclosure of Official Information

    • IRM 13.1.7, Taxpayer Advocate Case Procedures - Taxpayer Advocate Service (TAS) Case Criteria

    • IRM 20.1, Penalty Handbook

    • IRM 20.2, Interest

    • IRM 21.1.1, Accounts Management and Compliance Services Operations - Accounts Management & Compliance Services Overview

    • IRM 21.1.3.18, Operational Guidelines Overview, Taxpayer Advocate Service (TAS) Guidelines

    • IRM 21.3.3, Taxpayer Contacts - Incoming and Outgoing Correspondence/Letters

    • IRM 21.3.7.1.3, Processing sites (CAF Function)

    • IRM 21.4.4, Refund Inquiries - Manual Refunds

    • IRM 21.5, Account Resolution

    • IRM 21.6, Individual Tax Returns

    • IRM 21.7, Business Tax Returns and Non-Master File Accounts

    • IRM 25.1.2.2, Fraud Handbook - Recognizing and Developing Fraud, Indicators of Fraud

    • IRM 25.6, Statute of Limitations

    • IRM 25.16, Disaster Assistance and Emergency Relief

    • Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically through the IRS FIRE system

    • Publication 542 , Corporations

    • Document 6209, IRS Processing Codes and Information

4.119.4.1.4  (10-01-2012)
BMF-AUR Security

  1. The BMF-AUR system design protects both taxpayer data and the individual BMF-AUR users. ALL users are responsible for protecting taxpayer information. Users should access ONLY the data needed to perform their duties, and not divulge taxpayer information to any employee who does not have an official "need to know" . Users will report infractions to their managers immediately.

4.119.4.1.5  (10-01-2013)
Modernized e-File (MeF)

  1. Modernized e-File (MeF) is a web based system that allows electronic filing of Tax Returns through the Internet.

  2. The following forms can be e-filed through the MeF platform:

    • Corporations - Form 1120, Form 1120-F and Form 1120-S

    • Partnerships - Form 1065 and Form 1065-B

    • Individuals - Form 1040 and related forms and schedules

    Note:

    See IRM 3.42.4.2.1.5, Modernized e-file (MeF) System Functionality, for additional information.

  3. Employees needing a MeF (virtual) return can obtain it through the Employee User Portal (EUP). You must be a registered user for this application.

  4. Electronically transmitted returns are identified by a unique Document Locator Number (DLN). The first two digits represent the File Location Code (FLC). Use the FLC shown below for the electronic filing of income tax returns. The second number listed is the rollover FLC used when a site exhausts the regular FLC for a given processing date.

    • ANSC - 16; 14

    • CSC - 35; 38

    • OSC - 93; 92; 88; 91

    • PSC - 52 (and sometimes 66 - U. S. Possessions and 98 - International)

    • ECC-MEM - 64; 72

      Note:

      The system will not allow a user to order a Transaction Code (TC) 150 document with the above FLC codes.

  5. Information such as loose forms, schedules, and correspondence CANNOT be attached to an MeF return. Do not use an attachment or association form.

  6. The system generates a TC 290 for .00 for MeF tax returns that are closed with a No Change Process Code. See IRM 4.119.4.18.4, Discrepancy Explained (No Change) - General for further information.

4.119.4.2  (10-01-2012)
Controlling Work

  1. Underreporter cases to be analyzed by BMF-AUR tax examiners are assembled into batches, which are then divided into work units. See Exhibit 4.119.4-7 Batch Status Codes. The following windows are used to control cases:

    • Assign Work Unit

    • Release Work Unit

    • Transfer Work Unit

    • Accept Transfer

    • Assign Case

    • Release Batch

    • Transfer Case

    • Request Case

4.119.4.2.1  (10-01-2013)
Viewing Cases

  1. Each user may have clearance to view any case on the system. This function is necessary for users answering telephone inquiries.

  2. To view any case take the following actions:

    1. Select the appropriate Tax Year from the BMF-AUR Navigation menu.

    2. Input the TIN to be viewed.

    3. Click on the PHONE CONTACT field if viewing the case due to a taxpayer telephone contact. The BMF-AUR program will extract telephone contact data based on this entry.

  3. The only entries that can be updated on the cases are:

    • Telephone number and contact hours on the Tax Account screen

      Reminder:

      The telephone number must be input/updated, if available.

    • Case notes on the Case Note screen

    • Update address

    • Update Power of Attorney (POA)

    Note:

    Any other changes will not save to the database.

  4. The Print menu option is available when the user is viewing a case.

4.119.4.2.2  (10-01-2012)
Lost Cases

  1. When a TIN is assigned to a batch, but the corresponding case is missing, the case is considered a "lost" case.

  2. When a lost case is identified:

    1. Select the Process Code window.

    2. Input IPC 4XLC (Lost Case).

      Caution:

      If the work unit contains both copies of Form 4251, it is not a lost case. Input IPC "41RR" (Return Request).

    3. The BMF-AUR system moves the TIN to Batch Type (BT) 880.

  3. If the case is missing an MeF return, see IRM 4.119.4.1.5, Modernized e-File, for instructions on how to view the return.

    Note:

    The system will not allow a user to input IPC 4XLC when the case is an MeF return.

  4. Some cases are found to be missing after the work unit has been released by the tax examiner and is being disassembled by the Control Function. The Control Function notates "Lost Case" on a case transfer sheet and routes the case to the Lead Tax Examiner. The Lead Tax Examiner contacts the tax examiner who released the case.

    1. If the case is found, the tax examiner accepts and reworks the case on the system.

    2. If the case is not found, the tax examiner accepts and attempts to rework the case on the system, using a substitute Form 4251. If the case file contents are necessary to work the case, input IPC 4XLC on the Process Code window and discard the case history/transfer sheet.

      Note:

      In an effort to eliminate unnecessary paper inventory, substitute charge outs should only be printed if absolutely necessary.

4.119.4.2.3  (10-01-2012)
Wrong Pulls in Screening (WP)

  1. If the original tax return DLN and the Form 4251 DLN do not match:

    1. Leave the Form 4251 attached to the return.

    2. Input IPC "41WP" and notate "41WP" on the Form 4251.

    3. Leave the return in the work unit.

    Note:

    The return will be sent to Federal Records center (FRC) after the batch is disassembled.

  2. If the DLN's match, but the taxpayer's name is different, close the case with PC 4290.

  3. If the tax return is for the incorrect year (the DLN's match, but the TY is different), close the case using PC 4290, complete the Form 3465, Adjustment Request and Form 12634, Correspondence Transmittal, and route to the Accounts Management Function to be reprocessed to the correct tax year.

4.119.4.2.4  (10-01-2013)
Case History

  1. The Case History Screen is used to determine the location or status of a particular case. If the case is assigned to your unit, select the Display Case History window from the Case Analysis menu.

  2. If the case is assigned anywhere on the BMF-AUR system, select the case by entering the TIN and selecting the Go button. This will allow you to review the case only.

4.119.4.2.5  (10-01-2013)
Archived Cases

  1. Other areas may forward a Form 4442, Inquiry Referral, to request a copy of BMF-AUR Notices. To obtain a copy of the notice use the BMF-AUR print menu to make the copy and send it to the taxpayer.

    Note:

    Use IDRS to order the original return or the 29X adjustment document when the case is not on the system.

4.119.4.3  (10-01-2012)
Case Information

  1. Each BMF-AUR case contains information for one tax account.

4.119.4.3.1  (10-01-2012)
BMF Underreporter Cases

  1. A case where a paper Form 1120 was filed has an income tax return present in the case. If the Form 4251 is batched without an original tax return, order the Transaction Code (TC) 150 return or the controlling DLN on the Tax Account screen.

  2. Some cases may have an amended return, Form 1120-X, Amended US Corporation Income Tax Return, attached to the original U.S. Corporation income tax return.

    1. If the amended return was not processed, include it in the resolution of the case. Leave the amended return attached to the original return when the case is closed.

      Caution:

      If there is an indication that the amended return was filed to claim a tentative carryback or carryfoward credit, check the Tax Account screen to see if there is a matching TC 976 and TC 295. If those transaction codes are present, leave the amended return attached and continue working the case. If the carryback has not been processed, see IRM 4.119.4.18.7.3, NOL Carryback/Carryforward for further instructions.

    2. If the amended return was processed, consider it in the BMF-AUR case resolution and refile separately when the case is closed.

  3. All cases have online data which displays in a series of screens.

  4. An action trail MUST be made part of the case data whenever significant actions are taken. Use either the IR Note window or the Case Note window.

    Note:

    IR notes and Case notes are part of the official case file and may be viewed by the taxpayer.

  5. Form 4251 is attached to a return when it is pulled from the files at the Federal Records Center.

    1. Form 4251 MUST remain attached to the paper return when the case is closed.

    2. Notate the applicable PCs and IPCs on Form 4251.

    3. Keep the Form 4251 in the front of the case file with the bar code visible.

4.119.4.3.2  (10-01-2012)
Consolidated Returns Form 851 Affiliation Schedule

  1. An affiliated group of corporations can elect to file a consolidated income tax return.

  2. The consolidated return must include all the income of the parent plus the income of each subsidiary for the portion of such taxable year during which it was a member of the group.

  3. A manual review of IDRS CC IRPTR for each listed affiliated TIN will be required. Information return(s) must be created to provide the system with a complete record of the income to be reported by the taxpayer.

  4. If there is information documents attached to the return or reported amounts for which we have no corresponding information returns, an information return must be created to provide the system with a complete record of the income reported by the taxpayer. It may also be necessary to delete or modify an information return(s).

  5. Refer all cases with Form 851 to the Lead Tax Examiner or Tax Compliance Officer (TCO) for analysis.

4.119.4.3.3  (10-01-2012)
Case Analysis Screen

  1. The Case Analysis screen is the main screen used by tax examiners for the analysis of BMF-AUR cases.

  2. Certain Transaction Codes, Freeze Codes, or Indicators may require research, referral, or other specific actions. When these conditions are present, the Message window displays on the Case Analysis screen when the TIN of the case is entered. If this window displays, review the information on the Tax Account screen to determine the appropriate action to take.

4.119.4.3.4  (10-01-2012)
Tax Account Screen

  1. The Tax Account screen displays posted information from the taxpayer's Master File account. It contains the name and address, return amounts, transactions, and other current data. The data is downloaded to the BMF-AUR system from Enterprise Computing Center (ECC). The taxpayer's phone number and hours of contact can be entered. This screen is used to order a return if the related adjustment has posted to the account.

  2. Compare the Taxable Income on the return with the Taxable Income on the Tax Account screen. A mismatch could be due to a taxpayer and/or processing error. The BMF-AUR Function is responsible for issuing a CP 2030 to correct these types of errors.

    Note:

    If the processing error resulted in an erroneous refund, transfer to the Erroneous Refund Coordinator.

  3. If the Taxable Income on the return and the Taxable Income on the Tax Account screen do not match, the taxpayer/processing error may be found on the return.

    1. The system displays the Taxable Income as determined from Master File.

    2. Verify the Taxable Income on the Tax Account screen.

    3. If appropriate, use the Miscellaneous Adjustment/Deductions Adjustment window to account for the discrepancy.

  4. If the Tax Account screen displays a "check mark" in the New TRN field, a new Transaction Code (TC) has been added since the case was last analyzed. When a "check mark" is displayed:

    1. Review the Transaction Code (TC) to determine if any action is required.

    2. Remove the "check mark" to indicate the TC has been considered while working the case.

      Note:

      The system automatically totals TC 640 payments and displays a prompt: "Should amount be entered in Return Values Screen?" .

4.119.4.3.4.1  (10-01-2013)
Power of Attorney (POA)

  1. When a POA is on file an indicator displays in the Centralized Authorization File (CAF) Indicator field. The indicator is either alpha or numeric. See Document 6209 for the applicable POA indicators. The following TC may also be present.

    • TC 960 is a CAF Indicator (POA on file)

    • TC 961 reverses the CAF Indicator (POA revoked)

    • TC 962 updates the CAF (POA revised)

  2. Before issuing a CP 2030, CP 2531 or Recomputed Notice, the CAF is automatically researched for the valid POAs name and address

  3. If issuing a notice, and there is a valid POA on file that is authorized to receive copy of notices:

    1. A copy of the notice is automatically created for the POA. If there are multiple POAs, the notice is only created for the first two POAs authorized to receive notices per the CAF.

    2. PARAGRAPH 101 automatically generates on the CP 2030, CP 2531 and Recomputed Notice to inform the taxpayer that a copy is being sent to the POA.

      Note:

      This paragraph is set at the time the notice is generated and will not display in Notice Summary while the case is being worked.

  4. If an original POA is found attached to the tax return (not detached during processing), see IRM 4.119.4.18.1.15, Letters From a Third Party and Authorization From a Valid Power of Attorney (POA), for instructions on determining validity.

  5. Disregard invalid POAs.

  6. Consider Valid POAs approved.

    1. Make a photocopy for the BMF-AUR case file.

    2. Forward the original to the CAF Unit for processing.

    3. Input POA information on the Update Address window (POA).

4.119.4.3.4.2  (10-01-2013)
Freeze Codes

  1. If certain Freeze Codes are present on the tax module, a message window displays on the Case Analysis screen when the TIN of the case is entered. Access the Tax Account screen to determine the proper action.

  2. Freeze Code "-A" is present, this indicates an amended return was filed. See IRM 4.119.4.3.4.3, Transaction Codes Reflecting Tax Liability, for further instructions.

  3. Freeze Code "-I" is present, and/or the Net Tax Change field on the Return Value screen is less than the TC 846 with a corresponding TC 776 that is ≡ ≡ ≡ ≡ ≡ ≡ ≡ on the Tax Account screen, then a Manual Interest computation is required. If there is U/R income, input IPC 4XMI (Manual Interest) only if a CP 2030 is being issued. If the case results in a refund, do NOT use IPC 4XMI. Enter "0" (zero) in MANUAL INTEREST field of the Return Values , and continue processing. Input PC 4300, if issuing a CP 2531. See IRM 4.119.4.14.9, Manually Computed Interest for the CP 2030.

    Note:

    If a Manual Interest computation is required, and the tax examiner attempts to input Process Code 4500, 4520, 4530, or 4750 or IPC 45RN or 47SR, the system alerts the tax examiner that IPC 4XMI is required. Cases with CP 2030 Notice Indicator 6 do not require an IPC 4XMI.

  4. Freeze Code "-L" (Audit Indicators TC 420 or 424, not reversed by TC 421) indicates the return is currently being requested or possibly audited by Exam. During case analysis (screening phase), take the following action:

    1. Research IDRS CC TXMODA for a pending TC 421 that will reverse the "-L" freeze. If there is a reversal or CURRENT-STATUS-CD is 08 or less, continue normal processing.

    2. If there is NO reversal , determine if the case is controlled by the Tax Equity and Fiscal Responsibility Act (TEFRA) function. These cases are identified on IDRS by a "33" or "34" under the CURRENT-STATUS-CD/DATE field on IDRS CC AMDISA. If the case is controlled by TEFRA, continue normal processing. Do not use the Exam transfer PCs to close TEFRA cases.

    3. If the conditions above are not met, refer to the Lead Tax Examiner who will contact the appropriate Exam area to determine further case action.

  5. Freeze Code "-L" open TC 420/424 is present after an BMF-AUR notice has been issued, take the following actions:.

    1. Review the Tax Account screen to determine the Primary Business Code (PBC), Secondary Business Code (SBC) and Employee Group Code (EGC).

    2. Use the PBC, SBC and EGC information from AMDISA to locate the correct Exam contact by accessing one of the following websites: If the PBC is 301-309:
      http://wsep.ds.irsnet.gov/sites/co/dcse/sbse/exam/webdocuments/Document%20Library/1/AIMS/LB-I%20Contact%20Listing.xls
      all others:
      http://wsep.ds.irsnet.gov/sites/co/dcse/sbse/exam/webdocuments/Document%20Library/1/AIMS/Employee%20Group%20Code%20Listing.xls

    3. If Exam wants the case, input PC 4380 (CP 2531), PC 4570 (CP 2030) or PC 4790 (Statutory Notice).

      Note:

      Place the case in suspense and allow the statutory period to expire before closing the case PC 4790.

    4. If Exam does not want the case, leave a Case Note and continue normal processing.

  6. Freeze Code "-O" is a Disaster Indicator set by TC 971 AC 086 or 087 on CC:ENMOD. See IRM 4.119.4.4.3, Declared Disaster Areas, for more information.

  7. Freeze Code "-R" on Tax Account reflects Accounts Management Taxpayer Assurance Program (AMTAP) involvement and is identified with TC 971- AC 134, TC 971- AC 052 and TC 570 which indicates a frozen refund. Continue normal case processing.

  8. Freeze Code "-S" identifies tax returns filed within a declared disaster area and is set with a TC 971 AC 688 on CC:ENMOD. The "-S" freeze does not suppress notices. Continue normal case processing.

  9. Freeze Code "-T" indicates a TC 910 (Criminal Investigation Division) entity freeze on the account and used for monitoring purposes only. Continue normal case processing.

  10. Freeze Code "-U" is present, transfer to the Erroneous Refund Coordinator. Freeze Code "-U" indicates the Erroneous Refund area is monitoring a case for available credits and a closure may release needed credits.

  11. Freeze Code "-V" and/or TC 520 (not reversed by TC 521 or 522), a Bankruptcy condition is present. If identified on the Tax Account screen:

    • During Case Analysis (i.e., pre-notice contact), close the case using PC 4270.

    • During Response phase (after the taxpayer has been issued a BMF-AUR Notice), see IRM 4.119.4.18.1.9, Bankruptcy Procedures - Responses.

  12. Freeze Code "-W" and/or TC 520 (not reversed by TC 521 or 522) with cc 60 through 67, 70, 75, 78-81, cc 84, 85 or cc 89 indicates that a Bankruptcy condition is present, for litigation cc 71-74 is present. If present:

    • During Case Analysis (i.e., pre-notice contact), close the case using PC 4270.

    • During Response phase (after the taxpayer has been issued a BMF-AUR Notice), see IRM 4.119.4.18.1.9, Bankruptcy & Litigation Procedures - Responses.

  13. Freeze Code "-Y" indicates that the taxpayer filed an Offer-in-Compromise with the service. See IRM 4.119.4.3.4.4, Other Transaction Codes and Math Error Codes, for additional information.

  14. ≡ ≡ ≡ ≡ ≡ ≡ "≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  15. Refer to Document 6209 for additional information regarding any other Freeze Codes not mentioned above.

4.119.4.3.4.3  (10-01-2013)
Transaction Codes Reflecting Tax Liability

  1. A TC 150 indicates a return was filed and posted to the Master File. The TC 150 amount is the tax assessed when the original return was filed.

  2. TC's 290 and 300 indicate additional tax was assessed after the original return was filed. The system adds these amounts to the TC 150 amount to determine the total tax per return. If the TC 290/300 source document is present, determine if the adjustment source document (Form 5147, Form 5344, Examination Closing Record, amended or duplicate return) resolves the U/R issue(s).

  3. TC's 291 and 301 indicate a portion or all of a previously assessed tax was abated after the original return was filed. If the TC 291/301 source document is present, determine if the adjustment source document (Form 5147, Form 5344, Examination closing Record, amended or duplicate return) resolves the U/R issue(s). The system subtracts these amounts from the TC 150 amount to determine the total tax per return. If the Total Income on the Tax Account screen:

    1. Differs from the tax return, order the TC 291/301 document without screening for income discrepancies.

    2. Matches the tax return, screen for income discrepancies and see (8) below.

  4. When to order: If the adjustment source document is missing from the case file, order the TC 290/291 or TC 300/301 prior to either the issuance of a notice or PC 4200 action.

  5. TC 290 for .00 adjustment source documents should be ordered when one of the following is present:

    1. Corresponding TC 976.

    2. TC 971 Action Code (AC) 010 or 012 through 016.

    3. TC 766/767 without a Credit Reference Number (CRN) and a TC 290 for .00.

    4. MeF return and the Blocking Series of the TC 290 for .00 is "00" or "15." .

  6. The Tax Account screen will indicate if the adjustment source document is a Correspondence Imagining System (CIS) document by a "check mark" in the CIS column. If it is determined the adjustment is:

    • A CIS document see IRM 4.119.4.3.4.5, Correspondence Imaging System (CIS) Documents

    • Not a CIS document, follow the instructions below

  7. Do not order TC 290 for .00 adjustment source documents for the following:

    1. TC 290 for .00 adjustment source document is for changes to refundable credits (ex: TC 766/767 with a Credit Reference Number (CRN)) and there is no change to TXI.

    2. The TC 290 for .00 has a corresponding TC 971 AC 270. These are cases where the amended return was sent back to the TP.

    3. The TC 290 for .00 is in the 98 blocking series (adjustment made without the original return) and there is a RC 062. These are penalty abatement request disallowances and have no impact on our BMF-AUR case.

    4. The adjustment is a TC 290 for .00 with a corresponding TC 971 AC 142. This is a true duplicate return.

  8. Do not order the TC 290/291 (or TC 300/301) source document for the following situations:

    1. The difference between the TXI on the return and the TXI shown on the Tax Account screen matches the discrepant amount within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Consider the amount in question reported and close the case using process code 4210 if there are no other related issues.

    2. The adjustment changes the amount(s) or item(s) back to the original figures on the return (changes may have resulted from a math error code or unallowable code). The TXI and Tax (TC 150 minus TC 291) should equal the amounts on the original tax return.

    3. The adjustment is a TC 291/301 when the TXI and the tax has been reduced to zero. Close case with PC 4260 (these are generally incorrect EIN).

  9. Request an amended return to resolve the case, if necessary.

    1. To request an amended return, enter a "check mark" in the ORDER RTN field for the applicable DLN on the Tax Account screen. During the screening phase, use IPC 41RR.

      Exception:

      The system will not accept a "check mark" for any DLN where the DLN indicates the return is MeF/ELF Form 1120 or a CIS document.

    2. If the DLN of the amended return is the control DLN on the Tax Account Screen, attach the original return behind the amended return and refile together under the control DLN. Otherwise, refile them separately.

  10. Review all adjustment documents to determine if the U/R amount has already been taken into consideration. If so, close the case using PC 4210. If a document has been requested, refile it separately when the case is closed.

  11. Consider all previous changes to income, deductions, refundable/non-refundable credits, taxes, and penalties when a CP 2030 is to be issued.

  12. When a TC 300/301 is present on the Tax Account screen with a TC 421 and no -L freeze, a Disposal Code displays on the Tax Account screen. If pursuing U/R income, determine the Disposal Code. The Disposal Code is located under the column titled "DIS CD" in the transaction section of the Tax Account Screen:

    1. If the Disposal Code is 01 - 13, review the attached audit papers to determine if the U/R amount has been addressed. If there is still a U/R amount after review, issue a notice. Consider all changes made by Exam per the TC 300/301.

    2. If the Disposal Code is 20 - 99, no audit was performed. Continue processing the case.

  13. If a TC 300/301 and a TC 577 with Julian date 999 is displayed on the tax account screen (no "-L" Freeze present) the U/R income has not been addressed by Examination Function. Review the papers to determine what changes were made and take those changes into consideration when calculating U/R income adjustments.

  14. If a duplicate/amended return is filed (TC 976 or 971 AC 010 or 012 through 016), a TC 290/291 is present, the duplicate or amended return is not in the case file AND you are contacting the taxpayer (i.e., issuing a CP 2531, CP 2030 or adjusting withholding (W/H) using PC 4200):

    1. Order the duplicate/amended return by requesting the TC 290/291 DLN unless the conditions in (8) above apply.

    2. Close the case using PC 4290 if the duplicate/amended return is not available.

  15. If a duplicate/amended return is posted (TC 976 or TC 971 AC 010 or 012 through 016), a CP 2030 or CP 2531, is to be issued or closing case using PC 4200, a TC 290/291 is NOT present, AND the duplicate/amended return is not in the case file:

    1. Transfer the case to the Unit Suspense batch.

    2. Monitor the case for 45 days from the TC 976 or the TC 971 date for the pending/posting of the TC 290/291.

    3. If the TC 290/291 posts, order the adjustment source document.

    4. If the TC 290/291 does not post, continue processing the case.

  16. TC 295 indicates a tentative allowance from Form 1139, Application for Tentative Refund, was input on the taxpayer's account by Accounts Management. TC 299 indicates an abatement of the original tax. If there is a TC 295 or 299 unreversed, or only partially reversed by TC 294 or 298, and there is U/R income, issue a notice.

  17. TC 305 indicates a tentative allowance from Form 1139 was input on the taxpayer's account by Exam. TC 309 indicates an abatement of the original tax. If there is a TC 305 or 309 unreversed, or only partially reversed by TC 304 or 308, and there is U/R income, issue a notice.

4.119.4.3.4.4  (10-01-2013)
Other Transaction Codes and Math Error Codes

  1. Other TC's shown on the Tax Account screen may require additional action.

  2. TC 160 or 166 indicates a Delinquency/Failure to File Penalty was assessed. TC 161 or 167 means a portion or all of the penalty has been abated. When a U/R issue exists, the system computes or recomputes the Delinquency/Failure to File Penalty when required. See IRM 4.119.4.14.1, Failure to File Penalty (FTF).

  3. TC 170 or 176 indicates an Estimated Tax (ES) Penalty was assessed. TC 171 or 177 means a portion or all of the penalty has been abated. When a U/R issue exists, a recomputation of the ES penalty may be required. See IRM 4.119.4.14.3, Estimated Tax (ES) Penalty, for instructions.

  4. TC 270 or 276 indicates a Failure to Pay Penalty (FTP) was assessed. TC 271 or 277 means a portion or all of the penalty is abated. See IRM 4.119.4.14.2, Failure to Pay Penalty (FTP), for additional information.

  5. TC 460 indicates a request for extension of time to file was approved. The extension date appears in the Remarks column.

  6. TC 480 (not reversed by TC 481 or 482) indicates the taxpayer has filed an "Offer in Compromise (OIC)" with the Service. Continue normal BMF-AUR processing. A TC 29X may be input on these type cases. Send copies of the case data to Collection OIC function upon their request.

  7. TC 530 (not reversed by TC 531 or 532) with a closing code 07 or 10, indicates that the account is considered uncollectible. Close the case with PC 4260.

  8. TC 604 (not reversed by TC 605) indicates that assessed debit has been cleared.

    1. Close case using the appropriate Process Code (4260, 4460, 4660 or 4890).

    2. Issue Letter 4551C, if closing the case with PC 4460, 4660, or 4890.

    .

  9. TC 766 or 767 indicates substantiated payment credits, including withholding. Compare with entries on Form 1120, Schedule J, Part II lines 12 through 20.

  10. TC 780 indicates that the Service accepted an Offer In Compromise(OIC) from the taxpayer. If an unreversed TC 780 is present, a warning message will display to close the case. Take the following action:

    1. Close case using the appropriate Process Code (4260, 4460, 4660 or 4890).

      Exception:

      If the TC 780 has been fully reversed by a TC 781 or 782, continue normal BMF-AUR processing.

    2. Leave a Case Note stating that this is an OIC closure.

    3. Issue Letter 4551C, if closing the case with PC 4460, 4660, or 4890.

  11. If a Transaction Code other than those explained in IRM 4.119.4.3.4.3, Transaction Codes Reflecting Tax Liability, or IRM 4.119.4.3.4.4, Other Transaction Codes and Math Error Codes, are indicated on the Tax Account screen, refer to Document 6209.

  12. If the taxpayer was notified of a math error during original processing:

    1. The MATH ERROR STATUS field displays a "3" .

    2. The MATH ERROR NOTICE CODE field displays the related code. For a list of available codes and their descriptions, double click on the field.

    Note:

    If the MATH ERROR NOTICE CODE field is blank and you need to know the math error code, research IDRS CC:BRTVU. The code displays in the TP NOTICE CD field. Once you know the code, double click on the MATH ERROR NOTICE CODE field for related description.

4.119.4.3.4.5  (10-01-2013)
Correspondence Imaging System (CIS) Documents

  1. The Correspondence Imaging System (CIS) is used to manage scanned images of amended Master File (MF) returns, documents and electronic case files.

  2. When a duplicate/amended return (TC 976 or TC 971 with AC 010 or 012 through 016 and a posted TC 290/291) is present, a "check mark" will display in the Tax Account screen in the CIS column indicating that a CIS document is available.

  3. If a CIS document is indicated, take the following actions:

    1. Access IDRS CC TXMOD and verify that the CIS IND field displays a "1" .

    2. Access AMS.

    3. From the AMS screen, click on "Cases by TIN" in the Case Management section.

    4. In the Taxpayer Lookup screen, enter the taxpayer TIN in the "Request by TIN" field and then click on the Go button or press enter on the keyboard.

      Note:

      This will allow the taxpayer account screen to appear.

    5. In the Alert section, click on the view images link.

    6. Select the tax year to review the CIS image list and click on "Open Image" .

      Note:

      The thumbnail view can be used to view each page.

    7. Compare the amended return to the U/R issues to determine if any or all issues are addressed. Continue normal processing.

    8. After processing changes, input the received date located on the amended return.

  4. To exit AMS:

    1. Click on the Exit Account link in the upper right hand corner.

    2. In the Taxpayer Lookup window, click on the Logoff link to exit the system.

4.119.4.3.5  (10-01-2012)
Information Return Detail Window

  1. The Information Return Detail window displays complete IR information.

  2. Payer address information, as shown on the Information Return Detail window, displays on the notice.

4.119.4.3.6  (10-01-2012)
Income Comparison Screen

  1. The Income Comparison screen displays a comparison of amounts reported by payers on IRs and the amount the taxpayer reported on their tax return. Access this window when it is necessary to view RETURN and IRP amounts or to determine the discrepant income type.

  2. The OFFSET field displays codes describing how matched return and IRP amounts were offset for identification of potential discrepancies.

  3. When attempting to offset income, make sure the income to which it is being offset has not already been used. However, if you can determine that offsets were applied incorrectly, analyze that issue as well.

4.119.4.4  (12-04-2012)
Analysis Procedures

  1. The following instructions are for use by BMF-AUR tax examiners. They are to be used in conjunction with training and system usage materials:

    1. An UNDERREPORTED (U/R) condition exists when there is income shown on the IR(s) that was not reported by the taxpayer on the tax return. Proposed tax adjustments are based on these U/R amounts, as well as on reported income amounts for which the taxpayer failed to include any required additional taxes.

    2. An OVER-DEDUCTED (O/D) condition exists when the taxpayer claims more of a deduction than is substantiated by IR(s) and/or allowed by law.

    3. An UNDERCLAIMED (U/C) condition exists when the taxpayer does not claim all the payments to which they are entitled.

    4. An OVERCLAIMED (O/C) condition exists when the taxpayer reduces their tax liability by an amount that either exceeds the amount shown on the IRs, and/or the amount cannot otherwise be substantiated.

  2. Computer identified income/deduction discrepancies of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ are displayed in the LIST OF DISCREPANCIES field on the Tax Account screen. If the category is a combination type, all appropriate discrepancies are displayed.

  3. The IR(s) contributing to the discrepancies are listed first on the Case Analysis screen, and the specific income type is identified with a "check mark" in the "DISCR" field.

  4. If the Case Analysis screen does not contain any "check mark" , a message appears and tells the tax examiner to go to the Income Comparison screen to determine the discrepancy and screen the case accordingly.

  5. Analyze all income elements on all of the IR(s) following the guidelines for specific income types as provided in this IRM.

  6. When there is U/R income or if related tax/credit adjustment issues are involved, proceed to Return Values.

    1. Complete all applicable windows.

    2. Issue a notice when the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    3. Close the case with PC 4220 when the dollar tolerance for issuing a notice is not met.

  7. Proposed adjustments on the CP 2030, or CP 2531 may require an explanation to the taxpayer. There is only one set of explanation paragraphs for both the CP 2030 and CP 2531 Notices. Some PARAGRAPH's are automatically generated when the related condition applies and these paragraphs can be viewed. All automatic PARAGRAPH's are automatic toggle. Non-automatic PARAGRAPH's may be viewed, selected, deleted, and/or added.

    Note:

    Paragraphs are either manually selected or automatically generated based on the case condition. All applicable paragraphs display in the SELECTED PARAGRAPH field(s) on the Summary screen. If a CP 2531 Notice is selected (PC 4300), the system prevents any non-CP 2531 paragraphs from printing on the notice. If issuing a CP 2531do not"toggle off" apparent inappropriate CP 2531 paragraphs.

    Note:

    The programming that automatically selects paragraphs occurs in different screens (Case Analysis, Return Values or Summary) depending on the conditions needed to set the paragraph. To reduce the instances of paragraphs resetting, the tax examiner should only "toggle off" or "toggle on" paragraphs from the Select Notice Paragraph window accessed in the Summary screen.

    • CP 2030, CP 2531 automatic and non-automatic paragraphs are notated in this IRM as "PARAGRAPH" .

      Note:

      See Exhibit 4.119.4-9, CP PARAGRAPHS for a listing of available CP Paragraphs.

    • Miscellaneous Notice or Letter paragraphs are notated as "Special Paragraph" .

    Note:

    When the IRM provides specific verbiage for a "Special Paragraph" , the tax examiner is expected to include the paragraph on the notice, as written unless modification is applicable. The BMF-AUR Coordinator can include any IRM directed paragraphs as a local paragraph. There are 40 numbered paragraphs for local use. In situations where the numbered paragraphs are not applicable, the user can create a Special Paragraph to be included on the notice.

    Note:

    All Special Paragraphs MUST BE reviewed by a manager or Lead Tax Examiner.

  8. When issuing a notice for underreported issues, send the applicable element(s) of the IR. The entire IR will not be sent unless all Amount Types on the IR are marked with a "check mark" . This includes modified and created IRs. When an IR is marked with UR Status "Underreported" , the system automatically enters the Send Indicator. If it is determined that the IR should not be sent, remove the Send Indicator.

    Note:

    The Send Indicator must be manually entered on any created or modified IR that the tax examiner wants to include on the Notice.

  9. Close short year returns with PC 4260.

    Exception:

    Only initial returns will be worked following normal procedures. These returns can be identified by a check mark on Form 1120, Section E, box 1.

4.119.4.4.1  (10-01-2012)
Information Returns - Review

  1. The initial review of IRs is accomplished from the Case Analysis screen.

    Note:

    All IR(s) with the same document type are sorted in payer Employer Identification Number (EIN) sequence.

    Caution:

    Be aware of Payer Agent information.

  2. Delete IRs if any of the following conditions are present:

    Condition... And...
    The payee area indicates that the income belongs to a retirement plan. Indicators may include the following terms:
    • Retirement Plan

    • Retirement Rollover

    • Profit Sharing Plan (PSP)

    • Defined Benefit Pension Plan

    • Defined Benefit Plan (DFB or DBP)

    • Employee Benefit Plan (EBP)

    • Keogh (HR-10) or Tax Shelter Annuities (403(b)

    • Simplified Employee Pension (SEP) or Individual Retirement Accounts (IRA)

    • 401 (k) Plans

    Note:

    The above list is not all inclusive.

    Note:

    Consider all abbreviations and/or variations of terms.

     
    The payer area identifies the income as deriving from a Municipal Bond or a Capital Construction Fund (CCF) account.  
    The payee name line(s) is obviously not the taxpayer, even though the EIN matches.

    Exception:

    If it is obvious that the Payee may be an owner of the business. For example, the business is a medical practice and the name listed is one of the physicians.

     
    The Payer EIN is 99–9999999, foreign income Another EIN is present for the same payer.

    Note:

    Income dollar amounts may vary due to currency exchange rates. Foreign source IRs are treated the same as domestic source IRs. Therefore, do not delete a foreign source IR unless another related IR from the same payer is present. See (4) below for additional information.

    The money amount on a single IR equals $999,999,999, unless the taxable income on the tax return supports this amount (this may be an indicator the information return is incorrect).  
    If all elements (TIN, name, amount, account number, income type, etc.) on any two IRs are identical:
    • Including the source, delete one IR.

    • Except the source, delete the paper source.

     
    Payer Agent Indicator is checked The Payer Agent window contains instructions to delete the IR. See IRM 4.119.4.5, Payer Agent.

    Note:

    If all U/R income is from identified Payer Agents and the Payer Agent window contains instructions to delete the IR(s), close the case with PC 4240.

    The Amended field contains the literal "Deleted Original" .  
    There is an indication in the payee area that the income is not attributable to the taxpayer. Indicators may include the following terms:
    1. Escrow.

    2. Trust For (TR).

    3. In Trust For (ITF).

    4. Trust Account.

    5. Trust.

    6. Workers Compensation.

    Note:

    The above list is not all inclusive.

    Note:

    Consider all abbreviations and/or variations of terms.

    Exception:

    If there is an indication that the income is attributable to the taxpayer, then consider the IR as belonging to the taxpayer. For example: the taxpayer is ABC Corp and the payee area displays: "XYZ Corp ITF ABC Corp" . In this instance ABC Corp is responsible for reporting the income.

     
    All elements on any two IRs are identical except that one does not contain an account number. Delete the IR without the account number.  
    Form 1099-MISC and Schedule K-1 information returns are present with identical elements (TIN, name, amount, income type, etc.) It appears that one of the IRs is fully reported, delete the other. Otherwise pursue the income from both IRs.

  3. Consider the IR valid (as belonging to the taxpayer) when ANY of the following conditions are present:

    1. The payer's name is garbled, missing, or incomplete. Use the EIN to research IDRS for the proper payer name. If the income is U/R include a special paragraph to explain the proper name of the payer EIN being shown on the IR.

    2. The payee name is in a different order on the IR.

    3. Only a name control is showing as the payee name and it matches the Corporation's name.

    4. The name on the IR is different and a review of ENMOD shows it as a prior name.

    5. If it is obvious that the Payee name may be an owner of the Business (e.g., the Business is a medical practice and the name listed is the Physicians.)

  4. Foreign source income IRs are identified by:

    • A payer TIN of "99-9999999"

    • An unusual payer name (Bundesent fer Finazen, Banque de Quebec, etc.) or a payer name indicating a foreign country (French Dividends, German Securities, United Kingdom Royalties, etc.)

    • Foreign country abbreviation in the state field on the payer address

    • Account Code Type "T"

    Reminder:

    Foreign source IRs are treated the same as domestic source IRs. Therefore do not delete a foreign source IR (even if the payer name appears unclear or garbled) unless another related IR from the same payer is present.

  5. The AMEND field on the Case Analysis screen identifies if the Information Return is an original filing or amended/corrected. The following literals display in the AMEND field:

    • Original

    • Amended

    • Corrected Original

    • Duplicate

    • Replaced Original

    • Deleted Original

    Note:

    If the system has pre-identified amended IRs that are used to replace the original IR, the amended IRs display "Replaced Original" in the AMEND field and the original IR displays "Deleted Original" in the AMEND field.

    Note:

    PARAGRAPH 100 automatically generates when Amended IRs are included on the notice.

  6. The system cannot always pre-identify the original IR when amended IRs are present. Therefore, delete original IRs if amended IRs match an original. The amended and original IR must have:

    • The same payer name and/or EIN

    • The same account number (if present)

    • The same type of income if the money amount changes or different income types when the money amount stays the same (i.e. amending a Form 1099-MISC, Miscellaneous Income, from Non-employee Compensation to Other Income)

    Note:

    Pursue all IRs if the amended IR(s) does not match an original, or if the amended IR matches more than one of the other IRs.

    Note:

    If a document attached to the original return is marked "Corrected" consider the document more accurate than the IR.

    Caution:

    Amended IRs may reflect incomplete information; neither amount literals nor $0 (zero dollar amounts) are displayed. If such an IR is present, assume the payer attempted to zero out an incorrect income amount previously reported.

  7. Compare all valid IRs to amounts on the tax return and related schedules. Use instructions for the particular type of income involved.

4.119.4.4.2  (10-01-2013)
Comparison of Information Returns with Return Information

  1. Different income types may be combined on one information document. On the Case Analysis screen, each income type is displayed separately and can be assigned a UR Status.

    Note:

    If an IR with multiple income elements is U/R, input UR Status "Underreported" ONLY for the income element that is actually U/R. If necessary, enter UR Status "Reported" or "Non Taxable" for any remaining income elements that are not U/R.

  2. The following general rules apply to the analysis of all types of IRs:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Consider an IR reported if the taxpayer reports the same amount of income but under a different payer name.

    3. Allow a tolerance of $1 (rounding) for each IR. In those processes which do automatic calculations and grouping, the system considers the (rounding) tolerance.

    4. Consider Payer Agent criteria when evaluating IRs. See IRM 4.119.4.5, Payer Agent, for further instructions regarding Payer Agent data.

  3. Misplaced entries on the tax return are frequent causes of U/R discrepancies. Taxpayers report income on their returns in a variety of places. It is important to thoroughly review the ENTIRE return, attached schedules and statements before identifying income as being underreported.

    Caution:

    Be sure that income identified on attachments are appropriately carried forward and included in the total income.

  4. For IRs with multiple Amount Types (e.g., Form 1099-MISC or Schedule K-1) consider each component of the IR separately.

  5. Whenever possible attempt to match IR amounts to a specific line on the tax return. For example, match the sum of INTEREST Amount Types to the amount reported on Form 1120, line 5.

  6. When comparing IRs with entries on any line not specifically identified for that Amount Type, the amount must match within $1 or be clearly identified as the income type in question.

    1. If the amount matches within $1, consider the IR reported.

    2. If the amount does not match within $1, but the income has been clearly identified, consider the IR(s) reported if the entry is a larger amount, or consider the IR partially U/R if the entry is a lesser amount.

  7. When payer documents are attached to a paper return, consider them more accurate than the IR UNLESS:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ continue processing and consider the IR most accurate.

    3. There is an amended IR that corresponds with the payer document. Consider the amended IR the most accurate.

    4. They appear to be for an incorrect tax year.

  8. If the return is missing supporting forms or schedules, research IDRS. If the information is not available, take the following action(s):

    1. Give credit for amounts based on the available tax return information.

    2. Do not make any changes in the calculation windows, but allow the system to compute if the necessary supporting schedule or form is missing.

    3. Include a Special Paragraph requesting the missing forms or schedules from the taxpayer and apologize for the inconvenience.

  9. The Create Information Return window is used to create a new IR. Create an IR if:

    1. The taxpayer reports income/deductions for which there is no corresponding IR, and the reported amount is needed by the system to perform related calculations. The corresponding information document may or may not be attached to the return.

    2. The payer's name is garbled, missing or incomplete and income on the IR needs to be shown to the taxpayer. Use the EIN to research IDRS CC INOLES for the proper payer name. If the income is U/R, recreate the IR as shown on the Case Analysis screen, including the correct payer name. Include the created IR on the notice.

      Caution:

      In order for a created IR to be considered valid for inclusion on the notice, it must contain: a payer name, payer address, payer EIN, document name, amount type and an income amount greater than zero (in addition to other required entries). Ensure the Send Indicator has been checked or manually entered on the IR by clicking in the SEND field on the Case Analysis screen.

      Note:

      The tax examiner may determine other conditions that require creation of an IR.

  10. The Modify Information Return window modifies an existing IR. The Modify an IR option may be used to identify the excludable portion of taxable dividends as determined during response phase.

    Reminder:

    After an IR is modified the system marks the UR Status with "System Deleted" . To include the modified IR on the notice, click in the Send box.

    Note:

    The tax examiner may determine other conditions that require modification of an IR.

  11. Use the Query option to view only those IRs that fit specific criteria (e.g., Payer Name, TIN, income type, etc.).

  12. Use the Scroll and Compare option to view multiple IRs on the Information Return window, without returning to the Case Analysis screen.

  13. Use the Group option when the taxpayer has not provided a breakdown and it is necessary to compare a total money amount for related IRs with a single line entry on the taxpayer's return.

    Note:

    The Group function is a tool to assist the tax examiners in computing the correct U/R amount. It may not be necessary to use the Group function if the correct U/R can be determined without it. This policy is valid throughout the entire IRM, anywhere the Group function is cited.

    1. If the group total amount is larger than the single line entry on the return, assign UR Status "Underreported" to the group.

    2. If the group total amount is smaller than the single line entry on the return, assign UR Status "Reported" to the group.

  14. An Income Discrepancy field is available on the Case Analysis screen and the Information Return window. An indicator in this field identifies certain income types to the system so that U/R income is displayed properly on the BMF-AUR Notice. It is available for use when there are various "like" income type information returns on the case and the taxpayer does not provide a specific breakdown of the income reported on their return. The Income Discrepancy functionality allows U/R income from different Amount Types (ex: NONEMPLOYEE COMPENSATION and MEDICAL PAYMENTS) to display under a generic heading on the BMF-AUR Notice, instead of under the Amount Type name. The current Income Discrepancy indicators are:

    • "Gross Receipts"

    • "Other Income"

    Note:

    The system automatically assigns Income Discrepancy indicator "Gross Receipts" to gross receipt related Amount Types. See IRM 4.119.4.7.1, Gross Receipts or Sales (Bartering/Payment Card Transactions/Attorney's Proceeds/Fishing Proceeds/Medical Payments/Nonemployee Compensation) - General. The tax examiner may change or delete this indicator, if information on the taxpayer's return shows that the displayed indicator for the U/R Amount Type is inaccurate or inappropriate.

  15. If a Form 1099-MISC IR has two identical money amounts (e.g., Nonemployee Compensation is $500 and Medical Payment is $500) and the taxpayer reports one of the amounts, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  16. If a Form 1099-K and Form 1099–MISC are present with identical money amounts, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  17. A photocopy of a prior year CP 2030 or CP 2531 response may be attached to the return. Consider the information in the previous year's response. This information may result in resolving the U/R issue(s).

  18. When a U/R issue for the same Amount type from the same payer was resolved per a copy of a Letter 4552C response from a prior year attached to the return, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    If a prior year BMF-AUR closure Letter 4551C is attached to the return, research the prior year to see if the resolved issue(s) corresponds to the current BMF-AUR year discrepancy. If so, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  19. If all IRs are matched exactly, but there is still a U/R amount:

    1. Add the amounts reported on the return. There has probably been a math error.

    2. Pursue the U/R issue.

    3. Send appropriate paragraph to advise the taxpayer of the error.

  20. If the discrepancy is totally resolved, close the case using PC 4210.

  21. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4.119.4.4.2.1  (10-01-2012)
Service Center Recognition/Image Processing System (SCRIPS)

  1. The following procedures apply to the analysis of Service Center Recognition/Image Processing System (SCRIPS) IRs.

  2. The system displays a warning message when the user assigns UR Status "Underreported" to an Amount Type on a SCRIPS IR. When this message is received, the tax examiner should screen the related IR with EXTREME care.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ :

    1. Obvious decimal point errors. An option to identifying decimal errors is to multiply the U/R amount by 1.1111 and the result equals one of the IRs in question (within $1).

    2. Commas read as numeric (i.e., $1,050 read as $12050, etc.). U/R amounts that are a multiple of one-thousand (1,000) is an indication that the comma was misread as a numeric.

      Example:

      SCRIPS IR displays as 21230 (comma misread as the digit "1" ), the TP reports 2230 with a resulting U/R of 19000.

    3. Dollar signs read as numeric. When a dollar sign is misread as a numeric, the U/R amount is a multiple of 10, 100, 1,000, 10,000, etc., depending upon the number of digits in the SCRIPS IR.

      Example:

      SCRIPS IR displays 587 (dollar sign misread as the digit "5" ), the TP reports 87 with a resulting U/R of $500.

    4. Duplicate money amounts for both income and withholding.

    Note:

    If a SCRIPS IR is U/R and none of these conditions are present, consider the IR valid and pursue the issue using normal procedures.

  4. Do not send SCRIPS IRs with erroneous information to the taxpayer. Create an IR to reflect the correct information and include it on the notice.

  5. Do not send information regarding erroneous SCRIPS IRs to the BMF-AUR Payer Agent Coordinator, unless some other payer agent (P/A) condition exists.

4.119.4.4.3  (10-01-2012)
Declared Disaster Areas

  1. BMF-AUR Coordinators input ZIP Codes for specific declared disaster area situations as necessary based on IRS Disaster Relief Memos. Follow system prompts to ensure proper handling of declared disaster area cases. Disaster types with case impact:

    1. Type 2 - suppresses CP 2030, CP 2531 and Statutory Notices.

    2. Type 3 - prevents cases from defaulting (notices continue to be issued).

    3. Type 4 - suppresses CP 2030, CP 2531 and Statutory Notices AND prevents cases from defaulting.

4.119.4.4.4  (10-01-2012)
Frivolous Return Program (FRP)

  1. A frivolous return is defined as noncompliance with filing and/or paying tax based on unfounded legal or constitutional arguments per IRM 4.10.12, Examination of Returns - Frivolous Return Program. If in doubt about whether the return is frivolous, consult with your Lead Tax Examiner, TCO or manager. If it is determined during screening that the return is frivolous, close the case with PC 4130, notate the case for clerical "FRP to Ogden" .

  2. If the return is determined NOT to be frivolous, continue normal processing.

  3. If FRP requests a BMF-AUR case after contacting the taxpayer, close the case with the appropriate PC (4570 or 4790), notate the case for clerical "FRP to Ogden" .

4.119.4.4.5  (10-01-2013)
Fraud Referral Program

  1. The primary objective of the National Fraud Program is to foster voluntary compliance through the recommendation of a criminal investigation and/or civil penalties against taxpayers who evade the assessments and/or payment of taxes known to be due and owing.

  2. Tax fraud is often defined as an intentional wrongdoing on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing. Tax fraud requires both a tax due and fraudulent intent.

  3. The objective of the Campus Fraud Referral Program is to:

    1. Identify cases with potential fraud.

    2. Develop potential fraud cases with guidance from the Campus Fraud Technical Advisor.

    3. Refer potential fraud cases to Field Exam for further development.

    4. Develop fraud guidance to ensure campus employees are properly trained on the indicators of fraud.

  4. The Fraud Technical Advisor (FTA) assists with the development of fraud in the Campus Examination environment.

  5. The Functional Fraud Coordinator (FFC) is a fraud specialist assigned to a specific function or operation within the Campus. The FFC is responsible for reviewing Form 13549, Campus Fraud Lead Sheet, for potential fraud issues, conducting research to establish a pattern of non-compliance and, when appropriate, referring cases to the Campus Fraud Coordinator.

  6. The Campus Fraud Coordinator (CFC) is a fraud liaison assigned to each SB/SE Campus. The CFC is the main point of contact with the FTA assigned to that campus.

4.119.4.4.5.1  (10-01-2012)
Identifying and Developing Fraud in BMF-AUR

  1. During the course of BMF-AUR case work, situations may be encountered involving potential fraud, referred to as indicators of fraud. Although only a small percentage of cases are fraudulent, it is essential to detect and report any potential fraudulent activities. IRM 25.1.2.2, Fraud Handbook - Recognizing and Developing Fraud, Indicators of Fraud, provides several lists of Fraud Indicators. The following list has been developed for BMF-AUR and identifies examples of indicators of fraud that are most likely to be found in a campus environment (this list is not all inclusive and may involve a promoter/return preparer):

    • Altered Documents

    • False deductions/adjustments to income

    • False basis in assets

    • Concealing assets

    • False transaction date for asset disposition

    • False statements made by taxpayer

    • False business, rental, or farm expenses

    • False or overstated refundable credits

    • Amended returns with any of the above

    • Understating Income

    • Failure to cooperate

    • Maintaining inadequate records

    • Inconsistent or implausible explanations

    • Engaging in illegal activities

    • Concealment of activities

    • Preparer schemes

  2. Fraud cases are developed by trained Fraud caseworkers until it is determined that affirmative acts (deceit, subterfuge, camouflage, concealment or some attempt to color or obscure events or to make things seem other than they are) exist. The Service must prove that the taxpayer acted deliberately and knowingly with the specific intent to violate the law. Once a suspicion or indicator of fraud is found, it is essential that the case be transferred to the designated Fraud Coordinator for further development.

  3. See IRM 25.1.1.3, Indicators of Fraud vs. Affirmative Acts of Fraud.

4.119.4.4.5.2  (10-01-2013)
BMF-AUR Tax Examiners Fraud Responsibilities

  1. Identify indications of fraud that are uncovered through regular case processing. Use the list in IRM 4.119.4.4.5.1, Identifying and Developing Fraud in BMF-AUR.

  2. Discuss the indicators of fraud with your Lead Tax Examiner (i.e., Approving Official) Your Lead Tax Examiner will then make the determination if the case should be transferred to the Tax Compliance Officer (TCO) for further action. If the approving official concurs, the tax examiner will refer the case to the designated individual responsible for working/monitoring fraud cases by:

    1. Completing Sections I, II, III, and item 1 of Section V of Form 13549, Campus Fraud Lead Sheet and submitting to the approving official for approval.

    2. The approving official will forward the approved Form 13549 and case file to the designated BMF-AUR Functional Fraud Coordinator (FFC).

  3. Documentation is critical in the development of fraud. Maintain complete and accurate case notes that include each of the following:

    • All case actions

    • All documents received

    • All contacts must be adequately documented (e.g. changes to entity information were recognized/updated)

    • All conversations with the taxpayer, representative, return preparer, and third parties must be recorded (what was discussed and the responses)

4.119.4.4.5.3  (10-01-2012)
BMF-AUR Fraud Coordinator Responsibilities

  1. The BMF-AUR Functional Fraud Coordinator (FFC) is responsible for developing fraud cases. The FFC is responsible for conducting preliminary screening of Form 13549 to determine if the referral should be forwarded to the Campus Fraud Coordinator (CFC). The FFC will:

    1. Review the Form 13549 and case file to determine if indicators of fraud exist.

    2. Complete, document and attach research information, including, but not limited to IDRS transcripts, ACCURINT prints, and relevant web searches. Research will help to establish a pattern of non-compliance.

    3. Complete Section IV of the Form 13549, (Developmental Actions) and item 3 in Section V.

    4. The FFC has ten business days from the receipt date of a case and Form 13549 to evaluate a fraud referral and make a determination whether to accept or decline the referral.

    5. If the FFC accepts referral then acceptance is noted in item 3b, Section V, and the form and case file are forwarded to the CFC for final fraud determination.

    6. If the FFC declines the referral then item 3a in Section V is completed along with a written explanation for the declination in Section VI and returned to the initiator through the approving official. The case will be reassigned to the initiator’s Standard Employee Identifier (SEID).

    7. Update the Fraud Referral Monitoring Report (FRMF).

    8. Maintain a copy of each Form 13549.

    9. Track all BMF-AUR fraud leads, including those declined/returned to BMF-AUR and those accepted for further Fraud development.

    10. Submit information on Fraud referral/accepted/declined cases to Headquarters by the fifth day of each month.

      Note:

      The CFC is required to make a determination to accept or decline the fraud referral, within 21 business days of receipt of the case from the FFC.

  2. If the CFC accepts the fraud referral for further development, they will request the case be reassigned and ensure the case is established on AIMS. The BMF-AUR FFC will:

    1. Close the case using Fraud Closing PC 4140, 4370, 4580, or 4770 as appropriate.

    2. Annotate the Form 13549 and keep a copy for the BMF-AUR records.

    3. Make and send a copy of the Form 13549 to the initiator through the initiator's manager.

    4. Ensure the entire case contents are forwarded.

  3. If the CFC declines the fraud referral they will return the Form 13549 with a written explanation to the BMF-AUR FFC. The BMF-AUR FFC will return the Form 13549 to the initiator through the approving official and transfer the case to the initiating tax examiner’s SEID.

4.119.4.4.6  (10-01-2012)
Analysis Procedures - Miscellaneous

  1. Initial processing errors or additions to the TXI are corrected by entering the appropriate amount(s) in the MISCELLANEOUS ADJUSTMENT PER RETURN and MISCELLANEOUS ADJUSTMENT NOW fields on the Miscellaneous Adjustment/Deductions Adjustment window.

    1. The amount computed in the MISCELLANEOUS ADJUSTMENT CHANGE field is included by the system and is considered in all calculations. This amount is included in the U/R Amount on the Return Values screen and displays on the Summary screen as "Miscellaneous Adjustment" .

    2. The entry for the PER RETURN field can be positive or negative amounts.

    3. When issuing a Notice, include a Special Paragraph explaining the adjustment.

    Caution:

    Do not use this window for situations where a specific income/deduction type has its own calculation window or can be addressed by creating a new information return or through an existing information return.

  2. If an attachment indicates the income in question is nontaxable and the taxpayer cites an IRC section, determine the validity of the taxpayer’s statement by researching the IRC. If the IRC submitted by the taxpayer(s) is not valid, send a Special Paragraph to inform them that the explanation is not acceptable.

4.119.4.5  (10-01-2012)
Payer Agent

  1. The Payer Agent file is a compilation of Payer Information Return (IR) documents which have been verified as erroneously filed or processed. The BMF-AUR Payer Agent file is tax year specific.

  2. The BMF-AUR system will access data from the same Payer Agent listing currently maintained by the IMF-AUR program. Any updates made by either the AUR or BMF-AUR Payer Agent Coordinator will be available to both programs.

  3. Payer Agent Indicator "check mark" in the Payer Agent box of the Case Analysis screen indicates that the Payer Agent file contains data for the IR in question.

4.119.4.5.1  (10-01-2012)
Tax Examiner - Instructions

  1. Access the Payer Agent window for all IRs showing Payer Agent Indicator "check mark" . The Payer Agent window lists the payer's name, EIN, document type, source, and a synopsis of the reporting problem.

    Note:

    If all U/R income is from identified Payer Agents and the Payer Agent window contains instructions to delete the IR, close the case with PC 4240.

    Note:

    If U/R issues remain, continue normal processing (the Payer Agent closing PC would NOT apply).

  2. During the screening phase, the tax examiner may identify questionable IRs, which appear to be erroneous but are not marked with a Payer Agent code "check mark" . When IRs appear to be questionable and the tax examiner determines the IRs should be investigated, take the following steps:

    1. Print the Case Analysis screen and the Information Return screen.

    2. Forward both screen prints and any additional supporting information documents to the BMF-AUR site Payer Agent Coordinator.

    3. Continue normal processing.

  3. During the response phase, the tax examiner may receive information from the payer or the taxpayer indicating the proposed U/R is the result of a payer reporting error. Take the following action to forward the information to the BMF-AUR site Payer Agent Coordinator:

    1. Photocopy the TP statement or payer letter and a copy of the Case Analysis screen and the Info Return (IR) screen.

    2. Forward these photocopies and any additional supporting information documents to the BMF-AUR site Payer Agent Coordinator.

    3. Continue normal processing.

4.119.4.5.2  (10-01-2012)
BMF-AUR Site Payer Agent Coordinator - Instructions

  1. The BMF-AUR Payer Agent (P/A) Coordinator will perform the following tasks.

    1. Take action on all IRs referred by tax examiners as questionable/suspicious Payer Agent data.

    2. Sort and review the screen prints received from tax examiners deemed questionable/suspicious. Begin research when four or more screen prints with the same EIN are identified. The BMF-AUR Site P/A Coordinator should attempt to make a determination about the discrepant IRs. If payer contact is necessary to determine the impact, check IDRS for a telephone number or call XXX-555-1212 (XXX represents the area code of the city/state being called).

      Note:

      Revised Third Party procedures allow for the administrative action of verifying information received from Employers/Payers. This verification is not considered a third party contact if the purpose of the contact is to process information received from the source and/or to ensure its validity/correctness.

    3. Coordinate with the IMF AUR National Payer Agent Coordinator to add new or update existing information.

    4. Input the EIN to search/query the Payer Agent File.

    5. View and/or print Payer Agent reports from the Payer Agent Coordinator menu.

  2. At the end of the BMF-AUR program for the tax year, print a copy of the Payer Agent Listing and retain in the Payer Agent file for three years.

4.119.4.6  (10-01-2013)
Determination of CP 2531 Issuance

  1. CP 2531 (PC 4300) is required as the first taxpayer contact notice for the following conditions:

    1. The U/R income results in a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more.

      Note:

      You must complete Return Values screen to make this determination.

    2. Cases involving the use of Schedule O to determine tax. See IRM 4.119.4.10.2, Schedule O, Consent Plan and Appropriation Schedule for a Controlled Group, for further information.

    3. Cases involving a change to Personal Holding Company (PHC) tax. See IRM 4.119.4.12.3, Personal Holding Company (PHC) tax, for further information.

    4. Cases involving ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ See IRM 4.119.4.13.2, Withholding - Miscellaneous, for further information.

    5. Cases resulting in an ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. In certain situations, a CP 2531 may be issued as the initial taxpayer contact notice since it is an inquiry instead of a proposal of assessment. If in doubt, consult your Lead Tax Examiner for guidance.

4.119.4.7  (10-01-2013)
Analysis of Income Types

  1. BMF-AUR evaluates third party income from information returns (IRs) against amounts reported on the income section of Form 1120, U.S. Corporation Income Tax Return, for the following areas of income to determine the Underreported amount (U/R) for each income type:

    • Gross Receipts or Sales, line 1a.

    • Dividends, line 4

    • Interest, line 5

    • Rents, line 6

    • Royalties, line 7

    • Capital Gain net income, line 8

    • Net gain (or loss) from Form 4797, line 9

    • Other Income, line 10

  2. The following instructions are used to process the various U/R income amounts by each income type.

4.119.4.7.1  (10-01-2013)
Gross Receipts or Sales (Bartering/Payment Card Transactions/Attorney's Proceeds/Fishing Proceeds/Medical Payments/Nonemployee Compensation) - General

  1. Income types generally considered Gross Receipts are displayed on the Case Analysis screen with the following Amount type and Document Type:

    Income Type Amount Type Document Type Income Description
    Bartering BARTERING Form 1099-B An exchange of one taxpayer’s property or services for another taxpayer’s property or services. The fair market value of property or services received through barter is taxable income.
    Gross Payment Card Transactions GROSS PAYMENT CARD SALES-YEAR Form 1099-K Consist of total transactions received by third party settlement organizations, such as payment credit card providers (ie: Master Card, Visa, etc.) or electronic payment facilitators (ie: PayPal, etc.).
    Gross Attorney's Proceeds GROSS ATTORNEY’S PROCEEDS Form 1099-MISC Gross proceeds paid to an attorney in connection with legal services.
    Fishing Boat Proceeds FISHING BOAT PROCEEDS Form 1099-MISC Proceeds from the sale of a catch.
    Medical Payments MEDICAL PAYMENTS Form 1099-MISC Compensation for medically related services provided or goods sold.
    Nonemployee Compensation NONEMPLOYEE COMPENSATION Form 1099-MISC Compensation for services provided or goods sold.

  2. The IRDM system automatically assigns Income Discrepancy indicator "Gross Receipts" to the amount types listed in (1) above. On a case-by-case basis, it may be necessary to remove an existing Income Discrepancy indicator from an Amount type or assign an Income Discrepancy indicator "Gross Receipts" to other Amount types not included in the above listing.

4.119.4.7.1.1  (10-01-2013)
Gross Receipts or Sales (Bartering/Payment Card Transactions/Attorney's Proceeds/Fishing Proceeds/Medical Payments/Nonemployee Compensation) - Analyzation

  1. Gross Receipts or Sales refer to all other income received except those that are reported on Form 1120 lines 4 through 10.

  2. When determining underreported income, compare affected Amount Types to Form 1120, line 1a (Gross Receipts or Sales) and/or Form 1120, line 10 (Other Income).

    Note:

    Taxpayers are instructed to identify any amounts reported on Form 1120, line 10. DO NOT give credit for any unidentified amounts reported on line 10, unless it is a dollar match to the information return amount.

    Reminder:

    If a Form 1099-K and Form 1099-MISC are present with identical money amounts, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Gross Payment Card transactions are not adjusted for any authorized returns or other allowances.

    1. During Case Analysis consider the entire IR amount when determining underreported income UNLESS the taxpayer provides a specific breakdown of their Gross Receipts or Sales and includes this amount type on their tax return.

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

  4. Payers (generally insurance companies) report gross proceeds paid to an attorney (ie: Attorney’s Fees) on Form 1099-MISC when they cannot determine the specific portion of the payment attributable to the taxpayer. The taxpayer is instructed to report only the taxable portion as income on their return. The system automatically assigns UR Status "Deleted" to Gross Attorney’s Proceeds.

    1. During Case Analysis, do not consider this amount type when determining U/R UNLESS the taxpayer provides a specific breakdown of their Gross Receipts or Sales and includes this amount type on their tax return.

      Note:

      Accept the amount that the taxpayer identifies as the taxable (e.g. reportable) portion of the Gross Attorney’s Proceeds on their tax return. You may need to create an IR or modify an existing IR to account for this amount when determining overall Gross Receipts U/R.

    2. During response phase you may need to account for this amount type when evaluating the taxpayer’s response.

  5. When there are more than one type of Gross Receipts related Amount Type (e.g., Nonemployee and Medical payments) present on the same case and the taxpayer does not provide a breakdown of reported amounts, use the Group function to determine the overall income amount to compare against amounts reported on the tax return.

    1. If the group amount is greater than the return amount, assign Status Code "Underreported" to the group. The difference is U/R.

      Note:

      Ensure that Income Discrepancy indicator "Gross Receipts" is present on all Amount Types within the group.

      Note:

      In order to establish a Gross Receipts group, update the Group By section of the Grouping window as follows: the Amount Type field must be blank and Income Discrepancy field must display "Gross Receipts" .

    2. If the group amount is equal to or less than the return amount, assign Status Code "Reported" to the group.

  6. If the taxpayer reports the same amount of Form 1099-MISC income as shown in the IR, but under a different payer name, consider the IR reported.

4.119.4.7.1.2  (10-01-2013)
Gross Receipts or Sales (Bartering/Payment Card Transactions/Attorney's Proceeds/Fishing Proceeds/Medical Payments/Nonemployee Compensation) – Miscellaneous

  1. If Gross Receipts are U/R enter the amount from Form 1120, line 1a in the RETURN field on the Summary Screen.

  2. The U/R Amount Types that contain Income Discrepancy indicator "Gross Receipts" will display as "Gross Receipts" in the Changed Items section of the Summary Screen.

  3. Any U/R Amount Types that do not contain an Income Discrepancy indicator, will display in the Changed Items section of the Summary screen with that particular Income Type name.

    Example:

    If there is U/R from Amount Type BARTERING and the Income Discrepancy indicator is blank, then "Bartering" will display in the Changed Items section of the Summary screen. Enter the amount of bartering reported on the tax return (including zero if fully U/R) in the RETURN field on the Summary Screen.

  4. PARAGRAPH 1 automatically generates whenever Gross Payment Card transactions are U/R.

  5. Gross Receipts related Document Types may include withholding. See IRM 4.119.4.13, Withholding - General, for further instructions.

4.119.4.7.2  (10-01-2013)
Dividends and Capital Gain Distributions

  1. Dividends are distributions of property made by a corporation to its shareholders out of its current or accumulated earnings and profits. Dividends paid directly to a shareholder are reported onForm 1099-DIV, Dividends and Distributions. Dividends received indirectly through a pass-through entity are reported on Schedules K-1 from Form 1065, U.S. Return of Partnership Income, Form 1041, U.S. Income Tax Return for Estates & Trusts, and Form 1120-S, U.S. Income Tax Return for an S Corporation.

  2. Capital gain distributions are normally paid by regulated investment companies, mutual funds, and real estate investment trusts from their net long term capital gains.

4.119.4.7.2.1  (10-01-2012)
Dividends - General

  1. Dividends are identified on the Case Analysis screen by Document Type 1099–DIV and one (or more) of the following Amount types:

    • ORDINARY DIVIDENDS

    • QUALIFIED DIVIDENDS

    • COLLECTIBLES 28% GAIN

    • UNRECAPTURED SECTION 1250 GAIN

    • SECTION 1202 GAIN

    • NONDIVIDEND DISTRIBUTIONS (non-taxable)

    Note:

    QUALIFIED DIVIDENDS, COLLECTIBLES 28% GAIN, UNRECAPTURED SECTION 1250 GAIN, SECTION 1202 GAIN and NONDIVIDEND DISTRIBUTIONS are displayed for information purposes only. The system will automatically mark these Amount Types with UR Status "System Deleted" .

  2. Dividends reported on Schedule(s) K-1 are identified on the Case Analysis screen by Amount Type DIVIDENDS and by Document Type Sch K-1 (1041), Sch K-1 (1065) or Sch K-1 (1120-S).

4.119.4.7.2.2  (10-01-2012)
Dividends Analyzation

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ :

    • Keogh (HR-10) or Tax Sheltered Annuities (403(b)) accounts

    • A trust or a plan where the corporation is listed as a Trustee

    • A pension plan or profit sharing plan (PSP) (including a 401(k) plan)

    • An Escrow Account (Attorneys)

    • Municipal Bonds

    Note:

    If W/H from these IRs is claimed, allow it. Otherwise do not pursue the apparent U/C W/H.

  2. Compare Ordinary dividends and/or Dividend amounts with entries on:

    1. Form 1120, line 4.

    2. Form 1120, line 10. The amount must match within $1 or be clearly identified as dividend income.

  3. When more than one information return containing Ordinary Dividends and/or Dividend Amount Types are present and the taxpayer does not provide a breakdown of reported amounts, use the Group function to determine the overall income amount to compare against amounts reported on the tax return.

    1. If the group amount is greater than the return amount, assign UR Status "Underreported" to the group and consider the difference U/R.

    2. If the group amount is equal to or less than the return amount, assign UR Status "Reported" to the group.

  4. Dividends and Interest income may be interchanged. Check any interest income areas when comparing IR amounts. Offset dividend income against interest income ONLY if an unidentified amount matches the U/R dividend amount within $1.

4.119.4.7.2.3  (10-01-2012)
Dividends Miscellaneous

  1. If dividends are U/R, enter the return amount in the RETURN field on the Summary screen.

  2. PARAGRAPH 4 automatically generates whenever dividends are U/R.

  3. Dividend related Document Types may include withholding. See IRM 4.119.4.13, Withholding - General, for further instructions.

4.119.4.7.2.4  (10-01-2012)
Capital Gain Distributions - General

  1. Capital gain distributions reported on Form 1099-DIV are identified on the Case Analysis screen with Document Type 1099-DIV and Amount Type CAPITAL GAIN DISTRIBUTIONS.

  2. Capital Gain Distributions are considered separately from Ordinary Dividends.

4.119.4.7.2.5  (10-01-2013)
Capital Gain Distributions - Analyzation

  1. Compare Amount Type Capital Gain Distribution amounts with entries on:

    1. Form 1120, Schedule D, line 14.

      Note:

      Ensure that capital gain distributions reported on Schedule D are appropriately carried forward to Form 1120, line 8, before considering them reported. If not, then consider the amount U/R and send PARAGRAPH 12.

    2. Form 1120, line 8, if Form 1120, Schedule D is not attached.

  2. If a breakdown of capital gain distributions is not shown on the return and there is more than one capital gain distribution IR:

    1. Group all Capital Gain Distributions together.

    2. Compare the group total amount to the amount reported on the return.

    3. If the group total amount is smaller, assign UR Status Code "Reported" to the group.

    4. If the group total amount is larger than the amount reported, consider the difference U/R and assign UR Status "Underreported" to the group.

  3. If Capital Gain Distributions are U/R, enter the return amount from Form 1120, Schedule D, line 14 or Form 1120, line 8 (if Schedule D is not attached).

  4. Capital Gain Distributions related Document Types may include withholding. See IRM 4.119.4.13, Withholding - General, for further instructions.

4.119.4.7.3  (12-04-2012)
Interest - General

  1. Interest is reported by payers on Form 1099-INT, Interest Income, Form 1099-OID, Original Issue Discount, and on Schedules K-1.

  2. Interest reported on Form 1099-INT is identified on the Case Analysis screen by Document Type 1099-INT and one (or more) of the following Amount Types:

    • INTEREST

    • U.S. SAVINGS BOND INTEREST

    • INVESTMENT EXPENSE

    • FOREIGN TAX PAID

    • TAX EXEMPT INTEREST

    • PRIVATE ACTIVITY BOND INTEREST

      Note:

      INVESTMENT EXPENSE, FOREIGN TAX PAID, TAX EXEMPT INTEREST and PRIVATE ACTIVITY BOND INTEREST are displayed for information purposes only. The system will automatically mark these Amount Types with UR Status "System Deleted" .

  3. Interest reported on Schedule(s) K-1 is identified on the Case Analysis screen by Document Type: Sch K-1 (1041), Sch K-1 (1065) or Sch K-1 (1120-S) and Amount Type INTEREST.

  4. Original Issue Discounts (OIDs) are identified on the Case Analysis screen by Document Type 1099-OID and one (or more) of the following Amount Types:

    • ORIGINAL INTEREST DISCOUNT

    • INTEREST

    • OID TREASURY OBLIGATIONS

    • INVESTMENT EXPENSE

    Note:

    INVESTMENT EXPENSE is displayed for information purposes only. The system will automatically mark these Amount Types with UR Status "System Deleted"


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