5.19.2  Return Delinquency (Cont. 1)

5.19.2.5 
Return Delinquency Procedures

5.19.2.5.5  (12-08-2009)
BMF Return Delinquency Responses and Inquiries

  1. This subsection provides guidance on the procedures for processing Business Master File (BMF) Return Delinquency (RD) notice responses and inquiries.

  2. Document account of actions taken as stated per the specific IRM section.

  3. For additional information regarding BMF RD modules, see Document 6209, Chapter 11 Collection/BMF Taxpayer Delinquency Investigation (TDI) Explanation, at http://serp.enterprise.irs.gov/databases/irm.dr/current/6209.dr/6209ch11.5.1.htm.

5.19.2.5.5.1  (11-23-2011)
BMF Special Handling Responses

  1. Review for the following conditions:

    If And Then
    Taxpayer response is threatening or indicates a potentially dangerous situation (online or in correspondence), Account is in Notice Status 02 or TDI Status 03,
    1. Assign to 8150 using to Command Code (CC) ASGNB.

    2. Refer to IRM 5.1.3.1, Potentially Dangerous Taxpayer (PDT).

    3. Report all incidents to Treasury Inspector General Tax Administration (TIGTA), by telephone. TIGTA can be reached at 1-800-366-4484. TIGTA will inform you where to send the case.

    4. For cases in Notice Status 02, input delay C08 using CC ASGNB. To accelerate to Automated Collection System (ACS), see IRM 5.19.2.5.1.1, Accelerate or Delay To TDI Status 03.

    5. Document Account Management Services (AMS) indicating the case was sent to TIGTA.

    6. For cases in TDI Status 03, for "ACS/Field Assistance (FA)/ACS-Support (ACSS)" employees only, input comments in a narrative on AMS.

    7. If the account is on ACS, input TOR3,60,TIGTA.
      After the investigation is completed, a determination will be made, and the employee through their Director will be informed of the disposition of the case in a memo.

    8. If TIGTA states this isn't a threat then work the case appropriately.

    • Taxpayer indicates in correspondence they refuse to file a return or provides information based on claims of a frivolous return, or

    • Taxpayer is on the telephone and refuses to file a return or gives information based on frivolous claims, or

    • Taxpayer states they refuse to file a return or provide information on a constitutional basis, objects to filing, cites the Fifth Amendment, or states a violation of their constitutional rights,

    Note:

    Refer to IRM 4.10.12.1.1, Frivolous Arguments, for definitions of frivolous arguments,

    Account is in Notice Status 02 or TDI Status 03,
    1. Input TC 595 cc 82/32 and refer to:
      Ogden Compliance Services
      ATTN: FRP, m/s 4450
      1973 N. Rulon White Blvd.
      Ogden, UT 84404

    2. Document AMS of all secured pertinent information.

    3. If the account is on ACS, enter history code "TOR3,30,CMNTS " .

    4. Notate on correspondence "Already seen by Collections (CSCO or ACSS)" before routing.

     
    Open Criminal Investigation (CI) control or TC 914. Account is in Notice Status 02,
    1. Input delay "C03" (three week) using CC ASGNB (see IRM 2.4.27, Command Code ASGNI/ASGNB formerly TSIGN ).

    2. Route notice to CI Branch.

    3. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT telephone the taxpayer.

     
    Account is in TDI Status 03.
    1. Document AMS indicating case was sent to CI.

    2. For "ACS/ACSS/FA" employees only, document AMS of all pertinent information.

    3. Route to CI Branch.

    4. If the account is on ACS, enter "TOR3,60,CI or TC914 " .

    5. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT telephone the taxpayer.

     

  2. For potential fraud cases, refer to IRM 5.19.2.5.4.1, IMF Special Handling. However, also consider referrals to CI for cases when indicators of fraud exist and there is more than six years of delinquent returns.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Caution:

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Do not close responses with Collection Case Code W–2, unless an employment tax return (Form 941 , Form 943 or Form 944) is secured or was previously filed for any quarter during the previous year. A case code is used to identify the type of notice to be issued. (See Document 6209 for Collection Case Codes.)

  4. Route "Power of Attorney" (POA) Document 2848 or other tax authorization to the appropriate (Centralized Authorization File (CAF) team. See the state mapping table in IRM 21.3.7.1.3, Processing Sites (CAF Function).

    Note:

    A non-deployed spouse can represent as a POA for their deployed spouse in the military as long as she/he completes a Form 2848.

  5. If the taxpayer requests a visit from an IRS representative, see IRM 5.19.2.5.1.2, Accelerate to Compliance Territory Office (Revenue Officer).

  6. A bankruptcy stay does not prohibit gathering information from the taxpayer to determine the correct tax liability or sending the taxpayer information for the sole purpose of securing a return. If a return is secured, send a photocopy to the appropriate Insolvency/Bankruptcy area, along with a copy of any other pertinent information secured. Code the return for processing and input TC 599 cc 92/42 and process.

  7. The 6020(b) program is the BMF equivalent to (IMF) Automated Substitute for Return (ASFR) program. The information for preparing the return comes from the taxpayer’s last return filed, a third party, or provided by the taxpayer. See IRM 5.18.2, Business Returns IRC 6020(b) Processing regarding 6020(b) process and procedures or IRM 5.19.2.5.5.3, BMF Substitute for Return 6020(b) Program Referrals.

5.19.2.5.5.1.1  (09-11-2012)
Combat Zone BMF Procedures

  1. Section 7508 of the Internal Revenue Code (IRC) postpones the time that individuals have for performing certain tax related acts, including filing tax returns. These acts are postponed until at least 180 days after the taxpayer leaves the designated combat zone/qualified hazardous duty area/contingency operation ("Combat Zone" ). Generally, the IRS will not assess income tax or charge any penalty during the postponement period. The IRS will generally cease all enforcement activities against taxpayers in a Combat Zone during the postponement period.

  2. IRC Section 7508 applies to individual taxpayers, sole proprietors reporting their income on Schedule C of their individual tax return, estate or gift tax, as well as certain partnership entities. Nonetheless, the Service may provide administrative relief for certain qualified BMF taxpayers with military members serving in a combat zone/qualified hazardous duty area. Although BMF taxpayers are not entitled to time in the Combat Zone plus the 180-day (or more) postponement period, the Service can consider whether it is appropriate to waive any applicable penalties for that period due to reasonable cause. Note however, the Service does not have the authority to waive interest during the postponement period with regard to BMF taxpayers. In addition, the Service provides other administrative relief such as the suspension of collection activity during the period of time in which a postponement would occur if the BMF taxpayer qualifies. See paragraph 3 below for guidance to determine if a business meets criteria.

  3. To consider administrative Combat Zone relief to BMF taxpayers, the following conditions must be met:

    • The business is a partnership, sole proprietorship (except where the sole proprietorship is essentially Schedule C businesses of an individual income taxpayer) or a personal services corporation (e.g. doctor, dentist, Certified Public Accountant (CPA), etc.) where the key individual/partner is/or was in the combat zone, AND

    • The business had to CEASE operations from the time the key individual/partner entered the combat zone.

  4. To grant administrative Combat Zone relief to qualified BMF taxpayers, and to remove the RD modules from TDI notice status 02 and Status 03, Input TC 598 CC 70 to close out an open TDI.

  5. If the taxpayer contacts us, assist them with their issues. Inform them with a 2255C or other appropriate letter they ARE required to file their BMF return while in the combat zone and will NOT be given an additional 180 days after they exit the combat zone to file their current year and any delinquent returns. However, they can request relief from any penalties (excluding interest) that might be due based on reasonable cause. Otherwise, see IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

  6. When determined the taxpayer is no longer in combat zone or the -C freeze was input in error, see IRM 5.19.10.7.2.2 and IRM 5.19.10.7.2.3 for procedures to release the freeze on the account.

  7. See IRM 5.19.10.6 and Publication 3 for additional guidance on Combat Zone.

5.19.2.5.5.1.2  (11-23-2011)
Limited Liability Company (LLC)

  1. A Limited Liability Company (LLC) is an unincorporated business entity created under state law that has characteristics of both a partnership and a corporation.
    It is similar to a corporation that the owners have limited personal liability for negligent acts and LLC debts, yet it is similar to a partnership as it provides management flexibility and may provide benefits of a pass-through reporting of tax of income. Refer to IRM 5.1.21, Collecting From Limited Liability Companies, for additional information. Owners of an LLC are called members, without a maximum number of members.

  2. An LLC with two or more members has the option of filing, under certain conditions, as a partnership, or as a corporation. A single member LLC has the option under certain conditions, of either filing as a corporation, or be disregarded for tax purposes, in which case the single owner reports the LLC's income tax items directly on their own personal tax return. Refer to Publication 3402, Tax Issues for Limited Liability Companies, for additional information. However, for tax years after January 1, 2009, a single LLC is treated as a separate corporation for employment tax and excise tax purposes, even if it has elected disregarded entity status for federal income tax purposes. For periods after January 1, 2009, a single member LLC must file employment tax and excise tax returns under its own EIN. For years prior to 2009, a single member LLC can file employment and excise tax returns either under its own EIN or the EIN of the single member owner. For more information, see IRM 5.1.21.7.6, Employment and Excise Taxation for the Disregarded Entity.

  3. If a RD response states they are an LLC and have filed an employment, partnership or corporation return under another Employer Identification Number (EIN) or Master File Transaction (MFT), research the other account module. If determined filed under another EIN, MFT, then follow the table below:

    If And Then
    The response doesn't state this EIN will no longer be used

    Note:

    If working a Form 1065 response and research indicates income has been claimed under a cross reference TIN for at least the last 3 years, input a TC 591 cc 75),

    For Compliance Service Collection Operation (CSCO) and Account Management (AM) Employees,
    1. Input TC 590 cc 75 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Document AMS of actions taken, including the EIN the LLC filed under.

    3. If the account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees,
    1. Input TC 590 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Document AMS of actions taken, including the EIN of the LLC.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    The response states this EIN will no longer be used. For CSCO and AM Employees,
    1. Input TC 591 cc 75 using CC FRM49.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of information secured, including the EIN the LLC filed.

    3. If the account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND " .

    For FA Employees.
    1. Input TC 591 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Document AMS of information secured, including the EIN the LLC filed.

    3. If the account is on ACS, enter history code, "TOC0,21,RDPND" or "TOS0,21,RDPND" .

  4. If taxpayer responds they filed all the LLC income or employment taxes under their personal Form 1040 tax return, research IDRS to confirm if a Schedule C, E, or F was filed under a Form 1040 for the correct tax period, then close the module accordingly. See below table for guidance:

    If Then
    For CSCO and AM Employees,
    1. Input TC 590 cc 75 using CC FRM49. (TC 591 cc 75 can be used if the taxpayer indicates the income is being report or has been and continues to be reported on their individual 1040 tax returns, verified through research.)

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. If cross reference SSN is not on ENMOD, input SSN using CC ENREQ.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49. (TC 591 cc 75 can be used if the taxpayer indicates the income is being report or has been and continues to be reported on their individual Form 1040 tax returns, verified through research.)

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. If cross reference SSN is not on ENMOD, input SSN using CC ENREQ.

    3. If the account is on ACS, enter history code, "TOC0,30,RDPND " , "TOS0,30,RDPND " .

    For FA Employees.
    1. Input TC 590 cc 20 using CC FRM49. (TC 591 cc 75 can be used if the taxpayer indicates the income is being report or has been and continues to be reported on their individual 1040 tax returns, verified through research.)

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. If cross reference SSN is not on ENMOD, input SSN using CC ENREQ.

    3. If the account is on ACS, enter history code, "TOC0,21,RDPND" or "TOC0,21,RDPND " , whichever is appropriate.

  5. If the response states they are an LLC and have filed an employment, partnership or corporation return under another EIN, MFT or Form 1040 Individual Return, research the other account module, if it does not indicate a return was filed, or the response does not provide the EIN the return was filed under, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

5.19.2.5.5.1.3  (02-15-2011)
BMF Procedures for Field Assistance Employees

  1. For all Field Assistance (FA) employees working RD BMF cases with a taxpayer in a field assistance office, you will follow the procedures in this section.

    • If you are an Individual Taxpayer Advisory Specialist (ITAS) with an 809 book assigned to you, and any criteria throughout the IRM for 5.19.2 is met to enter any transaction/closing codes and history items, prepare a Form 4442 with the required information for all modules in Notice Status 02 or TDI Status 03. You must secure managerial approval and send the Form 4442 to the appropriate employee within your site for the actual inputs.

    • If you are an ITAS employee that is not assigned an 809 book, and criteria throughout this IRM is met, enter transaction codes and history items when applicable.

    • All ITAS employees will not issue any of the RD letters required throughout the IRM for all modules in Notice Status 02 or TDI Status 03.

    • For all modules in Notice Status 02, if you are assigned an 809 book, you would include this information on Form 4442.

    • For all modules in TDI Status 03, all ITAS will document any required comments or history codes on ACS, AMS or Integrated Collection System (ICS) as appropriate. If you are assigned an 809 book, you would include this information on Form 4442 you have prepared. ITAS employees will document Levy Sources on IDRS as appropriate when required throughout IRM 5.19.2. If you are assigned an 809 book, you would include this information on the Form 4442 you have prepared.

    • You are answering the taxpayer with a written or telephone response - FA employees working collection cases in Notice Status 02 or TDI Status 03 will set deadlines that are reasonable and appropriate for filing returns.

  2. As of September 2007, FA ceased working Collection inventory. See Document 6209 for FA closing codes.

5.19.2.5.5.2  (12-08-2009)
BMF Examination Referrals

  1. If the taxpayer's response indicates the case is in Exam, research Audit Information Management System (AIMS) using CC AMDIS.

    • If no data is available, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient, for procedural guidance.

    • If a TC 420, -L freeze, or an open AIMS control is present on TXMOD, input TC 595 cc 82/32 using CC FRM49 and route case to Examination, Classification Branch.

    • If command code "AMDISA" has a Status 90, indicating the case is closed, do not send to Exam even if a minus L freeze or open 420 exists. Work the response or return as appropriate per procedures throughout the IRM.

  2. If a TC 421 is on the module, which reversed the TC 420 indicating Exam did not select the case for their program, proceed with normal RD processing. See IRM 5.19.2.5.5.4, BMF Determining Liability.

    Note:

    For Notice Status 02 cases not closed as taxpayer not liable, accelerate to TDI Status 03 by inputting a C01.

  3. When working a transcript created by a TC 595 without a posted return, and there is no indication why the case was referred to Exam or not selected, reverse the TC 595 with a TC 592 and proceed with normal RD processing. See IRM 5.19.2.5.5.4, BMF Determining Liability.

5.19.2.5.5.3  (09-11-2012)
BMF Substitute for Return A6020(b) Program Referrals (Forms 940, 941, 943 or 944)

  1. Accounts may be referred for processing in the 6020(b) program. If you determined an account may be eligible for 6020(b) referral, refer to the subsequent paragraphs. For more information on 6020(b) criteria see IRM 5.18.2.2.1 , Research Criteria for IRC 6020(b) Processing or refer to the If and then chart below.

  2. For accounts in ACS- a letter (LT18) is mailed at the time of assignment of the case to ACS for modules identified and have a 6020(b) indicator. The LT18 advises the taxpayer a 6020(b) return may be prepared if the return is not filed. The case is assigned to the ACS C5 inventory that have a telephone number and to I2 inventory if there is no telephone number available.

    Note:

    Entities that meet 6020(b) criteria, see IRM 5.18.2.2.1, Research Criteria for IRC 6020(b) Processing for more information about 6020(b) criteria, can be excluded from C5 or I2 and not receive an LT18 letter if there is an open TDA for the case at the time of assignment. In some situations where the TDA is resolved, the case will require an LT18 letter be mailed if the non-filer has not been contacted and warned of 6020(b) enforcement action.

  3. A minimum of four telephone attempts made on at least two different days at two different times of the day must be made to secure a time frame (date) for filing. If prior contact has been made and a deadline for filing is set, then it is not necessary to contact the taxpayer again.

  4. If there is no telephone number or the telephone number is no longer in service, assign the case "TOI2,,TNR" for telephone number research.

    Note:

    The predictive dialer will not make directory assistance calls. CR's not working predictive dialer may make directory assistance calls at the discretion of local management. If a telephone number is found, the case may stay in the C5 inventory so the predictive dialer can make another telephone attempt.

  5. If a telephone number is not found, check to see if an LT18 letter has been issued.

    • If no LT18 has been issued, reassign TOI2 and issue the LT18.

    • If an LT18 has been previously issued, reassign the case to TOI7. If the previous LT18 was returned as undeliverable (UD), reassign case TOI2 for locator research to be conducted.

  6. If contact is made with the taxpayer or authorized representative, follow the directions in (7)..

  7. If filing requirements are Form 940 , Form 941, Form 943 or Form 944 and the module is on ACS, ask the taxpayer or authorized representative if they were in business during the delinquent tax period, and follow procedures in the "if and then" chart below:

    Note:

    For Form 940; Compare the Form 941 quarters for the same tax year as the delinquent module for information regarding wages paid to validate if taxpayer is liable to file the Form 940.

    If ... Then ...
    Response indicates they have no employees for that tax period only
    1. Input TC 590 cc 25.

    2. Document AMS

    3. Move to appropriate ACS inventory.

    Note:

    See IRM 5.19.2.5.5.4.1, BMF Response- Utilizing BMF Selection Codes (SC) for research guidance.

    Response indicates they no longer have employees
    1. Input TC 591 cc 25.

    2. Document AMS

    3. Move to appropriate ACS inventory.

    Note:

    See IRM 5.19.2.5.5.4.1, BMF Response- Utilizing BMF Selection Codes (SC) for research guidance.

    Response indicates they will be filing the missing returns and their account meets 6020(b) criteria:
    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Set a specific deadline to file and warn taxpayer of enforcement action if deadline not met: i.e. 6020(b).

    2. Document AMS.

    3. Reassign to "TOI7,XX,TFRO8600" , where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    Response indicate they will be filing the missing returns and their account meets 6020(b) criteria and the Module delinquency:
    • Is over $1500,

    • Or all the modules are over three years old from current calendar year,

    • Has an ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    1. Set a specific deadline to file and warn taxpayer of enforcement action if deadline not met.

    2. Document AMS.

    3. Reassign the case to "TOI7,XX,TFQU " , where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    No information is provided Re-assign the case TOI7,XX,TFQU, which XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

  8. If contact is made and the account does note meet 6020(b) criteria, set a specific deadline to file, warn taxpayer of enforcement action if deadline not met: i.e. 6020(b) and follow instructions below.

    If ... Then ...
    The account does not meet 6020(b) criteria, as it has an ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Re-assign the account for management approval for TFRO assignment:
    • TOC0,,TFRO (ACS Call Site) or

    • TOS0,,TFRO (ACS Support)

    The account has an ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Re-assign the account to TOR1,60,FAD.

    2. Document history of any pertinent information.

    Note:

    FAD accounts are worked at the Brookhaven Campus. Refer to Serp-Who/Where: FEDERAL AGENCY DELINQUENCY CONTACTS :

    The cases do not contain at least one Form 940, Form 941, Form 943 or Form 944 module Assign the account to "TOI7,XX,NO6020B " , where XX stands for the deadline date plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates. If the taxpayer fails to meet the deadline, the next case action will be to send the case to the queue since no other enforcement action is available for ACS to take at this time.
  9. If contact is made with the taxpayer and you determine 6020(b) action is no longer appropriate, see IRM 5.19.2.5.5.4, BMF Determining Liability.

  10. If the taxpayer sends in an original return and/or correspondence pertaining to a tax period that has a 6020(b) assessment open control to the Centralized 6020(b) unit identified with an IDRS number of 04657XXXX, take no action on the account. Forward the return and/or correspondence to the centralized 6020(b) unit in the Ogden Campus:

    IRS-6020B Centralized Unit/CSCO
    Stop 5508
    1973 North Rulon White Blvd
    Ogden, UT 84404

  11. In situations when a 6020(b) assessment is made (with or without an no open control) and the taxpayer responds stating they are not liable and a signed return is not included, forward the correspondence to the 6020(b) unit in Ogden (above address) to correspond with the taxpayer.

    Note:

    Input a STAUP 58/09 for any module in Status 21 or STAUP 22/09 for any module in Status 56 or 58. For any modules in Status 22,24 or 26, input a TC470 with no closing code

  12. If the taxpayer sends an original return for a tax period that has a posted 6020(b) assessment, forward to Submission Processing for an adjustment to be made.

5.19.2.5.5.4  (08-02-2011)
BMF Determining Liability

  1. The following IRM section will provide directive guidance on determining if the taxpayer is liable to file, and assist in resolving taxpayers RD issues, with the goal to resolve contact issues (correspondence or telephone calls) timely and accurately to prevent subsequent notices and/or TDI issuances. Complete research is necessary to determine appropriate action(s) needed for resolution. For complete research guidelines refer to IRM 5.19.2.5.5, BMF Return Delinquency Responses and Inquiries.

    Refer to Exhibit 5.19.2-10, Table of BMF Selection Codes with Definitions for assistance in determining if taxpayer is liable to file. BMF Selection Code (SC) for each module is identified on CC TXMOD.

  2. Resolve all taxpayer issues via correspondence, telephone calls or walk-in assistance in a timely manner to prevent subsequent notices and/or TDI issuances. If necessary, direct taxpayers to the appropriate office where assistance is available.

    Note:

    For CSCO employees: When corresponding with taxpayers use the appropriate AM Toll Free number on any correspondence being sent responding to either the CP 259 (1st Notice) or CP 518 notice, or resolving a transcript. Document AMS to reflect actions taken and any pertinent information for the next employee. Situations may arise when it will be necessary for CSCO employees to give their direct telephone number to resolve a situation on an account, but these instances should be rare.

  3. If determined the taxpayer is not liable to file a return, either by research, taxpayer response, or if a previous action was taken (i.e., credit misapplied and moved to correct account), close the account accordingly. Document AMS research completed and actions taken.

  4. If the taxpayer claims they are a victim of Identity theft, see IRM 5.19.2.6, Identity Theft Procedures for determination and referral guidance, if criteria is met.

  5. Send taxpayer applicable forms necessary to file the delinquent return, or provide taxpayer with the web-site for forms and publications at: http://www.irs.gov.

  6. When procedures require a "Full Compliance Check (FCC)" be conducted, verify/address all un-filed modules, whether the module is in an open RD status or not to determine/verify if taxpayer is liable to file. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Do not request a delinquent return if there is an indication a CP notice, correspondence was sent or telephone call was made within the past 25 cycles requesting the TDI module. Utilize the BMF Select Code assignment as a guide for research. See IRM 5.19.2.5.5.4.1, BMF Response- Utilizing BMF Selection Codes (SC).
    Research would include but not limited to:

    • IDRS research of CC: BMFOL with definers W, R, L.

    • Research CC IRPTRL using "IND Type 3" to verify business income and business activity reported to IRS.

    • Research cross reference TIN, if applicable (CC NAMES).

    • AMS history of prior documentation on account.

    • CC BRTVUE; Verify if wages paid.

  7. For AM employees: If the taxpayer states they are out of business, AM employees are not required to perform any research to determine if the taxpayer is liable to file or close out the TDI utilizing BMF Selection Codes instead they will complete the following:

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    Note:

    If you are able to determine the taxpayer is not liable to file without completing in-depth research (for example: if the taxpayer sent a copy of a previously filed "final return" for a year prior to the one in question or limited research determines a final return was filed close module accordingly.

  8. It is not necessary to create a TDI module or ask for a tax return on modules not in TDI status (not created) if it has been determined the taxpayer is not required to file. In addition, employees are not required to request a return for the current processing year until after 20 weeks past the Return Due date (RDD).

  9. CSCO Employees: If the business has a balance due module, and if the response addresses the balance due issue only, you are required to work the issue which might include a balance due FCC per IRM 5.19.1, Balance Due. If you are not trained to work balance due cases, route the case to the balance due function in your Site.

  10. When corresponding with the taxpayer and addressing multiple years only send one letter whenever possible. It may be necessary to send more than one letter when addressing multiple MFT’s, document AMS of actions taken and follow up date.

  11. When working a module in Status 06 previously closed with a TC 590 cc 19, 593, 597 or 598, follow the procedures throughout this IRM for the status (Notice-02 or TDI-03) the module was in when the 59X code was entered.

  12. Follow-up calls are not necessary, unless there is an indication the taxpayer will have information not previously available.

  13. If the taxpayer/business provides a personal business telephone number on a response to a notice, tax return, or RD correspondence, document the entity with the telephone number secured. If the area code is not available, input 000 as area code when updating.

  14. If the taxpayer responds their tax return is filed under the parent company or corporation, research the account to verify they filed under a parent EIN. See IRM 5.19.2.5.5.4.16, BMF Responses Employment Tax Overview.

  15. If the taxpayer claims they are an LLC filer and have filed under a Form 1040 or another EIN and MFT, see IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC).

5.19.2.5.5.4.1  (09-11-2012)
BMF Response - Utilizing BMF Selection Codes (SC)

  1. BMF CCNIP Selection Codes (SC) were developed to identify delinquencies with high potential that are identified as having third party data and may be liable to file the delinquent tax period. SCs are derived by correlating third party data, such as IRMF and CAWR, which can be secured for either the year in question, one year prior to the year in question or one year subsequent to the year in question (in that order). The third party account data can be researched via IDRS. Selection Codes are also an excellent research tool to determine if a taxpayer is liable to file, or if substantiation is necessary to close a module as not liable. As of April 2008 a field was added to CC TXMOD, "BMF SEL CODE" . BMF SC were developed to identify RDs with high potential of a return may be due. The SC assignment identifies what third party data was used to create the module.

  2. The reported data secured from various payer information reported to the IRS indicating taxpayers that have open filing requirements, and may be liable to file a unfiled or delinquent tax return.

  3. Selection codes are assigned in a pre-determined priority order. A module may meet various SC criteria, but will be assigned the SC with the highest priority. The SC assigned to a TDI module indicates the type of third party data that was secured on an entity for that specific MFT/period during the case creation process.

    Note:

    A module must have an open filing requirement for the specific MFT to be created.

  4. Several research tools are available on IDRS and CFOL to help in the initial analysis to evaluate and determine if a business is liable to file a specific tax return, or not. The available information can also be used as a probing tool when questioning the taxpayer to determine filing requirement via telephone or correspondence.
    IDRS Command Codes:

    • ENMOD

    • NAMES/NAMEE

    • TXMOD

    • TRBDV


    CFOL Command Codes:

    • RTVUE

    • BRTVUE

    • IRPTRL (use a definer of "3" for BMF information)

    • BMFOL Command Codes


    Utilizing the information derived from IDRS can be used to substantiate actions taken to determine whether or not a business is liable to file the tax period/return in question. If complete research indicates the taxpayer is not liable to file, the module can be closed with the appropriate TC 59X, without taxpayer contact. Document AMS of findings and actions taken.

    Note:

    Since businesses submit tax return information (Form 1120 , Form 1065, and Form 1040 Schedule C) and Form W-2 and Form W-3 under penalty of perjury, a module can be closed without taxpayer contact.

  5. There are currently a total of 99 BMF select codes a TDI module may be assigned during the Case Creation process. Employees only have to research and validate certain select codes during their research. These select codes are listed in the chart in paragraph 7 below.

  6. As stated in the prior paragraphs various IDRS CC's can be utilized to research and verify if the taxpayer is required to file. Conducting this research allows for the capability of closing a module if determined the taxpayer is not liable. Research cross-reference TIN(s) secured from taxpayer, or displayed on Master File to use as a determination if taxpayer is liable to file.

  7. The charts below can be used as a tool to assist with the research path when utilizing BMF Selection Code information. The procedures are general guidelines only and not indicative of all research necessary to determine if a taxpayer is liable to file. Even though a module is assigned to a specific SC due to prioritization, additional research may be necessary to resolve.

    Note:

    Not all situations can be closed via research, taxpayer contact may be needed to resolve the module. Refer to the IRM section for each specific form type for additional information on the filing requirement and guidance.

    Assigned Select Code

    Note:

    List is not inclusive of all applicable SC.

    Research Type Applicable MFT/Tax Forms

    Note:

    List is not inclusive of all returns/MFTs, and can apply to additional forms.

    1.
    01, 02, 03, 06, 07, 10, 13, 15, 16, 17, 18, 21, 23, 29,36
    Income Data MFT 01 Form 941
    MFT 02 Form 1120
    MFT 03 Form 720
    MFT 05 Form 1041
    MFT 06 Form 1065
    MFT 10 Form 940
    MFT 11 Form 943, Form 943PR

    MFT 12 Form 1042
    MFT 14 Form 944
    MFT 16 Form 945
    2.
    01, 02, 03, 04, 05, 06, 09, 19
    Wage Data MFT 01 Form 941
    MFT 02 Form 1120
    MFT 03 Form 720
    MFT 05 Form 1041
    MFT 06 Form 1065
    MFT 08 Form 8804
    MFT 09 Form CT-1
    MFT 10 Form 940
    MFT 11 Form 943
    MFT 12 Form 1042
    MFT 14 Form 944
    MFT 16 Form 945
    3.
    06, 07, 08, 09

    Note:

    Referral to 6020(b) is not applicable to assigned select codes.

    6020(b) Criteria MFT 01 Form 941
    MFT 10 Form 940
    MFT 11 Form 943
    MFT 14 Form 944

    If ... Research Steps Actions to Take
    Meets criteria in box 1 above
    1. Research CC IRPTRL under the EIN to identify income used for SC assignment, or MFT type.

      Note:

      Third party data can be derived from, the current year, one year prior, or the subsequent year, in that sequence.

    2. Verify and determine if the taxpayer filed under cross reference TIN. If the business is a sole proprietor, research taxpayer's RTVUE for the same tax year.

      Note:

      IRPTRL with a "3" definer is for BMF reporting. See IRM 2.3.35, Command Code IRPTR for additional information regarding CC IRPTR.

    3. CC BRTVUE/TRDBV can be used to verify information on various tax returns, i.e. Form 1120 (corporation), Form 1065 (partnership). The wage information reported on the return can be used to determine if taxpayer is liable to file Form 940, Form 941, Form 944, Form 943, or Form 945.

    Conduct complete research, including research of all cross reference TIN’s (IMF and BMF), if applicable:
    1. If research validates taxpayer reported income on cross reference TIN, indicating taxpayer not liable for the period,

      • Input a TC 590, with the appropriate closing code.

      • Input history on AMS research conducted, and actions taken.

    2. If research validates the taxpayer has filed their income under the cross reference TIN for at least the last 3 years, then consider the taxpayer no longer liable,

      • Input a TC 591, with appropriate cc on the earliest open TDI module.

      • Input history on AMS research and actions taken.

      Note:

      The Filing requirement will reopen if the taxpayer files a return in the future. Input of the TC 591 will prevent creation of future TDI modules as it was predetermined income is being reported under a cross reference TIN.

    3. If complete research conducted does not validate income and/or wages were reported under another TIN, and research indicates the taxpayer may be liable to file,

      • Taxpayer contact is required to request delinquent return and/or cross reference TIN to validate reporting of income or wages, if applicable.

      • CC BRTVUE can be utilized to verify compensations paid for employees, which are secured from F1065s or F1120s filed.

    Note:

    For additional guidance regarding specific situations, see
    IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC)
    IRM 5.19.2.5.5.3, BMF Substitute for Return A6020(b)
    IRM 5.19.2.5.5.4, BMF determining Liability,
    IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable
    IRM 5.19.2.5.5.4.5, BMF Response Out of Business
    IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable

    Meets criteria in box 2 above
    1. The purpose of utilizing CAWR data is to ensure employers paid and reported the proper amount of taxes for the specific tax year.

    2. Tax years identified as having a possible discrepancy on tax reporting are identified on CC BMFOLU. Research the MFT 88 on the tax year, if available. If not available, research the next most recent (prior year or subsequent) year of TDI module.

    3. Utilize CC BMFOLU, if the MFT 88 posted in the same year as the delinquent tax period, and the total information from all of the posted returns

      • The first column on CC BMFOLU indicates the cumulative data from posted 94X return(s).

      • The second and third columns are data extracted from Forms W-2 submitted to the IRS and Forms W-3 filed with SSA.

    See IRM 4.19.4.1, CAWR Overview, for additional information on CAWR reporting
    Research CC BMFOLU MFT 88 for the tax year of the delinquent MFT,
    1. If the first column (filed F94X's) "does not match" either one or both of the other 2 columns, this is an indication the taxpayer did not file all required employment tax returns for the specific tax year which indicates the delinquent return is required to be filed.

      • Contact taxpayer to request return,

      Note:

      For additional guidance regarding specific situations, see


      IRM 5.19.2.5.5.1.2, Limited Liability (LLC)
      IRM 5.19.2.5.5.4, BMF Determining Liability,
      IRM 5.19.2.5.5.3, BMF Substitute for Return A6020(b)
      IRM 5.19.2.5.5.4.5, BMF Response Out of Business
      IRM 5.19.2.5.5.4.3, BMF Taxpayer Not Liable

    2. If the first column (filed F94X's)"matches" the other 2 columns, then it validates all required Form 94X have been filed for the tax year, and indicates the taxpayer is not required to file the delinquent return.

      • Input a TC 590 with the applicable closing code on the "open" TDI module.

      • Document AMS of actions taken indicating TDI closed per research.

    3. If the CAWR information is not on the tax year of the delinquent module,

      • Conduct complete research utilizing command codes listed in the beginning of section to possibly resolve, including, research of all cross reference TIN’s (IMF and BMF), if applicable.

      • Document AMS of research completed and actions taken.

    Meets criteria in box 3 above Research account using CC IRPTRL and BMFOLU to determine if the taxpayer is liable to file.

    Note:

    6020(b) criteria definition:

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Research IRPTRL for the delinquent period as stated above, then:
    • Conduct complete research, including research of all cross reference TIN’s (IMF and BMF), if applicable.

    • If it is determined the income was reported under the cross reference TIN, or as a sole proprietor, then close the module with a TC 590, with the appropriate cc.

    • If research determines the income is not reported, continue with normal RD process.

    • Document AMS of research completed and actions taken.

5.19.2.5.5.4.2  (06-30-2011)
BMF Little or No Tax Due

  1. This section addresses closing modules without enforcement action even when a return is due if it meets certain criteria. Policy Statement P–5–133 of IRM 1.2.14Policy Statements for the Collecting Process allows closing modules if the following condition is met.

    • There would be no tax due on the delinquent return(s).

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

      Exception:

      This policy statement does not apply to Form 1065, U.S. Partnership Return of Income, Form 990 series, and Form 1120-S , U.S. Income Tax Return for an S Corporation. These forms are used for various reporting purposes and generally do not have tax due.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

  2. If the module meets criteria for "Little or No Tax Due" , take the following actions:

    Note:

    Managerial approval is required for closing account Little or no Tax Due.

    Exception:

    Closures over 6 years old do not require managerial approval.

    If And Then
    Account meets P-5-133 criteria, For CSCO and AM Employees,
    1. Contact the taxpayer via correspondence or telephone. If a telephone number is available make two attempts (one attempt for SBSE CSCO - do not leave a message on an answering machine or voice mail) prior to sending letter.

      • If taxpayer is reached by telephone request return(s) for all delinquent tax periods. (CSCO employees continue by following guidance in paragraph 7 of IRM 5.19.2.5.5.4, BMF - Determining Liability.)

      • If unable to contact by telephone or telephone number is not available, send Letter 2255C or other appropriate letter. It is not required to contact the taxpayer if the module is over 6 years old.



      Note:

      Do not inform the taxpayer the account module is being closed as Little or No Tax Due.

    2. If requesting more than one return, all must have a deadline documented.

    3. After managerial approval, input TC 590 cc 77 using CC FRM49.

      Note:

      Managerial approval not required for closing modules over 6 years old.

    4. If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    5. Document AMS of actions taken, including tax computation and telephone attempt.

    For ACS and ACSS Employees,
    1. Contact the taxpayer via correspondence or telephone and request return(s) for all delinquency periods.

    2. If contacting taxpayer by telephone, set a deadline of 30 days from the day you are closing the case.

    3. If account is not on ACS and unable to contact by telephone, set a 45 day deadline and send a Letter 2255C or other appropriate letter.

    4. If account is on ACS, enter ACS history code "TOC0,05,RDPND" or "TOS0,05,RDPND" and send an LT18 letter, which requests the taxpayer to file the return within 10 days from the date of receipt. Do not inform the taxpayer the account module is being closed as Little or No Tax Due.

    5. After managerial approval input TC 590 cc 27 using CC FRM49 on IDRS.

      Note:

      Closures over 6 years old do not require managerial approval.

    6. If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

      Note:

      If on the telephone with the taxpayer, address any credit balance during the call.

    7. Document AMS of actions taken, including tax computation.

    For FA Employees.
    1. If speaking with a taxpayer in a face to face meeting request return(s) for all delinquency periods.

    2. Set a deadline of 30 days from the day you are closing the case.

    3. If the account is on ACS enter ACS history code "TOC0,05,RDPND " or "TOS0,05,RDPND" .

      Note:

      Do not inform the taxpayer the account module is being closed as Little or No Tax Due.

    4. After managerial approval input TC 590 cc 20 using CC FRM49 on IDRS.

      Note:

      Closures over 6 years old do not require managerial approval.

    5. Document AMS of actions taken.

    Account does not meet P-5-133 criteria.   See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

5.19.2.5.5.4.3  (09-11-2012)
BMF Taxpayer Liable

  1. If it is determined the taxpayer is liable to file, determine the period(s) of delinquency and take the following actions below.

    Note:

    Address Full Compliance guidelines, see IRM 5.19.2.5.5.4, BMF Determining Liability.

  2. Reference to specific filing requirements and guidelines for each form type will be discussed later in BMF Response sub-sections.

  3. If the taxpayer has sent correspondence and provided a telephone number or a telephone number is available on the account make one out call attempt (CSCO and ACSS employees will not be required to leave a message on an answering machine or voice mail, telephone attempt(s) must be documented on AMS) before sending a letter to the taxpayer. If on the telephone with the taxpayer take the following actions:

    • Instruct the taxpayer to file a signed and dated return, including current address.

    • Provide the taxpayer with the appropriate IRS CSCO return address to mail the return. For CSCO addresses see Exhibit 5.19.2-12, CSCO Non-Filer Campus Addresses.

    • For CSCO employees: instruct the taxpayer to write RD on the top center of the first page of the return.

      Note:

      If the return is initially received in Submission Processing, they will forward to appropriate CSCO site to review and take necessary actions prior to sending for processing.

    • Document AMS comments accordingly.

  4. When responding to the taxpayer by written response (all employees), follow the guidelines below:

    If Then
    For CSCO and AM Employees,
    1. Instruct the taxpayer to file and set a deadline date for 30 days, with a follow up date 45 days to take next action, allowing mail time.

    2. Send a Letter 2255C , Letter 2284C , or appropriate letter that advises the taxpayer failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties and Form 940, Form 941, Form 943 and Form 944 employment returns may be processed under IRC 6020(b), if not filed voluntarily.

    3. If the taxpayer states they are a victim of Identity theft, see IRM 5.19.2.6, Identity Theft Procedures for additional guidance on Identity Theft.

    4. Document AMS of actions taken, including the target date.

    5. Input a delay "C08" using CC ASGNB (see IRM 2.4.27, CC ASGNI/ASGNB formerly TSIGN). See IRM 5.19.2.5.1.2, Accelerate to Compliance Territory Office (Revenue Officer), for additional guidance.)

    Note:

    If also addressing a balance due issue for the taxpayer, ensure all STAUPs and delays are equal.

    For ACS, ACSS and FA Employees
    1. Instruct the taxpayer to file and set a deadline of 30 days, with a follow up date of 45 days to take next action allowing mail time.

    2. Send LT18, or appropriate letter advising the taxpayer that failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties. Furthermore, if the delinquent module is Form 940, Form 941, Form 943 and Form 944 employment returns, they may be processed under IRC 6020(b) if not filed voluntarily.

    3. If the account is on ACS, enter history codes with "XX" equals 30 days past the deadline date as follows:

      • If the account does not have Employment code F, G or T, and

      • Has a module with MFT 01, 10 or 11 within last three years, and

      • LPS data with the same MFT of delinquent modules of $1500 or less, and/or

      • A delinquent module has a credit balance of $1500 or less,

      • Then reassign to "TOI7,XX,TFRO8600" See IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

      Note:

      The LPS data must be within 3 years of the earliest delinquent period. If the data is older, it does not meet 6020(b) criteria.

    4. If the account does not meet 6020(b) criteria enter, "TOI7,XX,TFQU" . See IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

      Exception:

      If the account contains Employment Code, G, or T, reassign the account for Managerial approval for TFRO assignment:
      TOC0,,TFRO (ASC Sites) or TOS0,,TFRO.

    5. If the account has an Employment Code F; Federal Agency Delinquency (FAD), re-assign the account to TOR1,60,FAD. Document AMS of actions taken.

      Note:

      FAD accounts (Employment Code F) are worked at the Brookhaven CSCO Operation.
      Refer to: FEDERAL AGENCY DELINQUENCY CONTACTS for FAD contact information.

  5. If you are a CSCO employee answering the taxpayer by telephone:

    • Determine if the taxpayer has the necessary information and forms to file the delinquent return(s). Provide necessary income and forms for taxpayer to file, if requested. Instruct the taxpayer to file and set a deadline of 30 days (allow more time if needed, taking into consideration the complexity of the delinquent return(s), and other pertinent circumstances), but not more than 60 days.

    • For Form 940, Form 941, Form 943 and Form 944 only, advise the taxpayer failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily.

    • Document AMS of actions taken.

    • Input a delay C08, using CC ASGNB (see IRM 2.4.27, Command Code ASGNI/ASGNB formerly TSIGN ) to accelerate to ACS, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03.

      Note:

      If also addressing a balance due issue for the taxpayer, ensure any STAUP's and delays equivalent.


  6. If you are answering the taxpayer by telephone and the taxpayer does not have a Balance Due module:

    If Then
    Account is in Notice Status 02,
    1. Ask the taxpayer for reason(s) the return was not filed (e.g. the taxpayer owed money and could not pay, so they did not file; taxpayer could not find tax records, health/family issues, etc.).

    2. Determine if the taxpayer has the necessary data and forms to file the return(s). If requested, provide income data, and instruct the taxpayer to file.

    3. Set a deadline for 30 days (allow more time if the information gathered above shows it is needed, taking into consideration the complexity of the delinquent return(s), and other pertinent circumstances), but not more than 60 days.

    4. For Form 940 , Form 941, Form 943 and Form 944 only, advise the taxpayer failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily.

    5. Document AMS of actions taken including the follow up date.

    6. Input a delay C08, using CC ASGNB (see IRM 2.4.27 ). See IRM 5.19.2.5.1.2, Accelerate to Compliance Territory Office (Revenue Officer), for additional guidance.

    Account is in TDI Status 03.
    1. Ask the taxpayer for explanation why the return(s) was not filed, (e.g. the taxpayer owed money and could not pay, so they did not file; taxpayer could not find tax records, health/family issues, etc.).

    2. Determine if the taxpayer has the necessary data and forms to file the return(s) and provide data, if needed.

    3. Instruct the taxpayer to file the return and set a deadline (see table in paragraph below) taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances, but generally not more than 30 days.

    4. For Form 940, Form 941, Form 943 and Form 944 only, advise the taxpayer that failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily.

    5. Document AMS of information secured, see IRM 5.19.2.5.5.3, BMF Substitute for Return 6020(b) , along with the deadline date for filing and warning of enforcement actions.

      • If the account is on ACS, enter ACS history codes with "XX" = equals 30 days past the deadline date, (IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.)

      • IF: the account does not have Employment code F, G or T, and,

      • Has a module with MFT 01, 10 or 11 within last three years, and

      • LPS data with the same MFT of delinquent modules of $1500 or less, and/or there is a delinquent module has a credit balance of $1500 or less,

      • Reassign to "TOI7,XX,TFRO8600"

    6. If the account "does not" meet 6020(b) criteria enter, "TOI7,XX,TFQU" .

    7. If the account contains Employment Code G or T, reassign the account for managerial approval for TFRO assignment:
      "TOC0,,TFRO" or "TOS0,,TFRO" .

    8. If the account has an Employment Code F (Federal Agency), assign the account to TOR1,60,FAD. Document comments of actions taken.

      Note:

      FAD accounts (Employment Code F) are worked in CSCO at the Brookhaven Campus.
      Refer to: FEDERAL AGENCY DELINQUENCY CONTACTS for additional contact information.

  7. If you are answering the taxpayer by telephone (ACS or FA Employee), and the taxpayer has another module in TDA Status 22, follow procedures below. See IRM 5.19.1, Balance Due to address the TDA modules).

    Note:

    If you are not trained on TDA modules transfer the call or ask the taxpayer if you can have someone call them and complete a Form 4442 for the TDA issue and forward to the appropriate area to resolve.

    If Then
    Account is in Notice Status 02 or TDI Status 03.
    1. Ask the taxpayer for reasons why the return was not filed (e.g. the taxpayer owed money and could not pay, so they did not file; taxpayer could not find tax records, health/family issues, etc.). Determine if the taxpayer has the necessary data and forms to file the return(s) and provide data as needed. Instruct the taxpayer to file the return and set a deadline date, taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances, but generally not more than 30 days.

    2. If the taxpayer has been given a previous deadline, allow only a 10-day extension, document the additional justification for the second extension and advise the taxpayer no further extensions will be granted.

    3. For Form 940, Form 941, Form 943 and Form 944 only, advise the taxpayer failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily.

    4. Warn the taxpayer of potential enforcement action (lien/levy).

      Note:

      If taxpayer is unable to pay, refer to IRM 5.19.1.7.1.5, CNC Unable to Pay - Hardship, to further analyze and verify for CNC criteria, otherwise follow items 5 through 8 below.

    5. Verify and document existing levy sources and add new levy sources.

    6. If on ACS, document comments with the information secured, see IRM 5.19.2.5.5.3, BMF Substitute for Return A6020(b) Program Referrals (Forms 940, 941 or 943) along with the deadline date for filing and warning of enforcement actions on AMS.

    7. Set the case up for the next enforcement action and enter a follow up date 30 days after the deadline given to the taxpayer.

  8. If you are an ACS employee use the following table to determine the time frame to allow the taxpayer to file a return:

    Circumstance/Complexity Establish Deadline
    Taxpayer has tax forms completed but has not mailed return(s) 10 days
    Taxpayer has not completed tax forms but has all necessary information for easy filing (no schedules) 10 days
    Taxpayer has most tax forms and must file a return with schedules 30 days
    Taxpayer is in need of all necessary tax forms 30 days
    Taxpayer has multiple returns that should be filed 30 days
    Taxpayer has multiple returns to be filed and has no forms or wage information 30 days
    Taxpayer has medical hindrance, POA issues, catastrophic event, or needs to reconstruct records 30 days

    Note:

    Allow more time if the information gathered above shows it is needed, taking into consideration the complexity of the delinquent return(s), and other pertinent circumstances

    Advise the taxpayer to:

    • "sign and date" the return(s),

    • use current address on the return,

    • include all required schedules and documents,

    Note:

    ACS employees can accept tax return(s) through fax while on the telephone with the taxpayer. If the taxpayer does not have the documents necessary during telephone contact the taxpayer should be directed to send the tax return and all required schedules to the appropriate ACS Support site.

  9. If necessary, provide the required tax forms or request them through SERP. If the taxpayer has Internet access, provide him/her with the IRS website address http://www.irs.gov/formspubs/index.html?portlet=3. You can also provide the Toll-Free number to order forms 1-800-829-3676.

    Note:

    On AMS use " ELITE" to directly mail forms to the taxpayer's address on entity.

5.19.2.5.5.4.4  (09-11-2012)
BMF Response Taxpayer Deceased

  1. This section will provide procedural guidance on identified decedent accounts related to sole proprietor businesses and husband and wife partnerships. All procedures apply to contacts via telephone, correspondence or in person unless otherwise noted. All information secured and/or actions taken must be documented on AMS. If original documents are secured, make copies and return the originals to provider.

    Note:

    Faxed copies are not considered originals. Filing of original tax returns via fax will be allowed only as part of a return perfection process (e.g., securing missing schedule or missing signature) initiated by the IRS or in the post-filing/non-filing activities.

  2. When speaking to or corresponding with third parties, refer to IRM 11.3.2.4.11, Deceased Individuals.

  3. See IRM 5.19.2.5.4.5.6, IMF Response Taxpayer Deceased for procedures on identifying decedent entities.

  4. See IRM 5.19.1.4.3.2, Deceased Taxpayers - Entity Changes for guidance on any Entity issues.

  5. If a telephone call is received from a third party stating taxpayer is deceased and the business is no longer in business, probe to secure date of death, request a copy of the death certificate. Research IDRS to determine if taxpayer is liable to file the return, see IRM 5.19.2.5.5.4, BMF Determining Liability, take necessary closing actions, if applicable.

  6. If there is an indication the delinquent module will have a potential liability or there is a balance due module existing on the entity or an associated module, attempt to secure the following information to be forwarded to the Advisory Unit.

    Note:

    It is not necessary to request documentation on modules meeting Little or No Tax Due or there are no other open modules or balance due issues.

    • Date of Death (unless there is a prior TC 540 already on the module). If there is no date of death present on CC INOLES, attempt to secure a copy of the death certificate.

    • County in which the taxpayer resided at time of death, and County in which taxpayer died, if different.

    • Name, address, telephone number of the fiduciary (executor or administrator), if any.

    • If speaking to third party on telephone, secure name and telephone number of person, if different than fiduciary.

    • If combo account, inquire for open probate and assets. See IRM 5.19.1.4.3, Deceased Taxpayers for guidance.

  7. Probe to determine if an EIN has been requested for the Estate, if applicable. If an EIN was requested, ask if a Form 1041 has been filed.

  8. If the business was a sole proprietorship and the taxpayer died before the notice period or indicates they were out of business before the notice period, follow the procedures in the above paragraphs. However, if there is an indication the deceased taxpayer has an estate, request the EIN of the estate and if they filed a Form 1041.

    Note:

    If a notarized or original death certificate is received, document the entity and return the original to the sender.

  9. If the business was a sole proprietorship and the taxpayer died during or subsequent to the delinquent period and the business was active, determine the net aggregate tax liability for all delinquent periods. Probe and secure documentation per paragraphs 2-6 above to establish if there is an estate. If an estate exists, secure supporting documentation and EIN of Estate. Forward any secured documentation to the Advisory Area for follow up.

  10. Refer to the If/Then table below for documenting and closing the module:

    If And Then
    The tax liability does not exceed the minimum tax due, see IRM 5.19.2.5.5.4.2, BMF Little or No Tax Due, for criteria, For CSCO and AM Employees,
    1. On delinquent modules, input TC 590 cc 77 using CC FRM49.

    2. Close all open Filing Requirements on the next tax period using a TC 591 cc 75.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. On the delinquent modules, input TC 590 cc 27 using CC FRM49.

    2. Close all open Filing Requirements on the next tax period using a TC 591 cc 25.

    3. If account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND " .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees,
    1. On delinquent modules, input TC 590 cc 20 using CC FRM49.

    2. Close all open Filing Requirements on the next tax period using a TC 591 cc 40.

    3. Document AMS of actions taken, including the taxpayer's date of death and tax computation.
      If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    The tax liability exceeds minimum tax due, see IRM 5.19.2.5.5.4.2BMF Little or No Tax Due, for criteria. Account is in Notice Status 02 or TDI Status 03.
    1. Close all open Filing Requirements on the next tax period using a TC 591 cc 75/25/23.

    2. Determine all the tax returns that may be due and request returns be filed. If a telephone number is provided make two telephone attempts (one attempt for SBSE CSCO - CSCO and ACSS employees are not required to leave a message on answering machine or voice mail). If fiduciary (executor or administrator) cannot be reached by telephone or no telephone number is not available send Letter 2255C or other appropriate letter.

      Note:

      If contact is made by telephone and you determine the taxpayer is liable for the return(s), request fiduciary (executor or administrator) to file all delinquent tax returns. Provide the fiduciary (executor or administrator) with the mailing instructions provided in paragraph 7 of IRM 5.19.2.5.4.5 BMF, Determining Liability.

    3. Document AMS of information secured, including any information indicating the taxpayer is deceased.

    4. For Employment Tax returns (Trust Fund) only, view the last return filed. If the liability is above $1,500 (last return filed multiplied by the number of delinquent modules), see IRM 5.19.2.5.1.2, Accelerate to Compliance Territory Office (Revenue Officer).

    5. If module is in Status 02, accelerate to ACS, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 .

    6. For ACS/FA and ACSS employees only, contact the administrator or executor and request the following information. Document AMS of information secured:

      • Date of death,

      • County in which the taxpayer died,

      • Name/address; telephone number of fiduciary,

      • Did the taxpayer own property at the time of death? What type of property and estimated value of property?

    7. Ask if Estate has been settled and date, if known. If an Estate has been established, request EIN number. Probe and document if a Form 1041 was filed or will be filed.

    8. For "ACS/FA/ACSS" employees only: Determine if there is an estate, the type of assets, court location, and docket number of the proceeding.

    9. Document AMS of pertinent information secured.

    10. If the account is on ACS, enter history code "TOR4,XX,DECD" (XX= the date the death certificate is to be sent, plus 15 days). IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

  11. If the return delinquency is for a partnership, and one of the partners is deceased, the other partner(s) are liable for the return and any taxes due, the remaining partner(s) are still liable to file. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable for resolution guidelines.

  12. If the return delinquency is on a corporation, and one of the responsible officers is deceased, contact the other officers for the return and any taxes due. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable, for resolution guidelines. If the corporation had only one officer, and he/she is deceased, follow procedures in paragraph 1-4 above.

5.19.2.5.5.4.5  (03-07-2012)
BMF Response Out of Business

  1. If a response is received indicating taxpayer is Out of Business, address all unfiled returns "open" or not in RD status within the last six years (per Policy Statement P-5-133) including modules in status 02, 03, 04 or 06 (closed with a TC 590 cc 19, 593, 597, or 598). Make a determination if taxpayer is required to file on all modules to the date of the business closed, and close all filing requirements for the next tax module preceding the out of business date. Refer to IRM 5.19.2.5.5.4.1, BMF Response Utilizing BMF Selection Codes (SC) for guidance to determine if liable to file.

    Note:

    See IRM 5.19.2.5.5.4, BMF- Determining Liability for "Full Compliance" guidelines.


    EXCEPTION: For calls received in Accounts Management (AM), if the taxpayer states they are out of business, AM will not perform any research or close out the TDI instead they will complete the following:

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

  2. A dissolving corporation or partnership is required to file a short period return covering the period beginning the first day of its accounting period through its date of dissolution.

    Note:

    Determination and closing actions can be accepted in lieu of filing final return if secured via direct contact, or correspondence.

  3. If taxpayer informs you the business is closed and provides the Date Business Closed (DBC) follow chart below:

    If And Then
    Closing date is before the notice period,  
    1. Input a TC 591 with the appropriate closing code.

    2. Document the Entity using a TC 016 to input the business closing date.

    3. Close all open filing requirements for each MFT.

    4. Document AMS of all research completed and action(s) taken.

    5. For ACS employees: enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" (XX= appropriate closing code).

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Taxpayer submits a final return,  
    1. Input a TC 591 with appropriate closing code (see box above) to close the filing requirement.

    2. Contact taxpayer either by telephone or appropriate letter requesting business close date, if appropriate.

      Note:

      If the taxpayer indicates a Last Wage Paid date, etc. and there is no open FR for non employment tax returns, us the Last Wage Paid date as the BCD. There is no need to correspond with the TP.

    3. Document AMS of all research completed and action(s) taken.

      Note:

      If taxpayer sends in a short period indicating final return use the short period date as the business close date.

    The closing date provided is only for a month and year with no specific day provided,  
    • Use the last day of the month for the Date Business Close (DBC) date.

    • Document AMS of all research completed and action(s) taken.

    The closing date provided is only a year with no specific month and day,  
    • Use the last month and day of the fiscal year filing period used by the business.

    • Document AMS of all research completed and action(s) taken.

    There is an out of business date indicated on CC ENMOD, The secured return date is prior to the date on CC ENMOD,
    • Code and send the return for processing following normal processing procedures. See IRM 5.19.2.5.5.4.10, BMF Response with Original Return for preparing return for processing.

    • Document AMS of all research completed and action(s) taken.

    There is an out of business date on ENMOD. The secured return date is after the date on CC ENMOD.
    • Input 9 in all fields in the Date Business Close date to remove the date and forward the return for processing as normal.

    • Document AMS of research completed and action(s) taken including documentation of the removal of the Business Close date.

  4. The input of TC 591 will close the taxpayer's FR for the specific MFT. If a TC 591 is input on the earliest delinquent period, it will close all subsequent delinquent periods for the same MFT, unless there is a credit or extension on a subsequent (newer) module. You must also input a TC 591 cc 75/25/40 on all modules with a credit or extension newer than the earliest delinquent period in order for the FR's to remain closed. It is not necessary to close out other subsequent modules as they will be closed systemically.

    Note:

    Example, If the taxpayer states as of December 31, 2008 he is no longer in business and there are open RD modules for Form 941's & Form 940 on tax year 2009, and a TC 591 is input on 01/200903 & 10/200912, the input of TC 591 will close out the FR for all open RD modules and cease future notices for that specific MFT.

  5. If the taxpayer indicates the Last Wages Paid date, input the date. However, if the taxpayer is filing a liable tax return after the "Wage Paid date" or liable tax return(s) have posted after the last wages paid date, do not input the Last Wage Paid date, as it will cause an Unpostable condition to occur.

5.19.2.5.5.4.6  (09-11-2012)
BMF Response Taxpayer Not Liable

  1. If the taxpayer response states they "no longer have employees" , a "Full Compliance Check" must be conducted. Address all unfiled returns within the last six years (per Policy Statement P-5-133), including all delinquent or "not open" RD status on CC BMFOLI and not older than 6 years from the current calendar year.

  2. To research RD filing requirements by specific Selection code, see IRM 5.19.2.5.5.4.1, BMF Response - Utilizing BMF Selection Codes (SC) for additional guidance.

  3. If taxpayer response indicates the income was reported under another TIN, and cannot be verified, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

  4. A review of the tax modules not on CC BMFOL should be conducted to determine whether or not the taxpayer is liable for filing the tax return. If the taxpayer is liable for the tax return, send the appropriate letter requesting the return. If the taxpayer is not liable for the tax return, it is not necessary to create a module on IDRS in order to close. Input history on AMS addressing modules not on CC BMFOL.

    Note:

    See IRM 5.19.2.5.5.4, BMF-Determining Liability for "Full Compliance" guidelines.

  5. If the taxpayer states they are not liable as they are a victim of Identity Theft, refer to IRM 5.19.2.6, Identity Theft Procedures, for additional guidance.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  6. If the taxpayer submits a .00 tax return with a credit on the module, and he requests the credit refunded. Write "Not Liable" on the front of the return, input credit amount along side the appropriate line of the tax return in "green" ink and send for normal processing. However, if the taxpayer responds he is not liable and is requesting a refund of credit but did not submit a tax return refer to IRM 5.19.2.5.8.1, Credit Balance Research Procedures.

  7. If the taxpayer states they are not liable for a delinquent return(s) or they are no longer in business but will be liable in the future, take the following actions on all modules the taxpayer states they are not liable, including all open RD and future modules:

    Note:

    If research indicates the taxpayer is liable to file follow guidance in IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

    If Then
    For AM employees, If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees
    1. Input TC 590 cc 75 using CC FRM49.

    2. Document AMS of pertinent information such as research completed and closing actions.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49.

    2. Document AMS of pertinent information such as research completed and closing actions.
      If the account is on ACS, enter history code "TOC0,30,RDPND " or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input TC 590 cc 20 using CC FRM49.

    2. Document AMS of pertinent information such as research completed and closing actions. .

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Note:

    TC 590 will "only" satisfy the period it is input on. The filing requirements will remain open for the subsequent periods, therefore a TC 590 must be input on all applicable periods.

  8. If the taxpayer states they are not liable and/or will not be liable for future returns on the delinquent MFT follow guidelines in the table below.

    Note:

    The TC 591 closes the module it is input on and all subsequent modules of the same MFT. Example: If there are open TDI modules for F941 on 200803-200812 and taxpayer response states no longer in business as of December 2007, input a TC 591 on 01-200803. It is not necessary to close out other subsequent modules as the processing programming will close modules systemically.
    A transaction code cannot be input on a module more than 12 months in advance of the current date. If a credit balance remains on the account, you must follow all credit balance research procedures before closing a module with a TC 590, 591 or 593.


    If research indicates taxpayer is liable to file follow guidance in IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

    If Then
    For AM employees, If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 591 cc 75 using CC FRM49.

    2. Form 941 /Form 943 /Form 944 : Close Form 940 FR if research indicates taxpayer not liable. IRM 5.19.2.5.5.4.16.1, BMF Response Form 940, to determine if taxpayer liable to file Form 940 .

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    3. Document AMS of complete research and action taken, including information secured from taxpayer.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

    2. Form 941 /Form 943 /Form 944 : Close Form 940 FR if research indicates taxpayer not liable. IRM 5.19.2.5.5.4.16.1 BMF Response Form 940, to determine if taxpayer liable to file Form 940.

    3. Document AMS of all closing actions including the business closing date.
      If the account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input TC 591 cc 20 using CC FRM49.

    2. Form 941 /Form 943 /Form 944 : Close Form 940 FR if research indicates taxpayer not liable. See IRM 5.19.2.5.5.4.16.1, BMF Response Form 940, to determine if taxpayer liable to file Form 940 .

    3. Document AMS of all closing actions including the business closing date.
      If the account is on ACS, enter history code, "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Note:

    Input of the TC 591 on the earliest delinquent period will close all subsequent delinquent periods for the same MFT, unless there is a credit or extension on a subsequent (newer) module. You must also input a TC 591 cc 75/25/20 on all modules with a credit or extension on any newer modules than the earliest delinquent period in order for the FR's to remain closed. The input of TC 591 will close all subsequent open modules and FR for the specific MFT. If there is no open TDI module create a dummy module and input a TC 591 on the earliest period, but not more than 6 years (old) (for example: Taxpayer indicates out of business and there is an open FR for Form 941 however there is no open TDI module; verify Business Operation Date input on the earliest period unfiled but not more that 6 years from current filing tax year.

  9. If there is a credit on a subsequent module, you must also input a TC 591 cc 75/25/20 on any newer modules than the earliest delinquent period in order for the FR's to remain closed.

  10. If taxpayer states, in writing, a payroll company is responsible for the filing of their tax return, do not close the FR. Although the payroll agent should be filing their returns, it is the taxpayer's responsibility to ensure all returns are filed timely. Contact the taxpayer via telephone or correspondence to request the delinquent return. If a telephone number is available, make at least two out call attempts (one for SBSE CSCO employees - CSCO and ACSS employees are not required to leave a message on an answering machine or voice mail) prior to sending a letter. If taxpayer is contacted by telephone and you determine the taxpayer is liable for the return(s) complete the following actions:

    • Instruct the taxpayer to file a signed and dated return, including current address.

    • Provide the taxpayer with the appropriate IRS CSCO return address to mail the return. For CSCO addresses see Exhibit 5.19.2-12, CSCO Non-Filer Campus Addresses.

    • Instruct the taxpayer to write RD on the top center of the first page of the return

      Note:

      If the return is initially received in Submission Processing, they will forward to the appropriate CSCO site to review and take necessary actions prior to sending for processing.

    • Document AMS comments accordingly.

    Note:

    A payroll company is not a Payroll Agent. If the taxpayer states he has a payroll agent, see IRM 5.19.2.5.5.4.16, BMF Response Employment Tax Returns Overview for additional information.

  11. An employer may designate an agent under IRC Section 3504 to withhold, report and pay Federal employment taxes. For example: an individual receiving in-home care from a home-care provider under a federal, state, or local government program may be the employer of the home-care service provider for tax purposes. Per IRC Section 3504 the employer designate someone else to take care of certain employment tax responsibilities. This designee is known as an Employer Agent or Fiscal Agent. The agent must file a Form 2678, Employer/Payer Appointment of Agent. Upon processing and approval of the Form, the entity will be identified with a TC 971 AC 382-385. For more information on Form 2678, see IRM 3.13.2.16.3, Form 2678 - Employer/Payer's Account. See IRM 5.19.2.5.5.4.16, BMF Employment Tax Returns Overview for additional information regarding Payer Agents.

    Note:

    If a 971 AC 382-385 is on the account but there is no Employment Code A, forward pertinent information to Entity to review and document the Employment Code.

5.19.2.5.5.4.7  (11-23-2011)
BMF Response Taxpayer Will File (Correspondence Only)

  1. The response indicates the taxpayer will file (i.e. records in the hands of accountant, waiting for additional information, etc.).

    Note:

    Do not follow the procedures in this section if you are on the telephone with the taxpayer or meeting with the taxpayer at a Field Assistance Site, see IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

  2. Follow the guidelines below to document account of actions:

    If Then
    For CSCO Employees,
    1. Send a Letter 2255C or appropriate letter.

      Note:

      If the correspondence does not specify a date, do not input mmdd.

    2. For Form 940 ,Form 941 ,Form 943 and Form 944 only, advise the taxpayer that failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily.

    3. Input a C08 using CC ASGNB (see IRM 2.4.27, CC ASGNI/ASGNB formerly TSIGN).
      To accelerate to ACS, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03

      Note:

      If the account has a subsequent balance due issue, ensure any STAUP’s and delays are equivalent.

    4. Document AMS of actions taken, including deadline date to file.

    For ACS, ACSS and FA Employees.
    1. Send a Letter 2255C or other appropriate letter.

    2. If the taxpayer does provide a date, do not allow more than 60 days. If the taxpayer does not provide a date, allow 30 days to file with a 45 day follow-up.

    3. For Form 940 ,Form 941 ,Form 943 and Form 944 only, advise the taxpayer that failure to file by the specified date, employment returns may be processed under IRC 6020(b) if not filed voluntarily. Follow guidelines below for 6020(b) criteria:

    4. If the account does not have Employment code F, G, or T, and

      • Has a module with MFT 01, 10 or 11 within the last three years,

      • LRA data with the same MFT of delinquent module between $250 - $1500, and/or

      • A delinquent module has a credit balance between $250-$1500,

      • Reassign "TOI7,XX,TFRO" where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    5. If the module delinquency is over $1500, reassign case "TOI7,XX,TFQU" , where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    6. If the account contains Employment Code G or T, reassign the account for managerial approval for TFRO assignment:
      TOC0,,TFRO or TOS0,,TFRO (ASC Sites)

    7. If the account has an Employment Code F (Federal Agency), assign the account to TOR1,60,FAD. Document comments of actions taken.

      Note:

      FAD accounts are handled at the Brookhaven Campus-CSCO Operations.
      Refer to: FEDERAL AGENCY DELINQUENCY CONTACTS for contact information.

    8. If the account does not meet 6020(b) criteria enter "TOI7,XX,TFQU" . See IRM 5.19.2.5.5.3 for additional guidance to determine if module meets 6020(b) criteria. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    9. Document AMS or ACS of actions taken, including the target date and warning of enforcement action. Note: If the correspondence does not specify a date, do not input mmdd.

  3. If requested, provide the required tax forms or if available request them through SERP. If the taxpayer has Internet access, inform him/her forms can be obtained from the IRS Digital Daily Web site at http://www.irs.gov/formspubs/index.html?portlet=3. You can also provide the Toll-Free number to order forms 1-800-829-3676.

    Note:

    On AMS use "ELITE" to directly mail forms to the taxpayer's address on entity.

5.19.2.5.5.4.8  (11-23-2011)
BMF Response Taxpayer Previously Filed Return(s)

  1. If return is received for multiple periods with an attachment providing a breakdown of wages and tax for each tax period:

    • Input TC 594/83 on the notice tax period.

    • Transfer to the appropriate Accounts Management BMF Unit. Notate on the routing slip "Multiple periods included on one return" .

  2. If a return is received for multiple tax periods with no breakdown provided, then return the tax return to the taxpayer, along with an appropriate letter requesting a tax return for each tax period.

  3. If the response indicates a return was filed less than ten weeks ago, and your initial research does not show a TC 150 has posted, follow the table below for guidance:

    If Then
    Account is in Notice Status 02 Allow time for the return to post by inputting a delay of 8 weeks using a "C08" on CC ASGNB (see IRM 2.4.27).

    Note:

    The delay prevents the module from going to TDI status.


    PC-B modules cannot be delayed, as these modules do not go into TDI status.
    Account is in TDI Status 03
    1. For non "ACS/ACSS" employees only, document AMS with actions taken, including date the taxpayer filed, as "mmdd" with mmdd for the month and date.

    2. If the account is on ACS, enter ACS history code "OADT,45,CMNTS" .

  4. If the response indicates the return was filed more than ten weeks ago, research to determine if the return has posted.

    If Then
    Return has posted to module (TC 150), Take no action.
    AP150 or PN150 has posted to the account, Take no action.
    RJ 150 or UNP 150 has posted to the account, Take no action.
    Form 941 was filed instead of a Form 944, or vice versa, See IRM 5.19.2.5.5.4.16, BMF Response Employment Tax Returns Overview.
    Return posted under another TIN or Business Name,
    1. Control or refer case, see IRM 5.19.2.5.6.1, TIN and Entity Problems for additional guidance.

    2. Input a TC 594 cc 83/33/40.

    3. Document AMS of actions taken.

    Return posted to different tax period (same TIN),
    1. Control or refer case accordingly, see IRM 5.19.2.5.6, Return Delinquency TIN and Entity Research.

    2. Transfer to the appropriate Accounts Management BMF Unit. Notate the routing slip (e.g., Form 4442 , Form 3210, etc.) "Return posted to incorrect tax period" .

    3. Input a TC 594 cc 83/33/22.

    4. Document AMS of actions taken.

    Cancelled check was submitted and encoder information matches the notice,
    1. If the payment is not on the module, follow the procedures in IRM 21.5.7, Payment Tracers.

    2. If research per the procedures for Payment Tracers lead you to a module with the return posted, then follow the procedures above for a return posted under another TIN, Name or Tax Period.

    3. If the payment is on the module, follow the procedures in paragraph 5 below and request a copy of the return from the taxpayer.

     
    Cancelled check was submitted and encoder information does not match the notice,
    1. Research the account module listed on the encoder information (TIN, MFT and Tax Period) to see if the return posted.

    2. If the payment is located, then follow the procedures above for a return posted under another TIN, Name or Tax Period.

    3. If the payment is not located, follow the procedures in IRM 21.5.7, Payment Tracers.

    4. If the procedures for Payment Tracers lead you to a module with the return posted, then follow the procedures above for a return posted under another TIN, Name or Tax Period.

    5. If the procedures for Payment Tracers does not lead you to a module with the return posted, follow the procedures in paragraph 5 below and ask the taxpayer for a copy of the return.

    6. Document AMS of information secured and target date given to taxpayer to file.

     
    Return or copy of return is in Source Document Suspense File (SDSF), Process the return following normal processing procedures. See IRM 5.19.2.5.5.4.10, BMF Response With Original Return(s).  
    If the response states they are an LLC filer, See IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC).  
    None of the above conditions is present. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.  

  5. If the response indicates a return was filed more than ten weeks ago and none of the conditions in paragraph 2 above exist, request a copy of the return with a signed signature or a copy of return with a new signature. Follow the table below for guidance.

    Note:

    If a telephone number is available, make two telephone attempts (one telephone attempt for SBSE CSCO employees - CSCO and ACSS employees are not required to leave a message on answering machine or voice mail). Document the telephone attempts on AMS. If telephone contact is made, provide taxpayer with return and mailing instructions in paragraph 7 of IRM 5.19.2.5.5.4, BMF Determining Liability and provide deadline dates as stated below. If telephone contact is not made, continue to follow procedures shown below:

    If Then
    For CSCO and AM Employees,
    1. Inform the taxpayer to send a copy of the return. Allow the taxpayer up to 30 days to file the return.

    2. Send a Letter 2255C or Letter 2284C or other appropriate letter using the applicable paragraph(s) advising the taxpayer we could not locate their return and request a signed copy of the return.

    3. Document AMS with actions taken, including target date provided to the taxpayer to file their copy.

    4. Input delay "C08" using CC ASGNI (see IRM 2.4.27, CC ASGNI/ASGNB former TSIGN) to accelerate to ACS (see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 ).

      Note:

      If also working a balance due issue, make sure any STAUP's and Delays are equal.

    For ACS, ACSS and FA Employees.
    1. Request the taxpayer to send a copy of the return and set a follow up of 45 days to review the account.

    2. Send LT18 or appropriate letter to advise the taxpayer we could not locate their return and request a signed copy of the return.

      Note:

      LT18 will systemically set the follow up date.

    3. If the account does not have an Employment code of F, G or T, and

      • Has a module with MFT 01, 10 or 11 within the last three years, and

      • The LRA data with the same MFT of delinquent module between $250 - $1500, and/or

      • A delinquent module has a credit balance between $250 -$1500,

      • Reassign case "TOI7,XX,TFRO8600" , where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

      Note:

      The LRA data must be within 3 years of the earliest delinquent period. If the data is older, then go to step 6 below.

    4. If the delinquent module is over $1500, reassign case to "TOI7,XX,TFQU" , where XX stands for the deadline plus 30 days. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    5. If the account contains Employment Code G or T, reassign the account for managerial approval for TFRO assignment:
      "TOC0,,TFRO" or "TOS0,,TFRO" .

    6. If the account has an Employment Code F (Federal Agency), assign the account to TOR1,60,FAD. Document AMS or ACS of actions taken.

      Note:

      FAD cases are worked in Brookhaven Campus-CSCO Operations. Refer to: Federal Agency Delinquency Contacts for additional contact information.

  6. If there is a payment on the account but no return posted, send a 112C or appropriate letter. If the account is in Notice Status 02, input a "C08" using CC ASGNB.

5.19.2.5.5.4.9  (11-23-2011)
BMF Response Insufficient

  1. When additional information is needed to resolve the account, and to determine if the taxpayer is liable or not, contact the taxpayer to request the information if cannot be secured through research. Follow the table below for general case resolution guidance:

    Note:

    If a telephone number is provided on the response or already available on the entity make at least two attempts (one attempt for SBSE CSCO employees - do not leave a call back message), before sending a letter to the taxpayer (telephone attempts must be documented on AMS).

    If And Then
    Telephone contact is made with the taxpayer, it is determined the taxpayer is not liable, See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable.
    • Document AMS of information secured to resolve the account including cross reference secured and income verified.

    Taxpayer is liable,
    1. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    2. Document AMS of actions taken, including date given to taxpayer to file.

    Unable to make telephone contact. For CSCO Employees,
    1. Send Letter 2255C or other appropriate letter requesting information required to close the module.

    2. Input delay C08 using CC ASGNB, refer to IRM 2.4.27 , Command Code ASGNI/ASGNB formerly TSIGN , for guidance. See IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 for guidance on referring case to ACS.

    3. Document AMS of research completed and actions taken, including information requested and date given to taxpayer to file.

    For ACS, ACSS and FA Employees.
    1. Send Letter 2255C or other appropriate letter.

    2. Enter history code "TOI7,XX,TFQU" (XX=follow-up date which is 30 days beyond filing date). IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    Note:

    If the module meets 6020(b) criteria do not send/assign to TOI7. See IRM 5.19.2.5.5.3, BMF Substitute for Return 6020(b) Program Referrals.

  2. If a response is received with no indication of taxpayer intent or has only a signature, and the delinquent module can not be resolved, follow the procedures in table below:

    If Then
    The account is in Status 02,
    1. Accelerate to ACS, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 .

      Note:

      PC-B's cannot be accelerated.

    2. Destroy the notice.

    Account is in TDI Status 03. Destroy the Notice.

    If the account is in Status 02, input a delay code of "C08" using CC ASGNB to accelerate the account to ACS. See IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 for additional guidance. (PC-B notices cannot be delayed.)

    Note:

    This delay code will allow any return that might have been detached from the notice to post before the next notice cycle.

  3. If the only information provided is that the taxpayer is in bankruptcy, see IRM 5.19.2.5.5.1, BMF Special Handling Responses.

5.19.2.5.5.4.10  (12-14-2011)
BMF Response with Original Return(s)

  1. This section provides the instructions to process original taxpayer returns. Employees are required to review all documentation on AMS, and IDRS for any pertinent information regarding the TDI module prior to forwarding the return for processing. If a prior TC 591 was input on the entity, review of the history documentation is required to possibly re-input the TC 591. Document AMS of research and action taken.

  2. IRMs 3.11.xx, i.e. for example, IRM 3.11.154.3.6, Statute Returns, and IRM 25.6.1.8, Original Delinquent Returns, it is not necessary to send delinquent original returns to the Statute Control Unit prior to being sent for processing if the return is the "initial" original return secured and we have coded the return with a TC 59X or we secured return(s) prepared under the authority of IRC 6020(b). However, this process does not apply to certain types of statute year tax returns, as a result the following types of tax returns need to be routed to the Statute Control Unit:

    • Tax return being reprocessed with an "Original IRS Received Date"

    • Reprocessed a tax return for a different tax period and/or incorrect tax form (i.e., F941 to F944, F1120 to F1120S or vice versa)

    • A previous TC 610 payment on a statute year module and no indication a return was previously processed

    • Previous unpostable condition on the module (DC/DU 150, DC 976, U301, etc.,) and the original return has not been processed and it is now more then 33 months from its original received date. Forward to Statute Unit requesting a quick assessment.

    • Credits/payments previously moved to Excess Collection (XSF), see IRM 25.6.1.8.4(6), Processing Original Delinquent Returns

    • If the prior (unpostable, rejected, etc.) return is over 2 years and nine months. Attach a print of the CC TRDBV screen to substantiate taxpayer's intent to the secured return. Forward to Statute Unit requesting a quick assessment.

    .

  3. If the secured return is a Form 941 /Form 944 verify the Form 944"cache" on CC BMFOLE or CC ENMOD to verify the filing requirement and to ensure the secured return is the accurate return for the tax period. If the taxpayer sent the incorrect form, forward the return back to the taxpayer informing of the correct form they need to file. If the CP notice sent to the taxpayer requested the incorrect tax return, inform taxpayer of error and the correct form that is required for the tax period. See IRM 5.19.2.5.5.4.16, BMF Responses Employment Tax Returns Overview . Document AMS of actions taken.

    If Then
    1. Taxpayer files a frivolous (lacking a legal basis or legal merit, not serious, not reasonably purposeful) return, or

    2. The Taxpayer files a return stating they refuse to provide information on a constitutional basis, objects to filing, cites the Fifth Amendment, or states a violation of constitutional rights, or

    3. The Taxpayer files a return claiming a protest adjustment, objection to war, abortion, etc.

    1. Input TC 595 cc 82/24 and
      Refer to:
      Ogden Compliance Services
      ATTN: FRP, m/s 4450
      1973 N. Rulon White Blvd.
      Ogden, UT 84404

    2. Document AMS of information secured and actions taken.

    3. For "ACS/FA/ACS-Support" employees only: If the account is on ACS, enter history code "TOR3,30,CMNTS " .

    4. Notate on correspondence "Previously seen by Collections (CSCO or ACSS)" before routing.

     
     
    The taxpayer sends in a return that just states they had no income, no tax due, or not liable, Send the return for processing per guidelines, proceed to paragraph 5 below.  
    A "0" (zero) return is secured with a credit on the module, that is not indicated on the return, Verify to determine if credit was applied correctly to the tax period by:
    • Researching credit per IRM 5.19.2.5.8.1, Credit Balance Research Procedures.

    1. If credit is verified.

      • Write "Not Liable" across the top of the return.

      • Input credit amount along side the appropriate line of the tax return in "green" ink to allow the credit during processing. Follow normal processing of returns procedures, see paragraph 6 below.

      • Send a Letter 2358C or appropriate letter informing taxpayer of actions taken.

      • Document AMS of actions taken.

    2. If the credit is not verified.

      • Contact taxpayer via telephone (if number available) to verify credit, and/or send Letter 112C or other appropriate letter.

        Note:

        If Letter 112C letter is sent, place the secured return in Unit SDSF file for follow up (taxpayer response/follow up date) and input a case control for monitoring.

      • If taxpayer does not respond by the follow up date forward to Submission Processing (SP) following normal processing procedures. See paragraph 6 below.

      • Document AMS of actions taken.

     
    A "0" return is secured on an entity that has a TC 591 on a prior tax period indicating "Out of Business" , or "last wages paid" , and the subsequent module was open due to a CP 259 issued,
    • Forward the signed "zero" to SP.

    • Input a TC 591 on the subsequent tax period to re-close the FR.

    • Notate AMS of actions taken.

    Note:

    This situation may occur if there is a delay in processing of the prior input and the issuance of the newer module. If a "0" return is sent for processing, it will re-open the FR, which is not the intent.

     
    A "un-signed " "0" return is secured on an entity that has a TC 591 on a prior tax period indicating "Out of Business" , or "last wages paid" ,
    • Take no action, discard the "0" return, as not considered a valid return per legal standpoint due to no signature on a non-taxable return.

     
    If a TC 150 is already on the account, indicating a return filed,
    • If research determines the secured return is an exact duplicate of the posted TC 150, then destroy the return.

    • If research determines the secured return does not match the TC 150 route to the appropriate Accounts Management. Document AMS with pertinent information and actions taken.

      Note:

      Prior to forwarding to AM write "TC 150 posted" in the top margin on the left hand side of the return.


      For additional information refer to IRM 5.19.2.5.6.2, Return Delinquency Due to Posting Errors.

     
    If there is a TC 610, indicating a payment posted, but return has not posted, See IRM 5.19.2.5.5.4.11, BMF Response with Copy of Return(s).  
    If multiple returns are received through taxpayer response for the same MFT and period. Research to determine if all returns are true duplicates, route one of the returns for processing and destroy duplicate returns.  
    If duplicate return is received within four weeks of TC 599. See IRM 5.19.2.5.5.4.11, BMF Response With Copy of Return(s).  

  4. Compare TIN, name, tax period, and MFT on the return with the notice or inquiry,

    If Then
    The TIN or name is different, See IRM 5.19.2.5.6.1.3, BMF TIN and Entity Problems.
    The tax period is different, See IRM 5.19.2.5.6.2, Return Delinquencies Due to Posting Errors.
  5. If none of the above conditions are present, code and prepare "all" secured return(s) (including any current year returns) for processing. This includes secured returns not in TDI status, or identified on CC BMFOLI. Any edits to a return must be done in "green" pen/pencil only. Prior to forwarding returns for processing follow guidance below:

    Note:

    If an original return is received via fax, date stamp or write the date on the return prior to forwarding for processing.

    If And Then
    Information in the entity area of the return is correct (per IRM 5.19.2.1.1, Return Delinquency Overview ), Intentionally left blank
    1. Code the return as normal (i.e., close TC 599 with appropriate closing code).

    2. Forward for processing as no editing is needed (do not: underline name control, circle received date, input "Process as Original" on top, etc.).

    Note:

    If a return is received with RD in the top margin indicating the return was submitted as a result of an out call. Circle the RD prior to submitting for processing.

    Information in the entity area of the return is incorrect. Name/name control is incorrect,
    1. Code the return as normal (i.e., close TC 599 with appropriate closing code).

    2. Circle the incorrect information and write the correct name/name control beneath the circled information.

    3. Forward for Processing.

      Note:

      It is not necessary to underline name control or correct In care of or Sort name lines.

    Note:

    If a return is received with RD in the top margin indicating the return was submitted as a result of an out call. Circle the RD prior to submitting for processing.

    Address is incorrect,
    1. Code the return as normal (i.e., close TC 599 with appropriate closing code).

    2. If Master file indicates the current address, circle the old address on the form and edit the return to match Master File. If determined the address on the return is more current than entity information, Document Master File using CC ENREQ.
      For 94X Series (including 940) put an * on the left side of address opposite the first line being changed, (e.g. street, city, or ZIP) and write the correct information on the return.

      Note:

      When processing returns, it is not necessary to address minor name differences (for example, INC. versus INCORPORATED or Co. versus Company) unless the name control is affected.

    3. Forward for Processing.

    Note:

    If a return is received with RD in the top margin indicating the return was submitted as a result of an out call. Circle the RD prior to submitting for processing.

    Tax year is incorrect,
    1. Code the return as normal (i.e., close TC 599 with appropriate closing code).

    2. Circle the incorrect information and write the correct tax year beneath the circled information.

    3. Forward for Processing.

    Note:

    If a return is received with RD in the top margin indicating the return was submitted as a result of an out call. Circle the RD prior to submitting for processing.

    The incorrect tax quarter box is checked,
    1. Code the return as normal (i.e., close TC 599 with appropriate closing code)

    2. Circle the incorrect information and check the correct box.

    3. Forward for Processing.

    Note:

    If a return is received with RD in the top margin indicating the return was submitted as a result of an out call. Circle the RD prior to submitting for processing.

    Research per CC TRDBV indicates a prior return was not processible (unpostable condition/deleted) due to a submission of incorrect filing of return (i.e.; Form 941/944 issues, Form 1120/1120S, or incorrect filing month). The taxpayer's intent was to file the correct tax return. The received date of the original return is to be used on the "new" correct tax return being sent for processing.
    • Input the date of the unprocessible return (per CC TRDBV) as the IRS Received date on the secured return.

    • Attach a print of the CC TRDBV screen to substantiate taxpayer's intent to the secured return.

    1. A received date is required on all tax returns secured if there is not one either date stamp or write the date (in green ink) on the return prior to forwarding for processing.

    2. If the return is unsigned, send the return for processing and Submission Processing will contact the taxpayer for a signature.

      Note:

      Do not attach any correspondence, or notice to the front of the return as may cause confusion during processing.

    3. If the return is notated as "copy" or there is an indication that the return is a possible duplicate, and the return is being forwarded for processing as the original, circle out the word "copy" or "duplicate return" (first page only) prior to sending to processing.

    4. If the return secured is considered a Short Period return (example: TP states business closed and submits a return in an earlier month as final), leave a history on IDRS "SHRTPDRTRN" .

    5. Close filing requirements on the Notice module with a TC 591 cc XX. Proceed with normal return processing. Input the Business Closed date & Last Wage Paid date on CC ENMOD, if secured.

    6. If the taxpayer requests relief from Failure to File, Failure to Pay, or Failure to Deposit penalties due to reasonable cause or taxpayer is deceased, document the information on a routing slip (e.g., Form 4227, Intra-SC Reject or Routing Slip) and attach to the front of the return. Attach any written requests secured from taxpayer requesting relief to the back of the return). This will alert "Code and Edit" of the taxpayer request. Do not input any Computer Condition Codes (CCC) on the return, including an "F" for a final return. If speaking to the taxpayer on the telephone who is requesting relief on a return that has not posted, inform the taxpayer requests for relief from penalties and interest can not be considered until after the return is posted with penalty and interest. The taxpayer must submit their request for abatement at that time. For additional information see IRM 20.1, Penalty Handbook.

  6. Input TC 599 with the appropriate closing code on "all" secured returns, whether the module is in open RD status or not on CC BMFOLI. Follow the chart below for guidance:

    If And Then
    Taxable return (return shows a tax liability before prepaid credits) For CSCO and AM Employees, Input a TC 599 cc 94 using CC FRM49.
    For ACS and ACSS Employees,
    1. Input a TC 599 cc 44 using CC FRM49.

    2. Document comments when return was filed, balance due/refund amount, full paid, installment agreement request in a narrative on AMS.

    If the account is on ACS, enter ACS history code "OADT,30,59944 " .
    For FA Employees,
    1. Input a TC 599 cc 24 using CC FRM49.

    2. Document AMS of information secured: when return was filed, balance due/refund amount, full paid, installment agreement request.

    If the account is on ACS, enter history code, "OADT,21,59940 " .
    Non-taxable return (return shows no tax liability before prepaid credits) For CSCO, TF and AM Employees, Input a TC 599 cc 96 using CC FRM49.
    For ACS and ACSS Employees,
    1. Input a TC 599 cc 46 using CC FRM49.

    2. Document closing actions including refund amount in a narrative on AMS.

    If the account is on ACS, enter ACS history code "OADT,30,59946 " .
      For FA Employees.
    1. Input a TC 599 cc 24 using CC FRM49.

    2. Document AMS of actions taken, including refund amount. If the account is on ACS, enter ACS history code "OADT,21,59941 " .

  7. Once the return is coded and perfected as stated above, forward for processing.

  8. If any type of return is forwarded to another Submission Processing Center for processing, all return delinquency issues and coding, along with the preparation of the return for processing must be completed at the receiving site. Send only the "Return" to the other Submission Processing Center for processing.

  9. If a employment tax return is secured (original or copy), follow Full Compliance guidelines, see IRM 5.19.2.5.5.4, BMF Determining Liability.

  10. If the taxpayer requests an installment agreement (IA), refer to pre-assessed IA in IRM 5.19.1.5.5.15, Pre-Assessed Installment Agreement Requests

5.19.2.5.5.4.11  (04-13-2011)
BMF Response With Copy of Return(s)

  1. When the taxpayer sends a copy of a return, research IDRS to determine if the original return has posted.

    If And Then
         
    The original return has posted to the correct period and TIN and the amount of tax, taxable income, etc. matches on IDRS, Whether there is an original signature or not, Destroy the copy of the return.
    1. The original return posted to an incorrect period or TIN, or

    2. The original return has posted to the correct account but the amount of tax, taxable income, etc. does not match on IDRS.

      Control or refer case, see IRM 5.19.2.5.6, Return Delinquency TIN and Entity Research.
    1. The original return has not posted and was filed less than 10 weeks ago,

    And/or there is a Rejected (RJ ) TC 150 or Unpostable 150 on the module,
    1. If this is a "refund" return, follow procedures to process return, see IRM 5.19.2.5.5.4.10, BMF Response with Original Return(s).

    2. If this is not a "refund" return, input a TC 594 with appropriate cc using CC FRM49.
      Contact the appropriate area (Rejects or Unpostables) for resolution.

    3. CSCO, FA, ACS/ACSS and AM Employees:
      File the copy of the return with correspondence attached in the Source Document Suspense File (SDSF).

    4. ACS, ACSS Employees: Document comments with date original return filed in narrative on AMS.
      If the account is on ACS, enter history code "OADT,45,CMNTS" .

    There is TC 599 or TC 610 payment posted to the module, Verify if IRS received date on return is within the same cycle of TC 599/610.
    If the date(s) are within the same cycle, code the return and send for processing.
    If the date(s) are not within the same cycle, follow steps 2 and 3 in above box.
    1. The original return has not posted and was filed more than 10 weeks ago, or

    2. If the taxpayer does not state when the original was filed, consider the return filed more than 10 weeks ago.

    and a RJ150 or Unp150 is not posted on the module,
    or a TC 599 or TC 610 payment is posted to the module.
    Treat the return as an original return, see IRM 5.19.2.5.5.4.10, BMF Response with Original Return(s).
    If the taxpayer states filed the Return, and attached a copy of the Return. and there is PN150/599 indicating the return is pending. Input TC 594 CC 83 and place "copy" of return in SDSF file to monitor posting.

5.19.2.5.5.4.12  (02-15-2011)
BMF Response Forms 11-C and 730

  1. The Form 11-C , Occupational Tax and Registration Return for Wagering is used to register a person or business that accepts wagers and to pay the occupational tax on wagering. Any person engaged in the business of accepting wagers is liable to file and pay tax on Form 11-C. Both the principal operator of a business and all employee-agents are required to file.

  2. All Form 11-C returns are processed at the Cincinnati Submission Processing Center (CSPC). All return delinquency issues and coding of return, along with the preparation of the return for processing are completed at the receiving site, only the "Form 11-C Return" is sent to CSPC for processing.

    Note:

    All Form 11-C Returns, 11-C Supplemental Returns without a TC 150 posted, and 11-C Correspondence received in Collection Operations when the taxpayer's account module is not in Status 02 or 03 should be sent to CIRSC Excise, Stop 5701G.

    1. A principal operator is a person or business that operates in the business of accepting wagers for their own account.

      Note:

      Each principal operator filing a Form 11-C is also required to file Form 730, Tax on Wagering see paragraph 7 below for definition and filing requirements for Form 730.

    2. An employee-agent is a paid employee of a principal operator and accepts wagers on the principal operator's behalf. All employee-agents are required to have their own TIN(s) separate from the principal operator's. Each employee-agent is responsible for filing and paying their own Form 11-C. However, principal operators are allowed to file a Form 11-C for each of their employee-agents.

      Note:

      If an employee-agent works for more than one principal operator, they are only required to file and pay tax with one Form 11-C.

  3. The tax liability on Form 11-C is computed on a fiscal year basis beginning July 1st and ending on June 30th of the next year. The Form 11-C is due to be filed and paid in advance by July 1st of each tax year.

    1. The Form 11-C for a new business is due on or before the first day of the month in which the business starts accepting wagers. The tax period will still end on the following June 30th. The tax period beginning date will always be shown as the tax period on IDRS, transcripts and notices.

      Note:

      A taxpayer begins accepting wagers on September 10th, 2006. The tax period will be reflected as 200609 on IDRS. The return is due to be filed and paid on September 10th, 2006.

    2. A person or business that was already accepting wagers as of July 1st will file renewal returns. The tax period will always be 20YY07, with YY representing the year in which the tax period begins.

    3. There are no deposit requirements for paying the tax on Form 11-C. the payment may be sent with the return.

  4. There are two different rates that are charged depending on whether wagering activity is legal according to the state law of the taxpayer. Organizations that are exempt from income tax under Section 501 or 521 of the IRC are not exempt from the excise tax on wagering. Organizations that are exempt from income tax under Section 501 or 521 of the IRC are not exempt from the excise occupational tax.

    1. In states where wagering is not legalized (as determined by the state), the rate is $500 per year. When a business or person starts in a month other than July, the tax is prorated at $41.66 per month for the remainder of the fiscal year through June 30th.

    2. In states where wagering is legalized (as determined by the state), the rate is $50 per year. When a business or person starts in a month other than July, the tax is prorated at $4.16 per month for the remainder of the fiscal year through June 30th.

      Note:

      There is no tax tolerance on Form 11-C.

  5. Although additional tax is not due, a supplemental return must be filed within 30 days (except as noted below) by principal operators and/or employee-agents when certain events occur. Principal operators must complete line 7 on the Form 11-C when any of the following events occur;

    1. Taxpayer changes their business or home address.

    2. A person continues as the surviving spouse or child, executor, administrator, or other legal representative of the business of a deceased person who paid the occupational tax.

    3. A person continues the business as a receiver or trustee in bankruptcy.

    4. A person continues the business as an assignee for creditors.

    5. One or more members withdraw from a firm or partnership.

    6. A corporate name is changed.

    7. A principal operator hires a new agent or employee to receive wagers. The supplemental return must be filed within 10 days of hiring a new employee-agent and will include the name, address and TIN of each new employee-agent.

  6. Employee-agents must file a supplemental return if they are hired to receive wagers for another party within 10 days after being hired. They must complete line 7 of the Form 11-C to record the name, address and TIN of each principal operator that hired them.

  7. A supplemental return is only required when a taxpayer has already filed and paid the occupational tax on a Form 11-C for the tax period. The taxpayer should fill out the entity portion of the return, check the supplemental registration return box, the applicable box in line 3 and fill-in information on line 7 only.

    Note:

    If an 11-C Supplemental Return is received in CSCO and a TC 150 has posted for the tax period, please associate the Supplemental return with the original return.

  8. Form 730, Monthly Tax Return for Wagers, is required to be filed by any person in the business of accepting wagers who conduct wagering pools or lotteries or who are required to be registered and received wagers for another. Taxpayers are required to use Form 730 to report monthly the taxes due under IRC Section 4401(a) . All Form 730, along with Form 11-C are processed at the Cincinnati Submission Processing Center (CSPC).

    Note:

    All return delinquency issues and coding, along with the preparation of the return for processing are completed at the receiving site, and only the "Form 730 Return" is sent to CSPC for processing.

    Note:

    All Form 730 Returns and Correspondence received in Collection Operations when the taxpayer's account module is not in Status 02 or 03 should be sent to CIRSC Excise, Stop 5701G.

    1. Form 730 is filed by principal operators to report excise tax on wagers accepted. Persons liable for filing Form 730 must have filed a Form 11-C to purchase the Special Tax Stamp to accept wagers.

    2. The Form 730 is due to be filed and paid by the last day of the month following the month in which wagers are being reported (i.e. The Form 730 for the month of August is due before the last day of September.)

    3. The tax rate is 2 percent, but a lower rate of 0.25 percent is applicable in states where the particular type of wagering is legalized.

  9. For a Form 730 to be taxable the wagers must be placed with a person of business engaged in the business of accepting wagers. A person is engaged in the business of accepting wagers if they make it a practice to accept wagers, on which they assume a risk of profit or loss, depending upon the outcome of the event on which the wager is placed. Organizations that are exempt from income tax under Section 501 or 521 of the IRC are not exempt from the excise tax on wagering.

    1. Wagers on which a tax is imposed includes any made on a sports event or contest, made in a pool (conducted for profit) on a sports event or contest, made on a lottery conducted for profit.

    2. Wagers on which a tax is not imposed includes any made on Pari-mutuel wagering such as horse racing, dog racing, when licensed under state law. Made on coin operated devices such as pinball machines. Wagers made on sweepstakes, wagering pools, or lotteries if they are conducted by an agency of a state and the wagers are placed with the state agency or its authorized agents or employees. Wagering made on social or friendly betting are also considered non taxable wagers.

      Note:

      The amount of the wager includes any fee or charge incident to placing the wager, and is not the amount that the bettor stands to win.

    3. There are no deposit requirements for paying the tax on Form 730. The payment may be sent with the return.

  10. If no wagers were accepted during a month, a zero liability return should be filed showing No Activity.

  11. If Form 730 will not be filed in the future, a return should be filed with Final Return written on the front.

  12. If a Form 730 or Correspondence is received stating a credit for Laid-off wagers, refer this to Examination.

  13. If a Form 11-C or Form 730 account is in Notice Status 02 or TDI Status 03 work as follows:

    Note:

    Any Form 11-C or Form 730 returns or correspondence received and research shows information under another TIN, name, or different tax period, whether or not a return has posted, refer the case to the Cincinnati Campus:
    CIRSC Excise
    Stop 5701G.

    If Then
    The taxpayer is liable See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable
    The taxpayer is liable and will file See IRM 5.19.2.5.5.4.7, BMF Response Taxpayer Will File (correspondence only)
    The taxpayer is not liable and/or will not be liable for future returns See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable
    Additional information is needed to resolve the case See IRM 5.19.2.5.4.5.11, BMF Response Insufficient
    taxpayer states they filed their return less than 10 weeks ago and they did not provide a copy of the return See IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s)
    taxpayer states they filed their return more than 10 weeks ago See IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s)
    An original return is received See IRM 5.19.2.5.5.4.10, BMF Response with Original Return(s)
    A copy of a return is received See IRM 5.19.2.5.5.4.10, BMF Response with Copy of Return(s)

5.19.2.5.5.4.13  (02-15-2011)
BMF Responses Forms 706 and 709 (Estate and Gift Tax)

  1. Form 706, U.S. Estate Tax Return , is filed by an executor of a decedents estate to compute the estate tax imposed by Chapter 11 of the IRC and also certain generation-skipping transfer taxes imposed at death under Chapter 13. Different types of Form 706 are filed according to specific requirements of each estate.

  2. A Return Delinquency module is created, and a delinquency notice is mailed if the Executor of the Estate files an extension to file and the return is not filed.

  3. Form 709, United States Gift (and Generation - Skipping Transfer) Tax Return , is used to report transfers subject to federal gift and certain generation-skipping transfer taxes and to compute tax due, if any on those transfers.

    Note:

    See IRM 21.7.5, Estate and Gift Tax Returns; for additional information, if necessary.

  4. All RD Notice Responses are worked by CSCO, TDA/TDI Department in the campus where the notice responses are received according to state mapping. ACS notice response(s) are worked in the appropriate ACS Support site.

  5. Form 706 and Form 709 returns or related correspondence received regarding cases not in RD Notice Status 02 or TDI Status 03 will be sent to (E&G) centralized processing in Cincinnati Campus:
    Estate and Gift Tax Operation
    201 W. Rivercenter Boulevard
    Covington, KY 41011
    Attention: Stop 824G

    Note:

    RD responses will not be sent to the Estate and Gift (E&G) Department in Cincinnati, but worked by the CSCO campus where the response is received.

  6. If the decedent’s executor or other third party responds to a notice requesting a Form 706United States Estate Tax Return, take the following actions:

    If Then
    They state the estate is not required to file, Inform the taxpayer notice was issued due to request for extension to file. Ask the taxpayer for reason for extension. If the taxpayer states filed in error, see IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable, for procedural guidance.
    They state the estate will file a return, See IRM 5.19.2.5.5.4.7, BMF Response Taxpayer Will File (correspondence only), for procedural guidance.
    They state the estate has previously filed, See IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s), for procedural guidance.
    The response is insufficient. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient, for procedural guidance.

  7. Take the following actions if the taxpayer response is for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return:

    If Then
    They state they are not required to file, See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable, for procedural guidance.
    They state they will file a return, See IRM 5.19.2.5.5.4.7, BMF Response Taxpayer Will File (correspondence only), for procedural guidance.
    They state they previously filed, See IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s), for procedural guidance.
    The response is insufficient. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient, for procedural guidance.

5.19.2.5.5.4.14  (11-23-2011)
BMF Response Forms 720 (Quarterly Federal Excise Tax Return)

  1. Form 720 , Quarterly Federal Excise Tax Return, and attachments is used to report liability and payment of various types of excise tax. Many of these taxes are set aside into trust funds earmarked for related capital projects, such as highway and airport improvements. Excise taxes are independent of income taxes. There are numerous changes to excise taxes as new tax laws are implemented for specific tax years, which result in tax rate changes, new credit reference numbers (CRN's) and procedures. For additional information refer to IRM 21.7.8.4, Excise Tax Procedures. Refer taxpayers toPublication 510 , Excise Taxes for additional information and guidance with preparation and filing requirements.

  2. If the taxpayer states he/she is not liable because the business is closed, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  3. All Form 720 returns are processed at the Cincinnati Submission Processing Center (CSPC).

    Note:

    All return delinquency issues and Return coding, along with the preparation of the return for processing are completed at the receiving site, and only the "Form 720 Return" is sent to CSPC for processing.

  4. If the taxpayer states they are not liable because they had no liability for excise tax to be reported on Form 720, take the following actions on all modules the taxpayer states they are not liable, including all open RD and any future modules;

    If Then
    For AM Employees, Do not complete research or close out the TDI instead take the following actions:
    1. Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e.: If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    2. Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 590 cc 75 using CC FRM49.

    2. Document AMS of complete research and actions taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document closing actions in a AMS narrative, including when taxpayer will be liable.
      If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees,
    1. Input TC 590 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document closing actions including when taxpayer will be liable in a AMS narrative.


    If on ACS, enter ACS history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .
    The taxpayer states they will not be liable for a future account module within 12 months.
    1. Create a dummy module for all MFT's affected and input a TC 590 cc 75/25/40 using CC FRM49.

    Note:

    You can not create a dummy module more than 12 months in advance of the current date.

    Note:

    The use of TC 590 will satisfy only the period which it is input. The filing requirements will remain open for subsequent periods.

  5. If the taxpayer states they had no liability for excise tax for this period and will not be liable for future returns on the delinquent MFT, research to validate the taxpayers response, see IRM 5.19.2.5.5.4.1, BMF Response - Utilizing BMF Selection Codes (SC). If research validates taxpayers information,. take the following actions

    If Then
    For AM Employees, Do not complete research or close out the TDI instead take the following actions:
    1. Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e.: If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    2. Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 591 cc 75 using CC FRM49.

    2. Document AMS of complete research and actions taken.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document closing actions including date business closed in a AMS narrative
      If account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees.
    1. Input TC 591 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document closing actions in a narrative on AMS, including date business closed.
      If the account is on ACS, enter ACS history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    The use of TC 591 will close the taxpayer's FR for the specific MFT. Input of TC 591 on the earliest delinquent period will close all subsequent delinquent periods for the same MFT, unless there is a credit or extension on the module.

5.19.2.5.5.4.15  (02-15-2011)
BMF Response Form 8804/8805

  1. Form 8804, Annual Return for Partnership Withholding Tax (Section 1446), is used to report the total liability under section 1446 for the partnership's tax year. (Form 8804 is also a transmittal form for Form 8805).

  2. Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, is used to report the connected taxable income, total tax credit and the withholding tax that is allocated to the foreign partner for the partnership's tax year.

  3. Who must file Form 8804 and Form 8805? All partnerships with effectively connected gross income that is associated to a foreign partner in any tax year, whether or not distributions were made during the partnership's tax year. The partnership may designate a person to file the forms. The partnership, or person it designates, must file these forms even if the partnership has no withholding tax liability under section 1446.

  4. Form 8804 is due on or before the 15th day of the fourth month after the close of the partnership’s taxable year. However, if the partnership keeps its books and records outside of the United States and Puerto Rico (this is indicated by a check box in the upper right corner of Form 8804 ), then the Return Due Date (RDD) is the 15th day of the sixth month after the close of the partnership’s taxable year. Therefore, a calendar year return would be due April 15th, or June 15th, respectively. See IRM 3.22.15., Foreign Partnership Withholding.

  5. Form 8804, Form 8805 original returns secured are to be coded and prepared for processing by the receiving site and forwarded to the Ogden Submission Processing, Stop 6110. However, any correspondence and/or amended Form 8804-C secured are handled by Exam in the Philadelphia Campus as it meets the BMF International Criteria.

5.19.2.5.5.4.16  (11-23-2011)
BMF Responses Employment Tax Returns Overview

  1. Form 940, Form 941, Form 943, Form 944 and Form CT-1 are all BMF Employment tax returns that are filed by employers who have employees.

  2. Form 940 is filed by employers to report Federal Unemployment Tax, also known as FUTA tax. Only employers pay FUTA tax.

  3. Form 941, Form 943, and Form 944 are filed by employers to report both the employers and the employees' share of social security and Medicare taxes, also known as tax under the Federal Income Contributions Act or FICA tax.

  4. Form CT-1 is used to report taxes imposed by the Railroad Retirement Tax Act (RRTA). There are two levels of taxes or "tiers" . Tier 1 provides equivalent social security and Medicare benefits, and tier 2 provides a private pension benefit.

  5. Employment tax returns are used to report FUTA tax, as well as the amount of federal income tax & FICA (or RRTA) tax withheld from the employees’ wages and owed by employees. The title of each form is:

    • Form 940 , Employers Annual Federal Unemployment (FUTA) Tax Return .

    • Form 941, Employers Quarterly Federal Tax Return .

    • Form 943, Employers Annual Federal Tax Return for Agricultural Employees .

    • Form 944, Employers Annual Federal Tax Return .

    • Form CT-1 , Employers Annual Railroad Retirement Tax Return .

  6. This sub-section will discuss general procedures on the return delinquency responses and/or inquiries received regarding Employment Tax returns. Specific definitions, filing requirements, and procedures regarding form type specifics will be discussed later in this IRM section under the specific sub-section titles in the section.

  7. Address "Full Compliance" on any un-filed associated Form 940 returns when working any Employment Tax Return responses. If you receive a Form 940 return, verify if the taxpayer is liable to file Form 941/ Form 943/ Form 944. If the taxpayer is liable to file, request the return from taxpayer via telephone or letter. Document AMS of actions taken. See IRM 5.19.2.5.5.4, BMF Determining Liability, for "Full Compliance" guidelines.

  8. There are situations where an employer elects to have a Parent entity/payer agent pay wages on their behalf. The taxpayer (employer) must complete Form 2678, Employer/Payer Appointment of Agent request an appointment of an agent to file returns on their behalf. In addition, the form is also used as an authorization for the payer agent to withhold and pay taxes via Form 941, 943, 944, 945 and CT-1 & CT-2. See IRM 3.13.2.16.3, Form 2678 - Employer/Payer's Account, for more information.

    Note:

    Form 940 cannot be filed under a parent company/corporation or Payer Agent and must be filed by each subsidiary.

    If Then
    The account has a TC 971 AC 384, indicating a payer agent has authority to pay, file tax return on behalf of taxpayer,
    • Input a TC 591 with the appropriate closing code.

    • Document AMS of information, including the taxpayer has a payer agent on file.

    There is no indication of a TC 971 AC 384.
    • Inform taxpayer by telephone or correspondence they are required to file a Form 2678, to request for a payer agent to file and pay taxes.

    • Inform taxpayer we cannot close their FR until verification is received that Form 2678 has been received and processed.

    • Document AMS of actions taken, including deadline date to taxpayer.

    • If the account is on ACS, input history OADT,45,F2678.

  9. If research indicates a return has posted (TC 150) to the incorrect MFT ( Form 941/Form 944) and the taxpayer has submitted a return for the correct MFT, input a TC 590 on the open TDI module. Destroy the secured return and document AMS of actions taken. This will eliminate unnecessary adjustments.

  10. If taxpayer sends an incorrect form, either a Form 941/Form 944, return the inappropriate form to the taxpayer with an appropriate letter advising the taxpayer the correct form he is required to file. See IRM 5.19.2.5.5.4.16.2, BMF Response Form 941 (Employer's Quarterly Tax Return) and see IRM 5.19.2.5.5.4.16.4 IRM 5.19.2.5.5.4.16.4, BMF Response Form 944, Employer's Annual Federal Tax Return for additional procedural guidance. Input history indicating actions taken including correct form taxpayer is required to file along with follow up given for taxpayer response. However, to prevent further confusion there is an exception to the rule when receiving all four 941 quarters and there is an open FR for 944. See IRM 5.19.2.5.5.4.16.4, BMF Response Form 944, Employer's Annual Federal Tax Return for further guidance.

  11. The exception does not apply in the reverse situation, receiving a Form 944 for a tax year the taxpayer is liable to file Form 941 , as the Form 941 is a quarterly return which includes a breakdown of wages for each of the 4 tax quarters, whereas the Form 944 is an annual return with no breakdown of wages to identify accurate wages paid in each specific quarter.

  12. If taxpayer states they are not liable as they had no employees, and/or no wages for this period, or if taxpayer states they had no employees that were subject to RRTA taxes, take the following actions:

    If And Then
    The taxpayer states they will not be liable for a future module. For AM Employees, Do not complete research or close out the TDI instead take the following actions:
    1. Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e.: If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    2. Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 590 cc 75, using FRM49 on the specific module(s).

    Note:

    A transaction code can not be input on a module more than 12 months in advance.

    Note:

    If there is a credit balance on account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS, ACSS, and FA employees.
    1. Input TC 590 cc 25/20, using FRM49.

    2. Document closing actions in a AMS narrative, including when the taxpayer will be liable.

    3. If account on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

      Exception:

      FA employees use 21.

    Note:

    If there is a credit balance on account, you must follow credit balance procedures, before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Note:

    Input of a TC 590 will satisfy only the module for which it is input. Filing requirements will remain open for subsequent modules.

  13. If the taxpayer states they are not liable as they no longer have employees and/or have no employees that are subject to RRTA taxes, or they have "leased" their employees to another company, and will not be liable for future returns on the delinquent MFT, take the following actions:

    If Then
    For AM employees, Do not complete research or close out the TDI instead take the following actions:
    1. Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e.: If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    2. Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO employees,
    1. Input TC 591 cc 75 using CC FRM49.

    2. Verify if taxpayer is liable to file Form 940. If not liable, proceed by closing the filing requirements, if appropriate.

    Note:

    If a credit balance remains on the account, see IRM 5.19.2.5.8, "Credit Balance Overview" before closing the module with TC 590, 591 or 593.

    For ACS and ACSS employees.
    1. Input TC 591 cc 25/20 using CC FRM49.

    2. Verify if taxpayer is liable to file a Form 940. If not liable, proceed by closing the filing requirement, if appropriate.

    3. Document closing actions, including business closed date in an AMS narrative.
      If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, see IRM 5.19.2.5.8, Credit Balance Overview.

  14. If the taxpayer states they are not liable as the business is closed, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

5.19.2.5.5.4.16.1  (11-23-2011)
BMF Response Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return

  1. Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return is used along with state unemployment tax systems in providing funds for paying unemployment compensation to workers who have lost their jobs. Only the first $7,000 paid to each employee is subject to Federal Unemployment Tax Act (FUTA) tax.

  2. As of 2006 calendar year return, the Form 940 was redesigned to combine the previous versions of Form 940 and Form 940-EZ into one simplified form. Form 940-PR was also redesigned for 2006. The new form provides significant burden reduction to multi-state employers.

  3. Taxpayers are required to file Form 940 if they answer "yes" to either one of these questions for the year at issue or the proceeding year:

    • Did they pay wages of $1,500 or more to employees in any calendar quarter?

    • Did they have one or more employees for at least some part of a day in any 20 or more different weeks?

    Note:

    Research CC BRTVUE on Form 941/943/944 to verify wages, and number of employees to determine if taxpayer is required to file Form 940.

  4. Taxpayers need to include all full-time, part-time, and temporary employees. However, if the business is a partnership, advise they do not count its partners.

  5. If the Employment Code (EC) of the Entity is W, F or G (identified on CC ENMOD) the taxpayer is generally not liable to file. If the EC is "F" , indicating a federal agency, contact the centralized FAD Unit in BSC CSCO prior to any actions taken to verify agency does not have any civilian employees.

  6. Agricultural employers are liable if they meet either of the tests below:

    • They paid cash wages of $20,000 or more to agricultural workers in any calendar quarter in the current or preceding calendar year.

    • They employed 10 or more agricultural workers for some portion of a day during any 20 different weeks in the current or preceding calendar year.

  7. Employers with household employees are liable and have the option to file either a Form 940 or Schedule H (Form 1040) if they paid $1,000 or more in any calendar quarter during the current or preceding year for work in:

    • A private home

    • A local college club

    • A local chapter of a college fraternity or sorority

    Note:

    Generally, employers of household employees must file Schedule H (Form 1040) Household Employment Tax instead of Form 940. If taxpayer states they reported wages on Schedule H of their Form 1040, then refer to the table in (14) below. See also IRM 21.7.3.3.1, Form 940 Filing Requirements for more information, if necessary.

  8. For additional guidance see IRM 21.7.3, Unemployment Taxes and Publication 15 , (Circular E) Employer's Tax Guide for further guidance on filing requirements.

  9. If the taxpayer is required to file Form 940, research and address all applicable Employment tax returns. If research indicates taxpayer is liable to file related Employment tax return, taxpayer contact is required to address delinquency, either by telephone or appropriate letter. See IRM 5.19.2.5.5.4, BMF Determining Liability and IRM 5.19.2.5.5.4.1, BMF Response - Utilizing BMF Selection Codes (SC) for complete research guidelines.

  10. If the taxpayer states he/she is not liable because no wages or insufficient wages were paid, review the 941/943/944 filing history:

    Note:

    If taxpayer states only employees are family members (spouse, child under 18) then taxpayer is not required to file a 940 return.

    If Then
    If notice response is received stating they did not pay $1,500 in non-agricultural wages,
    1. Input TC 590 with appropriate closing code on the appropriate Form 940 modules.

    2. Research and address all other delinquent associated returns in the same tax year to determine if liable to file. See IRM 5.19.2.5.5.4, BMF Determining Liability. If research determines the taxpayer is not liable to file an associated module, close the module(s), if applicable by inputting a TC 590 with appropriate closing code.

    3. Document AMS of actions taken.

    Form 941, Form 943, Form 944 filing history shows no wages paid or wages below the filing requirement, See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable.
    Form 941, Form 943, Form 944 filing history shows wages paid meets the 940 filing requirement, See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    If the taxpayer of business sends an annual return such as a Form 1120 showing no wages were paid. See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable.

  11. Some organizations, such as religious, charitable, and educational organizations, are exempt from FUTA taxes. If an organization claims to be exempt from FUTA taxes research the entity through CC ENMOD for possible TC07X/09X indicator. The transaction code indicates taxpayer made an election and has been granted church exemption from Social Security tax or small business election. If an entity has been identified as an exempt organization, follow the general guidelines below:

    If And Then
    IDRS research does not indicate exempt status, For CSCO and AM Employees,
    1. Input delay C08 using CC ASGNB to accelerate to ACS. See IRM 5.19.2.5.1.1, Accelerate or Delay To TDI Status 03, for guidance on accelerating account.

    2. Route the taxpayer's written response or Form 4442 to Entity area for determination of exempt status.

    3. Document AMS of actions taken, indicating forwarding to Entity Control area for exempt status assistance.

    For ACS, ACSS and FA Employees,
    1. Route the taxpayer's written response or Form 4442 to Entity Control for determination of exempt status.

    2. Document AMS of actions taken, indicating forwarding to the Entity Control area for exempt status assistance.

    3. Enter code "TOR1,45,CMNTS " .

    IDRS research shows exempt status. For CSCO and AM Employees,
    1. Input TC 591 cc 75 to indicate the business is no longer required to file Form 940.

    2. Document AMS of completed research and actions taken including findings of exempt status.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input a TC 591 cc 25 to indicate the business is no longer required to file Form 940.

    2. Document AMS of actions taken.

    3. If module on ACS input "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input TC 591 cc 20 to indicate the business is no longer required to file Form 940.

    2. Document AMS of action taken.

    Note:

    If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  12. If the taxpayer states he/she is not liable because the business is closed, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  13. If the taxpayer states he/she is not liable because the business is an LLC, see IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC). If the business merely had a change in the method of operation (e.g. sole proprietor to corporation or partnership to sole proprietor) during the notice period, so that the new entity is a successor employer see IRM 4.19.5.4.7.14, Successor Employer review accounts before requesting a Form 940 .
    For case resolution, the taxpayer can file a combined Form 940 on either TIN.

    If And Then
    Form 940 was filed on the "old" TIN which included wages and tax liability for both TINs, For AM Employees, Do not complete research or close out the TDI instead take the following actions:
    1. Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e.: If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    2. Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input a TC 590 cc 75 on the delinquent module on the "new" TIN.

      Note:

      If a credit balance remains on the account, you must follow credit balance research before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of actions taken including the TIN of combined return.

    For ACS and ACSS Employees,
    1. Input a TC 590 cc 25 using CC FRM49 on the delinquent module on the "new" TIN.

      Note:

      If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of closing actions, including the TIN of combined return.

    4. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees,
    1. Input a TC 590 cc 20 using CC FRM49 on the delinquent module on the "new" TIN.

      Note:

      If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of closing actions, including the TIN of combined return.

    Form 940 was filed on the "new" TIN which included wages and tax liability for both TINs, For CSCO and AM Employees,
    1. Input a TC 591 cc 75 using CC FRM49 on the delinquent module on the "old" TIN.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of actions taken, including the "new" TIN.

      Note:

      If a credit balance remains on the account, you must follow all credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input a TC 591 cc 25 using CC FRM49 on the delinquent module on the "old" TIN.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of actions taken, including the TIN of combined return.

    4. If the account is on ACS, enter history code "TOC0,230,RDPND" or "TOS0,30,RDPND" .

      Note:

      If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input a TC 591 cc 20 using CC FRM49 on the delinquent module on the "old" TIN.

    2. Close all open FR on the "old" TIN.

    3. Document AMS of actions taken, including the TIN of combined return.

    Note:

    If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593.

    Form 940 was not filed (but research indicates wages paid).  
    1. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    Note:

    If research (per above IRM guidelines) indicates taxpayer filed a Form 940 but did not claim all wages paid, inform taxpayer of discrepancy and how to correct.

  14. If a taxpayer with household employees states they now report all wages on Schedule H with their Form 1040, take the following actions.

    If And Then
    For CSCO and AM Employees, Research on RTVUE shows a Schedule H was filed on the taxpayer's Form 1040 return.
    • Input a TC 591 cc 75 to document the business is no longer required to file a Form 940.

    • Document AMS of completed research and actions taken.

    Note:

    If a credit balance remains on the account, you must follow credit balance procedures, see IRM 5.19.2.5.8.1, Credit Balance Research Procedures, before closing the module with a TC 590, 591 or 593.

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 104 return.
    • Send Letter 282C or appropriate letter to inform taxpayer our records do not indicate they reported the FUTA taxes on their Form 1040. They have the option to file a Form 940 or correct and file their Form 1040. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    • Document AMS of completed research and actions taken.

    For ACS and ACSS Employees, Research on RTVUE shows a Schedule H was filed on the taxpayer's Form 1040 return.
    1. Input a TC 591 cc 25 to document the business is no longer required to file a Form 940.

    2. Document AMS of actions taken.

    3. If the module is on ACS, enter the ACS history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 1040 return. Inform taxpayer our records do not indicate they reported the FUTA taxes on their Form 1040. They have the option to file a Form 940 or correct and file their Form 1040. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    For FA Employees. Research on RTVUE shows a Schedule H was filed on the taxpayer's Form 1040 return.
    1. Input a TC 591 cc 40 to indicate the business is no longer required to file a Form 940.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures in before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    3. If the module is on ACS, enter the ACS history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 1040 return.
    1. Inform taxpayer our records do not indicate they reported the FUTA taxes on their Form 1040. They have the option to file a Form 940 or correct and file their Form 1040. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    2. Document AMS of actions taken.

  15. If research indicates taxpayer had wages paid over $1,500 for a Form 941 , in any given quarter (per tax period), which is an indication taxpayer may be liable to file a Form 940. Complete research to determine if taxpayer needs to file a Form 940 whether in open TDI status or not.

5.19.2.5.5.4.16.2  (01-25-2012)
BMF Response Form 941 (Employer's QUARTERLY Federal Tax Return)

  1. Form 941 , Employer's QUARTERLY Federal Tax Return, is a quarterly return to report payroll taxes, which consists of withheld income tax and both employee and employer shares of Social Security and Medicare taxes for each quarter. Form 941 is also used to report any current quarter's adjustments.

  2. If the RD notice is for Form 941, but the response indicates that the correct FR for the calendar year is Form 944, verify the correct filing requirement for that year. The FR can be verified by the 944 CACHE indicator on CC BMFOLE which identifies specific tax year liable for Form 944. See IRM 5.19.2.5.5.4.16.4, BMF Response Form 944, Employer's ANNUAL Federal Tax Return ,for additional guidance.

  3. If the taxpayer states he/she is not liable because the business is closed, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  4. If the business responds it is a seasonal or intermittent filer but does not indicate if they are liable, verify the filing requirements on ENMOD or INOLE. Document or change filing requirements to denote a casual/intermittent filer, if appropriate, using CC ENREQ. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

  5. If the business responds indicating they are a seasonal or intermittent filer and therefore not liable use the table below for guidance on updating filing requirements:

    Note:

    Refer to Document 6209 for BMF Filing Requirements.

    If And Then
    Response does not provide the dates of operation (i.e. open during summer months only, open during Christmas), For CSCO and AM Employees,
    1. Input a TC 590 cc 75 using CC FRM49 only on the quarters the business is responding to.

    2. For all other open return delinquency modules, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

    3. Document AMS of actions taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input a TC 590 cc 25 using CC FRM49 only on the quarters the business is responding to.

    2. For all other open return delinquency modules, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

    3. Document AMS of actions taken including season/months of operation, if applicable.

    4. If the module is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees,
    1. Input TC 590 cc 20 (using CC FRM49) only on the quarters the business is responding to.

    2. For all other open return delinquency modules follow procedures in IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

    3. Document AMS of actions taken.

    4. If the module is on ACS, enter history code, "TOC0,21,RDPND" "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    Response does provide the dates of operation (i.e. open during summer months only, open during Christmas). For CSCO and AM Employees,
    1. Close all open return delinquency modules for all periods the business was not in operation by inputting a TC 590 cc 75 using CC FRM49.

    2. Document AMS with information secured by taxpayer and actions taken, including the dates of operation if secured.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS, ACSS , and FA Employees,
    1. Close all open return delinquency modules for all periods the business was not in operation by inputting a TC 590 cc 25/20 using CC FRM49.

    2. Document AMS of actions taken including season/months of operation.
      If the account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  6. If a taxpayer with household employees states they currently report all their employment taxes on Schedule H with their Form 1040, research CC RTVUE to verify if they reported as stated and take the following actions:

      If Then
    For CSCO and AM Employees, Research indicates the taxpayer filed a Schedule H on their individual Form 1040 tax return,
    1. Input a TC 591 cc 75 to show the business is no longer required to file a Form 941.

      Note:

      Close all FR's for Form 940, if appropriate.

    2. Document AMS of completed research and actions taken actions taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 1040 return. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    For ACS and ACSS Employees, Research on RTVUE shows a Schedule H was filed on the taxpayer's Form 1040 return.
    1. Input a TC 591 cc 25 indicating the business is no longer required to file a Form 941.

      Note:

      Close all FR's for Form 940 if appropriate.

    2. Document AMS of action taken.

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 1040 return. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    For FA Employees. Research on RTVUE shows a Schedule H was filed on the taxpayer's Form 1040 return.
    1. Input a TC 591 cc 20 to indicate the business is no longer required to file Form 941.

      Note:

      Close all FR's for Form 940 if appropriate.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter the ACS history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    Research on RTVUE shows a Schedule H was not filed on the taxpayer's Form 1040 return. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    Note:

    See Publication 926 , Household Employer's Tax Guide, and, Schedule H (Form 1040), Household Employment Taxes for additional information regarding filing requirements.

  7. If the Return Delinquency notice is requesting a delinquent Form 941 , but the taxpayer states that they are a Form 944 filer for that year, research and verify via Form 944 cache indicator on CC BMFOLE to determine the correct FR for year of the delinquent tax period. The filing requirement for Form 941/944 can change based on whether the employer's annual employment tax liability (that is, social security, Medicare, and withheld Federal income taxes) is $1,000 or less. However, the taxpayer is sent prior notification if their filing requirement is changed. See IRM 5.19.2.5.5.4.16.4 BMF Response Form 944, Employer's ANNUAL Federal Tax Return, for additional information regarding the requirements for Form 944 criteria.

    If And Then
    Form 944 is received, and it is determined that the FR is for 941, Intentionally left blank
    • Return the incorrect tax return to the taxpayer, advising of the correct tax form to file.

    • Document AMS of actions taken, including type of contact, follow up date.

    • If account in ACS, document history, and input history code with appropriate parameter for follow up actions.

    If determined the taxpayer has 941 FR for that calendar year, and the taxpayer states they meet the criteria for 944 FR, and did not have employees for the delinquent quarter, For CSCO and AM Employees,
    • Inform the taxpayer that our records indicate they are required to file Form 941 for the delinquent year, as based on a look-back period for that calendar year, although their tax for that year meets the Form 944 criteria.

    • Input TC 590, with appropriate closing code on the 941 quarter(s) the taxpayer states had no employees.

    • Document AMS of actions taken.

    Note:

    If a credit balance remains on account, see IRM 5.19.2.5.8, Credit Balance Overview before closing the module with TC 590, 591 or 593.

      For ACS, ACSS and FA Employees.
    • Follow procedures above.

    • If account is on ACS, input history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

  8. If a response is from an agricultural employer and he/she states Form 943 was filed instead of Form 941, research CC BMFOLI for filing history. If research validates taxpayers response:

    If Then
    Form 943 posted for delinquent period,
    1. Input a TC 591, with appropriate closing code, using CC FRM49 on the 941 delinquent module.
      Use cc 75 for CSCO, AM
      Use cc 25 for ACS, ACSS
      Use cc 20 for FA Employees

      Note:

      If there is a credit balance on the module, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Transfer any credits misapplied from 941 module(s) to the 943.

    3. If any Form 941 were filed in error, follow procedures in IRM 21.7.2, Employment and Railroad Tax Returns.

    4. Document AMS of actions taken, including where income was reported.

    5. If the account is on ACS, enter the ACS history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Form 941 posted for delinquent period, Control or refer the case, see IRM 5.19.2.5.6, Return Delinquency TIN and Entity Research .
    Neither Form 941 or Form 943 has posted. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
  9. If research indicates taxpayer had wages paid over $1,500 for a Form 941 , in any given quarter (per tax period), which is an indication taxpayer may be liable to file a Form 940. Complete research to determine if taxpayer needs to file a Form 940 whether in open TDI status or not see IRM 5.19.2.5.5.4.16.1, BMF Response Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. If there is no indication the taxpayer filed under another EIN send a letter to the taxpayer requesting the return.

  10. Effective January 1, 2012, monthly filing and special deposit procedures will become obsolete. Please see note in paragraph 11 below for guidance regarding receipt of any Form 941-M returns for 2012 monthly filing requirements.

  11. Form 941-M is used by Revenue Officers (RO) when it has been determined a taxpayer needs to be placed as a monthly filer as a compliance enforcement tool. The taxpayer is required to submit a monthly 941-M to the RO. The RO then compiles the information into a single 941 return. The combined package which consists of the three 941-M forms, 941 and Form 795 completed by the RO is then forwarded for processing. If a Form 941-M is received, research the account to determine if the taxpayer is a 941-M filer or used the incorrect tax form to file.

    • If FR is 09 or 10, indicating the taxpayer is a "true" 941-M filer, route the return to Submission Processing without coding the return or input of TC 599. Submission Processing will determine if the return is compiled correctly for processing.

    • If research indicates taxpayer used the incorrect form, return the tax return to the taxpayer indicating the correct tax form to file.

    • If it is determined the combined package does not contain all required forms as stated above, return back to the originating RO.

    Note:

    The final quarter for processing combined Form 941-M returns under monthly filing is the period ending December 31, 2011. If a combined 941-M package is received from a RO after the time frame above, return to the original Revenue Officer.

5.19.2.5.5.4.16.3  (11-23-2011)
BMF Response Form 943 (Employer's Annual Federal Tax Return for Agricultural Employees)

  1. Taxpayers are required to file Form 943 if they pay wages to one or more farm workers. Employees are subject to social security and Medicare taxes and federal income tax withholding if:

    • the employer paid an employee cash wages of $150 or more in a year for farm work, or

    • the total (cash and non-cash) wages that are paid to all farm workers is $2,500 or more.

  2. See the instructions for Form 943 , Employer's Annual Federal Tax Return for Agricultural Employees and Publication 51 , (Circular A), Agricultural Employer's Tax Guide for additional information.

  3. If the taxpayer employs both farm and non-farm workers, they must report employment tax for the farm workers on Form 943 separate from employment taxes of non-farm workers (Form 941 /Form 944).

  4. In addition, household employers who work on a for-profit farm, must report wages for these workers on Form 943. However, household employers who work on a non-profit farm must report wages for these workers separately on Schedule H (Form 1040).

  5. If taxpayer states not liable for Form 943 as they reported under their Individual return Form 1040 (Schedule F), research cross reference SSN on Form 1040 Schedule F for wages paid. Input TC 590 cc 75 on module if applicable.

  6. If a response is from an agricultural employer and he/she states Form 941 was filed instead of Form 943, research CC BMFOLI for filing history:

    If Then
    Form 941 posted for delinquent period,
    1. Input a TC 591, with appropriate closing code, using CC FRM49 on the Form 943 delinquent module.
      Use cc 75 for CSCO, AM
      Use cc 25 for ACS, ACSS
      Use cc 20 for FA Employees

      Note:

      If there is a credit balance on the module, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Transfer any credits misapplied from 943 module(s) to the 941.

    3. If any Form 943 returns were filed in error, follow procedures in IRM 21.7.2, Employment and Railroad Tax Returns.

    4. Document AMS of actions taken.

    5. If the account is on ACS, enter the ACS history code "TOC0,30,591XX" or "TOS0,30,591XX" .

    If taxpayer responses indicating he has agricultural employees and filed a Form 941, Control or refer the case, see IRM 5.19.2.5.6, Return Delinquency TIN and Entity Research .
    Neither Form 943 nor Form 941 has posted. See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

  7. If the taxpayer states he/she is not liable because the business is an LLC, IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC).

5.19.2.5.5.4.16.4  (11-23-2011)
BMF Response Form 944, Employer's ANNUAL Federal Tax Return

  1. As of January 2006, the Form 944 program was implemented with the objective to reduce burden on certain small business taxpayers. Qualified small businesses have the option to file and report their employment tax on a annual basis using Form 944 instead of on a quarterly basis using Form 941.

  2. To qualify for the program one of the following must apply:

    • The taxpayer would have been notified by the IRS that they were selected and are required to file Form 944, (Written notifications are sent to selected taxpayers prior to February 1st of the tax year ).

      Note:

      Taxpayers continue to file Form 944 for subsequent years unless they receive another notification letter informing them their FR was changed, or opt-out of the program prior to April 1st.

    • Those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less (indicative per EIN assignment process), or

    • Taxpayer filed Form 944 for the prior year and reported $2,500 or less in total tax liability.

  3. For tax years 2006-2008, Form 944 filers were identified via an eligibility extract, however as of tax year 2009 and subsequent years, the eligible extract will no longer be used to identify eligible taxpayers. Beginning with tax year 2009 and subsequent tax years, taxpayers will either self-identify during EIN assignment, or when a taxpayer contacts the Service directly inquiring about the Form 944 program.

  4. As of January 2010 tax year, Form 944 FR will change to a voluntary program.

    • Taxpayer will have the option to file Form 944 if they fit the criteria for the year requested by contacting the IRS.

    • Eligible employers who wish to file Form 944 must make the request by calling the IRS on or before April 1st of the current tax year (April 1, 2011 for returns for tax year 2011).

    • The IRS will then issue formal notification of the new Form 944 filing requirement.

    • Employers can also make the request to file Form 944 in writing; written correspondence must be postmarked on or before March 15th of the current tax year (March 15, 2011 for returns for tax year 2011).

    • New employers that recently received an EIN or had an EIN but were not previously required to file Form 941 or Form 944 who want to call to request to opt in or out of filing Form 944 for the current tax year must call the IRS on or before the first day of the month that their first required Form 941 for the current tax year is due to establish a Form 944 filing requirement.

      Example:

      If their first return is due July 30th, they must call on or before July 1st (e.g., for returns for tax year 2011, call made on or before April 1, 2011, July 1, 2011, October 1, 2011, or January 1, 2012).

    • Employers who want to make a written request to opt in or out of filing Form 944 for the current tax year must have their written correspondence postmarked on or before the 15th day of the month before their first required Form 941 for the current tax year is due (e.g., for returns for tax year 2011, correspondence postmarked on or before March 15, 2011, June 15, 2011, September 15, 2011, or December 15, 2011).

      Note:

      Except for new employers, the FR can not be changed after April 1st of the requested tax year.

  5. As of January 2009, a "F944 CACHE" field was created on CC ENMOD and BMFOLE to indicate tax years (2006-2015) for Form 944 filing requirement.

    • CC BMFOLE displays the cache on the second page, with an indicator "1" on each year the taxpayer is liable to file Form 944, and "blank" if the filing requirement is other than Form 944.

    • CC BMFOLE displays the cache with an indicator "2" , An indicator "2" in a cache field means that the taxpayer is liable for a Form 944 for the current year and will be liable for a Form 941 in the following year. At the close of a current year, an indicator "2" automatically updates to an indicator "1" .

    • CC ENMOD displays the cache on the first page, with a "1" under the tax years the taxpayer has a Form 944 FR, and "9" if the FR is other than Form 944.

    Note:

    The FR indicator on CC ENMOD displays the current tax year filing requirement and is not necessarily indicative for prior tax years due to the unique programming of the Form 944 .

    Note:

    This is an exception to the rule to prevent any further confusion to the taxpayer. This exception "only" applies when a return is already posted to an account.

  6. If the taxpayer states that during the period in question the total tax liability is $2,500 or more, notify the taxpayer they are still required to file the Form 944 for the delinquent tax period and can only change their filing requirement for the current tax year.

    Note:

    To assist and prevent taxpayer burden educate the taxpayer on the business rules for the Form 944 program. Inform the taxpayer they can only change the filing requirement from a Form 941 to Form 944 or vice-versa during a specified period of time prior to the filing of the return. For additional information see IRM 21.7.2.4.9, Form 944, Employer's ANNUAL Federal Tax Return.

  7. Exception to the rule: The following procedures were determined to be in the best interest of the taxpayer and Service regarding Form 944 . If the taxpayer has FR for Form 944 for the delinquent year and responds to the delinquent notice with all signed Form 941, determine if you have sufficient information to create a "dummy" return with the information secured from the appropriate Form 941. Creating a Form 944 will avoid returning the Form 941 returns to the taxpayer and requesting them to file Form 944 .

    Note:

    There may be situations when a taxpayer may not be liable for all 4 quarters of Form 941 (i.e.; seasonal or no employees for a specific quarter, or research indicates they filed the total tax with the returns secured). In this instance the "dummy" Form 944 should be created utilizing the appropriate 941 Forms.


    Follow the guidelines below to create a compiled Form 944 extracting the required data from the 4 signedForm 941 returns secured.

    • Total all wages and taxes that are identified in the table below from all 4 quarters of Form 941 and enter the combined total to the corresponding line on the "compiled" Form 944 created.

    • Mark in the top margin of the "created" Form 944, "COMBINED RETURN" .

    • Mark the signature line of the Form 944"See attached" to indicate taxpayer's signature is on the attached documents.

    • Mark the top of each Form 941"Do not Process " .

    • Attach all "signed" Form 941 returns securely beneath the combined Form 944 return and prepare for processing.

    • The Form 944 will now become the combined return

    • Follow normal processing procedures, see IRM 5.19.2.5.5.4.10, BMF Response with Original Return(s).

    • Document AMS of actions taken.

      Note:

      Ensure the returns are securely attached together to prevent confusion during processing.


    Guidelines for merging Form 941 quarters (received) into a combined Form 944 are as follows:

    From: Form 941
    (YR 2007)
    TO: Form 944
    (YR 2007)
    Line Title Line Title
    2 Wages, tips and other compensation 1 Wages, tips and other compensation
    3 Total taxes withheld 2 Income tax withheld
    5 (a-c) Taxable social security wages, social security tips and total Medicare wages and tip lines. 4 (a-c) Taxable social security wages, social security tips and total Medicare wages and tip lines.
    5 (d) Total combined social security & Medicare wages and tips, 4 (d) Total combined social security & Medicare wages and tips,
    7(a) Current quarter's fractions of cents 6 (a) Current year’s adjustments (Total of 7a-7c from Form 941)
    7 (b) Current quarter's sick pay    
    7 (c) Current quarter's adjustment to tips and group    
    7 (d) Current year’s income tax withholding 6 Prior years’ income tax withholding adjustments
    7 (e) Prior quarter’s social security and Medicare 6 Prior years’ social security and Medicare tax adjustments
    7 (f) Special additions to federal income tax 6 (d) Special additions to federal income tax
    7 (g) Special additions to social security and Medicare 6 (f) Special additions to social security and Medicare taxes
    8 Total taxes after adjustments 7 Total taxes after adjustments
    11 Total deposits for this year 10 Total deposits for this year
    13 Overpayment 12 Overpayment

    Note:

    Employees are only required to transfer data indicated in the above table.
    It is not necessary to complete Part 2 of Form 944 as it is used to determine FR for the following year on a current year return.

  8. If a taxpayer files a Form 941 in a calendar year which they are designated as a Form 944 filer, the Form 941 will cause an Unpostable condition and will not be processed. The taxpayer is sent a Letter 4148C (Letter 4086C was sent prior to January 1, 2007) by the Unpostable function if they file a Form 941 and is required to file a Form 944. Refer to IRM 21.7.2.4.9, Form 944, Employer's ANNUAL Federal Tax Return for additional information to assist taxpayer.

  9. An entity cannot have an open FR for both Form 941 1 and Form 944 within the same tax year. However, if a return posts (TC 150) to the incorrect FR for the year in question, input a TC 590 on the open TDI. If a TC 291 is present on the module indicating the return was reversed, forward to AM to add tax back onto the module.

    Note:

    When forwarding request to AM clearly notate actions to be taken and reason.

  10. Entities that are exempt to the Form 944 program:

    • Household and agricultural employers,

    • Taxpayers with a LMSB BOD code,

    • Employment code A or F indicators.

    Note:

    If the taxpayer's BOD changed while he is a Form 944 filer, he will remain a Form 944 filer. This criteria is only for newly eligible taxpayers.

  11. Address Full Compliance on associated delinquent Form 940 module. If the secured Form 944 indicates the wages are below Form 940 FR, input TC 590 on the delinquent Form 940, if appropriate. See IRM 5.19.2.5.5.4, BMF Determining Liability on guidance on Full Compliance research.

  12. Since Form 944 is considered interchangeable or a successor to Form 941, Form 944 information can be discussed with a valid Form 2848 or Form 8821 that states "Employment taxes" as type, or 941/944 indicated. Reporting agents do not have the authority to opt-out of the program for their clients.

  13. The following table is a description of the filing requirement process, the taxpayer notification process of the FR change or correct FR, and other considerations (applicable to current tax year only):

    If New Entities Existing Entities
    Establishment or systemic change to 944 FR New entities checking the applicable box on Form SS-4 will be automatically established with 944 FR when applying for EIN’s. Intentionally left blank
    CP 575 is sent to notify of the 944 FR, with instructions to opt out if applicable. Intentionally left blank
    Taxpayers must remain with 944 FR unless they opt out, or file 944 above the threshold. Intentionally left blank
    Opt IN to 944 FR New entities established as 941 filers, who believe their liability is under the threshold, can contact IRS to change to 944 FR. Existing Form 941 filers who believe they will be under the threshold, can contact the IRS to request change to FR 944.
    New employers must call the IRS on or before the first day of the month that the first required Form 941 for the current tax year is due to establish a Form 944 FR. For example, if the first return is due July 30th, they must call on or before July 1st. Employers who want to make a written request to opt in to file Form 944 for the current tax year must have their written correspondence postmarked on or before the 15th day of the month before their first required Form 941 for the current tax year would be due. IRS must be contacted by calling on or before April 1st (or written correspondence must be postmarked by March 15th) for the new calendar year.
    Letter 3007C will be sent as notification. Letter 3007C will be sent as notification.
    Establishment or systemic change to 941 FR New entities who check the applicable box on Form SS-4 will be established with 941 FR. Businesses required to file Form 944, but who file Form 944 with a liability above the threshold, will be systemically changed to 941 FR.
    CP 575 is sent as notification of FR establishment, with instructions to contact IRS to opt in to 944 FR if applicable. CP 250-A is sent as notification of the FR change.
    The effective date of the FR change depends on the posting date of the Form 944.
    Opt OUT of 944 FR New entities established with 944 FR can contact the IRS to change to 941 FR. Taxpayer can only opt "out" of the Form 944 program in the year in which they are mandated to file the Form 944, and must be requested by calling on or before April 1st (or written correspondence must be postmarked by March 15th) to be eligible.

    Note:

    Do not change a Form 944 filing requirement in a subsequent year for a prior year.

    New employers must call the IRS on or before the first day of the month that the first required Form 941 for the current tax year is due to establish a Form 941 FR. For example, if the first return is due July 30th, they must call on or before July 1st. Employers who want to make a written request to opt out of filing Form 944 for the current tax year must have their written correspondence postmarked on or before the 15th day of the month before their first required Form 941 for the current tax year would be due. IRS must be contacted by calling on or before April 1st (or written correspondence must be postmarked by March 15th) to change back to 941 FR for the upcoming calendar year.
    Letter 3007C will be sent as notification. Letter 3007C will be sent as notification.
    944 FR was not effective for the calendar year of the RD module The taxpayer is liable to file Form 941 for the delinquent module, and there were wages or withholding for the RD tax period.
    • See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.

    • If you receive an original Form 944 with the response, return the incorrect form to the taxpayer, advising the taxpayer our records indicate they are required to file Form 941 returns for that year.

    944 FR was effective for the calendar year. Intentionally left blank
    • Input TC 590 cc 25 on the RD module, and any other open RD 941 modules for the RD calendar year.

      Note:

      Do not process a non-taxable Form 941 for any quarter of a calendar year with a 944 FR, return the form to the taxpayer informing the taxpayer our records indicate they are required to file a Form 944 for that tax year.

    • Document AMS of actions taken.

    • If the account is on ACS, enter the ACS history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    • If the taxpayer’s current FR is 944, input TC 590 cc 25 on the 941 RD module.

    Note:

    If a credit balance remains on the account, you must see IRM 5.19.2.5.8, Credit Balance Overview, before closing the module with a TC 590, 591 or 593.

  14. Do not change filing requirements from a 944 to 941 or vice versa on a subsequent year for a prior year. See IRM 21.7.2.4, Employment Tax Returns Procedures for additional guidance.

  15. If research determines the taxpayer is not liable to file Form 944 for the tax period indicated, follow the table below:

    If And Then
    The module is in Status 02 and 944 FR was effective for the calendar year of the RD module. Taxpayer is not liable for 944 for the RD period,
    and
    If Form 944 FR became effective for a calendar year after the RD calendar year,
    1. Input TC 590, with appropriate closing code.

    2. Return the form to the taxpayer advising of the correct tax form they are required to file per the 944 criteria and process. Inform taxpayer they would have received notification from the IRS in the beginning of each year if their FR changed to a Form 944 .

    3. Document AMS of actions taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Intentionally left blank Taxpayer is not liable for 944 for the RD period,
    and
    If the taxpayer’s Form 944 last filing year was prior to the RD calendar year.
    1. Input TC 590, with appropriate closing code on the RD module.

    Note:

    If additional information is needed on Form 944 issues not covered in this section see IRM 21.7.2.4.9, Form 944, Employer's ANNUAL Federal Tax Return.

5.19.2.5.5.4.16.5  (12-08-2009)
CT-1, Employers Annual Railroad Retirement Tax Return

  1. Form CT-1 , Employers Annual Railroad Retirement Tax Return is used to report compensation subject to tax under the "Railroad Retirement Tax Act" (RRTA). Taxpayers are required to file Form CT-1 by the last day of February each tax year.

  2. All Form CT-1 returns are processed at the Cincinnati Submission Processing Center (CSPC). However, all return delinquency issues, coding, and preparation of the return for processing are required to be completed at the receiving site. Forward only the Form CT-1 tax return to CPSC for processing:
    IRS
    Cincinnati, OH 45999-000

  3. See Publication 15-A, Employer's Supplemental Tax Guide for additional information, or theInstructions for Form CT-1.

5.19.2.5.5.4.17  (12-08-2009)
BMF Response Form 945 (Annual Return of Withheld Federal Income Tax)

  1. Form 945, is used to report withheld federal income tax from non-payroll payments, such as:

    • Pensions (including governmental section 457(b) plan distributions), annuities, and IRA distributions

    • Military retirement

    • Gambling winnings

    • Indian gaming profits

    • Voluntary withholding on certain government payments

    • Back-up withholding

  2. Report all federal income tax withholding from non-payroll payments or distributions annually on one Form 945. All federal income tax withholding reported on Form 1099 (for example, Form 1099-R or Form 1099-MISC or Form W-2G must be reported on Form 945. Follow the guidelines in the table per taxpayers response:

    Note:

    Taxpayers are not required to file Form 945 for any year in which they do not have a non-payroll tax liability.

    If Then
    The taxpayer states they are not required to file, See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer Not Liable.
    The taxpayer states they will file a return, See IRM 5.19.2.5.5.4.7, BMF-Taxpayer will File (correspondence only).
    The taxpayer states they previously filed, See IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s) .
    The response is insufficient. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

5.19.2.5.5.4.18  (09-11-2012)
BMF Response Forms 966/964 (Corporate Dissolution or Liquidation)

  1. A corporation must file Form 966 /Form 964, Corporate Dissolution or Liquidation, if it adopts a resolution or plan to dissolve the corporation or liquidates any of its stock.

  2. Form 966 /Form 964 is required to be filed within 30 days after the resolution or plan is adopted to dissolve the corporation or liquidate any of its stock.

  3. If line 10 of Form 966 refers to "Sec.1361(b)(3)(B)" the form should be referred to the appropriate Entity area for review of intent of Q-sub election.

  4. If a Form 966 is received with the statement, "Filed Pursuant to Notice 97-4" refer the form to the appropriate Entity area.

  5. If a Form 966 is received "without" the statement "Filed Pursuant to Notice 97-4 " , or if the taxpayer refers to line 10 "Section 331 or 332" on the Form 966 (which identifies a partial or complete liquidation), refer to the table below to close the filing requirements and forward the Form 966 to files:

    1. Code the top of each Form 966 received with name control, and tax period.

    2. Review CC ENMOD to identify if there are open filing requirements (FR) on the entity. If there are open FR on the entity, use the date in Box 7A as the dissolution date to close filing requirements. If there is no final year indicated, no date on Box 7A, use the current year as the final year.

    3. Input the "date business closed" on CC ENMOD.

    4. Take the following actions to close the applicable filing requirements. Note: It is not necessary to research to validate whether the taxpayer is liable to file or not since the taxpayer signed the Form 966 /Form 964 validating their dissolution of the corporation:

      If Then
      For CSCO and AM Employees,
      1. Input TC 591 cc 75 (using CC FRM49) on period subsequent to dissolution date.

      2. If the taxpayer is on the telephone and states there is a liability on the current year return, inform the taxpayer they are required to file a final return. However, do not remove the filing requirements.

      3. Document AMS of actions taken, including the dissolution date.

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

      For ACS and ACSS Employees,
      1. Input TC 591 cc 25 (using CC FRM49) on periods subsequent to the dissolution date.

      2. If the taxpayer is on the telephone and states there is a liability on the current year return, and inform the taxpayer they are required to file a final return. However, do not remove the filing requirements.

      3. Document AMS of actions taken, including the dissolution date.

      4. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

      For FA Employees.
      1. Input TC 591 cc 20 (using CC FRM49) on period subsequent to dissolution date.

      2. If you are speaking to the taxpayer on the telephone and states there is a liability on the current year return, and inform the taxpayer they are required to file a final return. However, do not remove the filing requirements.

      3. Document AMS of actions taken, including the dissolution date.
        If the account is on ACS, enter the history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    5. These forms do not get processed or assigned a DLN as the form is only used to inform the Service of the dissolution of their corporation. Forward the Form 966 / Form 964 directly to appropriate Campus Support site (files) via Form 3210 . See also IRM 3.5.61.1.9 , Ramped Down Campuses - Processing of Documents, for additional information.

      Note:

      Form 966 for various years can be sent to Files using one (or the same) Form 3210. Complete a Form 3210, in the "remarks" section, write: "Form 966 - file and maintain in the alpha files" .
      If received in Philadelphia forward form(s) along with Form 3210 to:
      IRS, Ogden Submission Processing Center
      1973 N. Rulon White Blvd., Mail Stop 6722
      Ogden, UT 84201-1000.
      OR
      If received in either Memphis and Brookhaven forward form(s) along with Form 3210 to:
      IRS, Cincinnati Submission Processing Center,
      201 W Rivercenter Blvd., Mail Stop 2800F
      Covington, KY 41011-1454

  6. If Form 964 is received, use current year as last return due. If form not secured, request it from taxpayer, and close the following years as explained above.

  7. Input "Out of Business date on CC ENMOD" if date is provided on Form 966 . An "Out of Business date" can not be input or created more than 12 months after the current date.

    Note:

    For documenting the taxpayer is closing the business more than 12 months in the future, document AMS with future closing date and forward to files area within Submission Processing. Do not close the filing requirements.

  8. On all actions above, document AMS of all pertinent information including actions taken.

5.19.2.5.5.4.19  (10-03-2011)
BMF Response Form 990, Return of Organization Exempt from Income Tax

  1. Various Form 990 returns are used by tax exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with information required by IRC 6033.

  2. Organizations exempt from income tax must file a version of Form 990 based on their gross receipts and total revenues from all the sources without subtracting expenses.

  3. Review the Form 990 filing history, filing requirements, delinquent periods, and due date of the delinquent return(s). The following link provides a chart displaying Form 990 series filing thresholds:
    Form 990 Series - Which Forms do Exempt Organizations File? (Filing Phase-In)

  4. Determine whether the tax-exempt status has been revoked or will be revoked because the organization has failed to file its Form 990 series for three consecutive years and the due date (or extended due date) of the third year's filing has passed:

    1. If Exempt Organization status code 97 appears on ENMOD (EO-STAT), INOLES (STS-CD) or BMFOLO (Current Status CD), the exempt status has been systemically recognized as revoked.

    2. If the taxpayer has not filed the required Form 990 series for three consecutive years, beginning with tax year 2007 and if the due date (or extended due date) of the third year's filing has passed, the tax exempt status will be revoked even though status code 97 has not been generated.

      Note:

      A prior closed delinquent return does not indicate a return was filed. If the tax exempt status has been or will be revoked, no further action is required to secure a return or initiate a referral. Close the delinquent return modules by inputting TC 598 cc 32 for ACS/ACSS and TC 598 cc 82 for CSCO/AM.

  5. If the tax-exempt status has been or will be revoked, no further action is required to secure a Form 990 return or initiate a referral. The Form 990 filing requirement will convert to a Form 1120 or Form 1041 effective beginning with the tax year after the revocation. Close the delinquent Form 990 modules by inputting TC 598 cc 32 for ACS/ACSS and TC 598 cc 82 for CSCO/AM.

  6. If the taxpayer has filed a Form 990 series for one or more of the three previous years, the exempt status is retained, and a Form 990 is due for the un-filed years. Contact the taxpayer and request the filing of the appropriate Form 990. Use the filing threshold chart and information obtained from the taxpayer to determine which Form 990 series filing is required (Form 990, Form 990-EZ, Form 990-PF, Form 990-N).

    Note:

    If the taxpayer is a Form 990-N filer do not secure a return.

    • For current year Form 990-N filings ask the taxpayer to submit the electronic Form 990-N , or "e-Postcard" , online by visiting the IRS website at Tax Information for Charities & Other Non-Profits. The e-Postcard online process can only be used for the current tax year (i.e., an organization’s tax year 2009 Form 990-N can only be filed after its tax year 2009 has ended and before its next tax year ends.)

    • For more information regarding the IRM 990-N (e-Postcard), visit the frequently asked questions (FAQs) at: Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard).

  7. If all applicable Form 990 series filings are not secured, warn the taxpayer of possible revocation if the organization fails to file for three consecutive years. Close the delinquent return modules by inputting TC 598 cc 32 for ACS/ACSS and TC 598 cc 82 for CSCO/AM. It is not necessary to set a deadline date or to confirm filing. If the taxpayer does not file, TE/GE will revoke the tax-exempt status.

  8. If it is determined that the taxpayer is liable, request the returns be filed and mailed to: 1973 Rulon White Blvd, Ogden, UT 84404, and close the return delinquency modules by inputting TC 598 cc 32 for ACS/ACSS and TC 598 cc 82 for CSCO/AM.

  9. Document AMS comments that the open TDIs were shelved per Collection Policy Interim Guidance SBSE-05-0711-052.

  10. If the account is on ACS, input a 30-day follow-up time frame for the open modules to drop off ACS.

  11. If a Form 990 is received, forward the form along with any correspondence to the Ogden Campus: 1973 North Rulon White Blvd., Ogden, UT 84404.

    Note:

    For additional information regarding Form 990 returns, refer to IRM 21.7.4.4, Income and Information Returns Procedures. For information on working TDI notices received, refer to IRM 21.3.8.10.2.7, CP 42X and the CP 259 Series (EO TDIs).

5.19.2.5.5.4.20  (09-11-2012)
BMF Response Form 1041, U.S. Income Tax Return for Estates and Trusts

  1. Form 1041 , U.S. Income Tax Return for Estates and Trusts.Form 1041 is used to report income, deductions, gains, losses, etc. of an estate or trust. Form 1041 must be filed by the fiduciary of an estate that has:

    • Gross income for the tax year of $600 or more, or

    • A beneficiary who is a nonresident alien.

    Form 1041 must also be filed for "Trusts" that have:

    • Any taxable income for the tax year,

    • Gross income of $600 or more, regardless of taxable income, or

    • A beneficiary who is a nonresident alien.



    The types of returns are:

    • Form 1041U.S. Fiduciary Income Tax Return.

    • Form 1041-AU.S. Information Return - Trust Accumulation of Charitable Amounts (This is processed as an Exempt Organization return.)

    • Form 1041-ESEstimated Income Tax for Fiduciaries

    • Form 1041-QFTU.S. Income Tax Return for Estates and Trusts

  2. If taxpayer responds stating he/she files a Form 990 instead of a Form 1041. Review the account, if research shows a TC 598 cc 32 or cc 97, this indicates the taxpayer's exempt status has been revoked and they are required to file Form 1041. For additional information see IRM 5.19.2.5.5.4.19, BMF Response Form 990, Return of Organization Exempt From Income Tax.

  3. All return delinquency issues and coding, along with the preparation of the return for processing are completed at the receiving site, and only the "Form 1041 Return" is sent to CSPC for processing.

  4. The type of trusts reported on Form 1041 are:

    • Decedent's Trust - The fiduciary must file for the estate of a domestic.

    • Trust - The fiduciary must file for domestic trust taxable under IRC Sec 641.

    • Bankruptcy Estate - The fiduciary must file for an estate of an individual involved in bankruptcy proceeding under Chapter 7 or 11.

      Note:

      See IRM 21.7.4.4.1 , Form 1041, U.S. Income Tax for Estates and Trusts , for additional information.

  5. If response indicates no liability for Form 1041 because the trust did not have sufficient income, take the following actions.

    If Then
    AM Employees If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees, Input TC 590 cc 75 using CC FRM49.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49.

    2. Document ACS of actions taken.

    3. If the account is on ACS, enter ACS history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview

    For FA Employees.
    1. Input TC 590 cc 20 using CC FRM49.

    2. Document closing actions in a AMS narrative.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  6. If response indicates there is no current or future liability for Form 1041 or it describes a trust with any of the following terms, then take the necessary actions per the table below:

    • Unfunded Trust (trust set up but no money credited)

    • Grantor Trust (taxpayer filed for information purposes only)

    • Charitable Remainder (taxpayer files for information purposes only)

    • Revocable Trust (filing for information purposes only)

    • Keogh Plan (retirement plan for self-employed individuals)

    • Retirement Plan

    • Custody Account

    • Agency Account

    • Employee Benefit Account

    • Life Insurance Trust

    • Guardian and Conservationist

    • Ancillary Trust

    • Charitable Revocable Unfunded Trust (CRUT)

    • Substantial Owner (taxpayer files for information purposes only)

    If Then
    AM Employees If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 591 cc 75 using CC FRM49.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8. Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

    2. Document AMS of actions taken. .

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND"

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input TC 591 cc 20 using CC FRM49.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  7. When additional information is needed to resolve the module, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

5.19.2.5.5.4.21  (02-15-2011)
BMF Response Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

  1. Form 1042 is used by withholding agents to report tax withheld at source on certain income paid to nonresident alien individuals, foreign partnerships, or corporations not engaged in trade or business in the United States. Per IRC section 1441 - IRC Section 1464, Chapter Three Withholding and IRC Section 1442, states that, a person who makes a payment of U.S. source interest, dividends, royalties, and certain other types of income to a foreign person must generally deduct and withhold 30% from the payment. See IRM 21.8.2.12.3, Form 1042 Filing Requirement, or Pub 515 , Withholding of Tax on Nonresident Aliens and Foreign Corporations, as a reference. Form 1042 is identified with a MFT of 12, and a open FR of 01.

  2. Form 1042 must be filed if either of the following applies.

    • Taxpayer is required to file Form 1042-S (whether or not any tax was withheld or was required to be withheld). A Form 1042 must be filed even if they file Form 1042-S electronically.

    • Taxpayer pays gross investment income to foreign private foundations that are subject to tax under section 4948(a).

  3. The Form 1042-T serves as a transmittal for Form 1042-S returns, which are information returns used to report income paid to the foreign person. The Form 1042-T is Tax Class 5 and Document Code 01. A withholding agent must file a Form 1042 by March 15th in order to pay and report taxes withheld. Form 1042 is a Master File annual tax return (NMF for 1984 and prior), filed only for the calendar year and cannot be filed as a fiscal year return.

  4. If a Form 1042 is secured, follow normal processing procedures. See IRM 5.19.2.5.5.4.10, BMF Response with Original Return(s). Then forward to Ogden Submission Processing Service Center (OSPC) for processing.

  5. If a Form 1042-S and Form 1042-T are received forward to OSPC for processing.

    Note:

    If a Form 1042-T is received by itself return it to the taxpayer and request they resubmit with the appropriate Form 1042-S. If a 1042-S form is received by itself forward to SP for processing.

5.19.2.5.5.4.22  (09-11-2012)
BMF Response Form 1065, U.S. Return of Partnership Income

  1. Form 1065 , U.S. Return of Partnership Income , is an information return to report income, deductions, gains, losses, etc. from the operation of a partnership. See also Publication 541, Partnerships, for additional information.

  2. A partnership is the relationship between two or more persons who work together to carry on a trade or business. The term partnership includes a limited partnership, syndicate, group, pool, joint venture, or other unincorporated organization, that is not a corporation, trust, estate, or sole proprietorship. Each partner contributes money, property, labor, or skill and all expect to share in the profits and losses of the business. The partnership must file a Form 1065 to report its taxable income or loss. See Publication 541, Partnerships, for additional information.

  3. Form 1065 is an information return used to report the income, deductions, gains, losses, etc., from the operation of a partnership. A partnership does not pay tax on its income but "passes through" any profits or losses to its partners.

    • The return is due on the 15th day of the 4th month following the close of the tax year.

    • One general partner or limited liability company manager must sign the return.

    • See "Who Must Sign" in the instructions on the Form 1065 when the return is made by a receiver, trustee or assignee.

  4. Each individual partner's distributive share of the income or loss must be reported on the partner's' individual income tax return. Each partner must make estimated tax payments, if applicable.

  5. All partnerships must file Form 1065, unless it neither received income nor incurred any expenditures that are treated as deductions or credits for federal tax purposes.

  6. If the taxpayer states the partnership only consists of a husband and wife partnership, they may opt to file as a " Qualified Joint Venture- Husband and Wife" on their personal tax return. For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a "qualified joint venture" whose only members of the partnership are husband and wife have the option to report their partnership income on their joint tax return and elect not to be treated as a partnership for Federal tax purposes. Taxpayers can report their business earnings, expenses, etc. as sole proprietors under Schedule C on their 1040 tax return. The taxpayer must divide all items of income, gain, losses, deductions, and credit between them in accordance with their respective interests in the business, and report the income and deductions on their jointly filed federal tax return. Refer to IRM 21.7.4.4.2, Form 1065, U.S. Return of Partnership Income for additional information.

    1. If a taxpayer states they are a husband and wife partnership and, or they filed the delinquent year as a "qualified joint venture" and reported their business income on their joint individual Federal tax return - verify if taxpayer reported the income on their individual tax return.

    2. If it is determined by research the taxpayers included their partnership income on their personal joint tax return, input TC 590, with the appropriate closing code on the delinquent tax year for the Form 1065 .

    3. If the taxpayer states they will no longer file as a partnership, or dissolving partnership, and will continue to file as a joint venture, input a TC 591 with the appropriate closing code.

  7. If the response indicates no liability for filing based on any of the following situations:

    1. Joint venture (an association for investment purposes only that conducts no business),

    2. Doctors and lawyers who have a common secretary, office manager, etc.,

    3. Husband and wife partnership,

    4. IRC 761(a) election was made,

    5. Partnership for investment only, not active business,

    6. Partnership for joint production, extraction, or use of property, not for selling services or property produced or extracted, or

    7. Partnership made up of dealers in securities for a short period for the purpose of underwriting, selling, or distributing a particular security.

    8. Disregarded Entity (for additional information see IRM 21.7.13.4.3.5, Disregarded Entities).

      Note:

      If a disregarded entity has employees they may still be required to file employment taxes.

    9. If the taxpayer states he/she is not liable because the business is an LLC, see IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC).

    Take the following actions.

    If Then
    AM Employees If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees, Input TC 591 cc 75 using CC FRM49.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

    2. Document closing actions in a narrative on AMS.

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees.
    1. Input TC 591 cc 20 using CC FRM49.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  8. Taxpayer states he/she has not filed Form 1065 but is filing Form 1120 or vice versa, input a TC 591 on the inappropriate MFT to close the FR for that form. Document AMS of actions taken.

  9. If taxpayer states he/she is not liable because the partnership has dissolved, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  10. If the partnership states they did not receive any income and did not pay or incur any expenses, they are not considered to engage in a trade or business, and are not required to file a Form 1065, take the following actions:

    If Then
    AM Employees If the taxpayer states they are not liable, AM employees will not perform any research or close out the TDI instead they will complete the following:
    • Advise the taxpayer to respond in writing, as directed in the notice.

    • Assist the taxpayer with filing of their delinquent return (if requested) and/or inform the taxpayer to respond to the notice as indicated, with any supporting documentation to validate they are not required to file. (i.e., If taxpayer states they filed under another TIN, advise the taxpayer to indicate cross-reference TIN in their written response.)

    • Document AMS regarding taxpayers call, information given to taxpayer, and any actions taken if applicable.

    For CSCO Employees,
    1. Input TC 590 cc 75 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees.
    1. Input TC 590 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

  11. When more information is necessary to resolve the account, see IRM 5.19.2.5.5.4.9, BMF Response Insufficient.

5.19.2.5.5.4.23  (11-23-2011)
BMF Response Form 1120 (Series), U.S. Corporation Income Tax Return

  1. Corporations are required to file Form 1120, U.S. Corporation Income Tax Return, FR 01 to report their income, gains, losses, deductions, credits, and tax liability. All domestic corporations (including corporations in bankruptcy) must file whether or not they have taxable income. Some corporations may choose to file a specialized version of the Form 1120 . (Refer to IRM 3.13.2, BMF Account Numbers.)

    Form 1120–S, US Small Corporation Income Tax Return, FR 02: A domestic corporation can elect to be taxed under provisions of Sub-chapter S of the IRC. Form 2553 , election by a Small Business Corporation, must be submitted. An approved election can be identified by TC 090. These corporations elect not to be subject to income tax. If a corporation qualifies, its income is taxed to the shareholders, who report their share on their individual income tax returns.

    Note:

    The filing requirement (FRC) will indicate the type of corporate return to be filed.

  2. If a Form 1120 /Form 1120S return is received that does not match the filing requirement indicated on IDRS, overlay the return information to the correct version of the form, code the return for processing, and forward to Submission Processing. If necessary, contact the taxpayer (telephone or correspondence) regarding the correct FR to file for future returns.

    Note:

    A response from the taxpayer stating they are an 1120S filer does not change the filing requirement of Form 1120, the MFT remains the same.

  3. If the taxpayer states the corporation is a Form 1120S filer and TC 090 is not present on ENMOD, take the following actions:

    If And Then
    A return was filed and a UPC310/ RJ150 is on module, the account is in Notice Status 02,
    1. Input delay C15 using CC ASGNB, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 for additional information on accelerating to ACS.

    Account is in TDI Status 03,
    1. If the account is on ACS, enter history code "OADT,45,CMNTS" .

    No return has been filed. Account is in Notice Status 02,
    1. Refer taxpayer's correspondence or Form 4442 to Entity Control.

    2. Input delay C08 using CC ASGNB to accelerate account to ACS. See IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03 for additional information.

    3. Document AMS of actions taken,

    4. Send Letter 86C to taxpayer to inform their account was referred to Entity, if applicable.

    Account is in TDI Status 03.
    1. Refer the taxpayer's correspondence or Form 4442 to Entity.

    2. Document AMS of actions taken.

    3. Send Letter 86C to taxpayer to inform their account was referred to Entity, if applicable.

    4. If the account is on ACS, enter history code "OADT,45,CMNTS" .

    Note:

    If research indicates a TC 090 present on the module the Filing Year Month (FYM) now becomes a 12.

    1. If the corporation states a Form 990 series has been or will be filed instead of Form 1120, take the following actions:

      If And Then
      No previous filing history, Account is in Notice Status 02,
      1. Refer account to Entity.

        Note:

        Attach any pertinent information on Form 4442 or appropriate form.

      2. Document AMS of actions taken.

      3. Input delay C08 using CC ASGNB. to accelerate to ACS, see IRM 5.19.2.5.1.1, Accelerate and/or Delay To TDI Status 03

      4. Send Letter 86C to taxpayer to inform them of referral to Entity, if applicable.

      Account is in TDI Status 03,
      1. Refer account to Entity.

        Note:

        Attach any pertinent information on Form 4442 or appropriate form.

      2. Send Letter 86C to taxpayer to inform them of referral to Entity, if applicable.

      3. Document AMS of actions taken.

      4. If the account is on ACS, enter history code "OADT,45,CMNTS" .

      Research indicates Exempt Status (Form 990) has been revoked (TC 598 cc 32 or cc 97). For CSCO, AM, ACS, ACSS and FA employees, Inform the taxpayer their exempt status has been revoked and they are required to file Form 1120. For additional information see IRM 5.19.2.5.5.4.19, BMF Response Form 990, Return of Organization Exempt From Income Tax.
      Form 990 (MFTs 33, 34, 44, 56, or 67) has been filed. For CSCO and AM Employees, Input TC 591 cc 75 using CC FRM49 (on the 1120 module).

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

      For ACS and ACSS Employees,
      1. Input TC 591 cc 25 using CC FRM49 (on the 1120 module).

      2. Document AMS of actions taken.

      3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

      Note:

      If a credit balance remains on the account, you must follow all procedures in IRM 5.19.2.5.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

      For FA Employees.
      1. Input TC 591 cc 20 using CC FRM49 (on the Form 1120 module).

      2. Document AMS of actions taken.

      3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

  4. A parent corporation that is connected through stock ownership in a chain of corporations are considered subsidiaries. The parent corporation files one Form 1120 for all corporations involved as a consolidated return. If taxpayer's response states a consolidated Form 1120 tax return was or will be filed by a parent corporation, take the following actions:

    If And Then
    Parent TIN is provided and there is an 1120 or 990C FR, For CSCO Employees,
    1. Input TC 590 cc 14 using CC FRM49. Research CC BMFOLE to determine the parent NAICS code [North American Industry Classification System]. If unavailable use 999000.)

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS, ACSS and FA Employees,
    1. Input TC 590 cc 14 using CC FRM49. Research CC BMFOLE to determine the parent NAICS code. If unavailable use 999000.)

    2. Document AMS of actions taken, including the parent company TIN, if secured.

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND " .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    No Parent TIN is provided, or there is no Form 1120 or 990C FR on the parent TIN. Not available on BMFOLE. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient.
  5. If the taxpayer states the corporation merged with another corporation and all returns will be filed under merged corporation's TIN, take the following actions.

    If And Then
    The merge date is prior to the notice period For CSCO and AM Employees,
    1. Input TC 591 cc 75 using CC FRM49.

    2. Close all open FR on the notice (old) TIN.

    3. Transfer any credits to the merged (new) TIN.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 591 cc 25 using CC FRM49.

    2. Close all open FR on notice (old) TIN.

    3. Transfer any credits to the merged (new) TIN.

    4. Document AMS of actions taken, including the TIN of the merged corporation.

    5. If the account is on ACS, enter history code, "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593.

    For FA Employees,
    1. Input TC 591 cc 20 using CC FRM49.

    2. Close all open FR on notice (old) TIN.

    3. Transfer any credits to the merged (new) TIN.

    4. Document AMS of actions taken, including the TIN of merged corporation.

    5. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures. before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    The merge date is after the beginning of the notice period,   A short period return is due, see IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    No merge date is given.   See IRM 5.19.2.5.5.4.9, BMF Response Insufficient.
  6. If the taxpayer indicates the corporation was closed, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  7. If the taxpayer indicates the corporation became inactive or dormant (i.e. no activity, no income, no gains, no losses) and provides a date, see IRM 5.19.2.5.5.4.5, BMF Response Out of Business.

  8. If the taxpayer indicates the corporation was inactive or dormant during the tax period on the notice and does not provide a date, input a TC 590 CC 75/25 on the notice module only using command code FRM49.

  9. If the taxpayer states he/she is not liable because the business is an LLC or disregarded entity, see IRM 5.19.2.5.5.1.2, Limited Liability Company (LLC).

    Note:

    If a disregarded entity has employees they may still be required to file employment taxes.

  10. If the taxpayer states they file the income information on their Schedule C of Form 1040 , they are still required to file a Form 1120 Return.

  11. If a credit balance remains on the account, research and attempt to resolve the credit balance by following credit balance research procedures. See IRM 5.19.2.5.8, Credit Balance Research Overview.

5.19.2.5.5.4.24  (11-23-2011)
BMF Response Form 2290, Heavy Highway Vehicle Use Tax Return

  1. Form 2290 , Heavy Highway Vehicle Use Tax Return , is filed by the person, business, or organization in whose name the vehicle is registered or required to be registered under state, District of Columbia, Canadian, or Mexican law at the time of it's first use during the taxable period on a public highway in the United States. If registered in more than one name, the owner is required to file.

  2. The return is filed annually for the period July 1 through June 30. Research for the current tax module (i.e. TXYR 07) using the year and beginning month (July for a full 12 month return). All returns are filed and processed at the Cincinnati Submission Processing Center (CSPC).

    1. For vehicles in use in July, the tax return must be filed by August 31.

    2. For vehicles first used in any month other than July, the tax return must be filed by the last day of the month following the month the vehicle was first used. These returns will have a tax period beginning with the month the vehicle was first used and ending June 30. The tax on this short period return will be prorated.

    3. Additional returns for various short periods may be filed by the same person, business, or organization.

  3. Except for unusual circumstances (i.e. seasonal use) a short period return is only used in the first year of registration. After the first year an annual return is filed for the July 1st through June 30th period and is due on August 31st. When closing with a TC 590 cc XX on a short period return input "*" between the MFT and period on CC FRM49, see IDRS CC Job Aid at COMMAND CODE FRM49 JOB AID .

  4. All return delinquency issues and coding, along with the preparation of the return for processing are completed at the receiving site, and only the "Form 2290 Return" along with Form 8849 should be sent to CSPC for processing.

  5. All Form 2290 Returns without a TC 150 posted, and/or correspondence received in Collection Operations and the module is not in Status 02 or 03 should be sent to the Cincinnati Campus, CIRSC Excise, Stop 5701G.

  6. If the taxpayer is liable for filing a Form 2290, take the following actions:

    If And Then
    Vehicle was in use in July, Intentionally left blank See IRM 5.19.2.5.5.4.3, BMF Taxpayer Liable.
    Vehicle was first used after July and the short period return (the beginning year and month the vehicle is registered. If the first month of use is January, 2011, the tax module would be '201101' ) has been filed. For CSCO and AM Employees,
    1. Input TC 590 cc 75 on the full (12 month) tax period beginning module (TXYRO7).

    2. For the short period return, see IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s).

    3. Document AMS of actions taken, and the date vehicle was first used during the taxable period, if applicable.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 on full (12 month) tax period beginning module (TXYR07).

    2. For the short period return, see IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s).

    3. Document AMS of actions taken, and the date vehicle was first used during the taxable period, if applicable.

    4. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Intentionally left blank For FA Employees,
    1. Input TC 590 cc 20 on full (12 2 month) tax period beginning module (TXYR07).

    2. For the short period return, follow procedures in IRM 5.19.2.5.5.4.8, BMF Response Taxpayer Previously Filed Return(s).

    3. Document AMS of actions taken, and information secured, including the date vehicle was first used during the taxable period, if applicable.

    4. If the account is on ACS, enter ACS history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    Vehicle was put in use after July and the short period return (the beginning year and month the vehicle is registered. If the first month of use is January, 2011, the tax module would be '201101' ) has not been filed. For CSCO and AM Employees,
    1. Input TC 590 cc 75 on full (12 2 month) tax period beginning module (TXYR07).

    2. If unable to contact the taxpayer by telephone, send Letter 2255C or other appropriate letter. Instruct the taxpayer to file the short period return.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For ACS and ACSS Employees,
    1. Input TC 590 cc 25 on full (122 month) tax period beginning module (TXYR07).

    2. Instruct the taxpayer to file the short period return. If unable to contact the taxpayer by telephone, send Letter 2255C or other appropriate letter.

    3. Document AMS of actions taken and information secured, including the date the vehicle was put into use, if secured.

    4. If the account is on ACS, enter ACS history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    For FA Employees,
    1. Input TC 590 cc 20 on full (12 month) tax period beginning module (TXYR07).

    2. Instruct the taxpayer to file the short period return. If unable to contact the taxpayer by telephone, send Letter 2255C or other appropriate letter.

    3. Document AMS of actions taken and information secured, including the date vehicle was put into.

    4. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    The original return was previously filed and is AP/PN posted on IDRS, The taxpayer permanently takes the Heavy Vehicle off the road during the year, and requests a refund of the pre-paid tax, Refer the case to CIRSC Excise, stop 5701G.
    The taxpayer states they are not liable due to limited use, gross weight was below 55,000 lbs, or the previous owner paid the tax. The heavy vehicle 55,000 lbs or more was on the road 5,000 miles or less during the year (7,500 miles of less for agricultural use). See IRM 5.19.2.5.5.4.6, BMF Response Taxpayer not Liable.

5.19.2.5.5.4.25  (12-08-2009)
BMF Response Form 8752, Required Payment or Refund Under Section 7519.

  1. Form 8752, is filed by partnerships and S corporations that have elected to file their return (Form 1120 , Form 1065) as a fiscal tax year rather than a calendar year basis. The Form 8752 is used to remit the required payment intended to represent the value of the tax deferral from filing as a fiscal year versus a calendar year. The taxpayer must calculate the correct amount of tax that they would benefit from electing from fiscal year to calendar year basis. The payment must be paid when the Form 8752 is filed and is considered as a deposit for their Form 1120 or Form 1065 tax return. Form 8752 is an annual form that is due by May 15 of each year in which the election is in effect.

  2. Forms 8752 is identified with a MFT 15, document code 23, and tax class 2. See Form 8752 instructions for line by line computation instructions. See also IRM 21.7.4.4.7, Form 8752, Required Payment or Refund Under Section 7519, for additional information.

  3. Form 8752 is not considered a tax return, and is not processed through the normal TDI module process. If a Form 8752 is secured, code the form, but do not input a TC 59X on IDRS, as it will cause an Unpostable condition. Document AMS of actions taken on the account.

5.19.2.5.6  (02-15-2011)
Return Delinquency TIN and Entity Research

  1. This section provides guidance on working all Return Delinquency (RD) Research (Taxpayer Identification Number [TIN] and Entity) issues. When working an RD case, you may identify cases needing additional research because of a TIN and Entity problem or a posting error.

  2. Accounts Management (AM) call sites have employees trained to work RD Research cases related to TIN and Entity problems. Customer Service Representative's (CSR) not trained to work RD Research cases have the option of referring the case within their site in accordance with local management decision.

  3. For AM call-site employees only, if an "RD Research" case "can not" be closed, complete a Form 4442. If the module is in Notice Status 02, route the Form 4442 to the appropriate Compliance Services Collection Operation (CSCO). (For Individual Master File [IMF] Campuses are Fresno or Austin only). If the account is in Taxpayer Delinquency Investigation (TDI) Status 03, route the Form 4442 to the appropriate Automated Collection System (ACSS) Support site within your Business Operating Division (BOD).

  4. For AM Call site CSR's only, if you identify a TIN & Entity problem or RD posting error and you are unable to resolve the account, take the following actions:

    If Then
    Account is in Notice Status 02,
    • Input a delay code "C08" using command code (CC) ASSGNB to allow 8 weeks to delay the account from accelerating to TDI Status 03. Do not input a Notice Code "A" to prevent any additional RD notices.

    • The referring employee (TE or CSR) must open and close an Integrated Data Retrieval System (IDRS) control base with the activity code "RD Research" .

    Account is in TDI Status 03.
    • The referring employee (Tax Examiner [TE] or CSR) must open and close an IDRS control base with the activity code "RD Research" .

    • Route a Form 4442 to the appropriate ACS Support site.

5.19.2.5.6.1  (12-08-2009)
TIN and Entity Problems

  1. The following is a list of conditions that are considered TIN and Entity problems:

    • Taxpayer has two or more TINs.

    • Taxpayer used a TIN other than his/her assigned TIN.

    • Two or more taxpayers are using the same TIN.

    • Taxpayer changed names.

    • Taxpayer used a name other than the Master File name.

    • Change in business structure (Business master File [BMF] only).

    • Taxpayer lists TIN as applied for.

  2. The following sections contains procedures for working these cases.

5.19.2.5.6.1.1  (11-23-2011)
IMF TIN and Entity Problems

  1. A RD entity can be created in error when a taxpayer files a return with a name or TIN different than Master File information. If a taxpayer states he/she previously filed a return, research for another name or TIN.

    1. If the taxpayer used the TIN of a deceased spouse, research the deceased's account to verify the return posted. If the return posted to the deceased's account, take the following actions.

      Note:

      If a copy of death certificate or information on CC INOLES shows a date of death, input a Transaction Code (TC) 540 using REQ77 on year of death and document the entity on deceased spouses account, see IRM 5.19.2.5.4.5.6, IMF Response Taxpayer Deceased.

      If Then
      For CSCO and AM Employees,
      1. Transfer any credit on the notice taxpayer's account to the deceased spouse's Social Security Notice (SSN).

      2. Input a TC 594 closing code (cc) 84 using CC FRM49 on notice taxpayer's account, including the cross reference TIN.

      3. Advise taxpayer to use his/her own TIN in the future.

      4. Document Account Management Services (AMS) of actions taken.

      For ACS and ACSS Employees,
      1. Transfer any credit on the notice taxpayer's account to the deceased spouse's SSN.

      2. Input a TC 594 cc 34 using CC FRM49 on notice taxpayer's account, including the cross reference TIN.

      3. If speaking to taxpayer on telephone, advise them to use his/her own TIN in the future.

      4. Document AMS of actions taken, including the TIN of the deceased spouse taxpayer.

      5. If the account is on Automated Collection System (ACS), enter history code "TOC0,30,59434" or "TOS0,30,59434 " .

      For Field Assistance (FA) Employees.
      1. Transfer any credit on the notice taxpayer's account to the deceased spouse's SSN.

      2. Input a TC 594 cc 23 using CC FRM49 on notice taxpayer's account, including the cross reference TIN.

      3. Advise taxpayer to use his/her own TIN in the future.

      4. Document AMS of actions taken, including TIN of deceased spouse.

      5. If the account is on ACS, enter history code "TOC0,21,59423" or "TOS0,21,59423" .

  2. Determine the correct TIN and name using taxpayer information and IDRS research.

  3. If the taxpayer's return posted to the correct TIN with the correct name and the notice TIN/Name is incorrect, take the following actions:

    If And Then
    For CSCO and AM Employees, No returns have posted to the notice account
    1. Input TC 591 cc 75 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    For ACS and ACSS Employees, No returns have posted to the notice account
    1. Input TC 591 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0, 30,RDPND" .

    For FA Employees. No returns have posted to the notice account
    1. Input TC 591 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all procedures credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.5.8, Credit Balance Overview.

    2. Document AMS of actions taken.

    3. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

  4. If the notice TIN and name are correct but the taxpayer's return posted under another name or TIN, follow procedures below:

    1. Input TC 594 cc 83/33/22, and

    2. Transfer to the appropriate Account Management Unit, notating on the routing slip "TIN related problem" and

      Note:

      AM employees complete Form 4442 per IRM 21.6.4.4.16.1, Mixed Periods and IRM 21.6.2.4.2.1, Mixed Entities.

    3. Document AMS of actions taken, including the TIN where the return is posted.

5.19.2.5.6.1.2  (11-23-2011)
IMF- TIN and Entity Problem, Taxpayer Filed a Joint Return

  1. If the taxpayer filed a joint return, verify the fact of filing on IDRS with the TIN of the spouse.

    Note:

    Before transferring any credits to the primary account TIN, research to ensure the credits belong to the primary or secondary taxpayer.

    If And Then
    For CSCO and AM Employees, Joint return (Filing Status 2) posted to spouse's TIN as primary.
    1. Verify credits and transfer to the correct TIN.

    2. On the primary TIN which is now the secondary TIN, input TC 594 cc 84 using CC FRM49, and input the cross reference TIN in the cross reference TIN field.

    3. Document AMS of actions taken.

    For ACS and ACSS Employees, Joint return (Filing Status 2) posted to spouse's TIN as primary.
    1. Verify credits and transfer to the correct TIN.

    2. On the primary TIN which is now the secondary TIN, input TC 594 cc 34 using CC FRM49, and input the cross reference TIN in the cross reference TIN field.

    3. Enter history code "TOC0,30,59434" or "TOS0,30,59434" .

    4. Document AMS of actions taken.

    For FA Employees, Joint return (Filing Status 2) posted to spouse's TIN as primary.
    1. Verify credits and transfer to the correct TIN.

    2. On the Primary TIN which is now the secondary TIN, input TC 594 cc 23 using CC FRM49 and input the cross reference TIN in the cross reference TIN field.

    3. If the account is on ACS, enter history code "TOC0,21,59423" or "TOS0,21,59423" .

    4. Document AMS of actions taken.

    Return has not posted, an original or copy of return has not been secured, See IRM 5.19.2.5.4.5.4, IMF Taxpayer Liable, for further processing.
    Return has not posted and account is in Notice Status 02 or TDI Status 03, An original or copy of the return was secured indicating the TIN on the RD module as the primary SSN,
    1. See IRM 5.19.2.5.4.5.12, IMF Response with Original Return or see IRM 5.19.2.5.4.5.13, IMF Response with Copy of Return(s).

    2. Verify any credits from the secondary TIN module and transfer, if appropriate.

    3. Document AMS of pertinent information, including secondary spouse's TIN.

    4. If the account is on ACS, enter history code "TOC0,30,599cc" or "TOS0,30,599cc " .

    (using the appropriate closing code (cc) for the type of return received).
    Return has not posted and account is in Notice Status 02 or TDI Status 03, If an original or copy of the return was secured indicating the TIN on the RD module as the secondary SSN,
    1. See IRM 5.19.2.5.4.5.12, IMF Response with Original Return, or see IRM 5.19.2.5.4.5.13, IMF Response with Copy of Return(s), for further processing.

    2. Verify any credits on the secondary TIN module and transfer, if appropriate.

    3. Input a TC 594 cc 84/34/23 using CC FRM49 including the cross reference TIN, if applicable.

    4. Document AMS of actions taken.

    5. If the account is on ACS, enter history code "TOC0,30,59434" or "TOS0,30,59434" .

    Return posted on spouse's TIN and is not Filing Status 2. Intentionally left blank
    1. Transfer to the Inventory Control Team (ICT) within Accounts Management Unit and notate on the routing slip "Spouse filed originally as single and now is filing as Joint" .

    2. Document AMS of any pertinent information and actions taken.

  2. If a joint return was filed, determine if the secondary taxpayer's name and TIN are correct on Master File.

    If Then
    The secondary TIN is incorrect or missing on MF, Input TC 017 using CC ENREQ to correct the secondary TIN.
    The secondary name is incorrect. Send Letter 1825C or other appropriate letter, advising the taxpayer to contact Social Security Administration.
  3. If a joint return was filed and a BWH 2 Indicator is present on the secondary TIN, see IRM 5.19.2.5.4.4, Backup Withholding - C (BWH-C) Inquiries .

  4. Refer all Automated Substitute For Return (ASFR) (ASGNI 8000) responses with a TC 150 for $.00, the literal "SFR" , along with tax class 2 and doc code 10 in the DLN to the ASFR function, whether or not a TC 290 has posted to the account.

5.19.2.5.6.1.3  (11-23-2011)
BMF TIN and Entity Problems

  1. Use the following list to identify BMF notice responses which should be researched as TIN or entity problems and require research:

    • One taxpayer with two TINs, or two taxpayers using the same TIN.

    • Business changed from an individual owner to another individual owner.

    • Individual owner changed to corporation.

    • Individual owner changed to partnership.

    • Partnership changed to an individual owner.

    • Partnership changed to a corporation.

    • Corporation changed to a partnership.

    • Corporation changed to an individual owner.

    • Individual owner died, and the estate takes over the business.

    • TIN has been applied for.

    • TIN was assigned individually to either the husband or wife.

  2. Do not consider a return filed by a parent company or corporation as an entity problem. See IRM 5.19.2.5.5.4 BMF Determining Liability, for information regarding parent companies and subsidiary's. See IRM 5.19.2.5.5.4.23 BMF Response Form 1120 (Series), U.S. Corporation Income Tax Return , for information regarding parent corporations.

  3. A sole proprietor TIN is assigned to an un-incorporated business that is owned by one person.

    Note:

    A husband and wife can file as a "joint venture" , see IRM 5.19.2.5.5.4.22, BMF Response Form 1065, U.S. Return of Partnership Income

    for additional information. See IRM 21.7.13.5.1, EIN Assignment: Sole Proprietorship for complete definition of Sole Proprietorship.

    If Then
    The TIN was assigned individually and the taxpayer dies, The surviving spouse must be assigned a new TIN.
    The TIN was assigned jointly to the husband and wife and either dies. The surviving spouse can continue to use the same TIN.

  4. Determine the correct TIN and name using taxpayer information and IDRS research.

  5. If the taxpayer's return posted to the correct TIN with the correct name, but the notice TIN is incorrect, take the following actions:

    If And Then
    For CSCO and AM Employees, No returns have posted to the notice account
    1. Input TC 591 cc 75 using CC FRM49.

    2. Transfer credit to the correct TIN.

    3. Document AMS of information and actions taken, including the cross reference TIN.

    For ACS and ACSS Employees, No returns have posted to the notice account
    1. Input TC 591 cc 25 using CC FRM49.

    2. Transfer credit to the correct TIN.

    3. Document AMS of the information, including the cross reference TIN.

    4. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees. No returns have posted to the notice account
    1. Input TC 591 cc 20, using CC FRM49.

    2. Transfer credit to the correct TIN.

    3. Document AMS of all pertinent information, including the cross reference TIN.

    4. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

  6. If the RD notice has the incorrect name assigned to the TIN, and the return(s) posted to the notice account, forward the information with complete documentation to the appropriate BMF Accounts Management area for resolution on a Form 4442 or appropriate form.

  7. If the notice TIN and name are correct, but the taxpayer's return posted under another name or TIN, input a TC 594/83 on the module. Transfer to the appropriate BMF Accounts Management. Notate on the routing slip "TIN Related Problem" .

  8. If a business changes structure (i.e. sole prop. to corp.) during the notice period, employer tax returns can be filed on either TIN.

    If And Then
    For CSCO and AM Employees, The return was filed on the "old" TIN
    1. Input TC 590 cc 75 on the "new" TIN.

    2. Transfer any credits on the "new" TIN to the "old" TIN.

    3. Close FR on "old" TIN.

    4. Document AMS of cross reference TIN and any pertinent information.

    For ACS and ACSS Employees, The return was filed on the "old" TIN
    1. Input TC 590 cc 25 on the "new" TIN.

    2. Transfer any credits on the "new" TIN to the "old" TIN.

    3. Close filing requirement on the "old" TIN.

    4. Document AMS of any actions taken and pertinent information, including the "old" TIN.

    5. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

    For FA Employees, The return was filed on the "old" TIN
    1. Input TC 590 cc 20 on the "new" TIN.

    2. Transfer any credits on the "new" TIN to the "old" TIN.

    3. Close the filing requirement on the "old" TIN.

    4. Document AMS of pertinent information, including the "old" TIN.

    5. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    For CSCO and AM Employees, The return was filed on the "new" TIN
    1. Input TC 591 cc 75 on the "old" TIN.

    2. Transfer any credits on the "old" TIN to the "new" TIN.

    3. Close FR on "old" TIN.

    4. Document AMS of pertinent information, including the "new" cross reference TIN.

    For ACS, ACSS and FA Employees, The return was filed on the "new" TIN
    1. Input TC 591 cc 25 on the "old" TIN.

    2. Transfer any credits on the "old" TIN to the "new" TIN.

    3. Close FR on "old" TIN.

    4. Document AMS of pertinent information including the "new" (cross reference ) TIN.

    5. If the account is on ACS, enter history code "TOC0,30,RDPND" or "TOS0,30,RDPND" .

      Note:

      FA employees use cc 20.

    For FA Employees. The return was filed on the "new" TIN
    1. Input TC 591 cc 20 on the "old" TIN.

    2. Transfer any credits on the "old" TIN to the "new" TIN.

    3. Close FR on "old" TIN.

    4. Document AMS of all pertinent information, including the "new" (cross reference ) TIN.

    5. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

  9. If the return is not located via research, work the case as a insufficient response. See IRM 5.19.2.5.5.4.9, BMF Response Insufficient, for procedural guidance.

5.19.2.5.6.2  (04-13-2011)
Return Delinquency Due to Posting Errors

  1. If you determine a return has posted to an incorrect period or a BMF taxpayer used the wrong form, follow the appropriate adjustment IRM procedures.

    If Then
    IMF return posted to an incorrect period,
    1. Transfer to Accounts Management IMF unit within your Directorate via Form 4442 or appropriate form.

    2. Attach the form to the original return. Notate "Return posted to an incorrect tax period" on Form 4442 or appropriate form.

    3. Document AMS of actions taken.

    BMF return posted to an incorrect period, or tax posted to an incorrect period,
    1. Transfer to the appropriate Accounts Management BMF unit.

    2. Notate on the routing slip "Return posted to an incorrect tax period."

    3. Document AMS of actions taken.

    If the original return posted to the correct account, but the amount of tax, taxable income, etc. does not match IDRS,
    1. Forward the information secured to the appropriate Accounts Management Unit.

    2. Notate on the Form 4442 all pertinent information regarding the discrepancy identified, i.e. "Figures on Return do not match figures posted to IDRS."

    3. Document AMS of actions taken.

    One return for multiple periods, see IRM 21.7.2.4.7.4, Multiple Quarters Filed on Form 941.
    1. Transfer to the appropriate Accounts Management BMF Unit - notate on the routing slip "Multiple periods included on one return" .

    2. Document AMS of actions taken.

5.19.2.5.7  (09-11-2012)
Unable to Locate

  1. This section is not intended for AM employees.

  2. If correspondence is returned with no new address, research for new address. You can use any of the following research tools to research for a potential new address:

    • INOLE - Cross Reference accounts

    • IRPTR - Current W-2 or 1099 documents could provide a potential new address

    • TRDBV

    • ENMOD - Possible pending addresses

    • AMS comments

  3. If a new address is found, re-send the correspondence to the potential new address.

  4. If a new address can not be located, follow procedures below: Document Account Management Services (AMS) of actions taken.

    • For non-Primary Code (PC) B input D00 using CC ASGNI or CC ASGNB (see IRM 2.4.27, Command Code ASGNI/ASGNB formerly TSIGN ) with Notice Code "U" (Undelivered Mail Indicator).

      Note:

      For accounts in ST 03 document AMS regarding undeliverable mail.

    • For PCB's only, input TC 593 cc 82 using CC FRM49.

    • Destroy notice.

    • If taxpayer is missing in action (MIA), input TC 590 cc 19, document AMS of information.

  5. All undeliverable RD notices and ACS letters (including those with yellow stickers from the post office), See IRM 5.19.16.1.2, Undelivered (UD) Mail procedures, for additional information.

5.19.2.5.7.1  (09-11-2012)
Unable to Contact

  1. This section is not intended for AM employees.

  2. There are situations when a taxpayer will be unable to contact and there is not enough information to close the account and transferring to Automated Substitute For Return (ASFR) or the Queue is not warranted. Follow the guidelines below to determine if closing the RD as "Unable to Contact" is appropriate.

    If And Then
    Account is in Notice Status 02, The Information Return Process (IRP) exceeds 60 documents , therefore not meeting ASFR criteria, and all efforts to contact taxpayer have been exhausted,
    • Document AMS of actions taken.

    • Input TC 593 cc 80 via Integrated Data Retrieval System (IDRS) CC FRM14/49.

    Account is in Taxpayer Delinquency Investigation (TDI) Status 03, IRP exceeds 60 documents , therefore not meeting ASFR criteria, and all efforts to contact taxpayer have been exhausted,
    • Document AMS of actions taken.

    • Automated Collection Service (ACS)/ Field Assistance (FA)/ACS-Support (ACSS): enter the RD 593 in history or input directly on IDRS,

    • ACS/FA/ACS Support: enter history code TOC0,30,UTCPND or TOS0,30,UTCPND.

    • If account can not be closed Unable to Contact (UTC) enter TOI7,XX,TFQU. IRM 5.19.2.1.1, Return Delinquency Overview for information on determining follow-up dates.

    If account is in TDI Status 03. Is a Stand Alone TDI or Combo (Taxpayer Delinquent Account) TDA/TDI) account with "less " than 60 IRP docs , and all contact attempts were exhausted.
    • Input a Transaction Code (TC) 593 cc 30/80 via CC FRM14/49.

    • Document AMS of actions taken.

    • ACS Employees: Enter history code "TOC0,30, UTCPND" or "TOS0,30,UTCPND " .


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