3.11.16 Corporate Income Tax Returns

Manual Transmittal

November 28, 2023

Purpose

(1) This transmits revised IRM 3.11.16, Returns and Documents Analysis - Corporate Income Tax Returns.

Material Changes

(1) IRM 3.11.16.2.11(1) - Business Master File (BMF) Identity (ID) Theft - Changed "Identification" to "Identity" in the title and removed "identification" from paragraph (1) per Information Processing Services Organization (IPSO) feedback.

(2) IRM 3.11.16.2.13 - Deemed Payment Election and Credit Transfers - Added section per Inflation Reduction Act of 2022 (IRA) and CHIPS and Science Act of 2022 (IPU 23U0523 issued 04-20-2023).

(3) IRM 3.11.16.3.1(5) - Action Codes - Deleted Temporary Guidance due to pandemic.

(4) IRM 3.11.16.3.4.2(3) - Issuing Correspondence - Added forms to exception list.

(5) IRM 3.11.16.3.7- Statute Returns - Updated Statute exception process for BMF per MOU signed by Submission Processing and Accounts Management (IPU 22U1128 issued 11-29-2022) (IPU 23U0112 issued 01-17-2023).

(6) IRM 3.11.16.7.4(2) - Short Period - Editing Proof of Entitlement - Added revision clarifications per form changes.

(7) IRM 3.11.16.7.9(1)a - Short Period Returns - With Prepaid Credits - Changed line numbers per form revision changes.

(8) IRM 3.11.16.9.1.5(1)(2) - CCC "E" - Potential Identity Theft Filing - Added tolerance per Return Information Control System (RIC)s.

(9) IRM 3.11.16.9.1.15(1) - Changed line numbers per form revision changes.

(10) IRM 3.11.16.9.1.34(1) - CCC "9" - Low-Income Housing Credit - Added revision clarifications per form changes. Deleted reference to Form 8693, Low Income Housing Credit Disposition Bond - Deleted per Chief Council (CC) (Congress repealed the surety bond requirement in IRC 42(j)(6) as of July 30, 2008).

(11) IRM 3.11.16.9.2(4) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(12) IRM 3.11.16.9.2(4) - Return Processing Code (RPC) - Added RPC "N" per IRA 2022.

(13) IRM 3.11.16.9.3.1(2) - Schedule M-3 Checkbox - Added Audit Code "2" to instructions per feedback from OSPC (IPU 23U0082 issued 01-12-2023).

(14) IRM 3.11.16.10.1(1)(5)(10) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation. Deleted criteria to edit Audit Code "3" on Form 8283.

(15) IRM 3.11.16.11.1(1)(2)(3) - Sequence - Form 1120 - Added the following forms Form 4626 (2023 revision) to the sequence order and changed sequence order to follow section order.

  • Form 4626, Alternative Minimum Tax

  • Form 8936, Schedule A, Clean Vehicle Credit Amount

(16) IRM 3.11.16.11.5.14(1)(2)(4) - Line 25 - Energy Efficient Commercial Buildings Deduction - Added instruction for Form 7205, Energy Efficient Commercial Buildings Deduction.

(17) IRM 3.11.16.11.12(1) - Schedule J, Line 2 - Base Erosion Tax or Alternative Minimum Tax (prior year) - Form revision changes.

(18) IRM 3.11.16.11.13(1) - Schedule J, Line 3 - Corporate Alternative Minimum Tax (CAMT)(tax period 202301 and later) - Added new instructions for Corporate AMT per PL 117-169, Inflation Reduction Act.

(19) IRM 3.11.16.11.15(4) - Schedule J, Line 5c - General Business Credit - Added new forms developed per PL 117-169, Inflation Reduction Act (IPU 23U0082 issued 01-12-2023):

  • Form 7207, Advanced Manufacturing Production Credit

  • Form 8936-A, Qualified Commercial Clean Vehicle Credit

(20) IRM 3.11.16.11.15(1) through (9) - Schedule J, Line 5c - General Business Credit - Added new instructions per Form 3800 revision.

(21) Deleted subsection 3.11.16.15.1 - duplicate information, added "see also" for CCC "9."

(22) IRM 3.11.16.11.15.1(5) - Form 8844, Empowerment Zone Employment Credit - updated instructions per PL 117-169, Inflation Reduction Act.

(23) IRM 3.11.16.11.15.2(2) - Form 8941, Credit for Small Employer Health Insurance Premiums - updated instructions per PL 117-169, Inflation Reduction Act.

(24) Deleted subsection 3.11.16.15.3 - duplicate information added "see also" for RPC "4."

(25) IRM 3.11.16.11.18.2(2) - Schedule J, Line 9b - Recapture of Low-Income Housing Credit (Form 8611) - Deleted per Chief Council (CC) (Congress repealed the surety bond requirement in IRC 42(j)(6) as of July 30, 2008).

(26) IRM 3.11.16.11.18.7 - Schedule J, Line 9g - Other - Added instructions to scan Form 1120 and email to LB&I per PL 117-169, Inflation Reduction Act, Section 10101 (IPU 23U0082 issued 01-12-2023).

(27) IRM 3.11.16.11.18.7 - Schedule J, Line 9g - Other - Added instructions for returns with tax periods after 202212 per PL 117-169, Inflation Reduction Act.

(28) IRM 3.11.16.11.21.9 - Schedule J, Part III, Line 20d - Other - Added instructions for Elective or Deemed Payment Election per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(29) Changed Part III to Part II in the following subsections:

  • IRM 3.11.16.11.21 - Schedule J, Part II, (Part III for 2022-2018) Lines 13 - 23

  • IRM 3.11.16.11.21.1- Schedule J, Part II, (Part III for 2022-2018) Line 14 - Estimated Tax Payments

  • IRM 3.11.16.11.21.2 - Schedule J, Part II, (Part III for 2022-2018) Line 16 - Payments

  • IRM 3.11.16.11.21.3 - Schedule J, Part II, (Part III for 2022-2018) Line 17 - Tax Deposited with Form 7004

  • IRM 3.11.16.11.21.4 - Schedule J, Part II, (Part III for 2022-2018) Line 18 - Withholding

  • IRM 3.11.16.11.21.5 - Schedule J, Part II, (Part III for 2022-2018) Line 19 - Total Payments

  • IRM 3.11.16.11.21.6 - Schedule J, Part II, (Part III for 2022-2018) Line 20a - Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

  • IRM 3.11.16.11.21.7 - Schedule J, Part II, (Part III for 2022-2018) Line 20b - Fuel Tax Credit, Form 4136

  • IRM 3.11.16.11.21.8 - Schedule J, Part II, (Part III for 2022-2018) Line 20c - Reserved for Future Use

  • IRM 3.11.16.11.21.9 - Schedule J, Part II, (Part III for 2022-2018) Line 20d - Other

  • IRM 3.11.16.11.21.12 - Schedule J, Part II, (Part III for 2022-2018) Line 23 - Total Payments and Credits

(30) IRM 3.11.16.11.21.10 - Schedule J, Part II, Line 22 - Elective or Deemed Payment - Added instructions for Elective or Deemed Payment Election per IRA 2022.

(31) IRM 3.11.16.11.23(4) - Schedule K, Line 2a - NAICS Code - Clarified NAICS Code instructions per NAICS code review.

(32) IRM 3.11.16.11.32(1)(2) - Schedule K, Question 27 (Digital Assets) - New Question to address digital assets.

(33) IRM 3.11.16.11.33 - Schedule K, Lines 29a, 29b and 29c (Corporate AMT) - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10101.

(34) IRM 3.11.16.11.34 - Schedule K, Lines 30a, 30b and 30c (Stock Buy Back) - New questions for new stock buy-back per PL 117-169, Inflation Reduction Act, Section 10201.

(35) IRM 3.11.16.11.35 - Schedule K, Line 31 (Parent of Consolidated Group) - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10201.

(36) IRM 3.11.16.11.36.2(4)(5)a - Editing a Balance Sheet with Significant Entries - Added balance sheet entries per CHIPS and Science Act of 2022.

(37) IRM 3.11.16.11.37.10(2)b(4) - Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets - Corrected instructions per Ogden Submission Processing Center (OSPC) Course Development feedback.

(38) IRM 3.11.16.13(1)(2)(3) - Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later) - New Form 4626 instructions per PL 117-169, Inflation Reduction Act, Section 10101.

(39) IRM 3.11.16.13.1(1)(2)(3) - Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior) - Moved old section to accommodate new section.

(40) IRM 3.11.16.19(1) - Form 4136 - Credit for Federal Tax Paid on Fuels - Changed line numbers per parent form changes.

(41) IRM 3.11.16.24(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(42) IRM 3.11.16.27 - Form 8936, Schedule A, Clean Vehicle Credit Amount- Added subsection per PL 117-169, Inflation Reduction Act.

(43) IRM 3.11.16.32.2(1)(2)(3) - Sequence - Form 1120-C - Added Form 4626 2023 revision and Form 8936 , Schedule A , Clean Vehicle Credit Amount to the sequence order.

(44) IRM 3.11.16.32.8(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(45) IRM 3.11.16.32.8(3) - Return Processing Code (RPC) - Added RPC "N" per IRA 2022.

(46) IRM 3.11.16.32.13.2(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(47) IRM 3.11.16.32.16(7)(8)(11)(14) - Tax and Payments - Lines 27 through 34 - Added instructions for Elective or Deemed Payment Election per IRA (IPU 23U0523 issued 04-20-2023).

(48) IRM 3.11.16.32.16(11) - Tax and Payments - Lines 27 through 34 - Added instructions for Elective or Deemed Payment Election per IRA for PY2024.

(49) IRM 3.11.16.32.21(7) - Schedule J, Lines 2 through 8 - Added instructions for Form 1120-C per PL 117-169, Inflation Reduction Act, Section 10101 (IPU 23U0082 issued 01-12-2023).

(50) IRM 3.11.16.32.21(1)(2)(3)(4)(9)(10)(11)(12) - Schedule J, Lines 2 through 8 - Line number changes due to form revision.

(51) IRM 3.11.16.32.22(4) - Schedule K, Line 2 - NAICS Code - Clarified NAICS Code instructions per NAICS code review.

(52) IRM 3.11.16.32.25(1)(2) - Schedule K, Lines 20a, 20b and 20c (Corporate AMT) - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10101.

(53) IRM 3.11.16.32.29(1)(2)(3) - Form 4626 - Corporate Alternative Minimum Tax (Tax Periods 202301 and later) - New Form 4626 instructions per PL 117-169, Inflation Reduction Act, Section 10101.

(54) IRM 3.11.16.32.29.1(1)(2)(3) - Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior) - Moved old section to accommodate new section.

(55) IRM 3.11.16.32.34(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(56) IRM 3.11.16.32.35 - Form 8936, Schedule A, Clean Vehicle Credit Amount - Added subsection per PL 117-169, Inflation Reduction Act.

(57) IRM 3.11.16.33(5) - Return Processing - Form 1120-F (OSPC Only) - Added information for processing Form 1042-S per LB&I (IPU 23U0240 issued 02-06-2023).

(58) IRM 3.11.16.33.2(1)(2)(3) - Sequence - Form 1120-F - Added Form 4626 (2023 revision) to the sequence order.

(59) IRM 3.11.16.33.8(1) - Page 1, Line A - Country of Incorporation - Revised instructions per OSPC feedback.

(60) IRM 3.11.16.33.11(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(61) IRM 3.11.16.33.11(3) - Return Processing Code (RPC) - Added RPC "N" per IRA 2022.

(62) IRM 3.11.16.33.13(4) - NAICS Code - Clarified NAICS Code instructions per NAICS code review.

(63) IRM 3.11.16.33.14.1(1) - Form 8844 Indicator - Referred tax examiners to Form 1120 instructions for consistency.

(64) IRM 3.11.16.33.14.2(5) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(65) IRM 3.11.16.33.15(11) - Lines 1 through 5h - Computation of Tax Due or Overpayment - Added instructions for Elective or Deemed Payment Election per IRA (IPU 23U0523 issued 04-20-2023).

(66) IRM 3.11.16.33.17 - Line 5j - Elective Payment Election - Added new section for Line 5j.

(67) IRM 3.11.16.33.18(2)c)(5) - Change tolerance for Foreign Payment Practice (FPP) Review per LB&I (IPU 23U0217 issued 02-02-2023).

(68) IRM 3.11.16.33.24 Page 3, Question HH (Question II for 2022 and prior) (Form 8996 - Qualified Opportunity Fund) - Form line revision changes.

(69) IRM 3.11.16.33.25(1)(2) - Page 3, Question JJ (Corporate AMT) - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10101.

(70) IRM 3.11.16.33.27(2) - Page 5, Schedule J - Tax Computation Tax Preference Code - Added instructions to scan Form 1120-F and e-mail to LB&I per PL 117-169, Inflation Reduction Act, Section 10101 (IPU 23U0082 issued 01-12-2023).

(71) IRM 3.11.16.32.29(1)(2)(3) - Form 4626 - Corporate Alternative Minimum Tax (Tax Period 202301 and later) - New Form 4626 instructions per PL 117-169, Inflation Reduction Act, Section 10101.

(72) IRM 3.11.16.33.37(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(73) IRM 3.11.16.33.39(1)a)b) - Change tolerance for Foreign Payment Practice (FPP) Review per LB&I (IPU 23U0217 issued 02-02-2023).

(74) IRM 3.11.16.34.8(5) - NAICS Code - Page 2, Schedule A, Additional Information, Line 1(a) - Clarified NAICS Code instructions per NAICS code review.

(75) IRM 3.11.16.35.1(1)(2)(3) - Sequence - Form 1120-H - Added Form 3800 (2023 revision) to the sequence order.

(76) IRM 3.11.16.35.7(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(77) IRM 3.11.16.35.8.1(1)(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(78) IRM 3.11.16.35.12(5) - Tax and Payments - Lines 21 through 26 - Added instructions for Elective or Deemed Payment Election per IRA.

(79) IRM 3.11.16.35.12(8) - Tax and Payments - Lines 21 through 26 - Added new line for Elective or Deemed Payment Election per IRA.

(80) IRM 3.11.16.35.12(3) through (11) - Tax and Payments - Lines 21 through 26 - Line changes per form revision.

(81) IRM 3.11.16.35.17(1)(2) - Form 3800 - General Business Credit - New subsection per PL 117-169, Inflation Reduction Act.

(82) IRM 3.11.16.36.1(1)(2)(3) - Sequence - Form 1120-L - Added Form 4626 2023 revision to the sequence order.

(83) IRM 3.11.16.36.7(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(84) IRM 3.11.16.36.7(3) - Return Processing Code (RPC) - Added RPC "N" per IRA 2022.

(85) IRM 3.11.16.36.11.1(1) - Form 8844 Indicator - Referred tax examiners to Form 1120 instructions for consistency.

(86) IRM 3.11.16.36.11.2(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(87) IRM 3.11.16.36.14(8) - Tax and Payments - Added instructions for Elective or Deemed Payment Election per IRA 2022 (IPU 23U0523 issued 04-23-2023).

(88) IRM 3.11.16.36.14(12)a) - Tax and Payments - Added instructions for Elective Payment Election per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(89) IRM 3.11.16.36.14(2) through (13) - Tax and Payments - Changed line numbers per new form revision.

(90) IRM 3.11.16.36.14.1(1)(2)(3)(4) - Tax and Payment - Prior Year Line Instructions - Added new subsection for prior year instructions.

(91) IRM 3.11.16.36.18 - Schedule K, Line 3 - Corporate Alternative Minimum Tax (CAMT) - Changed subsection for Alternative Minimum Tax to Corporate Alternative Minimum Tax (CAMT).

(92) IRM 3.11.16.36.18.1 - Schedule K, Line 3 - Tax Preference Code - Added subsection for Tax Preference Code (prior year instructions).

(93) IRM 3.11.16.36.19(4) - Schedule K, Lines 5a through 9 - Added Line 5d per PL 117-169, Inflation Reduction Act, Section 10101.

(94) IRM 3.11.16.36.19(6)(7) - Schedule K, Lines 5a through 9 - Added instructions to scan Form 1120-L and e-mail to LB&I per PL 117-169, Inflation Reduction Act, Section 10101 (IPU 23U0082 issued 03-12-2023).

(95) IRM 3.11.16.36.22(1)(2) - Schedule M, Question 19a, 19b, and 19c (Corporate AMT) - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10101.

(96) IRM 3.11.16.36.23 - Form 4626 - Corporate Alternative Minimum Tax (Tax Period 202212 and later) - New Form 4626 instructions per PL 117-169, Inflation Reduction Act, Section 10101.

(97) IRM 3.11.16.36.30(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(98) IRM 3.11.16.38.1(1)(2)(3) - Sequence - Form 1120-PC - Added Form 4626 2023 revision to the sequence order.

(99) IRM 3.11.16.38.8(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022. (IPU 23U0523 issued 04-20-2023).

(100) IRM 3.11.16.38.8(3) - Return Processing Code (RPC) - Added RPC "N" per IRA 2022.

(101) IRM 3.11.16.38.12.1(1) - Form 8844 Indicator - Referred tax examiners to Form 1120 instructions for consistency.

(102) IRM 3.11.16.38.12.2(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(103) IRM 3.11.16.38.14(1)(2) - Line 6 - Corporate Alternative Minimum Tax (CAMT) - Added instructions for Corporate Alternative Minimum Tax (CAMT) per IRA 2022.

(104) IRM 3.11.16.38.15(1)a,b - Line 6 - Tax Preference Code (201811 and prior) - Added subsection for Tax Preference Code (prior year instructions).

(105) IRM 3.11.16.38.16(5)(7) - Lines 8a through 12 - Added instructions for Form 1120-PC per PL 117-169, Inflation Reduction Act, Section 10101 (IPU 23U0082 issued 03-12-2023).

(106) IRM 3.11.16.38.16(4) - Lines 8a through 12 - Added instructions for Form 8827 per PL 117-169, Inflation Reduction Act, Section 10101.

(107) IRM 3.11.16.38.17(9) - Lines 14 through 19 - Tax Computation and Payments - Added instructions for Elective or Deemed Payment Election per IRA (IPU 23U0523 issued 04-20-2023).

(108) IRM 3.11.16.38.17(9) - Lines 14 through 19 - Tax Computation and Payments - Added instructions for Elective Payment Election per IRA.

(109) IRM 3.11.16.38.17(1) through (19) - Lines 14 through 19 - Tax Computation and Payments - Changed line numbers per form revision.

(110) IRM 3.11.16.38.17.1(1)(2)(3)(4) - Tax and Payment - Prior Year Line Instructions - Added new subsection for prior year instructions.

(111) IRM 3.11.16.38.19(5) - Schedule A, Page 2 - Added Line 16 to Page 2, Schedule A as a transcription line per review of Form 1120-PC.

(112) IRM 3.11.16.38.24(1)(2) - Schedule I, Lines 20a, 20b, and 20c - New questions for new corporate AMT per PL 117-169, Inflation Reduction Act, Section 10101.

(113) IRM 3.11.16.38.27 - Form 4626 - Corporate Alternative Minimum Tax (Tax Period 202212 and later) - New Form 4626 instructions per PL 117-169, Inflation Reduction Act, Section 10101.

(114) IRM 3.11.16.38.34(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(115) IRM 3.11.16.39.1(2)(3) - Sequence - Form 1120-REIT - Added instructions per OSPC Course Development.

(116) IRM 3.11.16.39.8(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(117) IRM 3.11.16.39.11.1 (1) - Form 8844 Indicator - Referred tax examiners to Form 1120 instructions for consistency.

(118) IRM 3.11.16.39.11.2(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(119) IRM 3.11.16.39.14(10) through(15) - Page 1 - Deduction Items, Lines 9 through 21 - Added Line 18, Energy Efficient Commercial Buildings Deduction and changed line numbers accordingly.

(120) IRM 3.11.16.39.15(6) - Tax Computation - Lines 23 through 28 - Added instructions for Elective or Deemed Payment Election per IRA.

(121) IRM 3.11.16.39.15(1) through (11) - Tax Computation - Lines 23 through 28 - Changed line numbers per form revision.

(122) IRM 3.11.16.39.15.1(1)(2)(3) - Tax and Payment - Prior Year Line Instructions - Added new subsection for prior year instructions.

(123) IRM 3.11.16.39.18(5)(6) - Schedule J, Lines 2b through 2g - Taxes - Changed instructions per form revision.

(124) IRM 3.11.16.39.23(1)(2) - Schedule J, Lines 6 and 7 - Interest on Deferred Tax Liability - Changed instructions per form revision.

(125) IRM 3.11.16.39.24(1)(2) - Schedule J, Lines 8 and 9 - Interest on Deferred Tax Liability - Changed instructions per form revision.

(126) IRM 3.11.16.39.41(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(127) IRM 3.11.16.40.1(2)(3) - Sequence - Form 1120-RIC - Added instructions per OSPC Course Development.

(128) IRM 3.11.16.40.8(3) - Return Processing Code (RPC) - Added RPC "J" , "K" , "L" and "M" for Elective or Deemed Payment Election and Credit Transfers per IRA 2022 (IPU 23U0523 issued 04-20-2023).

(129) IRM 3.11.16.40.11.1(1) - Form 8844 Indicator - Referred tax examiners to Form 1120 instructions for consistency.

(130) IRM 3.11.16.40.11.2(2) - Audit Codes - Added Audit Code "C" per Secure 2.0 legislation.

(131) IRM 3.11.16.40.14(7) - Page 1 - Deduction Items, Lines 9 through 25 - Changed line numbers per form revision.

(132) IRM 3.11.16.40.16(6) - Page 2 - Tax and Payments, Lines 27 through 33 - Added instructions for Elective or Deemed Payment Election per IRA.

(133) IRM 3.11.16.40.16(2) through (12) - Page 2 - Tax and Payments, Lines 27 through 33 - Changed line numbers per form revision.

(134) IRM 3.11.16.40.16.1(1)(2)(3) - Tax and Payment - Prior Year Line Instructions - Added new subsection for prior year instructions.

(135) IRM 3.11.16.40.18(3)(5) - Schedule J - Lines 2b through 2d - Changed instructions per form revision.

(136) IRM 3.11.16.40.24(1)(2) - Schedule J. Lines 6 and 7 - Interest on Deferred Tax Liability - Changed line numbers per form revision.

(137) IRM 3.11.16.40.25(1)a - Schedule J, Line 8 - Form 4255 - Changed instructions per form revision.

(138) IRM 3.11.16.40.26(1)(2)(3) - Line 9 - Other Taxes - Changed instructions per form revision.

(139) IRM 3.11.16.40.40(3)(4) - Form 3800 - General Business Credit - Updated instructions per PL 117-169, Inflation Reduction Act.

(140) IRM 3.11.16.42.7(1)(2) - Form 4876-A Files - Rewrote section per feedback from Kansas City Submission Processing Center (KCSPC) feedback.

(141) IRM 3.11.16.42.9(1)(2)(3) - Form 4876-A File Review - Added new section to distinguish the files from file review per feedback from KCSPC.

(142) IRM 3.11.16.43.2(9)a) - Eligibility Determination - Added instruction for certified mail receipts per KCSPC feedback (IPU 23U0082 issued 01-12-2023).

(143) IRM 3.11.16.44(4)c - Form 8404, Interest Charge on DISC-Related Deferred Tax Liability - Added T-Bill Rate for 2022.

(144) Exhibit 3.11.16-3 - Form 1120 - Prior Year Conversion Chart - Added conversion instructions per form changes.

(145) Exhibit 3.11.16-4 - Form 1120-C - Prior Year Conversion Chart - Added conversion instructions per form changes.

(146) Exhibit 3.11.16-5 - Form 1120-F - Prior Year Conversion Chart - Added conversion instructions per form changes.

(147) Exhibit 3.11.16-7 - Form 1120-H - Prior Year Conversion Chart - Added conversion instructions per form changes.

(148) Exhibit 3.11.16-8 - Form 1120-L - Prior Year Conversion Chart - Added conversion instructions per form changes.

(149) Exhibit 3.11.16-9 - Form 1120-PC - Prior Year Conversion Chart - Added conversion instructions per form changes.

(150) Exhibit 3.11.16-10- Form 1120-REIT- Prior Year Conversion Chart -Added conversion instructions per form changes.

(151) Exhibit 3.11.16-11 - Form 1120-RIC - Prior Year Conversion Chart - Added conversion instructions per form changes.

(152) Exhibit 3.11.16-17 - Routing Guide for Attachments:

  • Other Tax Returns - Added Subsidiary to clarify instructions per OSPC Course Development.

  • Form 1139, Corporation Application for Tentative Refund - Added Note per OSPC feedback.

  • Form 4626, Alternative Minimum Tax (Revision 2023) - Revised form to capture Corporate Alternative Minimum Tax (AMT).

  • Form 5884-A- Deleted "see also " instructions per PL 117-169, Inflation Reduction Act.

  • Form 7204, Consent To Extend the Time To Assess Tax Related To Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement - New form developed per PL 117-169, Inflation Reduction Act (IPU 23U0523 issued 04-20-2023).

  • Form 7205, Energy Efficient Commercial Buildings Deduction, - New form developed per PL 117-169, Inflation Reduction Act (IPU 23U0523 issued 04-20-2023).

  • Form 7207, Advanced Manufacturing Production Credit. - New form developed per PL 117-169, Inflation Reduction Act, Section 13502 (IPU 23U0082 issued 01-12-2023).

  • Form 7208, Excise Tax on Recapture of Corporate Stock - New form developed per PL 117-169, Inflation Reduction Act.

  • Form 8283, Non-Cash Charitable Contribution - Changed Audit Code instructions per Secure 2.0.

  • Form 8693, Low Income Housing Credit Disposition Bond - Deleted per Chief Council (CC) (Congress repealed the surety bond requirement in IRC 42(j)(6) as of July 30, 2008)

  • Form 8845- Deleted "see also" instructions per PL 117-169, Inflation Reduction Act.

  • Form 8907- Deleted "see also" instructions per PL 117-169, Inflation Reduction Act.

  • Form 8909- Deleted "see also" instructions per PL 117-169, Inflation Reduction Act.

  • Form 8923- Deleted "see also" instructions per PL 117-169, Inflation Reduction Act.

  • Form 8931- Deleted "see also" instructions per PL 117-169, Inflation Reduction Act.

  • Form 8936-A, Clean Vehicle Credit Amount - New form developed per PL 117-169, Inflation Reduction Act, Section 13502 (IPU 23U0082 issued 01-12-2023).

  • Form 8936, Schedule A, - Clean Vehicle Credit Amount - New form developed per PL 117-169, Inflation Reduction Act.

(153) Editorial changes made throughout the IRM include:

  • Corrected spelling and grammatical errors

  • Corrected references, citations and links

  • Corrected names of forms, IRMs and systems,

  • Updated figures and exhibits

  • Updated dates throughout

  • Deleted old line numbers throughout

  • Used simpler words

  • Deleted unnecessary words

  • Created tables

  • Created smaller sentences

Effect on Other Documents

IRM 3.11.16 dated November 15, 2022 (effective January 1, 2023) is superseded. The following IRM Procedural Updates (IPUs), issued from January 12, 2023 through April 20, 2023, are incorporated into this IRM: IPU 23U0082, IPU 23U0112, IPU 23U0217, IPU 23U0240 and IPU 230523.

Audience

This IRM is intended for use by Wage and Investment (W&I) personnel in the Submission Processing Campuses.

Effective Date

(01-01-2024)

James L. Fish
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. This IRM section has instructions for Wage and Investment (W&I) Tax Examiners to process the following returns:

    • Form 1120, U.S. Corporation Income Tax Return

    • Form 1120-C, U.S. Income Tax Return for Cooperative Associations

    • Form 1120-F, U.S. Income Tax Return of a Foreign Corporation

    • Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation

    • Form 1120-H, U.S. Income Tax Return for Homeowners Association

    • Form 1120-L, U.S. Life Insurance Company Income Tax Return

    • Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons

    • Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return

    • Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts

    • Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies

    • Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B)

    • Form 1120-IC-DISC, Interest Charge Domestic International Sales - Corporation Return

    • Form 8404, Interest Charge on DISC-Related Deferred Tax Liability

  2. Purpose: The purpose of Document Perfection is to Code and Perfect (Edit) documents.

  3. Audience: These procedures apply to employees responsible for coding and editing returns in this IRM including:

    • Clerks, Lead Clerks, and Supervisory Clerks

    • Tax Examining Technicians, Lead Tax Examining Technicians and Supervisory Tax Technicians

  4. Policy Owner: Director, Submission Processing.

  5. Program Owner: Business Master File (BMF) Paper Processing Section.

  6. Primary Stakeholders: Other areas that may be affected by these procedures include (but not limited to):

    • Accounts Management (AM)

    • Chief Counsel (CC)

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Small Business Self-Employed (SBSE)

    • Statistics of Income (SOI)

    • Submission Processing (SP)

    • Taxpayer Advocate Service (TAS)

    • Tax Exempt and Government Entities (TEGE)

  7. Program Goals: Ensure all necessary action is taken on the return and attachments to ensure correct posting of the return data.

Background

  1. Document Perfection perfects returns and other documents for input to the Master File (MF) through the Integrated Submission and Remittance Processing System (ISRP) or the Service Center Recognition Image Processing System (SCRIPS). In addition, Document Perfection sends any other documents or attachments not related to the processing of the returns to the function responsible for handling them.

  2. Code and Edit does not mathematically verify or check the validity of the returns and other documents being processed unless otherwise specified in the applicable subsection. The computer and/or Error Correction (Resolution) will perform these functions if the returns and other documents are coded and edited as prescribed in the applicable subsections of this section.

Authority

  1. Authority for these procedures is found in the following sections of the Internal Revenue Code and their corresponding Treasury regulations:

    • IRC 6201(a) - Assessment Authority

    • IRC 6213(b) - Exceptions to restrictions on assessment

Responsibilities

  1. The Campus Director monitors operational performance for their campus.

  2. The Operations Manager monitors operational performance for their operation.

  3. The Team Manager/Lead monitors performance monitoring and ensuring employees have the tools to perform their duties.

  4. The Team Employees are responsible to follow the instructions in this IRM and maintain updated IRM procedures.

Program Management and Reviews

  1. Program Reports: The Batch/Block Tracking System (BBTS) stores a vast amount of data which can be used in performance monitoring and production projections.

  2. Program Effectiveness: The program goals are measured using the following methods:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

Program Controls

  1. Quality Review conducts a statistical valid sample size review of completed work to ensure IRM guidelines are followed.

Terms/Definitions/Acronyms

  1. For Terms, Definitions and Acronyms, see Exhibit 3.11.16-22, Terms/Definitions/Acronyms.

Related Resources

  1. The following is a list of related resources:

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Data Retrieval System (IDRS)

General Information

  1. This IRM can’t address every possibility that occurs while perfecting returns or documents. Take taxpayer intent into consideration. Refer issues not addressed in this IRM to the subject matter expert (SME), lead or manager to determine the corrective action.

  2. The purpose of this section is to provide instructions for general required processing actions on corporate tax returns in order to eliminate repetition of the same instructions in different subsections.

  3. In case of a conflict of instruction between this general subsection and the subsequent specific subsection, the specific subsection will govern.

♦IRS Employee Contacts♦

  1. The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98), Section 3705(a) gives identification requirements for all IRS employees working tax-related matters.

  2. All IRS employees who communicate by telephone, face-to-face, or any other method of correspondence with taxpayers or their personal representatives on tax-related matters must give (at a minimum) the following information:

    1. Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number. Toll-free employees may also give their location for identification purposes. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

    2. Face-to-Face Contact - Their title (e.g., Mr., Mrs., Ms., Miss), give as appropriate during the conversation, their last name and badge identification (ID Card) number.

    3. Correspondence (sent to the taxpayer and authorized representatives) - A telephone number that taxpayers can call for answers to questions. In addition, manually generated correspondence must have the employee's title (e.g., Mr., Mrs., Ms., Miss), last name, Integrated Data Retrieval System (IDRS) number, and letter system number, which are systemically generated by IDRS. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

    4. Correspondex letters - Specific employee name and telephone number if the employee initiating the correspondence is in the best position to respond to any questions the taxpayer may have or if the taxpayer is being asked to give more case-related information. If the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

  3. When taxpayer requests to speak with a specific employee who previously worked their inquiry or request, or complains about the level of service previously given, make every attempt to resolve the taxpayer's inquiry. If unable to resolve the issue, refer the inquiry using established procedures to the manager.

  4. Secretaries, receptionists, or other people who answer the telephone in functional offices need to identify themselves. They should provide their badge identification (ID Card) number only if they are answering telephones which are routinely used to give tax or account information.

  5. It is not necessary to repeat the badge identification (ID Card) number on a later contact, when the nature of an employee's work involves multiple contacts with the same taxpayer and the employee has given the taxpayer (either by telephone or in-person) their badge identification (ID Card) number on the first contact.

♦BMF Consistency♦

  1. The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit processing IRMs.

  2. Ogden, Kansas City, and Paper Processing Branch, BMF Code and Edit and Error Resolution System (ERS) identified and developed topics for BMF Consistency.

  3. A ♦ (diamond) before and after the subsection title shows BMF Consistency subsections.

  4. Text in normal print is the common process for BMF tax returns. The text in BOLD print is form specific and applies to this IRM only.

♦IRM Deviation Procedures♦

  1. Submit IRM deviations in writing following instructions from IRM 1.11.2.2.4, When Procedures Deviate from the IRM, and elevate through proper channels for executive approval.

♦Taxpayer Advocate Service (TAS)♦

  1. The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate. Its job is to protect taxpayers’ rights by striving to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights (TBOR). TAS offers free help to taxpayers, including when taxpayers face financial difficulties due to an IRS problem, when they are unable to resolve tax problems, they haven’t been able to resolve on their own, or when they need assistance to address an IRS system, process, or procedure that is not functioning as it should. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

  2. TAS uses Form 12412, Operations Assistance Request (OAR), to start the OAR process of referring a case to the Wage and Investment (W&I) Division, to affect the resolution of the taxpayer’s problem. For more information, refer to IRM 13.1.19, Taxpayer Advocate Service, Taxpayer Advocate Case Procedures, Advocating with Operations Assistance Requests (OARs).

  3. Refer taxpayers to TAS when the contact meets TAS criteria (see IRM 13.1.7), or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached and steps cannot be taken to resolve the taxpayer's issue the same day.

  4. The definition of "same day resolution" is within 24 hours. The following two situations meet the definition of "same day resolution" :

    • The issue can be resolved within 24 hours.

    • IRS takes steps within 24 hours to resolve the taxpayer’s issue.

  5. When making a TAS referral, use Form 911, and forward to TAS in accordance with local procedures.

  6. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for more information.

♦TAS Service Level Agreements (SLAs)♦
  1. The National Taxpayer Advocate (NTA) reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business and Self-Employed (SB/SE) Division, Tax Exempt Government Entities (TE/GE), Criminal Investigation (CI), Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for processing Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

  2. The SLAs are found at https://irsgov.sharepoint.com/sites/TAS/SitePages/SLA.aspx.

♦Edit Marks♦

  1. Edit marks are edited on the tax return for transcription to the Automatic Data Processing (ADP) System through Integrated Submission and Remittance Processing (ISRP). Enter edit marks in brown, red, orange, purple, or green pencil or pen.

  2. Only edit items on the return that are for transcription except where specific instructions require editing of a non-transcribed item. Leave lines blank if the entry would be a zero amount unless otherwise instructed.

  3. Do not obliterate, alter, or erase the original entry on a return when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

  4. Do not re-edit edit marks entered by other areas, such as Collections, Entity or Accounts Management, except to place the marks in the correct area or perfect for legibility.

    Exception:

    Photocopied Returns.

  5. Photocopied Returns - Re-edit or underline any valid, black edit marks. See IRM 3.11.16.3.4.3, Correspondence Imaging Inventory (CII) Returns, and IRM 3.11.16.3.8 Re-Entry Document Procedures.

  6. For a description of specific edit marks, see the table below:

    Edit Mark Description
    "X" Deletes tax data or indicates do not transcribe an item. For example, if deleting an original entry, edit an "X" to the left of the entry to delete. Edit the correct entry to the left or above the "X" .
    "/ " (slash) Indicates do not transcribe a form or schedule.
    "/ /$" Identifies the beginning and ending of a foreign country code in the entity area. For example, "/EI/$" is edited for "Ireland" or "/GM/$" is edited for "Germany" .
    "c/o" or "%" Indicates an "in-care-of" name for transcription.
    Circle Indicates do not transcribe an entry. Also, deletes entity data or a Received Date.

    Note:

    If the taxpayer circles an entry, edit the entry.

    Underline Identifies an entry for transcription (e.g., Name Control, Tax Period).
    Arrow Indicates the correct placement of a misplaced entry. Use an arrow if the misplaced item is close to the correct line and there is no question where the entry belongs.

    Note:

    Use a double arrow to identify the same figure for transcription in two different places (along with any required transcription data between the two arrows).

    Check Mark Indicates that an entry was manually math verified and is correct.
    Bracket/Parenthesis Indicates a negative numerical amount.

    Note:

    C&E is not required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets "( )" or "-" sign. Bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry).

    Vertical Line or Decimal Point Indicates the separation of dollars and cents.
    Zero, Dash, None, or N/A "ZERO," "DASH," "NONE," or "N/A" are valid entries except when specific instructions require editing of an entry.
    Rocker Indicates the amount paid when drawn under a remittance amount.

♦Frivolous Arguments♦

  1. Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.11.16-15, Frivolous Return Program for Examination Review.

  2. Review the tax return to decide whether it appears to be a frivolous return.

    If... Then...
    The return meets any of the conditions shown as a frivolous return, see Exhibit 3.11.16-15, Potential Frivolous Arguments for Examination Review,

    Exception:

    If the return shows Action Code "331," and has a Form 4227, Intra-SC Reject or Routing Slip, attached with the remarks, "Refer to Exam FRP for audit after processing," continue to next procedure.

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Program (FRP) for review.
    Examination has selected the return as frivolous (e.g., shown by an Action Code "331," and a Form 4227, Intra-SC Reject or Routing Slip, with the remarks, "Refer to Exam FRP for audit after processing," but sends the return for processing), Continue processing the return using procedures in IRM 3.11.16. However, do not circle or void the Action Code showing a frivolous return.

  3. Do not consider the following returns as frivolous, unless there is other evidence of a frivolous argument:

    • Returns that have only zeros, blanks, or no entries.

    • Returns showing "None," "Not Liable," etc.

♦Foreign Currency♦

  1. For tax returns completed in other than United States (U.S.) currency, process as filed. However, if corresponding for missing/incomplete item(s), include in the letter to resubmit in U.S. currency.

♦Protective Claims♦

  1. Remove returns marked as "Protective Claims," "Protective Claim for Refund," or similar statement from the batch and route to Accounts Management (AM). Notate "Protective Claim" in the remarks box of Form 4227, Intra-SC Reject or Routing Slip.

    Note:

    Do not remove any Form 1120-F with the "Protective return" box (upper right-hand corner) checked from the batch. These returns are not considered "Protective Claims."

    Exception:

    If the return is amended, do not remove from the batch. Edit Computer Condition Code "G" and follow normal processing procedures.

♦Criminal Investigation (CI) Referral♦

  1. Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC include willful attempts to evade or defeat the income tax. Criminal tax violations also include the willful failure to collect or pay over tax and false claims for refunds based on bogus return information.

  2. If CI has stamped the return, do not send for further CI action.

  3. For returns with refund claims of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, do the following:

    Refund Claim Kansas City and Ogden
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Make a copy of the first two pages of the tax return along with any page on the return that appears suspicious.

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, to the copy.

    3. Route the copy to Ogden, Mail Stop 9001, Criminal Investigation (CI).

    4. Edit an action trail "Copy to CI," or "CI Referral," or similar language in the lower left corner going vertically up the side of the return.

    5. Edit Action Code "341" or CCC "U" (whichever is applicable) on the return, see IRM 3.11.16.4, Refund Returns (45 Day Jeopardy and High Dollar Refunds).

    6. Continue processing the return.

  4. Because of the repetitive nature of the Code and Edit (C&E) function, C&E Tax Examining Technicians often recognize income tax return data which is outside of the norm for data found on similar returns for each income tax return type. If C&E finds return characteristics not meeting Audit Code or Exam referral criteria it deems suspicious, CI is available to review the referral.

  5. If a suspicious return is found, do the following:

    1. Make a copy of the first two pages of the tax return along with any page on the return that appears suspicious.

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, to the copy.

    3. Route the copy as shown in the table below.

      Ogden Kansas City
      Mail Stop 9001, Criminal Investigation (CI) Mail Stop S2 9000, Criminal Investigation (CI)

    4. Edit an action trail "Copy to CI," or "CI Referral," or similar language in the lower left corner going vertically up the side of the return.

    5. Continue processing the return.

  6. If the return fits other criteria (e.g., Frivolous Argument), take proper action.

♦Examination (Exam) Funny Box♦

  1. The primary goal in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination gives support and helps Submission Processing (SP) with any questionable return found during processing. Exam has a vast multitude of programs and tolerance criteria already found in several IRM sections. SP can refer any questionable return to Exam, unless prohibited by instructions currently found in several IRMs.

♦Business Master File (BMF) Identity (ID) Theft♦

  1. BMF ID Theft is increasing. If a case is found with attachments or correspondence showing the taxpayer is a victim of "ID Theft" , give the entire case to the manager/lead.

  2. The manager/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the Submission Processing (SP) BMF ID Theft liaisons. The taxpayer must show that they are a victim of "ID Theft" ; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or Fraud review.

Section 965 Returns (201712 through 202012)

  1. The instructions in this subsection only apply to tax periods 201712 through 202012.

  2. Section 965, as amended by the Tax Cuts and Jobs Act (TCJA) of 2017, requires certain taxpayers to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.

  3. Identify a corporate Section 965 return when any of the following are present and the corporation’s Tax Period is 201712 through 202012:

    • Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, is attached.

    • Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net Tax 965 Tax Liability and Electing REIT Report of 965 Amounts, is attached.

    • IRC 965 Transition Tax Statement (or similar statement) is attached for TY2017.

    • A significant entry is present on any of the following forms and/or lines.

      Note:

      A significant entry is defined as any amount other than zero.

      Form Lines
      Form 1120
      • Schedule C, Line 15

      • Schedule J, Line 12

      • Schedule J, Line 22

      • Page 1, Line 32

      Form 1120-C
      • Schedule C, Line 15

      • Page 2, Line 29

      • Page 2, Line 30i

      Form 1120-L
      • Page 1, Line 27

      • Page 1, Line 28i

      Form 1120-PC
      • Page 1, Line 14

      • Page 1, Line 15d

      Form 1120-REIT
      • Page 2, Line 24

      • Page 2, Line 25h

      Form 1120-RIC
      • Page 1, Line 28

      • Page 1, Line 29i

  4. When a return has been identified as a Section 965 return, edit as follows:

    1. Completely edit the return.

    2. Edit CCC "J," see IRM 3.11.16.9.1.10, CCC "J" - Section 965.

    3. Edit Action Code "460," see IRM 3.11.16.3.1, Action Codes.

    4. Do not issue correspondence on the return. ERS will correspond for any missing information.

Elective or Deemed Payment Election (DPE) and Credit Transfers (202201 to 202212)

  1. Under the Inflation Reduction Act (IRA) of 2022 and CHIPS and Science Act of 2022, the taxpayer can elect to:

    • Take certain credits as an “Elective or Deemed Payment.”

    • Transfer certain credits to another taxpayer.

    • Claim the credit as a General Business Credit.

  2. For tax periods 202201 to 202212, identify an "Elective or Deemed Payment Election" when the taxpayer writes "IRA22DPE" on Form 3800 or on an attachment or on any of the following lines (2022 and prior revisions):

    Form Lines
    Form 1120 Schedule J, Line 20d
    Form 1120-C Line 30f(1)
    Form 1120-F Line 5j
    Form 1120-H Line 23e
    Form 1120-L Line 28g(1)
    Form 1120-PC Line 15i
    Form 1120-REIT Line 25f(1)
    Form 1120-RIC Line 29f

  3. When a return is identified with an "Elective or Deemed Payment Election" , do the following:

    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

  4. Identify a "Credit Transfer" when the taxpayer writes "IRA22TRE" at the top of the return or on an attachment. When found, do the following:

    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    Note:

    A return can have both an RPC "J" and an RPC "K."

  5. Treat taxpayers who claim the credit on Form 3800 with no other indication of claiming the "Elective or Deemed Payment Election" or "Credit Transfer" as normal. See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

Unprocessable Documents - Error Resolution System

  1. The Document Perfection tax examiner will have the first opportunity to identify a problem which requires correspondence, research, or other action to make the return processable. Depending on the type of return, either an Action Code or Computer Condition Code (CCC) "U" is edited to find these unprocessable returns.

  2. The tax examiner will determine the kind of action required and assign an Action Code to the return which will force it to Error Resolution System (ERS) (on-line correction system). The code will show whether correspondence, research, or some other action is needed. Action Codes apply only to:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-H

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

  3. The following forms are processed through a manual correction system: Use Computer Condition Code "U" on these returns when action such as correspondence is needed.

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-SF

♦Action Codes♦

  1. Action Codes are used to show whether correspondence, research, or some other action is needed. The Action Code sets the suspense period for the return and places the return in the workable or unworkable suspense inventory.

  2. When necessary, assign a three-digit Action Code. Action Codes are valid on:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-H

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

    Any other returns are processed through a manual correction system. Use Computer Condition Code "U" on these returns when actions such as correspondence are needed.

  3. Edit the Action Code in the bottom left margin of the tax return.

  4. Assign Action Codes in the following priority:

    1. Action Code "310" (Statute Control).

    2. Action Code "320" (Entity Control).

    3. Action Code "4XX"

    4. Action Code "6XX"

    5. Action Code "3XX"

    6. Action Code "2XX" (Correspondence).

  5. Use the following table if more than one Action Code is needed:

    If ... Then ...
    Action Codes include 211, 215, 225 or 226 and Action Code 341,
    1. Edit the Action Code 211, 215, 225 or 226 on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

    2. Edit Action Code "341" on the Form 4227, Intra-SC Reject or Routing Slip.

    Action Codes have the same priority,
    1. Edit the Action Code with the shorter suspense period on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

    2. Edit the second Action Code on the Form 4227, Intra-SC Reject or Routing Slip.

    3. See IRM 3.11.16.3.1(8), Action Codes, for suspense periods.

    Action Codes have different priorities,
    1. Edit the Action Code with the higher priority on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      Exception:

      Use Action Code 211, 215, 225 or 226 before Action Code 341 to ensure the return is complete before a manual refund is issued.

    2. Edit the second Action Code on the Form 4227, Intra-SC Reject or Routing Slip.

  6. See Figure 3.11.16-1.

    Figure 3.11.16-1

    This is an Image: 33500001.gif

    Please click here for the text description of the image.

  7. Edit the following Action Codes when a return can’t be perfected:

    Action Code Description
    "211" (First Correspondence) or "215" (International Correspondence)
    • Return is illegible, incomplete, or contradictory and therefore unprocessable.

    • The taxpayer notates on the tax return or attachment that they are reporting tax for more than one tax period or for more than one type of tax.

    "225" (Missing Signature Correspondence)
    • Unsigned returns (only issue for correspondence).

    "226" (Missing Signature International Correspondence)
    • Unsigned foreign returns (only issue for correspondence).

    "440" (LB&I, review of Form 1120-F)
    • Foreign Payments Practice (FPP) review of credits for Form 1120-F.

    "460" (Section 965 indicated)
    • Section 965, Treatment of Deferred Foreign Income upon Transition to Participation Exemption System of Taxation, see, IRM 3.11.16.2.12, Section 965 Returns (201712 through 202012).

    "480" (Early Filed - Suspense)
    • The return is an early filed (future) return.

    "610" (Renumbered non-remittance) or
    "611" (Renumbered with-remittance)
    • Mis-batched return (e.g., Form 1065, U.S. Return of Partnership Income, found in a Form 1120, U.S. Corporation Income Tax Return, batch of work).

    "640" (Void)
    • To delete the assigned Document Locator Number (DLN) on the return (e.g., Re-entry Returns).

    "650" (International)
    • An international return, processed in Ogden Submission Processing Center (OSPC).

  8. Continue perfecting the return after editing the Action Codes.

  9. Valid Action Codes are listed below:

    Action Code Description Workday Suspense Period
    211 First Taxpayer Correspondence 40
    215 International Correspondence 45
    225 Taxpayer Correspondence (Signature Only) 40
    226 International Correspondence (Signature Only) 40
    310 Statute Control 10
    320 Entity Control 10
    321
    (Modernized Electronic Filing (MeF) only)
    Entity Control - Form 1120 with Form 851, Affiliations Schedule, attached 20
    322
    (MeF only)
    Foreign Investment in Real Property Act (FIRPTA) Credit Verification 10
    331 Frivolous Review 3
    341 Manual Refund 10
    342 Credit Verification 10
    345
    (MeF only)
    Form 1120-F Total Tax Math Error  
    346
    (MeF only)
    Form 1120-F Balance Due Math Error  
    352 Name Research 3
    360 Other In-House Research 10
    370 Examination - Prompt Assessment - Form 4810, Request for Prompt Assessment under Section 6501(d) 10
    420 Management Suspense A - (2006 Tax Return with Form 8913, Credit for Federal Telephone Excise Tax Paid) 5
    440 Management Suspense C, Large Business and International (LB&I) review of Form 1120-F in OSPC only) 15
    450 Management Suspense D 20
    460 Management Suspense E

    Note:

    Used for "Section 965" identification.

    25
    480 Early Filed Suspense 150
    610 Renumber - Non-Remittance 0
    611 Renumber - Remittance 0
    640 Void 0
    650 International 0

  10. For more information and applicable Action Codes, see IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes, and the exhibit in IRM 3.12.38-1, Action Codes.

Unprocessable Conditions and Rejection of Tax Returns

  1. A tax return is an "Ogden Submission Processing Center (OSPC) only" return if at least one of the following conditions exists:

    1. The tax return has a foreign address.

    2. The tax return is a Form 1120-C.

    3. The tax return is a Form 1120-F.

    4. The tax return is a Form 1120-FSC.

    5. The tax return is a Form 1120-L.

    6. The tax return is a Form 1120-ND.

    7. The tax return is a Form 1120-PC.

    8. The tax return is a Form 1120-SF.

    9. There is a refund credit claimed because of U.S. income tax paid or withheld at source because of the Foreign Investors in Real Property Tax Act whether or not Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons.

      Note:

      Form 8288-A credit must be verified by the OSPC Foreign Team.

Treatment of All Unprocessable Tax Returns

  1. If the tax return is an Ogden Submission Processing Center (OSPC) "only" return, discontinue perfection of the return. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer the return has been sent to Ogden Submission Processing Campus.

  2. If the tax return is other than an OSPC "only" return, perfect the return if possible:

    1. Examine schedules and other attachments for the necessary information and edit the return as needed for processing.

    2. If perfection is not possible, perfect to the extent possible and proceed as set forth in (3) below.

  3. Action to secure perfection:

    1. Where indicated, prepare Form 4227, Intra-SC Reject or Routing Slip, showing the reason for rejecting the document and that the document must be resubmitted for processing when it has been perfected.

    2. Attach the Form 4227, to the face of document in such a position that the Employer Identification Number (EIN) is visible for transcription.

    3. If the tax return has not been numbered, withdraw it from processing and send it to the proper activity.

    4. For numbered Form 1120-FSC, Form 1120-ND, and Form 1120-SF, edit Computer Condition Code (CCC) "U" and attach Form 4227.

    5. For numbered Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit the right Action Code in the bottom left margin of the return and leave it in the block.

♦Correspondence♦

  1. There are two types of correspondence that C&E may encounter:

    • Correspondence received from taxpayers, and

    • Correspondence Issued to taxpayers.

♦Definition of Correspondence from Taxpayers♦
  1. Correspondence is all written communications from a taxpayer or their representative, excluding tax returns, whether solicited or unsolicited. This includes:

    1. Written communications in response to IRS requests for information or data.

    2. Written communications, including annotated notice responses, which provide more information or dispute a notice.

    3. A telephone call that results in a written referral or research (Form e-4442, Inquiry Referral).

  2. The key to identifying taxpayer correspondence is to ask the following questions:

    1. Is the taxpayer waiting for a response from IRS?

    2. Is the taxpayer waiting for IRS to take action?

    3. Is the taxpayer asking a question?

    Note:

    A Post-It-Note, Sticky Note, or some other type of note stuck on the return by another function, for example - "Taxpayer (TP) requests penalties be waived" - does not constitute correspondence from the taxpayer.

♦Issuing Correspondence♦
  1. Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable.

    Exception:

    Section 965 Returns - Do not issue correspondence on the return. ERS will correspond for any missing information.

    Exception:

    Do not correspond on returns prepared by Collections, Section 6020(b) or by Examination, "Substitute for Return" (SFR).

  2. If the return is incomplete and doesn't appear to be a return meant for filing or is a conduit for providing information (e.g., indicates "payment only”), give the return to the lead. The lead must determine the correct course of action. The lead researches for a Transaction Code (TC) 150 and any other information necessary to determine if the return should continue processing, is an amended return, or must be routed to another function. An incomplete return could include any of the following:

    • A one-page return, with or without a signature.

    • Incomplete returns showing "Payment Only."

    • Incomplete returns showing they have previously e-filed.

    Note:

    This list is not all inclusive. Tax examiners may see other unusual documents not addressed in this subsection or in other areas of the IRM.

  3. Correspond for back up forms and schedules≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
    Exceptions:

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

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

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

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

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

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

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

      Example:

      Substantial evidence includes closing documents or settlement statement which shows the amount of tax withheld.

      Exception:

      If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, withholding and do not correspond for the missing Form 1042-S.

  4. Examine the return for all unprocessable conditions before initiating correspondence.

    If... And... Then...
    The return needs correspondence, Requires a response,
    1. Complete an approved Correspondence Action Sheet showing the letter number (118C, 599C, 319C etc.), Master File Tax (MFT) code, and the right paragraphs.

      Note:

      Some paragraphs may require fill-ins to enter, such as , tax period, form number, Document Locator Number (DLN), etc.

    2. Attach the Correspondence Action Sheet to the front of the return below the entity area.

    3. Edit Action Code "211" (First Correspondence) or "215" (International Correspondence) on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      Note:

      If the return is consolidated, input a Transaction Code (TC) "590" with Closing Code "014" for each subsidiary corporation listed on the Form 851 to satisfy the filing requirement.

    4. Edit CCC "U" for Form 1120-FSC, Form 1120-ND, and Form 1120-SF.

    5. Finish editing the return and leave in the batch.

    The return needs correspondence, Does not require a response,
    1. Complete an approved Correspondence Action Sheet showing the letter number (86C, 1382-C, etc.), Master File Tax (MFT), and the right paragraphs.

      Note:

      Some paragraphs may require fill-ins to enter, such as tax period, form number, DLN, etc.

    2. Photocopy the first page of the tax return and attach a Correspondence Action Sheet below the entity area on front of the return copy. Be sure the name and address clearly show above the Correspondence Action Sheet.

    3. Forward the copy to the Correspondence area.

    4. Edit an Action Trail (e.g., "1382-C Sent" ) in the lower left corner going vertically up the side of the return.

    5. Finish editing the return and leave in batch.

    Note:

    There are more campus exclusive letters. They are for processing specific forms or conditions. Go to the lead or manager for copies of these letters.

♦Correspondence Imaging Inventory (CII) Returns♦
  1. Correspondence Imaging Inventory (CII) is an inventory system for scanning all Accounts Management (AM) receipts into digital images and working the cases from those images.

    Note:

    Correspondence Imaging System (CIS) changed to Correspondence Imaging Inventory (CII).

  2. "CII" returns show a "CII Image - Do not correspond for Signature" stamped below the signature line or a "CII" annotation on the front of the return.

  3. Verify all edit marks and ensure placement is correct on a "CII" return.

    If... Then...
    The edit marks are black, Underline the edit mark if correct or circle if incorrect.
    The edit marks are red or green, Circle if incorrect.
    The edit marks are missing or incorrect, Perfect as necessary.

  4. Follow the correspondence instructions below for "CII" returns:

    If... And... Then...
    The "CII" return has a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules, or forms),
    1. Do not correspond.

    2. Remove the return from the batch and route to AM.

    3. If the return comes back from AM with incomplete information, send the return to AM again to secure all the missing information. Indicate "Additional information needed to process incomplete CII return," or similar language on Form 4227 (or other proper routing slip).

    The "CII" return has a Form 13596, Reprocessing Returns, attached and the return is incomplete (e.g., missing signature, schedules, or forms), The return shows correspondence was sent (e.g., CCC "3" is edited on the return), Do not route the return to AM. Continue processing the return.
    The "CII" return does not have a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules, or forms), Follow normal correspondence procedures.

♦Use of Fax for Taxpayer Submissions♦
  1. Taxpayers may send tax return information via fax as part of return perfection even when submitting a signature. In circumstances where contact with the taxpayer was made and documented, faxed signatures are acceptable.

  2. Contact the taxpayer by telephone or correspondence. Follow local procedures to decide which method of contact to use.

  3. Indicate the fax paragraph on the approved Correspondence Action Sheet to inform the taxpayer of the fax options.

  4. Use the following resources to make sure you are speaking with the taxpayer or authorized representative before disclosing any tax information:

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4, Additional Taxpayer Authentication

  5. Before leaving any messages on a taxpayer's answering machine, review:

    • IRM 10.5.1.6.7.2, Answering Machine or Voice mail

    • IRM 10.8.1, Information Technology (IT) Security, Policy and Guidance

C/SC Letters

  1. Listed below are letters provided by Headquarters for Submission Processing Center use in corresponding for items listed in this IRM. Tax examiners or their supervisors (or delegates) will have access to and be familiar with the Submission Processing Center Correspondex Handbook for selection of right letters.

    1. Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

    2. Letter 319C, Return Covers Other Than 12-month Accounting Period.

    3. Letter 3064C, IDRS Special Letter.

♦Compliance Secured/Prepared Returns♦

  1. Compliance notates:

    1. Prepared tax returns with "6020(b)" or "SFR" (Substitute for Return).

    2. Secured tax returns with "TC 59X" or "ICS" or "Process as Original" with a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box checked.

    Note:

    If "RD" (Return Delinquency) is notated on the front of the return and not circled, remove from the batch and route to Collections.

♦IRC 6020(b) - Prepared by Collections♦
  1. When the taxpayer doesn’t file a required return, IRC 6020(b) is the authority for the IRS to prepare the return.

  2. These returns are identified by the notation: "PREPARED AND SIGNED UNDER AUTHORITY OF SECTION 6020(b) OF THE INTERNAL REVENUE CODE," which is located in the center bottom of Page 1.

    1. Returns must have a received date. If missing, follow the normal procedures for editing the received date, see IRM 3.11.16.8, Received Date.

    2. Compliance Function representatives must sign returns. If not signed, route to Compliance using Form 4227, Intra-SC Reject or Routing Slip.

      Note:

      Accept revenue officer (RO) typed or electronic signatures as valid signatures on the return.

    3. Edit CCC "D" if the Compliance Function representative notates: "DO NOT ASSESS FAILURE TO PAY PENALTY" and the return due date (without regard to extensions) is July 30, 1996 or prior.

      Note:

      Do not edit CCC "D" if the return due date is after July 30, 1996 (without regard to extensions) even if the Compliance Function representative notates "DO NOT ASSESS FAILURE TO PAY PENALTY."

    4. Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

    5. Edit CCC "W" if the received date is more than two years and nine months after the return Due Date. Do not send the return to Statute Control.

♦Collection Secured♦
  1. These returns are identified by the notations: "TC 59X" or "ICS."

    1. Do not edit CCC "G" on these returns.

    2. Use approved Correspondence Action Sheet to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules).

    3. Edit CCC "W" if the received date is more than two years and nine months after the return Due Date. Do not send the return to Statute Control.

    Reminder:

    If there is a sign penalties require suppression, edit the right Computer Condition Code(s). Please refer to IRM 3.11.16.9.1, Computer Condition Codes, for more information.

♦Examination Prepared Returns♦
  1. These tax returns are identified by the notation "SFR" or "SUBSTITUTE RETURN" on Page 1.

    1. The return must have a received date. If no received date is present, follow the normal procedures for editing the received date.

    2. Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

    3. If Form 13133, Expedite Processing Cycle, is attached, edit the Computer Condition Codes checked on the form.

      Note:

      Do not enter CCC "D" unless the return due date (without regard to extensions) is July 30, 1996 or prior, even if the CCC “D” box is checked on Form 13133.

    4. Edit CCC "W" if the received date is more than two years and nine months after the return Due Date. Do not send to Statute Control function.

♦Examination Secured♦
  1. These tax returns are identified by the notation "Process as Original" on Page 1 of the return and a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box checked.

    1. Do not edit CCC "G" on these returns.

    2. Use approved Correspondence Action Sheet to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules).

    3. Edit the Computer Condition Codes checked on Form 13133.

    4. Edit CCC "W" if the received date is more than two years and nine months after the return Due Date. Do not send to Statute Control function. See IRM 3.11.16.9.1.23, CCC "W" - Return Cleared by Statute Control.

    Reminder:

    If Form 13133 (or something similar) indicates penalties require suppression, edit the right Computer Condition Code(s). Please refer to IRM 3.11.16.9.1, Computer Condition Codes, for more information.

♦Statute Returns♦

  1. Any tax return with a received date that is two years and nine months or more after the Return Due Date is a potential statute control return.

  2. Route statute returns to the Statute Control Unit daily or more often if needed.

  3. If any of the conditions listed below are present, do not route to Statute Control Unit for clearance. Instead, edit CCC "W" and continue processing.

    • Compliance IRC 6020(b) returns

    • Secured by Examination/Collections, including TEGE or TEGE Employee Plan (EP) Exam

    • Returns with Transaction Code (TC) TC 59X or "ICS" notated on the face of the return

    • Returns showing "substitute returns prepared by Examination (SFR)" in top margin of the return

    • Returns with a stamp showing a previous clearance by Statute Control within the last 90 days

    • Return is a 2019 or prior year original. Due to the COVID-19 pandemic and subsequent Submission Processing (SP) and Accounts Management (AM) site closures, SP and AM developed procedures to bypass AM statute clearance and be processed. In addition, any 2019 or prior year returns previously cleared by AM statute will not be returned by SP to AM to be cleared again if the 90-calendar day statute stamp has expired.

  4. If a return has any of the following computer paragraphs (CPs) or letters attached, do not route to Statute Control Unit for clearance. Edit CCC "W" if the return needs processing. See Exhibit 3.11.16-17, Routing Guide for Attachments, for more information.

    • CP 259, Master File Generated 1st TDI Notice

    • CP 959, Master File Generated 1st TDI Notice (Spanish version)

    • CP 518, Final Notice - Return Delinquency

    • Letter 112-C, Payment/Overpayment/Credit Applied; No Record of Return Filed

    • Letter 282-C, Return Not Received: Copy Requested/Received

    • Letter 2255-C, Delinquent Return (Forms 720, 1041, 1065, 1120)

    • Letter 2284-C, Delinquent Return (Form 940, 941, 942, 943)

  5. If a return has a Form 12412, Operations Assistance Request (OAR), from TAS and is a potential statute Control return but is not stamped "Cleared by Statute" , give it to the lead. The lead contacts the TAS employee listed on the OAR for rejection of the return and sends it back to TAS for clearance by the Statute Control Unit.

    Note:

    If the return is within 90 days of the statute expiration date, advise the TAS employee of such and route the return directly to Statute Control for clearance.

  6. Statute returns are unprocessable until cleared by Statute Control.

    If... Then...
    The return is numbered,
    1. Edit Action Code "310" on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

    2. All other returns edit CCC "U" and attach Form 4227. Check the "Statute Control" box on Form 4227, Intra-SC Reject or Routing Slip.

    3. Leave the return in the batch and continue processing.

    The return is unnumbered,
    1. Do not continue processing.

    2. Pull the return from the batch.

    3. Attach Form 4227, Intra-SC Reject or Routing Slip, and check the box for "Statute Control."

  7. Edit CCC "W" if the Statute Control Unit stamps or shows clearance on the front of the return.

  8. Follow the chart below to determine if CCC "W" is needed.

    If... And... Then...
    The return received date is two years and nine months or more after the Return Due Date, The return is stamped, "No Statute issue," "Statute N/A," or a similar statement showing there is no statute issue, Edit CCC "W."
    The return received date is less than two years and nine months from the Return Due Date, The return is stamped, "No Statute issue," "Statute N/A," or a similar statement showing there is no statute issue, Do not edit CCC "W."

♦Re-Entry Document Procedures♦

  1. A tax return posted to the wrong account or module or attempting to post must be reprocessed to post to the proper account or module.

  2. Some re-entry returns may have originally been filed electronically (E-File). These returns may be identified by the presence of Mod E-File printouts in lieu of an actual return. Do not correspond for missing signatures on these documents.

  3. Each re-entry tax return must have a Form 3893, Re-Entry Document Control or Form 13596, Reprocessing Returns, attached.

    • Form 3893 is used to reinput returns that have not posted to an account or module.

    • Form 13596 is used to reprocess returns to the correct account or module that had previously posted to the wrong account or module.

  4. Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.

  5. Examine Form 3893 or Form 13596 to determine the action needed to make the return processable.

    Caution:

    If the received date is two years and nine months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return, see IRM 3.11.16.3.7, Statute Returns.

♦Form 3893 - Re-Entry Document Control♦
  1. Reprocess a return posted to the wrong account or module to post it to the correct account module.

  2. If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control no.), edit all returns using current processing instructions and keep all returns clipped together.

  3. Circle the CCC "G" if present.

  4. Do not Edit CCC "G" on amended returns.

  5. Do not send Letter 1382C, Penalty Removal Request Incomplete, if a request for reasonable cause is attached.

  6. If the return is not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

  7. If the return is edited according to current processing instructions, ensure that the information from Form 3893 is edited to the return.

    Form 3893 Action Taken
    Box 14 (Remarks)
    1. Ensure that the information is edited to the return.

    Box 15 (Process as)
    1. Circle any green rocker and edit marks that may indicate a receipt of remittance.

    2. Do not change any tax due amounts.

  8. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection, Edit the same correction in red/green (per local procedure) to the right area.
    Taxpayer error, Leave the entries as shown on the document.

  9. A received date must be present on all re-input returns.

    If... Then...
    Received date is not present, Edit a received date to the middle of the return, see IRM 3.11.16.8, Received Date.
    Multiple Received Dates are present, Circle all but the earliest date.

  10. When more information is still needed to make the return processable, prepare approved Correspondence Action Sheet or Form 4227, Intra-SC Reject or Routing Slip, for the proper action (e.g., correspondence, research).

  11. When perfection is not possible, edit Action Code "640" (or CCC "U" ) and attach Form 4227 noting "PERFECTION NOT POSSIBLE" and leave in batch.

♦Form 13596 - Reprocessing Returns♦
  1. Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module that had previously posted to the wrong account or module.

  2. Circle CCC "G" if present.

  3. Do not edit CCC "G" on amended returns.

  4. Do not send Letter 1382C, Penalty Removal Request Incomplete, if a request for reasonable cause is attached.

  5. If the return is not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes, and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

    Caution:

    If a Form 1120 converted from Form 1120-S is received, ensure that the following items are present: EIN, name control, North American Industry Classification System (NAICS), received date, audit code 4, tax period (prior year returns), and CCC "3" (as applicable for No Replies). If not, then edit the needed items. No other editing is required.

  6. If the return is edited according to current processing instructions, ensure that the information from Form 13596 is edited on the return.

    Form 13596 Action Taken
    Taxpayer Identification Number (TIN) correction, Edit the correct TIN on tax return.
    Tax period correction, Edit the correct tax period ended on the tax return.
    Reasonable cause, Edit right Computer Condition Code.
    1. Edit CCC "R" if the "FTF" (Failure to File) box is checked.

    2. Edit CCC "D" if the "FTP" (Failure to Pay) box is checked.

  7. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection, Edit the same correction in red/green (per local procedure) to the right area.
    Taxpayer error, Leave the entries as shown on the document.

  8. A received date must be present on all reprocessed returns.

    If... Then...
    Received date is not present, Edit a received date to the middle of the return, see IRM 3.11.16.8, Received Date.
    Multiple received dates are present, Circle all but the earliest date.

  9. Circle any green rocker and edit marks that may indicate a receipt of remittance.

  10. When more information is still needed to make the return processable prepare an approved Correspondence Action Sheet or Form 4227, Intra-SC Reject or Routing Slip, for the proper action (e.g., correspondence, research).

♦Amended Returns♦

  1. A return is considered Amended based on the following:

    • The "Amended" box is checked

    • On MeF returns the "Superseded Return" or the "Amended Return" box is checked. The "Superseded Return" and the "Amended Return" boxes will only be on MeF returns that have been printed. They will be located on Line E.

    • Words such as "Supplemental," "Corrected," "Additional," "Superseded" are present

    • Any indication from the taxpayer that a previous return was filed

      Note:

      Words such as "Copy" or "Duplicate" are not sufficient indicators and must be accompanied by a statement from the taxpayer that a previous return was filed.

  2. Examine the return for attachments:

    • Do not separate any related attachments submitted to explain the reason for the Amended return. Accounts Management may use the information.

    • Detach any unrelated documents and route them to the correct function using Form 4227, Intra-SC Reject or Routing Slip. Edit an Action Trail on the return.

    Note:

    Pull any amended return that has "CBR" notated and route to AM.

  3. Follow the instructions in the chart below when there is a sign of an amended return:

    If... Then...
    Compliance Services entered "TC 59X" or "ICS" on the return,
    1. Do not edit CCC "G."

    2. Process the return as an original.

    Statute Control stamped the return "Delinquent Original Cleared for Processing" ,
    1. Do not edit CCC "G."

    2. Process the return as an original.

    Form 3893 or Form 13596, Reprocessing Returns, is attached,
    1. Do not edit CCC "G."

    2. See IRM 3.11.16.3.8.1, Form 3893 - Re-Entry Document Control, or IRM 3.11.16.3.8.2, Form 13596 - Reprocessing Returns.

    None of the above are present,
    1. Edit CCC "G."

    2. Do not use any other codes with CCC "G" .

    Exception:

    CCC "S," "T," "U," "W," "3" and/or Error Resolution System (ERS) Action Codes may be used with CCC "G."

  4. The following data must be edited on all amended returns:

    1. Name control, see IRM 3.11.16.6.3, Entity Perfection - Name Control

    2. EIN, see IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN)

    3. Tax period, see IRM 3.11.16.7, Tax Period

    4. CCC "G," see Exception above

    5. Received date, see IRM 3.11.16.8, Received Date

    6. Signature, see IRM 3.11.16.11.7, Signature

    Note:

    No further editing is required.

IRC 847 Deduction

  1. The instructions in this subsection only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed.

    Note:

    IRC 847 applies to taxable years beginning before January 1, 2018. Section 13516 of the Tax Cuts and Jobs Act (PL 115-97) repealed IRC 847. IRC 847 required certain insurance companies to make SETP in the amount equal to the tax benefit derived from the added deduction permitted under IRC 847 Deduction. Following the repeal of IRC 847, the entire amount of existing SETP is considered for the first tax year beginning after 2017, see IRM 21.7.4.4.4.11.4.2.

  2. If Special Estimated Tax Payments (SETP) is claimed for tax periods 201812 and prior, follow the instructions in the paragraphs below.

  3. The SETP payment (or application of prior SETP payment) was reported on the following lines:

    Form Line Number
    Form 1120
    Form 1120 Consolidated with a subsidiary Form 1120-PC or Form 1120-L attached.
    Schedule J, Part III, Line 14 (Part II, Line 13 for 2017 -2011) found by a notation in the margin or on the line referring to a "Form 8816" and/or SETP, and/or attached schedule, and/or Form 8816, Special Loss Discount Account and Special Estimated Tax Payments for Insurance Companies is attached.
    Form 1120-L Page 1, Lines 28b for 2018 (Lines 29b and/or 29d for 2017 and prior) and/or Form 8816 is attached.
    Form 1120-PC Page 1, Lines 15b for 2018 (Lines 14b and/or 14d for 2017 and prior) and/or Form 8816 is attached.

  4. If SETP are claimed, edit Action Code "342" and enter CCC "6" on the return. Give the return to the lead.

  5. C&E Lead or another assigned individual will do the following:

    1. Edit an action trail such as "Faxed to LB&I Exam 01-01-2018" (01-01-2018 would be the date faxed).

    2. Fax pages 1, 2, and 3 of the Form 1120, Form 1120-PC, and/or Form 1120-L and all Form 8816 to LB&I Exam at ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ with your contact information (name, phone number and e-mail address). For a consolidated Form 1120, also fax the subsidiary return or attachment on which the SETP are identified. If the fax does not work, contact LB&I Exam directly at ≡ ≡ ≡ ≡ ≡ ≡ ≡ or e-mail ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    3. Set the return aside in a location designated for Section 847 returns with a copy of fax acknowledgement or other record of correspondence with LB&I Exam. Check the bin daily to ensure returns have been properly communicated to LB&I Exam.

    4. LB&I Exam will respond within 72 hours by e-mailing a Form 3809, Miscellaneous Adjustment Voucher, to the person who provided the fax. Print the e-mailed Form 3809 on green paper and attach to the back of the return. If LB&I responds back stating the return is not a true Section 847 case, print that e-mail on green paper and attach to the back of the return.

    5. Place the return back in the processing pipeline.

Prompt Assessment (Form 4810) / Prompt Determination

  1. A "Prompt Assessment," Section 6501 is requested, either in the form of a letter or on Form 4810, Request for prompt Assessment Under Internal Revenue Code 6501(d). A "Prompt Determination," is requested under 11 U.S.A. 505(b) of the U.S. Bankruptcy Code.

    If... And... Then...
    A Prompt Assessment or Prompt Determination request is not attached to a tax return,   Send the Prompt Assessment/Prompt Determination request to Examination.
    A Prompt Assessment or Prompt Determination request is attached to a tax return, A TC "150" has not posted for that return, Process the return and send the Prompt Assessment/Prompt Determination request to Examination with a copy of the tax return.
    A Prompt Assessment or Prompt Determination request is attached to a tax return, A TC "150" has posted for that return, Route the return and the Prompt Assessment/Prompt Determination request to Examination.

    Note:

    If the return is numbered, edit Action Code "370" and continue processing.

♦Refund Returns (45-Day Jeopardy and High Dollar Refunds)♦

  1. Document Perfection identifies refunds in jeopardy and requests manual refunds.

    Note:

    Expeditious processing of refund returns is critical if the 45-day period is about to expire.

    If... Then...
    A refund tax return is batched in a non-refund batch,
    1. Completely edit the return.

    2. Pull the return from the non-refund batch using local procedures.

    Note:

    Follow the instructions below when the processing date is more than 20 days after the received date or the return due date OR the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    The processing date is more than 20 days after the received date or the return due date (whichever is later) and the refund amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

     

    Note:

    "Refund" in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other periods.

    1. Edit Action Code "341" for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

    2. Edit CCC "U" for Form 1120-FSC, Form 1120-ND, and Form 1120-SF. Attach Form 4227 and check the "Reject Correction" box.

    3. Unnumbered returns: Give the return to the manager.

    4. Numbered returns: Leave in batch.

    The refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,

     

    Note:

    "Refund" in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other periods.

    • Unnumbered Returns:

      1. Pull the return from the batch.

      2. Code and edit the return as completely as possible.

      3. Edit Action Code "341" or CCC U (whichever is applicable).

        Note:

        For returns with CCC U, attach Form 4227, Intra-SC Reject or Routing Slip, and check the "Reject Correction" box.

      4. Make a copy of the first two pages of the return along with any page of the return that appears suspicious, see IRM 3.11.16.2.9, Criminal Investigation (CI) Referral.

      5. Edit an action trail "Copy to CI" or "CI Referral," or similar language in the lower left corner going vertically up the side of the return.

      6. Expedite processing.

    • Numbered Returns:

      1. Code and edit the return as completely as possible.

      2. Edit Action Code "341" (or CCC U as applicable).

      3. Attach Form 4227, Intra-SC Reject or Routing Slip, to the return, edit Action Code "341" on Form 4227, and leave in batch.

        Note:

        For returns with CCC U, attach Form 4227 and check the "Reject Correction" box.

      4. Make a copy of the first two pages of the return along with any page of the return that appears suspicious for Criminal Investigation (CI), see IRM 3.11.16.2.9, Criminal Investigation (CI) Referral.

      5. Edit an action trail "Copy to CI" or "CI Referral," or similar language in the lower left corner going vertically up the side of the return.

    The W&I Submission Processing TAS Liaison walks a return through C&E, In addition to normal editing, edit the following:
    1. CCC "O," to freeze the refund.

    2. CCC "Y," to send the return to ERS.

Examination of Tax Data

  1. This subsection addresses general tax data editing procedures.

Non-Standard or Prior Year Format

  1. All prior year returns must be reformatted to current year format. See prior year conversion exhibits and the Job Aids for specific year coding.

  2. If the return is on other than current form format (may be either a prior year or non-standard form) and the transcription lines cannot be numbered to agree with the current year return:

    1. Edit all available transcribed tax data items to the tax data portion of a blank current year form.

    2. Place a large "X" across the tax data entries of the prior year (or non-standard) form.

    3. Staple the forms together, attaching the dummied form (current format) on top so that Data can enter the entity data from the prior year (or non-standard) form.

Conversion of Form 1120-S to Form 1120

  1. If a taxpayer filed Form 1120-S and the Entity Control Unpostable Unit has determined the Taxpayer does not have a valid Small Business Election on file (Form 2553), Rejects will convert Form 1120-S to a Form 1120. No action is required for Document Perfection. Do not detach Form 1120-S.

    Caution:

    If a Form 1120 converted from Form 1120-S is received and the Form 13596, Reprocessing Returns, is attached for reprocessing, see IRM 3.11.16.3.8.2, Form 13596 - Reprocessing Returns, for more information.

Significant Entries

  1. Reference is made throughout this IRM to "significant entries." A significant entry is defined as any amount other than zero.

    Note:

    Blank, Dash, "None," "N/A," or zero are not significant entries unless otherwise specified.

Incomplete Return

  1. When the return serves only as a transmittal for statements, schedules, and other attachments, or is otherwise incomplete, analyze the supporting documents and edit the missing entries on the form itself.

  2. Examine attachments and edit the information to correct transcription lines of both the income and deduction sections. This does not apply to Consolidated - Mixed Component returns.

    Exception:

    See IRM 3.11.16.5.5, Minimum Edit.

    1. Edit the income section if Line 11 is the only entry in the income section.

    2. Edit the deduction section if Line 27 is the only entry in the deduction section.

    3. Edit the income and/or deduction section if blank and there is a sign on the income and/or deduction items are included on an attachment (e.g., a notation such as "See attached," "See Schedule F," "Statement attached" ).

    Note:

    When a doubt exists concerning placement of an income or deduction item because of terminology used by taxpayer, edit income items as "other income" deduction items as "other deductions."

  3. Secured Delinquent Returns are returns secured by compliance personnel. If information is missing from one of these returns, correspond using an approved Correspondence Action Sheet.

Minimum Edit

  1. If Form 1120 does not require Balance Sheet inspection (see IRM 3.11.16.11.36, Schedule L, Balance Sheet, instructions), perform the least time-consuming edit on the income section and the deductions section through Total Deductions.

    1. If only totals are shown in Total Income and/or Total Deductions, edit Total Income to the Other Income line and/or edit Total Deductions to the Other Deductions line.

    2. If there is an entry on Form 1120, Page 1, Line 29b, enter Form 1120, Page 1, Line 4 (Dividends), from Schedule C, Page 2, Line 23a (Line 19 for 2017 and prior). Subtract the Line 4 (Dividends) amount from Line 11 (Total Income) to determine the difference. Enter the difference on Line 10 (Other Income).

      Exception:

      On a "Final" Form 1120, analyze and edit to right lines any entry on the attachments for Income and Deductions items.

    Note:

    (Form 1120 Only) Form 1120 filed by a large corporation (defined as a corporation with $10 million or more of assets in Box D), where "see attached" is notated in the Income Section and the Deduction Section, must be brought to the attention of your supervisor. Taxpayer correspondence must be initiated on these returns. Suggested language for the correspondence is as follows:
    "Complete every applicable entry space on Form 1120. Do not write "see attached" instead of completing the entry spaces. If you need more space on the forms or schedules, attach separate sheets, using the same size and format as the printed forms. Be sure to put the corporation's name and EIN on each sheet."

  2. Initiate correspondence using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S if Form 1120, (Form 1120 Only), is filed by a large corporation (defined as a corporation with $10 million or more of assets in Box D), and "see attached" is notated in the Income Section and the Deduction Section.

Editing Dollars and Cents

  1. Document Perfection is not required to edit a vertical line, 00, dash, or decimal point to indicate dollars and cents.

    If... Then...
    • The taxpayer has entered money amounts showing dollars and cents separated by a decimal point,

    • The taxpayer has entered dollars only where dollars only must be entered,

    • The taxpayer has entered dollars only where dollars and cents must be entered,

    No editing is required.

Negative Entries

  1. Edit negative entries as follows:

    If... Then...
    Brackets are pre-printed on the form, No editing is required.
    The taxpayer shows a negative amount with brackets or a minus (-) sign, No editing is required.
    Editing a negative amount to a transcription line (e.g., computing a line entry, entering a missing entry), Bracket the negative amount.

♦Entity Perfection - General♦

  1. The entity of a tax return shows the taxpayer on the Business Master File. The entity area of the return has the following:

    • Employer Identification Number (EIN)

    • Name

    • "In-care-of" Name

    • Address

♦Bankruptcy♦

  1. If any of the Form 1120 series forms indicates bankruptcy (e.g., shows RECEIVER, TRUSTEE, or DEBTOR IN POSSESSION) in the entity area or on an attachment, route to Entity Control. Follow local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

    Exception:

    Do not route Amended returns to Entity Control.

  2. Completely edit the return except the name control prior to routing to Entity Control.

    Exception:

    Do not route to Entity Control if there is an indication Entity has already edited the return, usually orange/purple editing of the EIN and name control.

♦Entity Perfection - Employer Identification Number (EIN)♦

  1. The EIN is a nine-digit number (xx-xxxxxxx) assigned to identify the taxpayer.

  2. The EIN is located in the upper right area of the form ("Employer Identification Number" box).

  3. Determine the EIN as follows:

    1. If... And... Then...
      The EIN is missing, The correct EIN can be determined from the attachments and/or schedules, Edit the EIN to the proper location.
      The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), or
      Multiple EINs are present,
      Unnumbered,
      1. Remove return from batch.

      2. Route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal, for EIN assignment.

      The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), or
      Multiple EINs are present,
      Numbered,
      1. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      2. Leave return in batch.

      The EIN has any of the following conditions and can’t be determined from attachments and/or schedules:
      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeros; or,

      • All nines

      Unnumbered,
      1. Circle all illegible EINs, zeros, or nines.

      2. Research IDRS.

      3. If found, edit to the proper location.

      4. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

      The EIN has any of the following conditions and can’t be determined from attachments and/or schedules:
      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeros; or,

      • All nines

      Numbered,
      1. Circle all illegible EINs, zeros, or nines.

      2. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      3. Leave return in batch.

      "PENDING," "APPLIED FOR," etc., is shown in the EIN area, Unnumbered,
      1. Research IDRS.

      2. If found, edit to the proper location.

      3. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

      "PENDING," "APPLIED FOR," etc., is shown in the EIN area, Numbered,
      1. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC,

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      2. Leave return in batch.

♦Entity Perfection - Name Control♦

  1. The Name Control consists of four characters or less.

    1. Valid characters are alpha, numeric, ampersand (&), hyphen (-), and blank. However, blanks are only valid in the last three positions.

    2. Disregard the word "THE" in the Name Control only when followed by more than one word.

  2. See Job Aid Document 7071A, Name Control Job Aid - For Use Outside the Entity Area, to determine the Name Control.

  3. If Box E(3) "Name Change," Form 1120 is checked, route the return to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

    • Form 1120-C - Box D(3)

    • Form 1120-F - Box "Name or address change"

    • Form 1120-FSC - Box F(2)

    • Form 1120-H - Box (2)

    • Form 1120-L - Box E(2)

    • Form 1120-ND - Box D(2)

    • Form 1120-PC - Box E(2)

    • Form 1120-REIT - Box F(2)

    • Form 1120-RIC - Box E(2)

    • Form 1120-SF - Box (2)

  4. Edit the Name Control as follows:

    1. If... And... Then...
      Able to determine the Name Control,   Underline the Name Control.
      See Figure 3.11.16-2.
      Unable to determine the Name Control, Unnumbered,
      1. Research IDRS.

      2. If found, edit to the proper location.

      3. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

      Unable to determine the Name Control, Numbered,
      1. Edit Action Code "352" (Name Research) on:

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

      2. All other returns, edit CCC "U." Attach Form 4227 and indicate "Name Research" in the "Other (explain)" area.

      3. Leave return in batch.

    Figure 3.11.16-2

    This is an Image: 33500004.gif

    Please click here for the text description of the image.

♦Entity Perfection - "In-Care-Of" Name♦

  1. An "in-care-of" name can be identified by the words "in care of" or the symbols "c/o" or "%" (percent).

  2. Ensure the "in-care-of" name is in the proper location.

    If... Then...
    The "in-care-of" name is located on the street address line preceding the street address, Do not edit.
    The "in-care-of" name is located above the first name line or below the street address, Arrow the in-care-of name so it appears below the first name line and above the street address.
    The "in-care-of" name is shown on an attachment, Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    The street address for the "in-care-of" name is different from the street address of the corporation,
    1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if included on an attachment.

    2. Circle the corporation street address and input TC "014."

    Note:

    Always circle the in-care-of symbol (% or c/o) if it is present with an address. Do not use the ampersand (&) and the percent sign (%) when editing address information.

  3. Determine a change in the in-care-of name by any of the following:

    • A check mark in the "Name change" box, or

    • A check mark in the "Address change" box, or

    • Taxpayer edits or added to the "in-care-of" name (e.g., original "in-care-of" name crossed out, new name added).

      If... Then...
      An "in-care-of" name is changed but there is no sign of an address change,
      1. Edit the "in-care-of" name as shown above.

      2. Continue editing the return.

      An "in-care-of" name is present and the "Address change" box is checked (or there is a sign of an address change),
      1. Edit the "in-care-of" name as shown above.

      2. Correct the address, see IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses.

      3. Continue editing the return.

♦Entity Perfection - Domestic Addresses♦

  1. Perfect the address when the mailing address (Street or P.O. Box) is not easily identified.

    Exception:

    Do not perfect the address on amended returns (CCC "G" ).

  2. A business may have two addresses. One is the mailing address and the other is the location address or physical location of the business.

  3. Perfect the address as follows:

    If... And... Then...
    An attachment shows the address was changed,   No perfection is necessary. ISRP will enter the complete address.
    There is a sign on an attachment that the address has been changed,   Edit the new address in the entity section of the return.
    Form 8822, Address Change Requested, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, All apply:
    • Mailing address information is the same,

    • Form 8822 or Form 8822-B, Line 7, does not list a location address,

    • No entry on Form 8822-B, Lines 8 or 9,

    Take no action.
    Form 8822, Address Change Requested, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, Any applies:
    • Mailing address information is different,

    • Form 8822 or Form 8822-B, Line 7, lists a location address,

    • Form 8822-B, Lines 8 or 9, have an entry,

    Detach Form 8822 or Form 8822-B and route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
    Both a P.O. Box and street address are shown, see Figure 3.11.16-3,  
    1. Notate "TC 014" in the upper left margin.

    2. Input TC "014."

    Two street addresses are shown,  
    1. Underline the second street address.

    2. Notate "TC 014" in the upper left margin.

    3. Input TC "014."

    One street address is shown, The taxpayer changes the address to a P.O. Box,
    1. Notate "TC 014" in the upper left margin.

    2. Input TC "014."

    The city and state are not shown on the return, but are shown on an attachment,   Edit the city and state in the entity section of the tax return.
    The ZIP Code is missing or illegible, Is not available from the return or attachments, See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the ZIP Code.

    Note:

    Edit the 3 digits followed by "01" of the first ZIP Code listed for the applicable state (e.g., "99501" for Alaska).

    Only the first three digits of the ZIP Code can be determined,   Edit "01" for the fourth and fifth digits.
    The "Change of Address" box is checked, An "in-care-of" name is present,
    1. Edit the "%" (percent sign) or "c/o" to the left of the "in-care-of" name (in the first position) followed by the right name.

    2. Correct the address.

    The National Change of Address (NCOA) label is present,   Underline the Name Control.
    It is necessary to edit the street address,   See Document 7475, State and Address Abbreviations, Major City Codes, ZIP Codes, and Countries.
    The address contains information other than a street address or P.O. Box,   Do not perfect. ISRP will enter the complete address.

    Note:

    Always circle the "in-care-of" symbol ("c/o" or "%" ) if it is present with an address. Do not use the ampersand (&) and the percent symbol (%) when editing address information.

    Figure 3.11.16-3

    This is an Image: 33500007.gif

    Please click here for the text description of the image.

  4. The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses. If the old address appears, convert to the new state code abbreviation based on the ZIP Code (e.g., APO New York, New York 091XX would be converted to APO AE 091XX). APO/DPO/FPO addresses are considered domestic addresses. Refer to Conversion Chart below:

    ZIP Code State Code
    340 AA
    090-098 AE
    962-966 AP

♦Entity Perfection - Foreign Address (OSPC)♦

  1. A foreign (international) address is any address that is not in the 50 states or the District of Columbia.

  2. Consider returns with APO, DPO, and FPO addresses as considered domestic addresses, see IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses.

  3. Route returns with a foreign address to the Ogden Submission Processing Center (OSPC) for processing. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer IRS sent the return to Ogden.

  4. Consider returns with addresses in the following U.S. Possessions/Territories as foreign for processing purposes. Edit the same way as domestic addresses.

    1. Edit a two-character alpha code for the possession name.

      U.S. Possession / Territory Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      U.S. Virgin Islands (U.S.) VI

    2. A ZIP code must be present for U.S. Possessions/Territories. Edit the right ZIP Code if one is not provided, see Exhibit 3.11.16-19, U.S. Possessions ZIP Codes.

  5. All other foreign addresses are edited the same as a domestic address with the following exceptions:

    1. Ensure the foreign country is the last entry in the address.

    2. Circle the foreign country and edit the country code preceded by a "/" and followed by "/$" (e.g., "/GM/$" is edited for Germany). For official foreign country codes, see Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    3. Edit a unique country code for returns filed with an address in Canada, see IRM 3.11.16.6.6.1 Country Code - Canada.

      Note:

      Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) provides examples for editing foreign addresses.

    4. If the foreign address is from Australia, Brazil, Cuba, Italy, Mexico, or The Netherlands, check if the address has a province, state, or territory.

      Note:

      There may be other countries with provinces, states, and territories not listed above, see Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) for more information.

      If... Then...
      A province, state, or territory is present,
      1. Circle the province, state, or territory name.

      2. Edit the right abbreviation, see Exhibit 3.11.16-16, Province, State and Territory Abbreviations.

      A province, state, or territory is shown in abbreviated format, Continue editing the return.
      A province, state, or territory name is not present, Continue editing the return.

  6. A ZIP Code or state is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

♦Country Code - Canada♦
  1. To assist Compliance with workload assignment, returns filed with an address in Canada will be edited using a unique country code based on the province.

    If... Then...
    The foreign address has a Canadian province/territory name, abbreviation, or postal code beginning letter shown in the table below,
    1. See table below to ensure the correct Canadian Province/Territory is present or edited to the return.

    2. Circle the country name.

    3. Edit the right "country" code based on the province/territory preceded by a "/" and followed by a "/$" as the last entry in the address.

    The foreign address does not have a Canadian province/territory name shown on the table below,
    1. Circle the country name.

    2. Edit the country code "/CA/$" as the last entry in the address.

    Canadian Province / Territory Province Abbreviation Postal Code beginning Country Code
    Alberta AB T XA
    British Columbia BC V XB
    Manitoba MB R XM
    New Brunswick NB E XN
    Newfoundland and Labrador NL A XL
    Northwest Territories NT X XT
    Nova Scotia NS B XS
    Nunavut NU X XV
    Ontario ON K, L, M, N, or P XO
    Prince Edward Island PE C XP
    Quebec QC G, H, or J XQ
    Saskatchewan SK S XW
    Yukon YT Y XY

  2. The rest of the foreign address is edited using procedures in IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. This subsection addresses the editing of the period for which the tax return is being filed.

Tax Period - Ending

  1. All returns must have a tax period.

  2. Edit the tax period to the right of the form title in YYMM format.

    If... Then...
    The return is for the current processing calendar year (e.g., 202312), Do not edit the tax period.
    The return is for a prior year, Edit the tax period.
    The taxpayer has notated a tax period other than the preprinted year on the return, Edit the tax period based on the taxpayer’s indication, per paragraph (3).
    The tax period is missing, incomplete, or illegible,
    1. Review the return or attachments for the correct period.

    2. If found, edit the tax period to the right of the form title in YYMM format.

    3. If unable to determine the tax period after researching, process the return for the year currently being processed.

  3. A tax period must end on the last day of a month. (Ignore a minor discrepancy such as October 30 instead of October 31.) The exceptions are a 52/53 week filer, and final and/or short period returns. Correspond using Letter 319C, Return Covers Other Than 12-Month Accounting Period, if the exceptions do not apply. The table below shows examples of tax periods.

    Tax Period Ends Tax Period
    Oct. 3, 2023 (52-53 week document) 2309
    Oct. 3, 2023 (Final short period return) 2310
    Oct. 25, 2023 (52-53 week document) 2310
    Oct. 25, 2023 (Final short period return) 2310
    Nov. 30, 2023 2311
    Dec. 31, 2023 2312 (No editing required)
    Feb. 28, 2024 2402

  4. Tax periods reported under the 52-53 week rule may end not more than six days before, and not more than three days after, the end of a month. In the edit format, use the numeric designation of the month, the last day of which is closest to the actual ending date.

    If... Then...
    The tax period ending date is not more than three days after the beginning of the month, Edit the previous month.
    (e.g., October 3, use the numeric designation for September, YY09.)
    The tax ending date is not more than six days before the end of the month, Edit the month shown on the return,
    (e.g., October 25, use the numeric designation for October, YY10.)

  5. If the tax period is for more than 12 months or 53 weeks, correspond.

  6. A "Final" short period return ends on the date the taxpayer went out of business. This may be any day of the month. Use the numeric designation of the calendar month in which it ends. If the taxpayer has not shown in which month the business ended, edit the tax period to be one month before the received date.

  7. Edit the Tax Period Beginning on a "Final" return in MMDDYY format, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  8. On a "Final" return if the tax periods month and year is equal to or later than the received dates month and year (future return), edit the tax period to be one month before the received date, see Figure 3.11.16-4.

    Note:

    If a prepaid credit is claimed on a short period "Final" return, see IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits.
    Form 1120, Page 3, Schedule J, Line 13, 14 or 17 (Lines 12, 13 or 16 for 2017-2011)

    Figure 3.11.16-4

    This is an Image: 33500009.gif

    Please click here for the text description of the image.

  9. On a "Final" return, if the received date is after the short period due date but on or before the regular full tax period due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, edit CCCs "R" and "F."

    Note:

    Also edit CCC "D" if the return is a Balance Due.

  10. The separate short period return of a subsidiary which became affiliated with a "consolidated" group may end on the day preceding such affiliation. As a practical matter, do not question the ending date on any change-of-accounting period return.

  11. Check all tax periods for the Statute of Limitation (two years and nine months from the normal due date of the return), see IRM 3.11.16.3.7, Statute Returns.

Tax Period Beginning - Initial, Final, or Short Period

  1. The Tax Period Beginning has been added to Form 1120, Form 1120-F, Form 1120-FSC, Form 1120-H, Form 1120-L, Form 1120-ND, Form 1120-PC, Form 1120-REIT, Form 1120-RIC and Form 1120-SF.

  2. Edit the Tax Period Beginning to the left of the Form 1120 title area in Month Month Day Day Year Year (MMDDYY) format on an Initial, Final, or Short Period return as follows: See Figure 3.11.16-5 below.

    If... Then...
    The Tax Period Beginning is present, Edit the Tax Period Beginning (MMDDYY).
    The Day is not present in the Tax Period Beginning, Edit "01" as the day (MM01YY).
    The Tax Period Beginning is not present, Editing is not required.

    Figure 3.11.16-5

    This is an Image: 33500002.gif

    Please click here for the text description of the image.

Early Filed Returns - Full Year and Short Period

  1. Never send an early filed return back to the taxpayer.

  2. If the month of the tax period is the same or after the month of the received date, determine how early the return has been filed:

    If... Then...
    • The received date and the tax period ending (TPE) are the same month (e.g., the received date and the TPE are both April), or

    • The received date is before the TPE by four months or less (e.g., the received date is April but the TPE is May, June, or July,

    1. Edit Action Code "480" for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      (Early Filed - Suspense).

    2. All other returns edit CCC "U" and attach Form 4227, Intra-SC Reject or Routing Slip. "Edit Early Filed - Suspense" in the "Other Activity" box.

    3. Leave return in batch.

    The received date is before the TPE by more than four months (e.g., the received date is April but the TPE is August or later),
    1. Edit Action Code "211" or "215" (International Correspondence) for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

    2. Edit CCC "U" for Form 1120-FSC, Form 1120-ND, and Form 1120-SF.

    3. Attach an approved Correspondence Action Sheet to request confirmation of the TPE.

    4. Completely edit the return. Edit the future tax period shown by the taxpayer.

    Note:

    Action Codes are only applicable to Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. Use CCC "U" for other returns in the 1120 series.

Short Period - Editing Proof of Entitlement

  1. A Short Period Return is one which covers a period of less than 12 months or 52-53 weeks.

    • If the Short Period Return is marked "Final," see IRM 3.11.16.7.1, Tax Period - Ending.

    • If the Short Period Return is marked "initial," "first return," "new corporation," etc., or meets any of the identifying conditions for "Initial Return Code," see IRM 3.11.16.9.4, Initial Return Code.

    • Process all other Short Period Returns as a "Change of Accounting Period." In such cases, proof of entitlement to the change is required.

    Reminder:

    Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  2. Use the table below to find and edit proof of entitlement.

    Note:

    Research of IDRS using Command Code BMFOLE may be needed for the following chart.

    Proof of Entitlement

    If... And... Then...
    A statement the corporation is changing the tax period under:
    1. Headquarters "Grant Letter."

    2. Revenue Procedure 2006-45 or 2006-46.

    Command Code BMFOLE shows a TC 053 or TC 054,
    (This is a sign that the Form 1128, Application to Adopt, Change, or Retain a Tax Year, or National Office "Grant Letter" has been approved.)
    Continue processing

    Note:

    No CCC "Y" is needed.

    Note:

    Audit Code "3" is also applicable for Form 1120-F, Form 1120-FSC, and Form 1120-SF.
    For Form 1120-F, see IRM 3.11.16.33.14.2, Audit Codes,
    For Form 1120-FSC, see IRM 3.11.16.34.16.1, Audit Codes, and
    For Form 1120-SF, see IRM 3.11.16.41.8.1, Audit Codes.

    A statement the corporation is changing the tax period under:
    1. Headquarters "Grant Letter."

    2. Revenue Procedure 2006-45 or 2006-46.

    Command Code BMFOLE shows a TC 059,
    (This is a sign that the Form 1128 or National Office "Grant Letter" has not been approved.)
    The return is unprocessable. Follow the instructions in IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    A statement the corporation is:
    1. Coming out of consolidation; or

    2. (Parent) is no longer a consolidated group; or

    3. Filing under "Section 338 Election" or attached Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases, and tax period begins after the acquisition date.

      Do all the following:
    1. Edit CCC "R" if filed before the specially privileged (full tax year of parent return) due date; and

    2. Edit CCC "Y."


    See Figure 3.11.16-6, Short Period - Editing Proof of Entitlement.
    26 CFR 1.1502-76 - returns may be identified by a notation referencing "Section 1.1502-76," "Changing the tax period to get in step with parent," "Affiliation with a Consolidated Group," or a similar statement on the return or attachment,   See IRM 3.11.16.7.4.1, Short Period Returns - 26 CFR 1.1502-76.
    Notation referring to:
    1. Section 898(c)(1)(A); or

    2. Election Change in Taxable Year under Section 898(c)(2); or

    3. "Section 1398 election" (Bankruptcy Petition has been filed), or

    4. "Second Short Year after Section 1398 Election"

      Edit CCC "Y." Do not correspond.
    Form 1128 attached, Command Code BMFOLE shows a TC 053 or TC 054,
    (This is a sign that the Form 1128 has been approved.)
    Continue processing

    Note:

    No CCC "Y" is needed.

    Form 1128 attached, Command Code BMFOLE shows a TC 059,
    (This is a sign that the Form 1128 has not been approved.)
    The return is unprocessable. Follow the instructions in IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    Form 1128 attached, Command Code BMFOLE does not show a TC 053, 054 or 059, See IRM 3.11.16.7.7, Short Period Returns - Editing Form 1128 With no Indication of Approval or Disapproval.
    Notation on Form 1120 or Form 1120-F indicates: "Section 444 Election Terminated,"   Edit CCC "Y" if the tax return is for a Personal Service Corporation
    • (e.g., Form 1120, Page 1, Box A, Item 3 is marked or Schedule J, Page 3, Line 2 box (201811 and prior) is marked: or

    • Form 1120-F, Page 2, Question O is marked or Schedule J, Page 5, Line 2 box (201811 and prior) is marked).

     

    Figure 3.11.16-6

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    Please click here for the text description of the image.

Short Period Returns - 26 CFR 1.1502-76
  1. 26 CFR 1.1502-76 applies to returns filed by a corporation which becomes a member of a consolidated group during the tax year. These returns may be identified by a notation referencing "Section 1.1502-76," "Changing the tax period to get in step with parent," "Affiliation with a Consolidated Group," or a similar statement on the return or attachment.

    Note:

    It is important to recognize these returns and follow the procedures outlined in this subsection to ensure the correct penalty and interest are charged, if applicable.

  2. The short period return under 26 CFR 1.1502-76 is not due until the normal full 12-month due date of the short period return or the due date of the consolidated parent return, whichever is earlier.

  3. Always edit CCC "Y" on these returns.

  4. The computer will calculate the due date of the return according to the tax period of the short period return. Since the actual due date of the return under 26 SFR 1.502-76 may be later than the short period return due date, do the following:

    If ... And ... Then ...
    The received date is later than the short period return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Before the consolidated return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Or,
    The normal full 12-month due date of the short period return ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡whichever is earlier,

    Note:

    If the consolidated return due date is unknown, use the normal full 12-month due date of the short period return.

    Edit CCC "R."

    Reminder:

    Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

    Figure 3.11.16-7

    This is an Image: 33500125.gif

    Please click here for the text description of the image.

Short Period Returns - Missing Proof of Entitlement

  1. If proof of entitlement is missing or the taxpayer states on the return or an attachment that the corporation has filed an application but has not received a response, research IDRS using Command Code BMFOLE for approval or disapproval information and proceed as follows:

    If... Then...
    BMFOLE shows a TC 053, 054, or 055,
    (This is a sign that the Form 1128, Application to Adopt, Change, or Retain a Tax Year or Form 8716, Election To Have a Tax Year Other Than a Required Tax Year, has been approved.)
    Continue processing.

    Note:

    No CCC "Y" is needed.

    BMFOLE shows a TC 058 or 059,
    (This is a sign that the Form 1128 or Form 8716 has not been approved.)
    The return is unprocessable, see IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    BMFOLE does not show a TC 053, 054, 055, 058, or 059, Correspond using Letter 319C, Return Covers Other Than 12-Month Accounting Period.

    Reminder:

    Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

Short Period Returns - Editing a Disapproved Application (Form 1128)

  1. If Form 1128 is disapproved, the return is considered unprocessable:

    1. Edit Action Code "211" or "215" (International Correspondence) or CCC "U" and correspond.

    2. In the correspondence, instruct the taxpayer to file a return for the next regular full period due. Request a disposition of any remittance paid with the return or other credits which have posted to the short period module.

    Reminder:

    Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

Short Period Returns - Editing Form 1128 with No Indication of Approval or Disapproval

  1. When a Form 1128 with no indication of approval or disapproval is attached and no proof of entitlement is present, research IDRS using Command Code BMFOLE for approval or disapproval and proceed as follows:

    If... Then...
    BMFOLE shows a TC 053 or 054,
    (This is a sign that Form 1128 has been approved.)
    Continue processing.

    Note:

    No CCC “Y” is needed.

    BMFOLE shows a TC 059,
    (This is a sign that Form 1128 has not been approved.)
    The return is unprocessable.
    See IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    BMFOLE does not show TC 053, 054, or 059, Take the actions in (2) below.

    Reminder:

    Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  2. A Form 1128 with neither approval or disapproval, discontinue processing Form 1120. Route Form 1120andForm 1128 to Entity as directed in the paragraphs below.

    1. If Form 1128 is attached to a numbered return, enter Action Code "320" for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. Edit CCC "U" for all other returns. Attach Form 4227, Intra-SC Reject or Routing Slip, and check the box for Entity Control box. Edit the Form 1120 received date on Form 1128. (Do not detach Form 1128.) Leave the return in the batch and continue processing, see Figure 3.11.16-8.

    2. If Form 1128 is attached to an unnumbered return, edit the Form 1120 received date on Form 1128, attach Form 4227 and route the return to Entity Control. (Do not detach Form 1128.)

    3. Entity will process the Form 1128 and route the return back to C&E with a Form 4227 attached. The Form 4227 will indicate if the Form 1128 is approved, denied or if the Form 1128 was returned to the taxpayer and the words "Process Return" or "Let Unpost."

    Figure 3.11.16-8

    This is an Image: 33500011.gif

    Please click here for the text description of the image.

Short Period Returns - Editing Returning Correspondence

  1. If the taxpayer provides acceptable proof, follow instructions in IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

  2. If the taxpayer fails to reply, or does not provide tax period approval, enter CCC "3."

Short Period Returns - With Prepaid Credits

  1. Route to Accounting for possible adjustment action any return meeting both conditions below.

    1. A prepaid credit is claimed.

      Form Type Line Numbers
      Form 1120 Page 3, Schedule J, Line 13, 14 or 17 (Line 12, 13, or 16 for 2017-2011)
      Form 1120-C Line 30a, 30b, or 30e (Line 29a, 29b, or 29e for 2017 and prior)
      Form 1120-F Line 5a, 5b, or 5e
      Form 1120-FSC Line 2a, 2b, or 2e
      Form 1120-H Line 23a, 23b, 23c
      (Lines 23a, 23b, 23d for 2022 and prior).
      Form 1120-L Line 27a, 27b, or 27e
      (Line 28a, 28b, 28c or 28f for 2022 and prior).
      Form 1120-ND Line 14a, 14b, or 14e
      Form 1120-PC Line 15a, 15b, or 15e
      (Line 15a, 15b, 15c or 15g for 2022 - 2018).
      (Line 14a, 14b, 14c, or 14g for 2017 and prior)
      Form 1120-REIT Line 25a, 25b, 25e (Line 24a, 24b, or 24e for 2017 and prior)
      Form 1120-RIC Line 28a, 28b, or 28e
      (Line 29a, 29b, 29e for 2022 through 2018).
      (Line 28a, 28b, or 28e for 2017 and prior)
      Form 1120-SF Line 16a, 16b, or 16e

    2. The return is a short period (an initial return, a final return or one with a change of accounting period).

  2. Take the following action when routing these returns to Accounting, see Figure 3.11.16-9.

    1. Enter Action Code "342" on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. Edit CCC "U" on all other returns. Attach Form 4227, Intra-SC Reject or Routing Slip check the "Accounting" box and notate "Short period return with ES Credits."

    2. Continue normal processing.

    3. If the return shows a refund, see IRM 3.11.16.4, Refund Returns (45-Day Jeopardy and High Dollar Refunds).

      Reminder:

      Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

    Figure 3.11.16-9

    This is an Image: 33500012.gif

    Please click here for the text description of the image.

♦Received Date♦

  1. The date a document is received in the Campus or IRS Office is the date stamped as the "IRS Received Date."

  2. All Form 1120 series returns require an IRS Received Date.

    If... Then...
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the legal or the extended due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,
    See Exhibit 3.11.16-2, Due Date Chart.
    The return is considered timely.
    The due date falls on a weekend or legal holiday, The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date, Edit the received date to agree with the postmark or shipment date.

    Note:

    The postmark or shipment date includes returns delivered by:

    • U.S. Postal Service,

    • Private Delivery Services (PDS), e.g., Federal Express Corporation (FedEx) or United Parcel Service (UPS), "designated" by the IRS. See IRM 3.10.72, Receiving, Extracting, and Sorting, for a list of designated private delivery services, or

    • Returns with a Foreign Postmark.

    Caution:

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

    Note:

    For certified mail only - If a postmark is not present, look for a "USPS.com Track & Confirm" record attached to the return (should be in front of the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures, see Exhibit 3.11.16-20, USPS.com Track and Confirm.
    If the "USPS.com Track & Confirm" record is not attached, take no action.

  3. When a Form 1120 or Form 1120-F is delinquent and the taxpayer explains the return is late due to the rejection of a timely filed electronic return, check the return for a MeF rejection notification.

    Note:

    Taxpayers are instructed to notate in red in the top margin of the return "REJECTED ELECTRONIC RETURN" to indicate the timely filed return cannot be filed electronically. The notation could be anywhere on the return and is not required, but they are required to attach a copy of the MeF rejection notification in order to show they qualify for an edited Received Date.

  4. If a MeF rejection notification is not attached, perfection of the Received Date is not necessary. If a notification is attached, edit the IRS Received Date in MMDDYY format as follows:

    Note:

    The taxpayer has 10 days to resubmit an electronically filed return after being rejected and 10 days to submit a paper return after the last rejection. The first transmission of any rejected return must have been filed before the due date of the relevant form for this rule to apply.

    If ... And ... Then ...
    The postmark date is within 10 days of the date of the rejection,   Edit the IRS Received Date to be the date of the rejection.

    Example:

    Postmark date is 03-22-2024 and first rejection is 03-12-2024. Change Received Date to 031224.

    The postmark date is more than 10 days after the date of the rejection,   Leave the IRS Received Date as is.

    Example:

    Postmark date is 03-23-2024 and first rejection is 03-12-2024. Leave the Received Date as is.

    Exception:

    Change the Received Date to the postmark date if the postmark date makes the return timely.

    There are two rejections, Within 10 days of one another and one is within 10 days of the postmark date, Edit the IRS Received Date to be the date of the first rejection.

    Example:

    Postmark date is 03-22-2024, the second rejection is 03-12-2024. The first rejection is 03-09-2024. Change the Received Date to 030924.

    There are two rejections with the time between the first rejection and the second rejection greater than 10 days, The second rejection is within 10 days of the postmark date, Edit the IRS Received Date to be the date of the second rejection.

    Example:

    Postmark date is 03-22-2024, the second rejection is 03-12-2024. The first rejection is 03-01-2024. Change the Received Date to 031224.

    There are two rejections, Not within 10 days of one another and second rejection not within 10 days of the postmark date, Leave the IRS Received Date as is.

    Example:

    Postmark date is 03-23-2024, the second rejection is 03-12-2024. The first rejection is 03-01-2024. Leave the Received Date as is.

    Exception:

    Change the Received Date to the postmark date if the postmark date makes the return timely.

  5. The received date may or may not be stamped on the face of the return.

  6. A valid received date stamp may consist of the following:

    • The word "Received"

    • Month (alpha or numeric)

    • Day (for example "1" or "01" )

    • Year - four digits

    • "Area Office," Campus, "Field Office," "Taxpayer Assistance Center (TAC)" plus the City location or functional area within one of these sites (e.g., Compliance Services Collection Operations (CSCO), Examination, Image Control Team (ICT). Correspondence Imaging Inventory (CII), Accounts Management (AM)).

    Exception:

    Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return has a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or IRS campus (Compliance, Accounts Management, or Submission Processing (SP)), circle out the invalid received date and edit the correct received date according to instructions below. For example, returns received by the Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office is not the "IRS Received Date."

  7. If the received date stamp is not present or the date is illegible or invalid, edit the received date in "MMDDYY" format in the middle of Page 1 of the tax return. Edit the received date according to the following priority:

    1. The earliest legible postmark date (U.S. Postal Service, Foreign Postmark, or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service Postmark (USPS) or Foreign Postmark date are as follows:

      If... Then...
      An envelope is not attached to the tax return, Use the postmark date stamped on the face of the return.
      A document was returned for insufficient postage, Use the postmark date that coincides with the correct delivery of the return.
      The postmark is missing and the envelope is certified,
      1. Look for the USPS.com Track & Confirm record that was attached to the return (should be in front of the envelope). Use the acceptance date on the record to determine timeliness and follow normal editing procedures, see Exhibit 3.11.16-20, USPS.com Track and Confirm.

      2. If the "USPS.com Track & Confirm" record is not attached, take no action.

      An envelope has a USPS and private metered postmarks, Always use the USPS postmark.
      An envelope has a foreign and private metered postmark, Always use the foreign postmark.
      An envelope has two private metered postmarks, Always use the latest private metered postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.

    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer's Signature date.

    4. Signature date. (Only if within current year.)

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  8. Edit the received date as follows.

    1. If... Then...
      A timely received date is the only received date stamped on the return, Do not edit.
      Two or more dates are stamped on the return,
      1. Use the earliest IRS received date stamp.

      2. Circle all other dates (handwritten or stamped) not needed for transcription.

      Note:

      Treat Received Dates that are circled out by another function as if they are not present.

      A Federal return is addressed to the IRS and delivered to a state agency, Use the Postmark Date as the received date.
      A Federal return is addressed to a state agency, Use the IRS date stamp as the received date.
      The only received date on the return is a Taxpayer Advocate Service (TAS) received date, Edit the received date according to (6) instructions above.

      Reminder:

      Check any envelope attached to the return for remittance. If found, hand carry remittance to manager.

  9. If a return is faxed to another area of IRS and then sent to Submission for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Edit a Received Date according to normal procedures.

    Caution:

    Do not use the EEFax date as the IRS received date.

Special Processing Codes

  1. This subsection addresses special processing codes.

Computer Condition Codes

  1. Computer Condition Codes (CCC) identify special conditions or computation for the computer. Computer Condition Codes post to the Master File.

  2. Computer Condition Codes are edited in the center of Lines 1 and 2 of the tax return.

CCC "A" - Form 2220
  1. No editing is required.

CCC "B" - Schedule M-3
  1. Edit CCC "B" when the corporation checks the Schedule M-3 box on:

    1. Form 1120, Page 1, Box A, 4.

    2. Form 1120-C, Page 1, Box A, 2.

    3. Form 1120-F, Page 1, Schedule M-3 Box.

    4. Form 1120-L, Page 1, Box A, 3.

    5. Form 1120-PC, Page 1, Box A, 3.

  2. Edit CCC "B" if Schedule M-3 is attached to Form 1120, Form 1120-C, Form 1120-L, Form 1120-F or Form 1120-PC.

    Note:

    For Form 1120, edit Audit Code "8" if Schedule M-3 is attached, see IRM 3.11.16.10.1, Audit Codes.

CCC "C" - Qualified Derivatives Dealers (Form 1120-F) or Partner’s Additional Reporting Year Tax (Forms 1120-FSC, 1120-ND or 1120-SF)
  1. Edit CCC "C" when either is present:

    • Form 1120-F, Page 2, Question CC is answered "Yes," or both the "Yes" and "No" boxes are checked.

    • Form 8978, Partner’s Additional Reporting Year Tax, is attached to a Form 1120-FSC, Form 1120-ND, or Form 1120-SF and the tax period is 201712 and later.

♦CCC "D" - Reasonable Cause for Failing to Pay Timely♦
  1. Do not edit CCC "D" if the taxpayer requests abatement for "Failing to Pay Timely" when the return is submitted. Send Letter 1382C, Penalty Removal Request Incomplete, to inform the taxpayer of the proper procedure to follow to request penalty abatement when a penalty is assessed, see IRM 3.11.16.3.4.2(4), Issuing Correspondence.

  2. Edit CCC "D" when the return is stamped: "DO NOT ASSESS FAILURE TO PAY PENALTY."

    Note:

    Do not enter CCC "D" if the return was prepared by IRS under IRC 6020(b) and the return due date (without regard to extensions) is after July 30, 1996.

  3. Edit CCC "D" on a "Final," Balance Due return if the received date is after the short period due date but on or before the regular full tax period due date≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  4. CCC "D" must be edited when a return has the special due date for "Co-Op" 1120 returns, see IRM 3.11.16.9.1.18, CCC "R" - Reasonable Cause for Failing to Timely File Return.

  5. Edit CCC "D" if a corporation attaches a statement showing the corporation qualifies for an automatic 2 or 3 - month extension under 26 CFR 1.6081-5 (or regulations under IRC 6081), or the statement or return indicates one of the following:

    • The foreign corporation maintains an office or place of business in the United States.

      Note:

      It is not necessary to edit CCC "D" on Form 1120-F. The "Office or Place of Business Code" establishes the correct due date.

    • The domestic corporation transacts its business and keeps its books and records of account outside the United States and Puerto Rico, or

    • The domestic corporation's principal income is from sources within the possessions of the United States.

    Exception:

    Do not edit CCC "D" if the balance due is paid after the 15th day of the 6th month following the tax period ending date.

  6. Do not edit CCC "D" when pre-computed penalty is shown on the return.

CCC "E" - Potential Identity Theft Filing
  1. Effective January 1, 2017, Computer Condition Code "E" may be edited on Form 1120 series (any year) by the BMF ID Theft Liaison to identify a potential identity theft filing if the return is claiming a refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ If CCC "E" has been edited, no action is required by C&E.

    Note:

    CCC "E" may be edited by other functions. C&E will continue to follow procedures in Paragraph (2).

  2. If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence showing the taxpayer is a victim of ID Theft and the return is claiming a refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must indicate that they are a victim of "ID Theft" ; do not send cases that are subject to "Criminal Investigation" (CI), "Examination" (Exam) or "Fraud" review.

  3. If the SP ID Theft Liaison says the return is "ID Theft," the tax examiner may (upon request) edit CCC "E."

CCC "F" - Final Return
  1. Edit CCC "F" when the "Final Return" box is checked or there is another indication the corporation is not liable for filing future returns. Notations may include (but are not limited to):

    • Final

    • Deceased

    • Out of Business

    • Liquidation

    • Exempt under IRC 501(c)(3)

    • Dissolved

      Note:

      The presence of Form 966, Corporate Dissolution or Liquidation, is a sign of a possible dissolution. If Form 966 is attached, compare tax periods in Box 7A to the Form 1120 being edited. If the same and the entity section of Form 966 is for the parent corporation, edit CCC "F."

    • Cites IRC 708(b)(1)(B)

    • Notates "Filed per Rev. Proc. 2003-84"

  2. Edit the Tax Period Beginning in MMDDYY format per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. If a prepaid credit* is claimed on a short period "Final" return, enter Action Code "342" or CCC "U" on the return, see IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits.

    • *(Form 1120, Page 3, Schedule J, Line 13, 14 or 17 (Lines 12, 13 or 16 for 2017-2011)

♦CCC "G" - Amended Return♦
  1. See IRM 3.11.16.3.9, Amended Returns.

CCC "H" - Form 1042-S Attached to Form 1120-F
  1. Editing CCC "H" is no longer required.

CCC "I" - Form 6781, Gains and Losses from Section 1256 Contracts and Straddles
  1. CCC "I" is valid for Form 1120, Form 1120-C, Form 1120-F, Form 1120-L, and Form 1120-PC.

  2. Edit CCC "I" when Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, is present.

    Note:

    CCC "I" must be edited as a capital in block style to distinguish it from CCC "1."

CCC "J" - Section 965
  1. The instructions in this subsection only apply to tax periods 201712 through 202012.

  2. Edit CCC "J" and Action Code "460" when any of the following conditions apply:

    • Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, is attached.

    • Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, is attached.

    • IRC 965 Transition Tax Statement (or similar statement), is attached (for TY2017).

    • A significant entry is present on any of the following forms and/or lines.

      Note:

      A significant entry is defined as any amount other than zero.

      Form Lines
      Form 1120
      • Schedule C, Line 15

      • Schedule J, Line 12

      • Schedule J, Line 22

      • Page 1, Line 32

      Form 1120-C
      • Schedule C, Line 15

      • Page 2, Line 29

      • Page 2, Line 30i

      Form 1120-L
      • Page 1, Line 27

      • Page 1, Line 28i

      Form 1120-PC
      • Page 1, Line 14

      • Page 1, Line 15d

      Form 1120-REIT
      • Page 2, Line 24

      • Page 2, Line 25h

      Form 1120-RIC
      • Page 2, Line 28

      • Page 2, Line 29i

  3. Do not issue correspondence on the return. ERS will correspond for any missing information, see IRM 3.11.16.2.12, Section 965 Returns.

CCC "K" - Form 8697
  1. Edit CCC "K" when Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, is attached and shows a balance due in Part I, Line 10 and/or Part II, Line 11. The tax will be claimed on Form 1120, Schedule J, Line 9c. If Form 8697 is missing, correspond for the missing form.

CCC "L" - Treaty Based Positions
  1. Edit CCC "L" when taxpayer writes "Section 6114 Election" on the return or Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or 7701(b), is attached.

    Note:

    Edit Audit Code "2" if Form 8833 is attached to Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, or Form 1120-RIC, see IRM 3.11.16.10.1, Audit Codes.

CCC "M" - Opportunity Zones
  1. Edit CCC "M" when:

    • Tax period ending is 201712 and later, and

    • Form 8949, Sales and Other Dispositions of Capital Assets, is attached and Form 8949, Column (f) has a code "Z" or "Y," see Figure 3.11.16-23.

    Note:

    Tax Cuts and Jobs Act of 2017, P.L. 115-97 (H.R. 1), Section 13823, Opportunity Zones. Taxpayers who elect to defer gain on the sale of an asset by investing in an Opportunity Zone Fund will indicate that they are deferring the gain by entering code "Z" or "Y" in Column (f).

CCC "N" - Joint Committee Case
  1. Edit CCC "N," Joint Committee Case, when an unusual credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed on:

    • Form 1120, Page 3, Schedule J, Lines 13 through 22 (Lines 12 through 19 for 2017-2011)

    • Form 1120-L, Page 6, Schedule K, Lines 5a through 5e

    • Form 1120-PC, Page 1, Lines 8a through 8e

    • Form 1120-FSC, Page 1, Lines 2a through 2g

    • Form 1120-SF, Page 1, Lines 16a through 16e

  2. Unusual credits are defined as follows:

    • Form 1120-PC, Line 15h states: By reciprocal for tax paid by Attorney in Fact under Section 835(d).

    • A credit claimed under IRC 1341 or a "Claim of Right" for refund of excessive prior year taxes.

    • Credits claimed under IRC 1383 in a later year for a refund of excessive prior year taxes.

  3. Usual credits are defined as follows:

    • A refundable credit normally found on Form 1120, Page 3, Schedule J, Lines 13 through 22 (Lines 12 through 19 for 2017-2011).

    • Form 7004 payment.

    • Estimated tax payments.

    • Credit from Regulated Investment Company.

    • Fuel Tax Credit present on Schedule J, Line 20b (Line 19b 2017-2011).

    • A refundable credit claimed with or without Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, are attached.

      Note:

      Form 8288-A credit must be verified by OSPC Foreign Team.

CCC "O" - Module Freeze
  1. CCC "O" is entered when a Pre-Settlement Manual Refund will be made and a Form 3753, Form 5792, or Form 12857 is attached. Verify that the name control, EIN, and tax period on the return are the same as the data on the form.

    1. Research to determine if "TC 840" (Manual Refund Transaction) has posted:

      If... Then...
      "TC 840" has posted, Edit CCC "O" and continue processing.
      "TC 840" has not posted,
      1. Enter Action Code "341" for:

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        to issue Manual Refund.

      2. All other returns edit CCC "U" and attach Form 4227, Intra-SC Reject or Routing Slip. Check the "Accounting" box on Form 4227.

  2. Edit CCC "O" if there is an entry on:

    1. Form 1120, Schedule J, Part II, Line 15 (Line 14 for 2017-2011).

    2. Form 1120-C, Line 30c (Line 29c for 2017 and prior).

    3. Form 1120-F, Line 5c.

    4. Form 1120-FSC, Line 2c.

    5. Form 1120-L, Line 27ce (Line 28d for 2022 through 2018) (Line 29e for 2017 and prior).

    6. Form 1120-ND, Line 14c.

    7. Form 1120-PC, Line 15c (Line 15e for 2022 through 2018) (Line 14e for 2017 and prior).

    8. Form 1120-REIT, Line 25c (Line 24c for 2017 and prior).

    9. Form 1120-RIC, Line 28c (Line 29c for 2022 through 2018) (Line 28c for 2017 and prior).

    10. Form 1120-SF, Line 16c.

  3. Edit CCC "O" when the Wage and Investment (W&I), Submission Processing (SP), Taxpayer Advocate Service (TAS) Liaison walks a return through C&E.

CCC "P" - Form 1118 - Foreign Tax Credit (Corporations)
  1. Edit CCC "P" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on any of the following lines:

    • Form 1120, Schedule J, Line 5a.

    • Form 1120-C, Schedule J, Line 5a.

    • Form 1120-REIT, Schedule J, Line 3a.

    • Form 1120-RIC, Schedule J, Line 3a.

♦CCC "Q" ♦
  1. No editing required.

♦CCC "R" - Reasonable Cause for Failing to File a Timely Return♦
  1. Do not edit CCC "R" when a reason is given for the delay in filing a return. Send Letter 1382C, Penalty Removal Request Incomplete, and continue editing the return, see IRM 3.11.16.3.4.2(4), Issuing Correspondence.

  2. Special Rules for Form 1120 Cooperatives: Certain non-farm Cooperative ("Co-Op" ) returns are filed on Form 1120 instead of the usual Cooperative Form 1120-C. These filers are entitled to a return due date on the 15th day of the ninth month following the close of the taxable year. Both CCC "R" and CCC "D" must be edited to returns identified as 1120 Cooperatives. Indication of this status is made by the taxpayer and may include the word "Cooperative" in the name, along with notations such as:

    • IRC 6072 (d) (2),

    • References to "Subchapter T" of the Internal Revenue Code ("IRC" ),

    • IRC 1381-1388 referenced,

    • IRS Regulations Section 1.6072-2(d) referenced.

      Note:

      If the word "Cooperative" is the only indicator, do not edit CCC "R." It must be used in addition to one or more of the other indicators named above.

  3. Edit CCC "R" if a corporation attaches a statement showing the corporation qualifies for an automatic 2 or 3 - month extension under 26 CFR 1.6081-5 (or regulations under IRC 6081), or the statement or return indicates one of the following:

    • The foreign corporation maintains an office or place of business in the United States.

      Note:

      It is not necessary to edit CCC "R" on Form 1120-F. The "Office or Place of Business Code" establishes the correct due date.

    • The domestic corporation transacts its business and keeps its books and records of account outside the United States and Puerto Rico, or

    • The domestic corporation's principal income is from sources within the possessions of the United States.

    Exception:

    Do not edit CCC "R" if the return is filed after the 15th day of the 6th month following the tax period ending date.

  4. Edit CCC "R" on a "Final" return if the received date is after the short period due date but on or before the regular full tax period due date≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  5. Edit CCC "R" on the return when any of the following conditions are present:

    • There is a sign such as "DO NOT ASSESS FAILURE TO FILE PENALTY" on a secured return annotated with "599."

    • If an internal use form or routing slip is attached and indicates do not assess failure to file penalty.

      Note:

      All "R" coded returns must have an IRS Received Date. If one is not present, edit the IRS Received Date in the middle of the return.

      Note:

      CCC "R" cannot be used with CCC "4."

CCC "S" - Form 8883, Asset Allocation Statement
  1. Edit CCC "S" when Form 8883 is attached to:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-FSC

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

    Reminder:

    Audit Code "3" will also apply when a Form 8883 is attached ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, see IRM 3.11.16.10.1, Audit Codes.

CCC "T" - Form 8886, Reportable Transaction Disclosure Statement
  1. Edit CCC "T" when Form 8886 is attached to:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-FSC

    • Form 1120-H

    • Form 1120-L

    • Form 1120-ND

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

    • Form 1120-SF

    Note:

    Edit Audit Code "1" if Form 8886 is attached, see IRM 3.11.16.10.1, Audit Codes.

CCC "U" - Unprocessable Document
  1. Edit CCC "U" on any of the following forms with an unprocessable condition:

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-SF

    Note:

    Action Codes are used for unprocessable conditions on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.

CCC "V" - Qualifying Therapeutic Discovery Project Credit
  1. No editing required.

♦CCC "W" - Return Cleared by Statute Control♦
  1. Edit CCC "W" when Statute Control cleared the return, see IRM 3.11.16.3.7, Statute Returns.

CCC "X" - Refund/Settlement Freeze
  1. Edit CCC "X" when the taxpayer indicates on the tax return a request that any balance left over after paying tax and/or penalties to be applied to another account. Take the following action to route the request to Accounts Management.

    1. Prepare Form 3465, Adjustment Request, and indicate in the "Routing" box "Adjustments."

    2. Notate the requested action in the "Remarks" box.

    3. Attach a photocopy of Page 1 of the tax return to Form 3465.

    Reminder:

    Subtract the tax, penalties and interest amounts from the remittance amount if available.

CCC "Y" - Short Period Return for Change of Accounting Period
  1. CCC "Y" is edited for Change of Accounting Period. Enter only for short period returns due to change of accounting period (not due to initial or final filing), see IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits.

  2. Edit the Tax Period Beginning in MMDDYY format per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. If a prepaid credit* is claimed on a short period return, enter Action Code "342" or CCC "U" on the return, see IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credit.

    • Form 1120, Page 3, Schedule J, Line 13, 14 or 17 (Line 12, 13, or 16 for 2017-2011) or applicable line on other Form 1120 series.

  4. Edit CCC "Y" when the Wage and Investment (W&I), Submission Processing (SP), Taxpayer Advocate Service (TAS) Liaison walks a return through C&E.

CCC "Z" - Schedule UTP (Form 1120 ), Uncertain Tax Position Statement
  1. Schedule UTP (Form 1120), Uncertain Tax Position Statement, is a high priority form.

  2. Edit CCC "Z" if Schedule UTP is attached to a Form 1120, Form 1120-F, Form 1120-L, or Form 1120-PC.

    Note:

    Do not edit CCC "Z" if Schedule UTP has no entries.

CCC "1" - Like-Kind Exchanges (and section 1043 conflict-of-Interest sales)
  1. Edit CCC "1" if Form 8824 is attached. CCC "1" is valid on:

    • Form 1120

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-REIT

    • Form 1120-SF

CCC "2" - Statement of Specified Foreign Financial Assets
  1. Edit CCC "2" if Form 8938, Statement of Foreign Financial Assets, is attached. (Form 1120 only), see IRM 3.11.16.11.37.10, Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets.

♦CCC "3" - "No Reply" to Correspondence♦
  1. Edit CCC "3" when the tax return is unprocessable and there is a sign that correspondence was sent and no reply received.

CCC "4" - IRC 6020(b) Return
  1. CCC "4" is not valid for Form 1120 series at this time.

CCC "5" - Bank Holding Company Tax Act
  1. Edit CCC "5" when there is a statement electing to make installment payments for a portion of the total tax attributable to the Bank Holding Company Tax Act, see Figure 3.11.16-10.

    Figure 3.11.16-10

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    Please click here for the text description of the image.

CCC "6" - Section 847 Deductions
  1. The instructions for CCC "6" only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed.

  2. Edit CCC "6" when any of the following is present:

    • Form 1120, Form 1120-L, or Form 1120-PC indicates a "Section 847 Deduction." Form 8816, also, indicates a "Section 847 Deduction," see IRM 3.11.16.3.10, IRC 847 Deduction.

    • Form 1120 includes a notation stating "Form 8816" with a corresponding entry for the amount of the deduction on Schedule J, Part III, Line 14 (Part II, Line 13 for 2017-2011).

    • Form 1120-L includes an entry on Line 28b for 2018 (Line 29b and/or 29d for 2017-2011).

    • Form 1120-PC includes an entry on Line 15b for 2018 (Line 14b and/or 14d for 2017-2011).

CCC "8" - Waiver of Estimated Tax Penalty
  1. Edit CCC "8" when any of the following is present:

    • Form 2220 is attached and Part II, Box 6 or Box 7 is checked, see Figure 3.11.16-11.

    • Form 2220 is attached and any column on Form 2220, Schedule A, page 4, Line 38 has entries.

    Figure 3.11.16-11

    This is an Image: 33500015.gif

    Please click here for the text description of the image.

CCC "9" - Low-Income Housing Credit
  1. Edit CCC "9" when any of the following conditions exist:

    • Form 1120, Schedule J, Line 9b has a significant entry.

    • Form 1120-C, Schedule J, Line 8 has a significant entry.

    • Form 1120-REIT or Form 1120-RIC, Schedule J, Line 9 (Line 7 for 2021 and 2022; Line 6 for 2020 and prior) has a significant entry.

    • Form 8611 is attached.

    • Form 8609 is attached.

    • Form 8609-A is attached.

    • Form 8586 with entries on Line 1 or 3.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1c of Form 1120.

  3. More than one RPC can be edited and in any order.

  4. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    A Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached.
    B Form 5471, Schedule H, Current Earnings and Profits, is attached.
    C Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, is attached.
    D Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached.
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    H Form 5472. Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, Part VIII, Cost Sharing Agreement, has an entry (e.g., description, checkbox marked, percent, or an amount).
    J For tax periods 202201 - 202212, taxpayer writes IRA22DPE on Form 3800, Form 1120, Schedule J, Line 20d or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, on an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement, is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction, is attached.
    N Form 4626, Alternative Minimum Tax (Revision 2023 and later ) is attached or Form 1120, Schedule J, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached.

ABLM Code and Schedule M-3 Checkbox

  1. ABLM is not an acronym. The letters are a carryover from when Form 1120 was generic. The ABLM Code identifies a specific type of tax return. The ABLM letters are defined as follows:

    • A - Consolidated Tax Return

    • B - Personal Service Corporation

    • L - Life Insurance Tax Return

    • M - Mutual Fund Tax Return

  2. ABLM Codes are valid for Form 1120, Form 1120-REIT, and Form 1120-RIC.

  3. Edit an ABLM code in the margin by Boxes A - 1, A - 2, and A - 3 to the left of the name line as instructed in paragraphs (4) through (7) below.

  4. There is no need to edit the ABLM Code on Form 1120-C, Form 1120-L or Form 1120-PC because it is computer-generated.

    Note:

    For Form 1120-REIT, and Form 1120-RIC, if no code applies, leave the area blank.

  5. If ABLM Code "010" is entered on Form 1120, the return must be batched as a "Consolidated Return." If not, reject for proper batching. Enter Action Code "610" if the return is numbered.

  6. Only one ABLM Code should be entered; edit in the following priority:

    • 400 - Box A - 3

    • 010 - Box A - 1a or A - 1b

    • 001 - Box A - 2

    Note:

    If ABLM Code "400" is edited on a Consolidated Return, Form 851 processing procedures must also be followed, see IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

  7. Code ""010" " when any of the following apply (Form 1120 only):

    1. Box A - 1a or Box A - 1b is checked, see Figure 3.11.16-12 a.

    2. Subsidiaries are listed on Form 851 or Form 1122 is attached.

  8. Code "001" when any of the following apply:

    1. Box A - 2, Page 1, Form 1120 is checked, see Figure 3.11.16-12 b.

    2. Box B - 2, Page 1, Form 1120-REIT is checked.

    3. Box F, Page 1, Form 1120-RIC is checked.

    4. Schedule PH (Form 1120) is attached to Form 1120, Form 1120-REIT, or Form 1120-RIC.

    5. Form 1120, Page 3, Schedule J, Line 8 has an entry.

    6. Form 1120-REIT, Page 3, Schedule J, Line 5 has an entry.

    7. Form 1120-RIC, Page 3, Schedule J, Line 5 has an entry.

    Note:

    If Form 1120, Schedule J, Line 8 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond. for Schedule PH if not attached, see IRM 3.11.16.11.17, Schedule J, Line 8 - Personal Holding Company Tax.
    (Form 1120-REIT or Form 1120-RIC, Schedule J, Line 5.)

  9. Code "400" when any of the following apply:

    1. Box A - 3, Page 1, Form 1120 is checked.

    2. The box on Form 1120, Page 3, Schedule J, Line 2 is checked (2017 and prior).

    Note:

    Also edit Personal Service Corporation Code "2" if the box on Form 1120, Page 3, Schedule J, Line 2 is checked (201811 and prior).

Schedule M-3 Checkbox
  1. Edit Computer Condition Code "B" when the box for Schedule M-3 is marked, see Figure 3.11.16-12 c.

    1. Form 1120, Page 1, Box A, 4.

    2. Form 1120-C, Page 1, Box A, 2.

    3. Form 1120-F, Page 1, Schedule M-3 box.

    4. Form 1120-L, Page 1, Box A, 3.

    5. Form 1120-PC, Page 1, Box A, 3.

  2. Edit Computer Condition Code "B" when Schedule M-3 is attached to Form 1120, Form 1120-C, Form 1120-F, Form 1120-L, or Form 1120-PC.

    Note:

    Audit Codes 2, "7" and "8" may also be required for Form 1120. Audit Code "2" may be required for Form 1120-PC, see IRM 3.11.16.10.1, Audit Codes.

    Figure 3.11.16-12

    This is an Image: 33500016.gif

    Please click here for the text description of the image.

Initial Return Code

  1. Initial Return Code is valid for Form 1120, Form 1120-REIT, and Form 1120-RIC.

  2. Edit an Initial Return Code "2" in the margin to the right of the Date Incorporated if any of the following conditions are met:

    1. The "Initial return" box under the entity area is checked.

    2. Page 1, Box B (1120-RIC), Box C (1120), Box D (1120-REIT) has a date incorporated which is within 12 months from the tax period ending date, see Figure 3.11.16-13a.

    3. There is a taxpayer notation of initial filing, such as, "New Corporation," etc.

    4. The incorporation date is within 24 months from the tax period ending date (or is not shown) and the taxpayer's Balance Sheet, "Beginning of tax year" is blank or zeros, see Figure 3.11.16-13"First Return" b.

      Reminder:

      Edit the Tax Period Beginning on an "Initial" Short Period return in MMDDYY format, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

      Note:

      Do not edit Initial Return Code "2" if the balance sheet is missing or the balance sheet has been dummied.

    Initial Return/ Tax Period Ending 24 Month Rule/24 Month Cutoff Date
    2403 04/01/2022
    2402 03/01/2022
    2401 02/01/2022
    2312 01/01/2022
    2311 12/01/2021
    2310 11/01/2021
    2309 10/01/2021
    2308 09/01/2021
    2307 08/01/2021
    2306 07/01/2021
    2305 06/01/2021
    2304 05/01/2021
    2303 04/01/2021
    2302 03/01/2021
    2301 02/01/2021
    2212 01/01/2021
    2211 12/01/2020
    2210 11/01/2020
    2209 10/01/2020
    2208 09/01/2020
    2207 08/01/2020
    2206 07/01/2020
    2205 06/01/2020
    2204 05/01/2020
    2203 04/01/2020
    2202 03/01/2020
    2201 02/01/2020
    2112 01/01/2020
    2111 12/01/2019
    2110 11/01/2019
    2109 10/01/2019
    2108 09/01/2019

    Figure 3.11.16-13

    This is an Image: 33500017.gif

    Please click here for the text description of the image.

Additional Return Perfection

  1. Elements will be edited in the left margin near Line 12 (Line 2 for Form 1120-F, Form 1120-FSC and Line 5 for Form 1120-ND) preceded by the applicable number as follows:

    Element... Edit...
    1 - Form 8844 Indicator "1 - 1."
    See IRM 3.11.16.11.15.1, Form 8844 - Empowerment Zone Employment Credit.
    2 - Audit Code "2 -" followed by the right Audit Code (e.g., "2 - 1" ).
    See IRM 3.11.16.10.1, Audit Codes.
    3 - Missing Schedule Code Normal correspondence procedures will replace Missing Schedule Codes. Do not edit Missing Schedule Codes.
    See IRM 3.11.16.3.4.2, Issuing Correspondence.
    4 - Penalty and Interest Code "4 - 1."
    See IRM 3.11.16.10.2, Penalty and Interest Code.
    5 - Reserve Code "5 - 4."
    See IRM 3.11.16.10.3, Reserve Code.
    6 - Installment Sale Indicator "6 -" followed by the right Installment Sale Indicator (e.g., "6 - 3" ).
    See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).
    7 - Form 1120-F Indicator "7 - 1" if Form 1120-F has both Non-Effectively (Section I) and Effectively (Section II) Connected Income.

    Note:

    Check for proper blocking of returns and re-block as required.
    See IRM 3.11.16.33.14.6, Form 1120-F Indicator.

Audit Codes

  1. Up to 15 Audit Codes can be used. Do not use an Audit Code more than once.

    Note:

    Audit Codes do not need to be edited in a specific order.

  2. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2 - 1" ).

    • (Line 2 for Form 1120-F, Form 1120-FSC and Line 5 for Form 1120-ND)

  3. Audit Code "1" - Disclosure Statement or Inconsistent Treatment. Edit Audit Code "1" if any of the following conditions are present:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) is attached.

    2. Form 8275, Disclosure Statement, or Form 8275-R, Regulated Disclosure Statement, is attached, or a statement referring specifically to IRC 6662 (Disclosure).

    3. Form 8886, Reportable Transaction Disclosure Statement, is attached.

      Note:

      Edit CCC "T" if Form 8886 is attached, see IRM 3.11.16.9.1.20, CCC "T" - Form 8886, Reportable Transaction Disclosure Statement.

  4. Audit Code "2" - International. Edit Audit Code "2" when any of the following conditions are present:

    1. An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ appears on Page 2, Schedule C, for any of the following Lines: 3, 6, 7, 8, 12, 13, 14, 15 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16 for 2017 and prior). (Form 1120-PC, Page 4, Schedule C, Lines 3, 6, 7, 8, 10, 11, 12a, 12b, 12c, 13, and/or 14. (Lines 3, 6, 7, 8, 10, 11, and/or 12 for 2017 and prior).

    2. Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation, is attached.

    3. Form 1116, Foreign Tax Credit (Individual, Fiduciary or Nonresident Alien Individual) is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit (Part IV, Line 29).

    4. Form 1118, Foreign Tax Credit - Corporations, is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Form 1120, Schedule J, Line 5a (or applicable line on Form 1120-L, Form 1120-PC, Form 1120-REIT, or Form 1120-RIC).

    5. Schedule M-3 (Form 1120), Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More, is attached and any of the following are present:
      - Any entry on Part II, Column (c), Lines 2 through 5 or 10 is a negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - Any entry on Part III, Column (c), Lines 5 through 7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - The sum of Part III, Columns (b) plus (c) of any of Lines 9 or 23 - 25 (Lines 8, 23, 24 or 25 for Form 1120-PC) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. Schedule N (Form 1120), Foreign Operations of U.S. Corporations, is attached and Questions 1a, 3, 5, or 7a are answered "Yes" (Questions 1a, 3, 4a, 5, or 7a for 2019 and prior).

    7. Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, is attached.

    8. Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner (under IRC 6048(b)), is attached.

    9. Form 5471, Information Return of U.S. Persons with Respect to a Foreign Corporation, is attached, or Schedule N (Form 1120), Foreign Operations of a U.S. Corporations, Line 4a (2019 and prior) is marked "Yes."

    10. Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code), is attached.

    11. Form 5713, International Boycott Report, is attached and both questions in 7(f) are answered "Yes."

    12. Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and any line in Part V, Lines 15a though 16f* has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    13. Form 8832, Entity Classification Election, is attached and either Box 6(d), (e), or (f) is checked.

    14. Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or 7701(b), is attached.

    15. Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs), is attached or Schedule N (Form 1120), Foreign Operations of U.S. Corporations, Question 1a is marked "Yes."

    16. Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, is attached.

    17. Form 8902, Alternative Tax on Qualifying Shipping Activities, is attached.

  5. Audit Code "3" - Non-Cash Charitable Contributions and Asset Transfers. Edit Audit Code "3" when any of the following conditions are present:

    1. Form 8883, Asset Allocation statement under section 338, is attached ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    2. Form 8594, Asset Acquisition Statement, is attached ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      Note:

      It is not necessary to compute the total if more than one Form 8594 is present. If any ONE of the Form 8594 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, edit Audit Code "3."

  6. Audit Code "4" - Invalid S Election. Edit Audit Code "4" when a Form 1120-S without a valid election is reprocessed as Form 1120 and Form 13596, Reprocessing Returns, is attached.

    Caution:

    If a Form 1120 converted from Form 1120-S is received and the Form 13596, Reprocessing Returns, is attached for reprocessing, see IRM 3.11.16.3.8.2, Form 13596 - Reprocessing Returns.

  7. Audit Code"6" - Form 3115 (Form 1120 only). Edit Audit Code "6" when Form 3115, Application for Change in Accounting Method, is attached.

  8. Audit Code"7" - International (Form 1120 only). Edit Audit Code "7" when any of the following conditions are present:

    1. An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120, Page 2, Schedule C for any of the following lines: 3, 6, 7, 8, 12, 13, 14, 15, 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15, or 16 for 2017 and prior).

    2. Form 1116, Foreign Tax Credit, (Individual, Fiduciary or Nonresident Alien Individual) is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Part IV, Line 33.

    3. Form 1118, Foreign Tax Credit - Corporations, is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Form 1120, Schedule J, Line 5a.

    4. Form 1120, Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More, is attached and any of the following apply:
      - Any entry on Part II, Column (c), Lines 2 through 5 or Line 10 is a negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - Any entry on Part III, Column (c), Lines 5 through 7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - The sum of Part III, Columns (b) plus (c) of any of Lines 9, 23, 24, or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    5. Form 5713, International Boycott Report, is attached and both questions in 7(f) are not answered "Yes."

    6. Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and Part V, Lines 15a through 16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  9. Audit Code""8" " - Schedule M-3 (Form 1120 only). Edit Audit Code "8" when Schedule M-3 is attached.

  10. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

Penalty and Interest Code

  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    • Line 2 for Form 1120-F, Form 1120-FSC and Line 5 for Form 1120-ND

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated tax penalty, do not Code "4 - 1" and do not edit Condition Code "R."

    Note:

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

Reserve Code

  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Installment Sale Indicator (Form 6252)

  1. Form 6252, Installment Sale Income, is used to report the sale of property on the installment plan.

  2. Codes are based solely on taxpayer response to Form 6252, Question 3.

  3. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252 is present (e.g., "6 - 1" ).

    • (Line 2 for Form 1120-F and Form 1120-FSC.)

  4. Valid Installment Sale Indicator codes are as follows:

    Code One Form 6252 More Than One Form 6252
    1 "Yes" response to Question 3 At least one form has a "Yes" response.
    2 "No" response to Question 3 All "No" responses, or a combination of "No" and/or blank responses.
    3 "Yes" and "No" are checked or Question 3 is blank Question 3 is blank on all forms.

    Note:

    See IRM 3.11.16.25, Form 6252 - Installment Sale Income (Form 1120 Only) for sequencing and transcription instructions.

Form 1120-F Indicator

  1. Edit "7 - 1" in the left margin near Line 2 if Form 1120-F has both Non-Effectively (Section I) and Effectively (Section II) Connected Income.

  2. Check for proper blocking of returns and re-block as required, see IRM 3.11.16.33.14.6, Form 1120-F Indicator Code.

Return Processing - Form 1120

  1. This subsection addresses the editing of specific areas on Form 1120.

  2. If a Form 5472 is attached to a blank (no tax data), Form 1120, do not process. Send the Form 1120 and Form 5472 to SOI at the following address:

    Internal Revenue Service
    1973 N Rulon White Blvd.
    PIN Unit, Stop 6112
    Ogden, UT 84201-0012

    Note:

    Consider a return blank if the only money amount is Box D, Total Assets.

    Note:

    Foreign-owned domestic disregarded entities are instructed to attach the Form 5472 to a pro forma Form 1120. These entities are not required to file a Form 1120 and the return must not be processed.

  3. A Form 1120 series with a notation such as "Pro Forma," "Pro Forma Form 1120," "Pro Forma Form 1120 for New York State," or similar statement, the "Pro Forma" return must not be processed.

    If... Then...
    A "Pro Forma" return is attached to a Form 1120 series, Do not detach. Move the "Pro Forma" return to the back of the document.
    A "Pro Forma" return is not attached to a Form 1120 series,
    1. DO NOT edit the return.

    2. Route to Correspondence to be returned to the taxpayer.

    3. Use Letter 3064C, IDRS Special Letter and include the following in the open paragraph:
      "The attached form appears to have been sent to us in error. Please keep it for your tax records."

  4. To convert prior year tax returns, see Exhibit 3.11.16-3, Form 1120 - Prior Year Conversion Chart.

Sequence - Form 1120

  1. Document Perfection is responsible for arranging Form 1120 in the following order when transcription line entries are present:

    • Pages 1, 2, 3, 4, 5, 6

    • Schedule N (Form 1120)

    • Schedule D (Form 1120)

    • Form 4797

    • Form 8949

    • Form 8996

    • Schedule O (Form 1120) (Tax periods 201811 and prior only)

    • Form 4626 (Tax periods 201811 and prior only (Revision 2017))

    • Form 4626 (Tax periods 2022 and later (Revision 2023)

    • Form 8050

    • Form 1125-A

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

    • Form 8997

    • Form 6252

    • Form 8936, Schedule A

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

Negative Figures

  1. On Page 1 of the Form 1120:

    1. Do not bracket or "X" the amount on Line 1b if negative.

    2. If editing a negative entry on Lines 1b, 2, 9, 10, 11, 15, 26, and 27, bracket the negative amount.

  2. Line 8 will NEVER be bracketed. "X" any negative entry on Line 8, see IRM 3.11.16.11.4.7, Line 8 - Capital Gain.

  3. Do not bracket Lines 29a and 29b.

  4. "X" any negative transcription entries on Pages 2 and 3 of the Form 1120.

  5. Page 6 (Page 5 for 2017 and prior), "Schedule L, Balance Sheet," see IRM 3.11.16.11.36, Schedule L, Balance Sheet.

  6. Form 4626, Alternative Minimum Tax, (201811 and prior), see IRM 3.11.16.13, Form 4626 - Alternative Minimum Tax.

  7. Form 4136, Credit for Federal Tax Paid on Fuels - "X" any negative entries, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Total Assets - Box D

  1. Total Assets is shown in Box D of Form 1120.

  2. If Total Assets, Box D is blank, check the Balance Sheet and edit Total Assets Ending from Schedule L, Line 15, Column (d) to Total Assets, Box D, Page 1. Bracket if negative, see Figure 3.11.16-14.

    Note:

    It is not necessary to edit a "1" in Box D even if it is edited on Schedule L, Line 15, Column (d). The "1" is needed on Schedule L, Line 15, Column (d) to prevent Error Code 150 from generating in ERS.

    Figure 3.11.16-14

    This is an Image: 33500018.gif

    Please click here for the text description of the image.

Form 1120, Total Income - Lines 1 through 11

  1. The following subsection provides editing instructions for Form 1120, Lines 1 through 11. Edit Lines 1 through 11 in dollars only.

  2. If Line 11 is the only entry in the income section or the income section is blank and there is a sign the income items are included on an attachment (e.g., a notation such as "See attached," "See Schedule F," "Statement attached" ), examine the return for more detailed schedules.

    If... And... Then...
    Additional income is found The income is not reflected elsewhere on the return,
    • Edit the income to the right transcription line(s).

    • For Schedule F transfer lines, see Exhibit 3.11.16-18, Schedule F - Transfer Lines.

Line 1 - Gross Receipts or Sales
  1. Line 1a is Gross Receipts or Sales, and Line 1b is Returns and allowances (Do not bracket or "X" amount on Line 1b if negative).

  2. If Lines 1a, 1b and 1c are all blank but the taxpayer indicates Gross Profit on Line 3, add Line 2 and Line 3 and enter on Line 1a. Bracket if negative.

    Exception:

    If Line 2 is blank, see IRM 3.11.16.11.4.2, Line 2 - Cost of Goods Sold, before computing Line 1a.

  3. If Line 1a is blank and an amount is present on Lines 1b and 1c, add Line 1b and Line 1c and enter the total amount on Line 1a. Bracket if negative.

  4. If Line 1b is blank, check attachments.

    1. If found, enter the amount to Line 1b.

    2. If not found and Line 1a is greater than Line 1c, compute and enter Line 1b (Line 1a minus 1c).

Line 2 - Cost of Goods Sold
  1. If Line 2 is blank, edit from Form 1125-A, Line 8. Bracket if negative.

    If... Then...
    Form 1125-A, Line 8 is blank and Line 6 has an entry, Edit the amount from Line 6, minus any amount on Line 7.
    Form 1125-A, Line 6 is blank and there are entries on Lines 1 through 5, Edit the total of Lines 1 through 5 minus any amount on Line 7.

Line 4 - Dividends and Inclusions
  1. Accept taxpayer's entry.

Line 5 - Interest
  1. Accept taxpayer's entry.

Line 6 - Gross Rents
  1. Accept taxpayer's entry.

Line 7 - Gross Royalties
  1. Accept taxpayer's entry.

Line 8 - Capital Gain
  1. If there is a significant entry on Line 8, and Schedule D (Form 1120) is not attached, correspond.

  2. When Schedule D is attached, compare Form 1120, Line 8 to Schedule D, Line 18:

    If... And... Then...
    The comparison shows the entries are the same, Both entries are positive, Continue processing.
    The comparison shows the entries are different, Both entries are positive, Edit the Schedule D, Line 18 amount to Form 1120, Page 1, Line 8.
    Form 1120, Line 8 is blank, zero or illegible, Schedule D, Line 18 is positive, Edit the Schedule D, Line 18 amount to Form 1120, Page 1, Line 8.

  3. If the comparison shows a negative entry:

    1. "X" the Line 8 amount.

    2. Math verify and perfect Schedule D to ensure the negative figure is correct and intended.

    3. If the negative amount is due to a loss under IRC 582 for worthlessness of bonds, move the amount to Bad Debts (Form 1120, Page 1, Line 15) as a positive figure. Adjust Total Income and Total Deductions as required.

    4. If the negative amount is due to a loss under IRC 582 for the sale or exchange of securities by a bank, etc., move the amount to Other Deductions (Form 1120, Page 1, Line 26) as a positive figure. Adjust Total Income and Total Deductions as required.

      Note:

      All other losses on Schedule D will not be allowed.

Line 9 - Net Gain or Loss from Form 4797
  1. Edit Line 9 as follows:

    Reminder:

    Form 4797 is a transcribed form. Place in sequence order if attached to a Form 1120 and Line 1b and/or 1c is present. See IRM 3.11.16.15, Form 4797 - Sales of Business Property (Form 1120 Only).

    If... Then...
    Form 1120, Page 1, Line 9, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, Correspond.
    Form 4797 is attached, compare Form 1120, Page 1, Line 9 with Form 4797, Line 17, If different, edit Form 4797 amount to Form 1120, Page 1, Line 9. Bracket if negative.
    Form 4797, Line 17 is blank (has not been computed by the taxpayer) and there are entries in Parts II or III of Form 4797, Correspond for completed Form 4797.

  2. Check for taxpayer errors in the transfer of entries from Form 4797 to Page 1, Form 1120. Also check the transfer of data from Line 9, Form 4797 to Line 11, Schedule D.

    If... And... Then...
    Form 1120, Page 1, Line 8 is blank, There is a positive entry on Form 1120, Page 1, Line 9 and Form 4797, Line 9 has a significant positive entry, Arrow Form 1120, Line 9 entry to Line 8 and correspond for Schedule D.
    See Figure 3.11.16-15.
    There is a notation on Form 1120, Page 1, Line 9 that Form 4684 is attached,   Do not correspond. Compare Form 1120, Page 1, Line 9 with Form 4684, Line 31 plus 38a. If different, edit Form 4684 amount to Line 9, Form 1120.

    Figure 3.11.16-15

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Line 10 - Other Income
  1. Other income or loss not shown on Lines 1a through 9 is reported on Line 10 of Form 1120.

  2. Edit Line 10 as follows:

    If... Then...
    "Other Income" items are included on Lines 1 through 9,
    • Add all the "Other Income" items and include in Line 10.

    • Bracket if negative.

Line 11 - Total Income
  1. The total income or loss (sum of Lines 3 through 10) is reported on Line 11 of Form 1120.

  2. Edit Line 11 as follows:

    If... Then...
    Line 11 is blank or illegible, but there are entries on Lines 1a through 10,
    • Compute and edit Line 11.

    • Bracket if negative.

    Line 11 is the only entry in the income section,
    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-18, Schedule F - Transfer Lines.

    The income section is blank and there is a sign the income items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ),
    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-18, Schedule F - Transfer Lines.

    There is an amount present for "Total Income" on Line 11, but the amount is not identified on Lines 1a through 10 or from attachments,
    • Edit the Line 11 amount to Line 10.

    • Bracket if negative.

Form 1120, Deduction Items - Lines 12 through 29

  1. Edit Lines 12 through 29 in dollars only.

  2. If Line 27 is the only entry in the deduction section or the deduction section is blank and there is a sign the deduction items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ), examine the return for more detailed schedules.

    If... And... Then...
    Additional deductions are found The deductions are not reflected elsewhere on the return,
    • Edit the deductions to the right transcription lines (Lines 12 through 26).

    • See Schedule F - Transfer Lines, Figure 3.11.16-16.

    Figure 3.11.16-16

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Line 12 - Compensation of Officers
  1. Accept taxpayer's entry.

Line 13 - Salaries and Wages (less employment credits)
  1. Accept taxpayer's entry.

Line 14 - Repairs and Maintenance
  1. Accept taxpayer's entry.

Line 15 - Bad Debts
  1. Accept taxpayer's entry.

Line 16 - Rents
  1. Accept taxpayer's entry.

Line 17 - Taxes and Licenses
  1. Accept taxpayer's entry.

Line 18 - Interest
  1. Accept taxpayer's entry.

Line 19 - Charitable Contributions
  1. Accept taxpayer's entry.

Line 20 - Depreciation
  1. Accept taxpayer's entry.

Line 21 - Depletion
  1. Accept taxpayer's entry.

Line 22 - Advertising
  1. Accept taxpayer's entry.

Line 23 - Pension, Profit-sharing, etc. Plans
  1. Accept taxpayer's entry.

Line 24 - Employee Benefit Programs
  1. Accept taxpayer's entry.

Line 25 - Energy Efficient Commercial Buildings Deduction (Form 7205) (202301 and later)
  1. Accept taxpayer entry.

  2. Edit RPC "M" if Form 7205 is attached.

  3. For prior years, Line 25 was used for the domestic production activities deduction. The deduction has been repealed under IRC 199.

  4. The Domestic Production Activities Deduction is valid for tax periods beginning 01/01/2005 through 01/01/2018. The Energy Efficiency Commercial Buildings Deduction is valid for tax periods beginning after 01/01/2023. If the tax period beginning date is not between 01/01/2005 and 01/01/2018 nor after 01/01/2023, or 202301 and later (Energy Efficient Commercial Building Deduction), delete Line 25 if a significant entry is present.

Line 26 - Other Deductions
  1. Other deductions not shown on Lines 12 through 25 are reported on Line 26 of Form 1120.

  2. Edit Line 26 as follows:

    If... Then...
    "Other Deductions" items are included on Lines 12 through 25,
    1. Add the "Other Deductions" entries and edit the total to Line 26. Bracket if negative.

    2. "X" the "Other Deductions" items from Lines 12 through 25.

Line 27 - Total Deductions
  1. The total deductions (sum of Lines 12 through 26) is reported on Line 27 of Form 1120.

  2. Edit Line 27 as follows:

    If... Then...
    Line 27 is blank or illegible but there are entries on Lines 12 through 26, Add Lines 12 through 26 and enter the total on Line 27 of Form 1120. Bracket if negative.
    Line 27 is the only entry in the deduction section,
    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-18, Schedule F - Transfer Lines.

    The deduction section is blank and there is a sign the deduction items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ),
    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-18, Schedule F - Transfer Lines.

    There is an amount present for "Total Deductions" on Line 27, but the amount is not identified on Lines 12 through 26 or from attachments,
    • Edit the Line 27 amount to Line 26 of Form 1120.

    • Bracket if negative.

Lines 29a and 29b - Net Operating Loss and Special Deductions
  1. Never bracket Line 29a or 29b amounts as they are negative fields. Do not "X" these lines if they are bracketed by taxpayer.

  2. If it is obvious from a notation on Line 29b that it includes patronage dividends, edit patronage dividends from Line 29b to Line 26, "Other Deductions," and adjust Line 27, "Total Deductions," see Figure 3.11.16-17.

  3. If Line 29c has an entry and Lines 29a and 29b are blank, look for an entry on Schedule C, Line 24, Column (c) (Schedule C, Line 20 for 2017 and prior). If present, enter the amount on Line 29b and edit any difference to Line 29a. If blank or zero, edit the entire Line 29c amount to Line 29a.

    Figure 3.11.16-17

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Tax Computation and Settlement - Lines 31 through 37

  1. Following are instructions for Lines 31 through 37. Edit in dollars only.

Line 31 - Total Tax
  1. If blank, enter amount from Page 3, Schedule J, Line 11 if present.

  2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 31.

    If... Then...
    The amount on Line 31 has pre-computed interest or penalty or additional charge,
    1. "X" the Line 31 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct total tax to the left of the original entry.

Line 32 - Reserved
  1. Line 32 - Net Tax Liability for the Reporting Year (revisions 2018 through 2020),

  2. The instructions in this subsection only apply to tax periods 201712 through 202012.

  3. If blank, enter amount from Schedule J, Part II, Line 12 or from the following lines from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (k), Line 1
    2018 Part II, Column (k), Line 2
    2019 Part II, Column (k), Line 3
    2020 Part II, Column (k), Line 4

  4. Edit CCC "J" and Action Code "460."

Line 33 - Total Payments and Credits (Schedule J, Part III, Line 23)
  1. If blank, enter amount from Page 3, Schedule J, Line 23 (Line 21 for 2017-2011) if present.

Backup Withholding
  1. "X" any entry identified by the taxpayer as "Backup Withholding" and edit it to Part III, Schedule J, Line 18 (Part II, Line 17 for 2017-2011).

  2. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

FIRPTA, Form 1042-S, Form 8805 and Form 8288-A Credits
  1. If Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Form 8805, Foreign Partners Information Statement of IRC 1446 Withholding Tax, or Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, credit is claimed, route to OSPC.

  2. If Form 8288-A withholding is claimed, OSPC will:

    If ... Then ...
    Form 8288-A or substantial evidence is attached,

    Example:

    Substantial evidence includes closing documents or settlement statement which shows the amount of tax withheld.

    1. Use Form 13698, International Credit(s) Verification Slip, to request verification of credit from the Foreign Team.

    2. If the credits are verified from the FIRPTA database by the Foreign Team, "X" the amount entered by the taxpayer and edit the verified FIRPTA/8288-A credit from Form 13698 to the bottom center of Form 1120, Page 1. See Figure 3.11.16-18, FIRPTA and Form 1042-S Credit.

    3. If FIRPTA/8288-A credits are not verified, disallow.

    4. If another credit is claimed on the same line with the Form 8288-A credit, adjust the line total to only reflect the other credit.

    Form 8288-A or substantial evidence is not attached,

    Example:

    Substantial evidence includes closing documents or settlement statement which shows the amount of tax withheld.

    Correspond.

  3. If Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, withholding is claimed, OSPC will:

    If ... Then ...
    The Form 1042-S credit is claimed on any other credit line, "X" the credit and add to Schedule J, Line 20a (Line 19a for 2017-2011).
    See Figure 3.11.16-19.
    The taxpayer's name is not listed as the recipient in Box 13a of the Form 1042-S,

    Note:

    Box 13a cannot be a withholding rate pool,

    "X" the amount.
    The withholding amounts on Form 1042-S do not equal the amount of the credit, "X" the amount.
    Form 1042-S is not attached, Correspond.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

  4. If Form 8805 withholding is claimed, OSPC will:

    If ... Then ...
    The Form 8805 credit is claimed on any other credit line, Edit the credit to Schedule J, Line 20a (Line 19a for 2017-2011).
    Form 8805 is not attached, Correspond.

    Figure 3.11.16-18

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    Figure 3.11.16-19

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Line 34 - Estimated Tax Penalty
  1. Estimated tax penalty must be edited when either:

    1. An additional penalty is precomputed on the return, or

    2. Form 2220, Underpayment of Estimated Income Tax by Corporations, is attached to the return, and shows liability for estimated tax penalty.

  2. To edit Line 34 (Line 33 for 2017 and prior), do the following:

    1. If the taxpayer follows the instructions on Form 2220, the applicable amount must be shown on Form 2220, Page 2, Line 38, and on Form 1120, Line 34 (Line 33 for 2017 and prior) or equivalent lines on other forms. The taxpayer may also have increased Form 1120, Line 35 (Line 34 for 2017 and prior) or decreased Line 36 (Line 35 for 2017 and prior). Do not adjust this amount.

    2. If Form 1120, Line 34 (Line 33 for 2017 and prior) is blank, edit the amount from Form 2220, Page 2, Line 38 to Form 1120, Line 34 (Line 33 for 2017 and prior).

    3. If Form 2220, Page 2, Line 38 is blank and Form 1120, Line 34 (Line 33 for 2017 and prior) is also blank, review the Form 2220 to determine the taxpayer's method of computation. If there are entries on Form 2220, Line 37, Columns (a) through (d), compute the total amount and enter on Form 1120, Line 34 (Line 33 for 2017 and prior), see Figure 3.11.16-20.

      Note:

      If Form 2220 is attached some conditions may require CCC "8" and/or Reserve Code "4."

    Figure 3.11.16-20

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Lines 35 and 36 - Amount Owed/Overpayment
  1. Lines 35 and 36 (Lines 34 and 35, for 2017 and prior) are edited as positive only. If the taxpayer enters a negative amount, do not bracket.

  2. If both lines 35 or 36 (Lines 34 and 35 for 2017 and prior) are blank, edit as follows:

    Form 1120 Revision Action
    2021 and later
    1. Add Lines 31 and 34.

    2. Subtract Line 33.

    3. Edit the positive result on Line 35 or the negative result (do not bracket) on Line 36.

    2020 through 2018
    1. Add Lines 31, 32 and 34.

    2. Subtract Line 33.

    3. Edit the positive result on Line 35 or the negative result (do not bracket) on Line 36.

    2017 and prior
    1. Add Lines 31 and 32.

    2. Subtract Line 33.

    3. Edit the positive result on Line 34 or the negative result (do not bracket) on Line 35.

  3. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 35 or reduced Line 36 (Lines 34 and 35 for 2017 and prior).

    If... Then...
    The amount on Line 35 (Line 34 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 35 amount.

    2. Delete the interest, penalty or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 36 (Line 35 for 2017 and prior) is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 36 (Line 35 for 2017 and prior) amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

Line 37 - Credit to Estimated Tax
  1. Line 37 (Line 36 for 2017 and prior) - (Center) Overpayment Credit to Estimated Tax.

♦Signature♦

  1. A signature and jurat are required on all returns except the following:

    • Returns prepared under IRC 6020(b). These returns must be signed by a Compliance Function representative, see IRM 3.11.16.3.6.1, IRC 6020(b) Prepared by Collections.

      Note:

      Accept electronic or typed revenue officer (RO) signatures as valid on the return.

    • Returns prepared by Examination, for example Substitute for Return.(SFR) or "SUBSTITUTE RETURN," see IRM 3.11.16.3.6.3, Examination Prepared Returns - SFR or Substitute for Return.

    • Dummy returns prepared by IRS.

    • Returns filed under IRC 501(d) (Religious or Apostolic Organization).

    • Returns attached to taxpayer response to IRS correspondence containing a jurat and the taxpayer’s signature. (See paragraph (5) below.)

    • Re-entry returns originally filed electronically ("E-File" ). These returns may be identified by the presence of Mod E-file printouts or TRPRT prints in lieu of an actual return.

      Note:

      If the TRPRT print states "TRPRT Print Do Not Process" in the top margin, circle the words "Do Not Process."

    • Form 1120-X, with a signature on the line designated for the taxpayer's signature is attached to Form 1120. Form 1120-X must be for the same tax period as Form 1120.

  2. Do not correspond for a signature on "CII" tax returns with a Form 13596, Reprocessing Returns, attached. For processing instructions, see IRM 3.11.16.3.4.3, Correspondence Imaging Inventory (CII) Returns.

  3. If a signature is missing, correspond:

    Note:

    See IRM 3.11.16.3.4.2, Issuing Correspondence, for returns that are incomplete and appear to be duplicate filings.

    If... Then...
    • The return is not signed on the line designated for the taxpayer's signature,

    or
    • The jurat is not present on the line designated for the taxpayer's signature (a non-standard tax return),

    or
    • Only the Entity information is present and there are no attachments having tax data,

    1. Edit:

      • Action Code "225" (Correspondence for Signature only) or "226" (International Correspondence for Signature only) for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT and Form 1120-RIC.

      • CCC "U" for all other 1120 series. Attach Form 4227, Intra-SC Reject or Routing Slip, notating "Signature missing."

    2. Leave in batch and continue editing.

    Note:

    Paper returns stating the return was rejected through the E-file system require a signature. Form 8879-CORP, E-file Authorization for Corporations, is not an acceptable signature substitute for a paper return (Form 8879-C/ Form 8879-I for 2021 and prior).

  4. If the jurat is altered or stricken (crossed out), see IRM 3.11.16.2.6, Frivolous Arguments.

  5. Accept a "signature declaration" (a signature with jurat obtained through IRS correspondence) if attached to the tax return.

    1. If the "signature declaration" is altered or stricken (crossed out), see IRM 3.11.16.2.6, Frivolous Arguments.

    2. If the taxpayer responds with a self-prepared "signature declaration," it must have the same language as the jurat on the tax return: e.g., "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT, AND COMPLETE."

    3. Form 8879-CORP, E-file Authorization for Corporations, is not an acceptable signature substitute for a paper return ( Form 8879-C/Form 8879-I for 2021 and prior).

  6. Tax examiners are not handwriting experts. 26 CFR 301.6064-1 allows the Service to presume that the signature on the tax return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    Do not accept a “✓” or “X” on the signature line as a valid taxpayer signature.

  7. The following types of signatures are not valid for corporate returns:

    • Faxed signatures

      Exception:

      Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, faxed signatures are acceptable.

    • Electronic signatures

    • Docusign digital signatures

    • Typed font Signature

    Exception:

    If one of the following returns are mailed between August 28, 2020 through October 31, 2023, accept a digital signature.

    • Form 1120-C

    • Form 1120-H

    • Form 1120-IC-DISC

    • Form 1120-FSC

    • Form 1120-L

    • Form 1120-ND

    • Form 1120-PC

    • Form 1120-RIC

    • Form 1120-REIT

    • Form 1120-SF

  8. Correspond one time for the signature.

♦Paid Preparer Checkbox Indicator♦

  1. The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the taxpayer has elected to allow the Paid Preparer to answer questions about the return as it is processed.

  2. No action is required on amended returns.

  3. Take the following actions when an entry is present in the Paid Preparer Checkbox:

    If... Then...
    Only the "Yes" box is checked, Take no action.
    • The "No" box is checked,

    • Neither box is checked; or

    • Both boxes are checked,

    Circle the Paid Preparer's Phone Number if present.

♦Paid Preparer Section♦

  1. The Paid Preparer section is located below the Signature area at the bottom of Form 1120.

♦Paid Preparer Tax Identification Number (PTIN)♦
  1. The Paid Preparer's Social Security Number (SSN) or Preparer's Tax Identification Number (PTIN) is located to the right of the Preparer's Signature in the PTIN box at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. A valid PTIN begins with a "P," followed by an eight digit number (e.g., PXXXXXXXX). Circle the SSN/PTIN if it is invalid, all zeros or all nines.

♦Paid Preparer EIN♦
  1. The Preparer's EIN is located below the PTIN box at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. The Preparer's EIN is a nine digit number. Circle the EIN if all zeros or all nines.

♦Paid Preparer Phone Number♦
  1. The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right hand corner of Form 1120.

  2. If the return is amended, no action is required.

  3. If the Preparer's Phone Number is more than 10 digits, no action is required.

  4. If the Preparer's Phone Number is illegible or less than 10 digits, circle the Phone Number.

Schedule C, Page 2 - Dividends, Inclusions and Special Deductions

  1. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14, 15, 16a, 16b, 16c, 17, 18, and/or 19, edit Audit Code "2."

    Note:

    For 2017 and prior, Schedule C, Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16.

  2. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14,15, 16a, 16b, 16c, 17, 18, and/or 19, edit Audit Code "7."

    Note:

    For 2017 and prior, Schedule C, Lines 3, 6, 7, 8, 12, 13,14, 15, and/or 16.

Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation (201811 and prior)

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Personal Service Corporation Code "2" above the checkbox on Line 1, Page 3, Schedule J if the Qualified Personal Service Corporation box located on Page 3, Schedule J, Line 2 is checked.

    Note:

    If the box on Schedule J, Line 2 is checked, edit ABLM Code "400" on Form 1120, Page 1, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  3. Personal Service Corporation Code "2" takes priority over Controlled Group Codes "4" and "1" (described below).

  4. If both the Schedule J, Line 2 box and the Schedule J, Line 1 box are checked, edit Personal Service Corporation Code "2" and delete Schedule O (Form 1120) if significant entries are present.

  5. Edit Controlled Group Code "4" above the checkbox on Line 1, Page 3, Schedule J when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ at least one of the following is present:

    1. The box on Page 3, Schedule J, Line 1 is checked.

    2. There is a sign that the taxpayer is a member of a controlled group as defined in IRC 1561 or IRC 1563.

    3. Schedule O (Form 1120), Box 3a, 3b, 3d, or 5b is checked.

    4. An allocation/apportionment schedule is attached. Some examples of the title of these schedules may be "apportionment plan," "apportionment consent plan," "consent to apportionment," "controlled group tax apportionment plan," "surtax apportionment plan," or "allocation schedule." Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

      Note:

      If there is any doubt whether an attachment is a "Surtax Apportionment Plan," refer the document to the lead tax examiner.

  6. Edit Controlled Group Code "1" above the checkbox on Line 1, Page 3, Schedule J when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ any of Code "4" conditions in paragraph (5)a through (5)d are present.

  7. If Controlled Group Code "4" or "1" is edited, process Schedule O (Form 1120), see IRM 3.11.16.11.38, Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group.

  8. If neither Controlled Group Code "4" or "1" is edited, delete Schedule O (Form 1120) if significant entries are present.

Schedule J, Line 2 - Base Erosion Tax or Alternative Minimum Tax (prior year)

  1. Follow the instructions below for Schedule J, Line 2 (Line 3 for 2022 and prior):

    If ... And ... Then ...
    Tax period is 201811 and prior, Schedule J, Line 3 is blank and Form 4626 (revision 2017 and prior) is attached with an amount on Line 14, Edit the amount from Line 14, Form 4626 to Schedule J, Line 2 (Line 3 for 2022 and prior).
    Tax period is 201811 and prior, Schedule J, Line 3 has a significant entry and Form 4626 (revision 2017 and prior) is not attached, Correspond.
    Tax period is 201812 and later, Schedule J, Line 2 (Line 3 for 2022 and prior) is blank and Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached, Do the following:
    1. Edit RPC "1"

    2. Edit the amount from Form 8991, Line 5e to Schedule J, Line 2 (Line 3 for 2022 and prior).

    Tax period is 201812 and later, Schedule J, Line 2 (Line 3 for 2022 and prior) has a significant entry and Form 8991 is not attached, Correspond.

Schedule J, Line 3 - Corporate Alternative Minimum Tax (CAMT) (tax period 202301 and later)

  1. Edit RPC "N " if there is a significant amount on Schedule J, Line 3 or Form 4626 (revision 2023 and later) is attached.

  2. Correspond If a significant amount is present on Schedule J, Line 3, and Form 4626 (revision 2023 and later) is not attached.

Schedule J, Lines 5a and 5b - Credits

  1. The following general instructions apply to Schedule J, Lines 5a and 5b only:

    1. If supporting documentation is missing for one or more credits ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond.

Schedule J, Line 5a - Form 1118, Foreign Tax Credit
  1. If Schedule J, Line 5a, Foreign Tax Credit has an entry, check for Form 1118 or similar statement:

    If... Then...
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1118 is missing, Correspond.
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit CCC "P."
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2."
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "7."

Schedule J, Line 5b - Form 8834 Credit and Form 5735
  1. Schedule J, Line 5b, includes credits from Form 8834, Qualified Electric Vehicle Credit, and/or a write-in credit from Form 5735, American Samoa Economic Development Credit. If the Line 5b entry or the write-in entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present, take the following action:

    If... And... Then...
    The entry is for Form 8834
    (Form 5735 is not shown)
    Form 8834 is missing, Correspond.
    The entry is for Form 5735
    (Form 5735 is shown)
    Form 5735 is missing, Correspond.

Schedule J, Line 5c - General Business Credit (202301 and later)

  1. Per the Inflation Reduction Act of 2022 and the CHIPS and Science Act of 2022, the Form 3800 has changed significantly.

  2. For prior year returns, transcription of some credits is no longer needed. If a prior year return has significant amounts on Lines 1d, 1g, 1o, 1q, 1u, 1v, 1z, 1aa or 1bb, no editing is required. See Exhibit 3.11.16-14 for complete conversion instructions.

  3. Question A - Corporate Alternative Minimum Tax (CAMT) and Base Erosion Anti-Abuse Tax (Beat) - No editing required, Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

  4. The following lines are transcribed from Parts I and II. No editing is required.

    • Part I, Line 1

    • Part I, Line 2

    • Part I, Line 3

    • Part I, Line 4

    • Part I, Line 5

    • Part II, Line 10B

    • Part II, Line 22

    • Part II, Line 24

    • Part II, Line 28

    • Part II, Line 32

    • Part II, Line 33

    • Part II, Line 34

    • Part II, Line 35

  5. Certain credits require additional transcription from Form 3800, Part III, Columns b, g, h, i and j.

    Form 3800, Part III, Line Credit Form Form Title Column(s) transcribed
    1a Form 3468, Part II Investment Credit j
    1b Form 7207 Advanced Manufacturing Production Credit b, g, h, i, j
    1c Form 6765 Credit for Increasing Research Activities j
    1d Form 3468, Part III Investment Credit b, g, h, i, j
    1e Form 8826 Disabled Access Credit j
    1f Form 8835, Part II Renewable Electricity Production Credit b, g, j
    1g Form 7210 Clean Hydrogen Production Credit b, g, h, i, j
    1h Form 8820 Orphan Drug Credit j
    1i Form 8874 New Markets Credit j
    1j Form 8881. Part I Credit for Small Employer Pension Plan Startup Costs j
    1k Form 8882 Credit for Employer-Provided Childcare Facilities and Services j
    1l Form 8864 (diesel) Biodiesel and Renewable Diesel Fuels Credit j
    1m Form 8896, Low Sulfur Diesel Fuel Production Credit j
    1n Form 8906 Distilled Spirits Credit j
    1o Form 3468, Part IV Investment Credit b, h, i, j
    1p Form 8908 Energy Efficient Home Credit j
    1q Reserved Reserved  
    1r Form 8910 Alternative Motor Vehicle Credit j
    1s Form 8911, Part II Alternative Fuel Vehicle Refueling Property Credit b, g, h, i, j
    1t Form 8830 Enhanced Oil Recovery Credit j
    1u Form 7213, Part II Nuclear Power Production Credit b, g, h, i, j
    1v Reserved Reserved  
    1w Form 8932 Credit for Employer Differential Wage Payments j
    1x Form 8933 Carbon Oxide Sequestration Credit b, g, h, i, j
    1y Form 8936, Part II Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-In Electric Vehicles) j
    1aa Form 8936, Part V Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-In Electric Vehicles) b, h, i, j
    1bb Form 8904 Credit for Oil and Gas Production from Marginal Wells j
    1cc Form 7213, Part I Nuclear Power Production Credit j
    1dd Form 8881, Part II Credit for Small Employer Pension Plan Startup Costs j
    1ee Form 8881, Part III Credit for Small Employer Pension Plan Startup Costs j
    1ff Form 8864, Line 8 Biodiesel and Renewable Diesel Fuels Credit j
    1gg Reserved Reserved  
    1zz Other Other j
    4a Form 3468, Part VI Investment Credit b, g, h, i, j
    4b Form 5884 Work Opportunity Credit j
    4c Form 6478 Biofuel Producer Credit j
    4d Form 8586 Low Income Housing Credit
    See IRM 3.11.16.9.1.34 CCC "9" - Low-Income Housing Credit
    j
    4e Form 8835, Part II Renewable Electricity Production Credit b, g, h, i, j
    4f Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips j
    4g Form 8900 Qualified Railroad Track Maintenance Credit j
    4h Form 8941 Credit for Small Employer Health Insurance Premiums
    See IRM 3.11.16.11.15.2, Form 8941, Credit for Small Employer Health Insurance Premiums, for more instructions.
    j
    4i Form 6765, Eligible Small Business only Credit for Increasing Research Activities j
    4j Form 8994 Employer Credit for Paid Family and Medical Leave
    See IRM 3.11.16.9.2, Return Processing Code (RPC)
    j
    4k Form 3468, Part VII Rehabilitation Credit j
    4z Other   j

  6. Edit a “1” in the bottom right margin of Form 3800, Page 4, Part III, when Form 3800, Part V, Column b has significant data.

    Figure 3.11.16-21

    This is an Image: 33500127.gif

    Please click here for the text description of the image.

  7. If Form 3800, General Business Credit, is required but missing, correspond. Form 3800 is required when a 2008 or later tax return has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c.

  8. Review the Schedule J, Line 5c for the following conditions:

    If... And... Then...
    Schedule J, Line 5c is blank, Form 3800 has an entry on Line 38, Edit the Line 38 amount to Schedule J, Line 5c.
    Schedule J, Line 5c has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 3800 is not attached, Correspond.
    Schedule J, Line 5c and Form 3800, Line 38 do not match The difference is not supported by another credit, Edit the lesser of Schedule J, Line 5c and Line 38 to Schedule J, Line 5c.

  9. Correspond when a business credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is not supported by the applicable form or if supporting documentation is missing for an unidentified amount on Schedule J, Line 5c.

    Exception:

    If Form 3800, Part IV, Columns (e), (f) or (g) have entries (Part III Box C, D, or G are checked for 202212 and prior), do not correspond.

    Exception:

    If an EIN is present on Form 3800, Part III, Column (d) (Column (b) for 202212 and prior), do not correspond. The credit is from a pass-through entity and the form is not required. If a credit is claimed on Part III, Lines 1a, 1d, 1o, 4a, 4k, 1l or 1ff, the form must be attached even if the EIN is present.

Form 8844, Empowerment Zone Employment Credit
  1. Form 8844 is a high priority form.

  2. Form 8844 is required if:

    1. Form 3800, Part II Line 22 or Part III, Line 3 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    2. Form 1120, Schedule J, Line 5c has an entry showing Form 8844 is attached and Form 8844 credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed.

  3. Edit "1 - 1" in the left margin of Form 1120, near Line 12 when the Form 8844 is shown on:

    1. Form 1120, Page 3, Schedule J, Line 5c.

    2. Form 1120-C, Page 3, Schedule J, Line 5c.

    3. Form 1120-F, Page 6, Schedule J, Line 5b.

    4. Form 1120-L, Page 4, Schedule K, Line 5c.

    5. Form 1120-PC, Page 1, Line 8c.

    6. Form 1120-REIT, Page 3, Schedule J, Line 3c.

    7. Form 1120-RIC, Page 2, Schedule J, Line 3c.

    8. Form 3800, Part III, Line 3 has an entry.

    9. Form 3800, Part II Line 22 has an entry.

  4. Edit a "1 - 1" in the left margin of Form 1120, near Line 12 if Form 8844 is attached even if dollar amounts are not present.

    • (Line 2 for Form 1120-F.)

  5. When an amount is present on Form 3800, Part II Line 22 or Part III, Line 3 or Form 1120, Schedule J, Line 5c for Form 8844, take the following actions:

    If... Then...
    Empowerment Zone Employment credit is≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 8844 is not attached, Correspond.

    Exception:

    If Form 3800, Part IV, Columns (e), (f) or (g) have entries (Part III Box C, D, or G are checked for 202212 and prior), do not correspond.

    Exception:

    If an EIN is present on Form 3800, Part III, Column (d) (Column (b) for 202212 and prior), do not correspond. The credit is from a pass-through entity and the form is not required.

    Note:

    Editing "1 - 1" in the left margin of Form 1120, Line 12 allows Statistics of Income (SOI) a means of monitoring this credit. (HIGH PRIORITY)
    (Line 2 for Form 1120-F)

Form 8941, Credit for Small Employer Health Insurance Premiums
  1. Form 8941, Credit for Small Employer Health Insurance Premiums, must be filed with corporate tax returns when claiming Small Employer Health Insurance Premiums credit.

  2. If an amount is present on Form 3800, Part III, Line 4h or Form 1120, Schedule J, Line 5c for Form 8941:

    If... Then...
    Form 8941 is not attached, Correspond.

    Exception:

    If Form 3800, Part IV, Columns (e), (f) or (g) have entries (Part III Box C, D, or G are checked for 202212 and prior), do not correspond.

    Exception:

    If an EIN is present on Form 3800, Part III, Column (d) (Column (b) for 202212 and prior), do not correspond. The credit is from a pass-through entity and the form is not required.

    Form 8941 is present, Place in sequence order if significant entries are present.
    See IRM 3.11.16.22, Form 8941 - Credit for Small Employer Health Insurance Premiums, for Form 8941 editing instructions.

Schedule J, Line 5d - Form 8827, Credit for Prior Year Minimum Tax - Corporations
  1. If Schedule J, Line 5d has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, correspond.

Schedule J, Line 5e - Form 8912, Credit to Holders of Tax Credit Bonds
  1. When Schedule J, Line 5e has an entry for Form 8912 , take the following action:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8912is not attached, Correspond.

Schedule J, Line 6 - Total Credits

  1. When editing Line 6, take the following action:

    If... Then...
    Line 6 is blank and there are entries on any of Lines 5a through 5e, Add Lines 5a through 5e and enter on Line 6.
    There is no tax on Schedule J, Line 2, "X" the Line 6 entry and "X" Lines 5a through 5e.
    Line 6 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Lines 5a through 5e are blank, Correspond for documentation to support the entry on Line 6.

Schedule J, Line 8 - Personal Holding Company Tax

  1. If Schedule J, Line 8, Personal Holding Company Tax, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule 1120-PH is not attached, correspond.

    Note:

    A significant entry on Schedule J, Line 8 would also require editing an ABLM Code, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

Schedule J, Line 9a through 9z - Other Taxes

  1. This subsection has instructions for Schedule J, Lines 9a through 9z.

Schedule J, Line 9za - Recapture of Investment Credit (Form 4255)
  1. If an amount is present on Schedule J, Line 9a, Recapture of Investment Credit (Form 4255) or Form 4255 is attached:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 4255 is not attached, Correspond.
    Form 4255 is attached and Line 9a is blank, Edit the amount from Line 20, Form 4255 to Schedule J, Line 9a, Form 1120.

Schedule J, Line 9b - Recapture of Low-Income Housing Credit (Form 8611)
  1. If an amount is present on Schedule J, Line 9b, Recapture of Low-Income Housing Credit, or Form 8611 is attached:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8611 is not attached, Correspond.
    Form 8611 is attached and Line 9b is blank, Edit the amount from Line 14, Form 8611 to Schedule J, Line 9b. (Dotted portion of Schedule J, Line 7 of Form 1120-REIT.)
    More than one Form 8611 is attached,
    1. Combine Form 8611, Line 14.

    2. Edit the total to Schedule J, Line 9b. (Dotted portion of Schedule J, Line 7 of Form 1120-REIT.)

  2. Edit CCC "9" to Page 1 of Form 1120 in the income section when at least one of the following conditions exists:

    1. Schedule J, Line 9b has an amount; or

    2. Form 8611 is attached; or

Schedule J, Line 9c - Interest Computation Under the Look-Back Method for Completed Long-Term Contracts (Form 8697)
  1. If an amount is present on Schedule J, Line 9c, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, or Form 8697 is attached:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8697 is not attached, Correspond for missing Form 8697.
    Form 8697 is attached and the tax from Part I, Line 10 or Part II, Line 11 is shown on Schedule J, Line 9c, Edit CCC "K."
    Form 8697 is attached and Schedule J, Line 9c is blank,
    • Edit the amount from Form 8697, Part I, Line 10 or Part II, Line 11 to Schedule J, Line 9c.

    • Edit CCC "K."

Schedule J, Line 9d - Interest due under the look-back method (Form 8866)
  1. Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method, is attached.

    If ... Then ...
    Form 8866, Line 9 has an entry, Edit tax period and EIN on Form 8866. Detach Form 8866 and route to AM.
    Form 8866, Line 10 has an entry, Edit the Line 10, amount to Schedule J, Line 9d.
Schedule J, Line 9e - Alternative Tax on Qualifying Shipping Activities (Form 8902)
  1. If an amount is present on Schedule J, Line 9e, Alternative Tax on Qualifying Shipping Activities, or Form 8902 is attached:

    If... Then...
    Form 8902 is attached, Edit Audit Code "2."
    Form 8902 is attached and Schedule J, Line 9e is blank, Edit the amount from Line 30, Form 8902 to Schedule J, Line 9e.

Schedule J, Line 9f - IRC 453A Tax
  1. No editing required.

Schedule J, Line 9g - Other
  1. For tax periods 202201-202212, if a significant amount is present on Line 9g and the taxpayer writes "CAMT" or "IRA AMT" or indicates the amount is for Corporate AMT, completely edit the return and give to the lead. The lead will:

    1. Notify P&A that a return has been found (P&A will scan the Form 1120, pages 1 through 6 and any attachment with the new AMT calculation and email a copy to an LB&I Point of Contact (POC)).

    2. Edit an action trail on the return.

    3. Rebatch the return with "CAMT" in the batch ID.

    4. Continue processing.

  2. For tax periods other than 202201-202212, no editing is required.

Schedule J, Line 11 - Total Tax

  1. Form 1120, Schedule J, Part I, Line 11 may have "add on" taxes that will be identified by an explanation in the dotted portion to the left of Line 11.

    1. If the only entry on Form 1120, Schedule J, Part I, is Line 11, edit the amount to Schedule J, Line 2.

    2. If any identifiable "add on" taxes are misplaced on Lines 3, 8, or 9, "X" them but be sure that they have been included in Line 31, Total Tax on Page 1 of the Form 1120.

Schedule J, Line 12 - Reserved

  1. Line 12- Schedule J, Part II, Line 12 - Net 965 Tax Liability Paid for the Reporting Year (revisions 2018 through 2020),

  2. The instructions in this subsection only apply to tax periods 201712 through 202012.

  3. If blank, enter from the following lines from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (k), Line 1
    2018 Part II, Column (k), Line 2
    2019 Part II, Column (k), Line 3
    2020 Part II, Column (k), Line 4

  4. Edit CCC "J" and Action Code "460."

Schedule J, Part II, (Part III for 2022-2018) Lines 13 - 23

  1. This subsection has instructions for Schedule J, Part II, (Part III for 2022-2018) Lines 13 through 23 (Line 22 for 2017-2011).

Schedule J, Part II, (Part III for 2022-2018) Line 14 - Estimated Tax Payments
  1. IRC 847 Deduction - The instructions in this subsection only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed.

  2. If the tax period is 201812 and prior and the taxpayer notates "Section 847" or reports SETP on Schedule J, Part II (Part III for 2022-2018), Line 14 (Line 13 for 2017 - 2011) or "Form 8816" is attached, see IRM 3.11.16.3.10, IRC 847 Deduction.

Schedule J, Part II, (Part III for 2022-2018) Line 16 - Payments
  1. If Schedule J, Part II, (Part III for 2022-2018) Line 16 (Line 15 for 2017-2011) is blank, add Lines 13 (Line 12 for 2017-2011) and 14 (Line 13 for 2017-2011). Subtract Line 15 (Line 14 for 2017-2011) and enter the total amount on Line 16 (Line 15 for 2017-2011). If there is an entry on Line 15 (Line 14 for 2017-2011), see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

Schedule J, Part II, (Part III for 2022-2018) Line 17 - Tax Deposited with Form 7004
  1. Accept taxpayer's entry.

  2. If the taxpayer indicates a Form 1138, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback, credit on Line 17 (Line 16 for 2017-2011), disallow and delete amount of credit from Line 17 (Line 16 for 2017-2011).

Schedule J, Part II, (Part III for 2022-2018) Line 18 - Withholding
  1. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Part II, (Part III for 2022-2018) Line 18 (Line 17 for 2017-2011) and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

Schedule J, Part II, (Part III for 2022-2018) Line 19 - Total Payments
  1. If Line 19 (Line 18 for 2017-2011) is the only entry for Lines 13 through 19 (Lines 12 through 18 for 2017-2011), arrow the amount to Line 16 (Line 15 for 2017-2011).

Schedule J, Part II, (Part III for 2022-2018) Line 20a - Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
  1. Compare Form 1120, Schedule J, Line 20a (Line 19a for 2017-2011) to Form 2439, Line 2:

    If... Then...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Schedule J, Part II, (Part III for 2022-2018) Line 20a (Line 19a for 2017 - 2011) Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

Schedule J, Part II, (Part III for 2022-2018) Line 20b - Fuel Tax Credit, Form 4136
  1. If Line 20b (Line 19b for 2017 - 2011) has a significant entry and Form 4136 is not present, correspond for the missing Form 4136.

  2. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Schedule J, Part II, (Part III for 2022-2018) Line 20c - Reserved for Future Use
  1. Schedule J, Line 20c - Reserved for future use on the 2020 and later revisions of Form 1120.

  2. For 2019 through 2012 revisions, if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8827 must be attached to substantiate the credit. Correspond for missing forms to substantiate the credit.

  3. For 2011 and prior, if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ either Form 3800 or Form 8827 must be attached to substantiate the credit. Correspond for missing forms to substantiate the credit.

Schedule J, Part II, Line 20d - Other (Part III for 2022-2018)
  1. For 202201 - 202212, if a significant amount is present and "IRA22DPE" is notated, edit RPC "J" and give the return to the lead. Otherwise, accept taxpayer’s entry.

Schedule J, Part II, Line 22 - Elective Payment Election
  1. Accept taxpayer entry.

Schedule J, Part III (202012-201712) - Line 22 - Net 965 Tax Liability.
  1. The instructions in this subsection apply only to tax periods 201712 through 202012.

  2. The amount on Schedule J, Part III, Line 22 is edited from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (d), Line 1
    2018 Part II, Column (d), Line 2
    2019 Part II, Column (d), Line 3
    2020 Part II, Column (d), Line 4

  3. Edit CCC "J" and Action Code "460."

Schedule J, Part II, (Part III for 2022-2018) Line 23 - Total Payments and Credits
  1. If Line 23 (Line 21 for 2017 - 2011) is the only entry for Lines 13 through 23 (Lines 12 through 21 for 2017 - 2011), arrow the amount to Line 16 (Line 15 for 2017 - 2011).

Accounting Method Code

  1. The Accounting Method Code is transcribed from the taxpayer’s response to the boxes on Form 1120, Schedule K, Line 1.

  2. No editing is required for C&E.

Schedule K, Line 2a - NAICS Code

  1. The Principal Business Activity (PBA) Code is based on the North American Industry Classification System Code (NAICS). These codes are a high priority to the Service. It is critical data for Statistics of Income, Examination, Research and other Service organizations.

  2. The NAICS Code is a four or six- digit code on Schedule K, Line 2a of Form 1120.

  3. A NAICS Code is required on all Forms 1120 (Form 1120-C, Form 1120-F, and Form 1120-FSC).

    Exception:

    Do not edit a NAICS Code on "G" coded returns (amended returns).

  4. Only one NAICS Code can be used on the return. Edit the NAICS Code as follows:

    If... Then...
    A legible six digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    A legible four digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    There is more than one NAICS Code on Schedule K, Line 2a, Circle all but the first NAICS Code listed.
    Schedule K, Line 2a is blank, illegible, or other than four or six digits, Edit NAICS Code "999999."

Schedule K, Question 3

  1. If Schedule K, Question 3 meets one of the following conditions, a Name Control and EIN must be edited.

    If... And... Then...
    Question 3 is checked "Yes," or both the "Yes" and "No" boxes are checked, The name and EIN is the same as the return name and/or EIN,
    1. Circle out the name and EIN,

    2. Check the attachments for another name control and/or EIN,

    3. Edit (from attachments) the Name Control on Line 3. If unable to find a Name Control, edit "XXXX."

    4. Edit (from attachments) the TIN on Line 3. If unable to find the TIN, edit "12-9999999."

    Question 3 is checked "Yes" or both the "Yes" and "No" boxes are checked, The name and/or EIN is different from the return name and/or EIN, Underline the Name Control and TIN on Line 3.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.

    Question 3 is checked "Yes" or both the "Yes" and "No" boxes are checked, There is no Name and/or EIN present on Line 3,
    1. Check attachments for name control and/or EIN.

    2. Edit from attachments the Name Control on Line 3. If unable to locate a Name Control, edit “XXXX”.

    3. Edit from attachments the TIN on Line 3. If unable to find the TIN, edit “12-9999999”.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.

    Question 3 is checked "No" or neither box is checked, A corporation name and/or EIN is present (must be different than that on the return),
    1. Underline the Name Control on Line 3.

    2. Underline the TIN on Line 3.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.

    Question 3 is answered "No" or neither box is checked, A corporation name and EIN are not present, No editing is required.
    Question 3 is answered "No" or neither box is checked, A corporation name and EIN are the same as the return name and/or EIN, Circle the name and/or EIN.

Schedule K, Line 7c - Number of Form 5472

  1. No entry is required for Schedule K, Line 7c unless Form 5472 is present.

  2. Edit Line 7c as follows:

    If... And... Then...
    A number is present for Schedule K, Line 7c,   No editing required.
    Schedule K, Line 7c is blank, Form(s) 5472 is attached, Edit the number of Forms 5472 in the dotted line area of Line 7c.
    Form 5472 is attached, Schedule K is not present, Dummy a Schedule K and edit the number of Forms 5472 to Schedule K, Line 7c.

    Note:

    If a Form 5472 is attached to a blank (no tax data), Form 1120, do not process, send the Form 1120 and Form 5472 to SOI at the following address:

    Internal Revenue Service
    1973 N Rulon White Blvd.
    PIN Unit, Stop 6112
    Ogden, UT 84201-0012

    Note:

    Foreign-owned domestic disregarded entities are instructed to attach the Form 5472 to a pro forma Form 1120. These entities are not required to file a Form 1120 and the return should not be processed.

Schedule K, Line 12 - NOL Carryover

  1. Accept taxpayer's entry.

Schedule K, Question 13

  1. This is not a transcription line and does not require editing. If the "Yes" box is checked for this question it is a sign that the taxpayer is not required to complete Schedule L, Balance Sheet entries.

Schedule K, Question 16

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

Schedule K, Question 17

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

Schedule K, Question 18

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

Schedule K, Question 25 (Form 8996 - Qualified Opportunity Fund)

  1. If Form 1120, Schedule K, Question 25, "Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund" is answered "Yes," search attachments for Form 8996. If Form 8996 is attached with an amount in Part III, Line 15, edit the amount to Schedule K, Question 25.

    Form 8996 Revisions

    Prior Year Revision Line
    2020 and later Part III, Line 15
    2019 Part III, Line 14
    2018 and 2017 Part III, Line 13
     

  2. See IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund, for transcription lines.

  3. If Form 8996, Qualified Opportunity Fund, is attached, edit Return Processing Code (RPC) "6," see IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

Schedule K, Question 27 (Digital Assets)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Schedule K, Lines 29a, 29b and 29c (Corporate AMT)

  1. If Question 29b is marked "Yes" or Question 29c is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Schedule K, Lines 30a, 30b and 30c (Stock Buy Back)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Schedule K, Line 31 (Parent of Consolidated Group)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Schedule L, Balance Sheet

  1. This subsection provides instructions for processing the Balance Sheet. The Balance Sheet is found on Form 1120, Page 6 (Page 5 for 2017 and prior).

Blank or Missing Schedule L
  1. Use the following chart for a Balance sheet that is blank, no significant entries (e.g., zeros) or missing and there is no attachment present with Balance Sheet entries.

    Note:

    The following chart is listed in "Priority" order.

    If ... And ... Then ...
    The return is "Amended,"   Do not correspond.
    The return is "Final,"   Do not correspond.
    There are no "significant entries" on Form 1120, Page 1, Lines 1 through 27,   Do not correspond.
    Form 1120, Page 1, Box D is less than $250,000, and Total Receipts (Line 1a plus Lines 4 through 10) are less than $250,000,   Do not correspond.
    The "Yes" box is checked on Form 1120, Schedule K, Question 13, Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Do not correspond. Edit a "1" to Schedule L, Line 15(d).

    Note:

    Dummy a Schedule L if necessary.

    The "cash" box on Schedule K is checked or the taxpayer has notated "Single Entry" , "See Books," "Balance Sheet not available," or similar entry, Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Do Not correspond. Edit a "1" to Schedule L, Line 15(d).

    Note:

    Dummy a Schedule L if necessary.

    Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more,   Correspond for Schedule L.
  2. If Schedule L is required and blank or missing, but an attachment is present with significant Schedule L amounts, edit the applicable line entries from the attachment. If necessary insert a blank Schedule L to edit the applicable entries. Then follow the instructions in IRM 3.11.16.11.36.1, Editing a Balance Sheet with Significant Entries.

    Figure 3.11.16-22

    This is an Image: 33500029.gif

    Please click here for the text description of the image.

Editing a Balance Sheet with Significant Entries
  1. To determine if editing a Balance Sheet that has significant entries is necessary follow the chart below:

    Note:

    The following chart is listed in "Priority" order.

    If ... And ... Then ...
    The return is "Amended,"   No action is required. The Balance sheet will not be transcribed.
    The return is "Final,"   Delete the Balance Sheet.
    There are no "significant entries" on Form 1120, Page 1, Lines 1 through 27,   Delete the Balance Sheet.
    The "Yes" box is checked on Form 1120, Schedule K, Question 13, Form 1120, Page 1, Box D is less than $250,000, and Total Receipts (Line 1a plus Lines 4 through 10) are less than $250,000, Delete the Balance Sheet.
    None of these conditions exist,   Continue editing the Balance Sheet.
  2. Place Page 6 (Page 5 for 2017 and prior), Schedule L in sequence order when the Balance Sheet is required.

  3. Edit Balance Sheet amounts in dollars only.

  4. The following lines are transcribed fields:

    Note:

    Letters in brackets "( )" designate columns.

    • Trade Notes and Accounts Receivable - Ending Schedule L, Line 2a(c) (positive/negative)

    • Loans to Shareholders - Ending Schedule L, Line 7(d) (positive/negative)

    • Less Accumulated Depreciation - Ending Schedule L, Line 10b(d) (positive)

    • Total Assets - Beginning Schedule L, Line 15(b) (positive/negative)

    • Total Assets - Ending Schedule L, Line 15(d) (positive/negative)

    • Other Current Liabilities - Ending Schedule L, Line 18(d) (positive/negative)

    • Loans from Shareholders - Ending Schedule L, Line 19(d) (positive/negative)

    • Other Liabilities - Ending Schedule L, Line 21(d) (positive/negative)

    • Preferred Stock - Schedule L, Line 22a(a) (positive)

    • Preferred Stock - Schedule L, Line 22a(c) (positive)

    • Common Stock - Schedule L, Line 22b(a) (positive)

    • Common Stock - Schedule L, Line 22b(b) (positive)

    • Common Stock - Schedule L, Line 22b(c) (positive)

    • Capital Stock - Ending Schedule L, Line 22b(d) (positive)

    • Retained Earnings - Unappropriated - Beginning Schedule L, Line 25(b) (positive/negative)

    • Loss cost of treasury stock - Beginning Schedule L, Line 27(b) (positive/negative)

    • Loss cost of treasury stock - Ending Schedule L, Line 27(d) (positive/negative)

    • Total Liabilities - Ending Schedule L, Line 28(d) (positive)

  5. When it is necessary to edit Schedule L, Balance Sheet entries, follow the instructions below:

    1. "X" negative entries on Lines 10b(d), 22a(a), 22a(c), 22b(a), 22b (c), 22b(d), and 28(d). Accept negative entries on Lines 2a(c), 7(d), 15(b), 15(d), 18(d), 19(d), 21(d), 25(b), 27(b) and 27(d) only.

    2. If line titles on Schedule L have been changed, edit the items which are to be perfected to their proper location on the return.

    3. Edit lines as follows:

    If ... And ... Then ...
    There is no entry on Line 2a, Column (c), Line 2b, Column (c) has an entry,
    • Add Line 2b(c) to Line 2b(d) and edit the total to Line 2a, Column (c).

    • Bracket if negative.

    There is no entry on Line 2a, Column (c), Line 2b, Column (c) is blank,
    • Edit the Line 2b(d) amount to Line 2a(c) if present.

    • Bracket if negative.

    There is no entry on Line 10b, Column (d),  
    • Compute and enter Line 10b, Column (d) by subtracting the Line 10b, Column (c) amount from Line 10a, Column (c).

    • Positive only.

    There is no entry on Line 15, Column (b), Lines 2b, 10b, 11b, and 13b, Column (b) are blank, Use right Column (a) entries (if present) to compute Column (b) entries.
    There is no entry on Line 15, Column (b), Entries are present on Lines 1 through 14, Column (b),
    • Add Lines 1 through 14, Column (b) and edit the total to Line 15, Column (b).

    • Bracket if negative.

    There is no entry on Line 15, Column (d), Lines 2b, 10b, 11b, and 13b, Column (d) are blank, Use right Column (c) entries (if present) to compute Column (d) entries.
    There is no entry on Line 15, Column (d), Entries are present on Lines 1 through 14, Column (d),
    • Add Lines 1 through 14, Column (d) and edit the total to Line 15, Column (d).

    • Bracket if negative.

    After computing Balance Sheet, Line 15, Column (d) is still blank, zero, dash, "none" or "N/A," Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Edit a "1" on Line 15(d).
    If Line 22b, Column (d) is blank,  
    • Add Line 22a, Column (c) and Line 22b, Column (c) and edit the total to Line 22b, Column (d).

    • Positive only.

    There is no entry on Line 28, Column (d),  
    • Compute and enter Line 28, Column (d) by adding Lines 16 through 27, Column (d).

    • Positive only.

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. Schedule N (Form 1120), Foreign Operations of U.S. Corporations is valid for tax periods beginning 01-01-2000. Delete Schedule N if the tax period begins before 01-01-2000.

  2. Corporations that, at any time during the tax year, have assets in or operate a business in a Foreign Country or U.S. possession may have to file Schedule N (Form 1120) with Form 1120, Form 1120-C, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.

  3. Do not correspond if Schedule N is missing. Dummy a Schedule N and edit the applicable entries when Form 5471, Form 8865, or Form 8873 are attached to the tax return.

  4. If Schedule N is present and has no entries, do not correspond.

  5. If more than one Schedule N is attached, combine the information from all Schedules N, including all subsidiaries and:

    1. Edit to the first Schedule N that has the EIN of the return being processed. "Staple up" any remaining Schedules N, or

    2. Dummy and edit a Schedule N, for the parent return if one is not present on a consolidated return.

Schedule N, Line 1 - Form 8858, Foreign Disregarded Entities
  1. Beginning tax period 2004 Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs), will be required to be filed by U.S. persons that are tax owners of Foreign Disregarded Entities.

  2. Edit Audit Code "2" if:

    1. Schedule N, Question 1a is answered "Yes."

    2. Form 8858 is present.

Schedule N, Line 2 - Number of Forms 8865
  1. No entry is required for Schedule N, Line 2 unless Form 8865 is present.

  2. If Form 8865, Schedule G is attached, edit RPC "E."

  3. If Form 8865, Schedule H is attached, edit RPC "F."

  4. Edit Line 2 as follows:

    If... And... Then...
    A number is present for Schedule N, Question 2,   Take no further action.
    Schedule N, Line 2 is blank, Form(s) 8865 is attached, Edit the number of Forms 8865 in the dotted line area of Question 2.
    Form 8865 is attached, Schedule N is not present, Dummy a Schedule N and edit the number of Forms 8865 to Schedule N, Line 2.

  5. For Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Form 8865 is attached, see IRM 3.11.16.10.1, Audit Codes.

Schedule N, Line 3 - Form 8865 Question
  1. For Form 1120, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 3 is answered "Yes" or Form 8865 is attached, see IRM 3.11.16.10.1, Audit Codes.

Schedule N, Lines 4a and 4b- Form 5471, Controlled Foreign Corporation
  1. Line 4a - Reserved for future use.

    1. For prior year returns (2019 and prior revisions), edit Audit Code "2" if Schedule N, Question 4a is answered "Yes."

  2. Line 4b - Edit Audit Code "2" if Form 5471 is attached, see IRM 3.11.16.10.1, Audit Codes.

  3. Edit Return Processing Codes as follows:

    If ... Then ...
    Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached, Edit RPC "A."
    Form 5471, Schedule H, Current Earnings and Profits, is attached, Edit RPC "B."
    Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, is attached, Edit RPC "C."
    Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached, Edit RPC "D."
    Form 5471, Schedule G-1, Cost Sharing Arrangement is attached, Edit RPC G.

  4. No entry is required for Schedule N, Line 4b unless Form 5471 is present.

  5. Edit Schedule N, Line 4b as follows:

    If... And... Then...
    A number is present for Schedule N, Line 4b,   Take no further action.
    Schedule N, Line 4b is blank, Form(s) 5471 is attached, Edit the number of Forms 5471 in the dotted line area of Question 4b.

    Note:

    Document Perfection is responsible for determining the number of any and all Form(s) 5471 received, whether attached to a parent return in a consolidated group, or found as an attachment to a subsidiary return.

    Form 5471 is attached, Schedule N is not present, Dummy a Schedule N and edit the number of Forms 5471 to Schedule N, Line 4b.

Schedule N, Line 5 - Form 3520 Question
  1. For Form 1120, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 5 is answered "Yes" or Form 3520 is attached, see IRM 3.11.16.10.1, Audit Codes.

Schedule N, Line 6b - Foreign Country Code
  1. Edit Schedule N, Line 6b as follows:

    If... Then...
    The taxpayer has entered the name of a Foreign Country in Question 6b, Edit the two letter "Country Code" to the left of Question 6b. See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475 or a U.S. Possession is listed on Box A.

    No Foreign Country is present or "US," "USA," "America" or similar reference to the United States is present, and Box 6a is checked "Yes," Edit Country Code, "OC."
    More than one Foreign Country is present, Edit the Country Code of the first Foreign Country shown.

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands, "NL."

Schedule N, Line 7a - Form 8873 Question
  1. For Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 7a is answered "Yes," see IRM 3.11.16.10.1, Audit Codes.

Schedule N, Line 7b - Number of Forms 8873
  1. No entry is required for Schedule N, Line 7b unless Form 8873 is present.

    Note:

    Input of Command Code (CC) REQ77 with IDRS Transaction Code TC 971 and right IDRS Action Code (depending on which election has been made) may be needed when Form 8873 is present, see IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

  2. Edit Schedule N, Line 7b as follows:

    If... And... Then...
    A number is present for Schedule N, Question 7b, Form(s) 8873 is attached, Process Form 8873.
    • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

    A number is present for Schedule N, Question 7b, Form(s) 8873 are not attached, Take no further action.
    Schedule N, Line 7b is blank, Form(s) 8873 is attached,
    1. Edit the number of Forms 8873 in the dotted line area of Question 7b.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

    Form 8873 is attached, Schedule N is not present,
    1. Dummy a Schedule N and edit the number of Forms 8873 to Line 7b of Schedule N.

    2. Process Form 8873.

      • See IRM 3.11.16.12Form 8873 - Extraterritorial Income Exclusion.

Schedule N, Line 7c - Total Extraterritorial Income Exclusion
  1. No entry is required for Schedule N, Line 7c unless Form 8873 is present.

  2. Edit Schedule N, Line 7c as follows:

    If... And... Then...
    An amount is present for Schedule N, Question 7c, Form 8873 is attached, Process Form 8873.
    • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

    An amount is present for Schedule N, Question 7c, Form 8873 is not attached, Take no further action.
    Schedule N, Line 7c is blank, Form(s) 8873 is attached,
    1. Compute the total amount of extraterritorial income exclusion from Line 52 and edit to the area provided on Line 7c.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

    Form 8873 is present with a significant entry on Line 52, Schedule N is not attached,
    1. Dummy a Schedule N and compute the total amount of extraterritorial income exclusion from all attached Forms 8873. Edit the total to the area provided on Schedule N, Line 7c.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 -Extraterritorial Income Exclusion.

    Reminder:

    Form 8873, Extraterritorial Income Exclusion, requires TC "971" input, see IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets
  1. For Tax Year (TY) 202101 and later, Form 8938, Statement of Foreign Financial Assets, will be transcribed into the General Purpose Program (GPP) database.

    Note:

    These instructions only apply to Form 1120.

  2. Process Form 8938 with the following criteria:

    1. The Tax Period Beginning on Form 1120 is 202101 or later and,

    2. Form 8938 is a 2021 or later and,

    3. Form 8938 has significant entries.

  3. If Form 8938 is attached, but does not meet the above criteria, edit CCC "2" and continue normal processing of the Form 1120. Do not sequence the form to the back of the return, or place the form in a designated basket.

  4. If Form 8938 is attached and meets the criteria in paragraph (2), process Form 8938 per the instructions below:

    1. Completely edit Form 1120.

    2. Edit CCC "2."

    3. Pull the Form 8938 from the return and sequence to the back of the last page of Form 1120 (after schedules and attachment pages), attaching the Form 8938 so that it is back- to- back with the parent return.

    4. Place the Form 1120 in a designated basket.

    5. Only one Form 8938, Pages 1 and 2, can be processed. If multiple Forms 8938 are attached, select the form that has the highest account value in Part V, Line 23 (Line 4 for revision 2020 and prior) or highest asset value in Part VI, Line 32 (Line 4 for revision 2020 and prior) and delete the others.

      Note:

      The Form 8938 can have multiple "Additional or Continuation Statements." Do not confuse the multiple additional or continuation statements with multiple Forms 8938.

  5. Form 1120 with Form 8938 attached must be batched separately. The transcription of Form 8938 will occur under Program Code 43300 after the parent Form 1120 has been transcribed using normal procedures.

Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group

  1. The instructions in this subsection (paragraphs 2 through 4) only apply to tax periods 201811 and prior. If a Schedule O is attached to a Form 1120 for tax period 201812 and later, do the following:

    If ... Then ...
    Schedule O is in sequence order, Line through Schedule O, Parts II and III (old revision), Part II (new revision).
    Schedule O is not in sequence order, No action needed.

  2. This subsection includes instructions for processing Schedule O (Form 1120).

  3. Schedule O (Form 1120) replaces the Controlled Group tax computation previously included on Schedule J, Lines 2a(1) through 2b(2) for 2005 and prior tax returns.

  4. If Controlled Group Code "1" or "4" is edited on a prior year return, dummy a Schedule O and edit significant positive amounts as follows:

    1. Schedule J, Line 2a(1) to Schedule O, Part II, Line 1, Column (c).

    2. Schedule J, Line 2a(2) to Schedule O, Part II, Line 1, Column (d).

    3. Schedule J, Line 2a(3) to Schedule O, Part II, Line 1, Column (e).

    4. Schedule J, Line 2b(1) to Schedule O, Part III, Line 1, Column (f).

    5. Schedule J, Line 2b(2) to Schedule O, Part III, Line 1, Column (g).

Schedule O, Part II, Line 1 - Taxable Income Apportionment
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Schedule O, Part II, Line 1 as follows:

    If... And... Then...
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (c), (d), or (e).
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation taxable income apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (c), (d), or (e).

    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e), or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    Taxable income brackets are found on an attachment,
    (See Note below for examples.)
    Edit the positive taxable income bracket amounts to Schedule O, Line 1, Columns (c), (d), and (e).

    Note:

    Dummy a Schedule O if needed.

    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e), or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    No taxable income brackets are found, Correspond for taxable income bracket amounts.
    • Exception: Do not correspond if:

      1. There is no indication of an income tax liability on Form 1120, Schedule J, Line 2, or

      2. The taxable income on Form 1120, Page 1, Line 30 is zero (0), or a negative amount, or

      3. Schedule O (Form 1120), Page 1, Box 3c or Box 4a is checked.

    No Controlled Group Code was edited, see IRM 3.11.16.11.11(4), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation,   Delete Schedule O.

  3. Entries may be shown on an attached allocation/apportionment schedule. Some examples of the title of these schedules may be:

    • "apportionment plan"

    • "apportionment consent plan"

    • "consent to apportionment"

    • "controlled group tax apportionment plan"

    • "surtax apportionment plan"

    • "allocation schedule"

  4. The attachment may identify the amounts by the tax rate and/or taxable income bracket. Column (c) is the $50,000 taxable income bracket taxed at 15 percent, Column (d) is the $25,000 taxable income bracket taxed at 25 percent and Column (e) is the $9,925,000 taxable income bracket taxed at 34 percent.

  5. Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

Schedule O, Part III, Line 1 - Income Tax Apportionment
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Part III, Line 1 as follows:

    If... And... Then...
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (f) and (g).
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1" .

    2. "X" any negative entries on Line 1, Columns (f) and (g).

    A Controlled Group was edited, Part III, Line 1, Column (f) is blank, Check attachments for possible entry (additional 5 percent tax):
    1. If found, edit the positive amount to Line 1, Column (f).

    2. If not found, continue processing.

    A Controlled Group was edited, Part III, Line 1, Column (g) is blank, Check attachments for possible entry (additional 3 percent tax):
    1. If found, edit the positive amount to Line 1, Column (g).

    2. If not found, continue processing.

Form 8873 - Extraterritorial Income Exclusion

  1. Document Perfection is responsible for processing Part I of Form 8873, "Elections and Other Information." Elections are identified by inputting Command Code FRM77 with Transaction Code "971" and IDRS Action Code "361," "362," or "363" depending on which election has been made. See the following subsections for specific instructions:

    • IRM 3.11.16.12.1, Part I, Line 1 - IRC 942(a) (3) Election.

    • IRM 3.11.16.12.2, Part I, Line 2 - Extraterritorial Income Exclusion in lieu of Election.

    • IRM 3.11.16.12.3, Part I, Line 3 - Domestication Election.

    Note:

    "Action Codes" referenced in the Form 8873 instructions are IDRS Action Codes, not to be confused with ERS Action Codes. IDRS Action Codes should only be edited as part of the Action Trail (e.g., TC 971-361).

  2. It is necessary to process all Forms 8873 attached to a return, including those attached to subsidiary returns on a consolidated return.

  3. If Part I, Lines 1 - 3 of the Form 8873 are not checked, then no TC "971" needs to be edited.

Part I, Line 1 - IRC 942(a)(3) Election

  1. If the box is marked for Part I, Line 1 of Form 8873, enter TC "971" with IDRS Action Code "361." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-361" ) in the lower left margin going vertically up the side of the return.

Part I, Line 2 - Extraterritorial Income Exclusion in lieu of Election

  1. If the box is marked for Part I, Line 2 of Form 8873 enter TC "971" with IDRS Action Code "362." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-362" ) in the lower left margin going vertically up the side of the return.

Part I, Line 3 - Domestication Election

  1. If the box is marked for Part I, Line 3 of Form 8873 enter TC "971" with IDRS Action Code "363." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-363" ) in the lower left margin going vertically up the side of the return.

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. The instructions in this subsection apply to tax periods 202301 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the following lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision) is attached. See IRM 3.11.16.9.2, Return Processing Code.

Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior)

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Taxpayers may sometimes include more than one Form 4626 with the return. If more than one Form 4626 is present, compute the totals and edit the right transcription lines.

  3. If Form 4626 is attached, perfect the following lines, as necessary:

    1. Line 3 - Pre-adjustment Alternative Minimum Taxable Income (AMTI). If there is no entry on Line 3, but any of Lines 1 or Lines 2a through 2o have an entry, compute Line 3. Bracket if negative.

    2. Line 4e - Adjusted current earning (ACE) adjustment. Accept taxpayer's entry.

    3. Line 6 - Alternative tax net operating loss deduction. Accept positive taxpayer's entry. "X" negative entry.

    4. Line 11 - Alternative minimum tax foreign tax credit. Accept positive taxpayer's entry. "X" negative entry.

Schedule D - Capital Gains and Losses

  1. Edit the Schedule D as follows:

    If... Then...
    All the following conditions apply:
    1. Form 1120 is for 201212 tax year or later and

    2. The Schedule D is a 2012 or later revision and

    3. Significant entries are present on one or more of the transcription lines or checkbox is marked.

      • Transcription lines for 2019 and subsequent:

        • Checkbox above Part I,

        • Part I, Line 1a, Columns (d) and (e), Lines 1b - 3, Columns (d), (e), and (g),

        • Part II, Lines 8a, Columns (d) and (e), Lines 8b - 10, Columns (d), (e), and (g),

        • Line 14,

      • Transcription lines for 2013 through 2018:

        • Part I, Line 1a, Columns (d) and (e), Lines 1b -3, Columns (d), (e), and (g),

        • Part II, Lines 8a, Columns (d) and (e), Lines 8b - 10, Columns (d), (e), and (g),

        • Line 14,

      • Transcription lines for 2012:

        • Lines 1-3 Columns (d) and (e),

        • Lines 8-10 Columns (d) and (e),

        • Line 14,

    1. Place Schedule D in sequence order

    2. Edit Schedule D in dollars only.

    3. For 2013 revisions and later: "X" any negative transcription entries, except Lines 1b(g), 2(g), 3(g), 8b(g), 9(g) and 10(g). These lines can be positive or negative.

    4. For 2012 revisions: "X" any negative transcription entries and change Line 1 to 1b and Line 8 to 8b.

    Criteria above is not met, Cross out or slash the Schedule D.

Form 4797 - Sales of Business Property (Form 1120 Only)

  1. Line 1b - No editing necessary.

  2. Line 1c - No editing necessary.

Form 8949 - Sales and Other Dispositions of Capital Assets

  1. Form 8949, Sales and Other Dispositions of Capital Assets, is valid for tax periods ending 201712 and later. See Figure 3.11.16-23.

  2. If the taxpayer entered a "Z" or "Y" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, do the following:

    1. Place the form in sequence order. If there is more than one Form 8949 attached, sequence the Form 8949 with the edited data.

    2. Edit CCC "M."

    3. If the taxpayer entered a "Z" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, edit as follows:

      If ... Then ...
      EIN is present in Column (a), Underline the EIN.
      No EIN is present in Column (a) or is illegible, No action is needed.
      A Date Acquired is present in Column (b) and the day, month, and year are present, Underline the Date Acquired.
      A Date Acquired is present in Column (b) and the day, month, and year are not present, No action is needed.
      A dollar amount is present in Column (g), Underline the dollar amount.
      No dollar amount is present in Column (g), No action is needed.
      If more than one row has a "Z" in Column (f), Edit "Z-1" to the right margin of Part I, Line 1, Row 1.

    4. If the taxpayer entered a "Y" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, edit as follows:

      If ... Then ...
      EIN is present in Column (a), Underline the EIN.
      No EIN is present in Column (a) or is illegible, No action is needed.
      Date Sold or Disposed of is present in Column (c) and the day, month, and year are present, Underline the Date Sold or Disposed of.
      Date Sold or Disposed of is present in Column (c) and the day, month, and year are not present, No action is needed.
      A dollar amount is present in Column (g), Underline the dollar amount.
      No dollar amount is present in Column (g), No action is needed.
      If more than one row has a "Y" in Column (f), Edit "Y-1" to the right margin of Part I, Line 1, Row 1.
      If "Z-1" is edited, Edit "Y-1" under "Z-1."

    Figure 3.11.16-23

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Form 8996 - Qualified Opportunity Fund

  1. Form 8996 is valid for tax periods ending 201712 and later. See Exhibit 3.11.16-13, Form 8996 - Prior Year Conversion Chart.

  2. The table below shows Form 8996 revision line numbers:

    Form 8996 Revisions

    2021 and later 2020 2019 2018 and 2017
    Line 5 Line 5 Line 5 N/A
    Line 6 N/A N/A N/A
    Line 7 Line 7 Line 6 Line 5
    Line 8 Line 8 Line 7 Line 6
    Line 10 Line 10 Line 9 Line 8
    Line 11 Line 11 Line 10 Line 9
    Line 14 Line 14 Line 13 Line 12
    Line 15 Line 15 Line 14 Line 13
  3. Place Form 8996 in sequence order if significant entries are present on any of the lines in paragraphs (4) through (10) below:

    Note:

    Only Part III, Lines 14 and 15 require editing.

  4. Part I, Line 5 - checkbox is checked.

  5. Part I, Line 6 - Reserved for Future Use.

  6. Part II, Line 7 - Total qualified opportunity zone property held by the taxpayer on the last day of the first 6-month period of the taxpayer’s tax year.

  7. Part II, Line 8 - Total assets held by the taxpayer on the last day of the first 6-month period of the taxpayer’s tax year.

  8. Part II, Line 10 - Total qualified opportunity zone property held by the taxpayer on the last day of the taxpayer’s tax year.

  9. Part II, Line 11 - Total assets held by the taxpayer on the last day of the taxpayer’s tax year.

  10. Part III, Line 14 - Perfect line 14 as follows:

    1. Edit the percent on Line 14 in 0.00 format. For example, edit 50 percent as 0.50.

    2. If the entry is greater than 1.00, "X" the entry on Line 14. For example, the entry is 1.23 or 1.23 percent.

  11. Part III, Line 15 - Perfect Line 15 as follows:

    1. If Form 8996, Part III, Line 15 is blank and Part IV, Line 8 has an amount, edit Part IV, Line 8 to Part III, Line 15 in dollars and cents.

  12. Edit Return Processing Code (RPC) "6," see IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

  13. See the following IRM references:

    • Form 1120 - IRM 3.11.16.11.31, Schedule K, Question 25 (Form 8996 - Qualified Opportunity Fund)

    • Form 1120-F - IRM 3.11.16.33.24, Page 3, Question II (Form 8996 - Qualified Opportunity Fund)

    • Form 1120-REIT - IRM 3.11.16.39.29, Schedule K, Question 12 (Qualified Opportunity Fund - Form 8996)

Form 1125-A - Cost of Goods Sold

  1. Place Form 1125-A in sequence order if significant entries are present on Lines 1, 6, or 7.

  2. Edit Form 1125-A in dollars only.

  3. Line 1 is "Inventory at Beginning of Year." If Line 1 is blank, edit from the taxpayer's attachment, see Figure 3.11.16-24.

  4. Line 6 is "Total Cost of Goods." If Line 6 is blank, do one of the following:

    1. Add Lines 1 through 5 and edit the total to Line 6, or

    2. Perfect from attachments if possible for a Line 6 total, see Figure 3.11.16-24, or

    3. Edit the positive amount from line 2, page 1 of Form 1120 to line 6 of Form 1125-A.

  5. Line 7 is "Inventory at End of Year." If Line 7 is negative "X" the amount. If Line 7 is blank, enter from taxpayer's attachment, see Figure 3.11.16-24.

  6. Forms 1125-A must be dummied if missing and if Lines 1, 6, and/or 7 can be edited. Use instruction in 2-5 above to edit lines. Place Form 1125-A in sequence order.

    Figure 3.11.16-24

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Form 4136 - Credit for Federal Tax Paid on Fuels

  1. If Form 4136 is missing and a significant entry is present on any of the lines below, correspond for the missing Form 4136.

    • Form 1120 - Schedule J, Part III, Line 20b (Line 19b for 2017-2011)

    • Form 1120-C - Line 30g (Line 29f for 2017 and prior)

    • Form 1120-F - Page 1. Line 5g

    • Form 1120-FSC - Page 1, Line 2f

    • Form 1120-H - Page 1, Line 23e (23f for 2022 and prior)

    • Form 1120-L - Page 1 Line 27g (28g for 2022 - 2018) (Line 27g for 2017 and prior)

    • Form 1120-PC - N/A

    • Form 1120-REIT - Page 2, Line 25g Line 25f for 2022 - 2018) (Line 24f for 2017 and prior)

    • Form 1120-RIC - Page 2, Line 28g (Line 29g for 2022-2018) (Line 28g for 2017 and prior)

  2. If a fuel credit claim is found on other than the right line on the return, and Form 4136 is attached, adjust incorrect entry before editing fuel tax credits.

  3. If fuel tax credit is claimed and Form 4136 is attached, compute as follows:

    If ... And ... Then ...
    Form 4136, Column (d) is blank, There is an entry in Column (c), Multiply the entry in Column (c) by the rate in Column (b)
    Column (d) should equal Line 17 of Form 4136. See Figure 3.11.16-25.
    Perfection is not possible,   Correspond.

    Figure 3.11.16-25

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    Please click here for the text description of the image.

  4. C&E is no longer required to renumber the lines on prior year Form 4136 to current year format. Column (d) credit amounts are transcribed using the corresponding Credit Reference Number (CRN) in Column (e).

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total additional reporting year tax.

  6. Part II, Line 16 - Total penalties.

  7. Part III, Line 18 - Total interest.

Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts

  1. Form 965-B is valid for tax periods ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount (other than the pre-printed year) is present on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. Line A: To determine if correspondence is needed for the SHOP (Small Business Health Options Program) checkbox (Line A, Form 8941) for 2014 and later, follow the table below:

    Note:

    This chart is only applicable for the Form 1120.

    If... Then...
    Line A, Only "Yes" box or"No" box is checked, No correspondence is needed.
    Line A, Neither the "Yes" box or the "No" box is checked, Correspond using Letter 118C.
    Line A, Both the "Yes" box and the "No" box is checked, Correspond using Letter 118C.

  3. Line C: To determine if correspondence is needed for the checkboxes on Line C (2016 and later), follow the table below:

    Note:

    This chart is only applicable for the Form 1120.

    If... Then...
    Line C, Only "No" box is checked, No correspondence is needed.
    Line C, Only "Yes" box is checked, Correspond using Letter 118C.
    Line C, Neither the "Yes" box or the "No" box is checked, Correspond using Letter 118C.
    Line C, Both the "Yes" box and the "No" box is checked, Correspond using Letter 118C.

  4. For prior year conversion instructions, see Exhibit 3.11.16-12, Form 8941 - Prior Year Conversion Chart.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when an amount is present on Schedule J, Line 5c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Form 6252 - Installment Sale Income (Form 1120 Only)

  1. The transcription of Form 6252 is valid for tax periods ending 201712 and later.

  2. Place Form 6252 in sequence order if the form is attached to a Form 1120 and significant entries are present on any of Lines 1, 2a, 2b, 7, 19, 21 or 23.

    Note:

    Part II, Line 19 is the only line that requires editing, however, an Installment Sale Indicator must be determined from Line 3, see IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

  3. Only one Form 6252 can be processed. If multiple forms are attached, process the first one with significant transcription entries and delete the others.

    Caution:

    Multiple Forms 6252 must be used to determine the Installment Sale Indicator.

  4. Line 1 - Description of Property - Taxpayer may enter a code and a description of installment sale property as described below: (No editing necessary)

    Code Description of property
    1 Sale property is timeshares or residential lot
    2 Sale by an individual of personal use property (within the meaning of section 1275(b)(3))
    3 Sale of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5))
    4 All other installment sales not listed

  5. Line 2a - Date acquired.

  6. Line 2b - Date sold.

  7. Line 3 - Information is used to determine the Installment Sale Indicator - Edit "6 -" followed by the right Installment Sale Indicator code in the left margin of Form 1120, Page 1, near Line 12 when Form 6252 is present (e.g., "6 - 1" ).

    1. Valid Installment Sale Indicator codes are as follows:

      Code One Form 6252 More Than One Form 6252
      1 "Yes" response to Question 3 At least one form has a "Yes" response.
      2 "No" response to Question 3 All "No" responses, or a combination of "No" and/or blank responses.
      3 "Yes" and "No" are checked or Question 3 is blank Question 3 is blank on all forms.

  8. Part I, Line 7 - Taxpayer subtracts Line 6 from Line 5.

  9. Part II, Line 19 - Gross Profit Percentage.

    1. If Line 19 is not in 0.0000 format, edit the percentage as follows:

      Taxpayer’s Entry Edit
      50 percent 0.5000
      .123 0.1230
      .12345 0.1234

      Note:

      Data will only transcribe four digits after the decimal, If the percentage is in the correct format e.g., 0.0000, but more than four digits are present after the decimal e.g., 0.123456, no editing is needed.

    2. If the percent is greater than 1.00, "X" the percentage amount on Line 19. For example, the percentage is 1.2300 or 1.23 percent.

  10. Part II, Line 21 - Payments received during year.

  11. Part II, Line 23 - Payments received in prior years.

Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. Form 8997 is valid for tax periods ending 201901 and later.

  2. Place Form 8997 in sequence order if the form is attached and significant entries are present in any of Parts I, II, III or IV.

  3. No editing is required except for the indicator in Parts I, II, III or IV. Transcription is from Row 1 of each part.

  4. Part I - Total QOF Investment Holdings Due to Deferrals before Beginning of Tax Year (Row 1).

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part I Indicator - If more than one row of tax data is present in Part I, edit a "1" in the right margin of Part I, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  5. Part II - Current Tax Year Capital Gains Deferred by Investing in QOF (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part II Indicator - If more than one row of tax data is present in Part II, edit a "1" in the right margin of Part II, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  6. Part III - Inclusion Events and Certain Other Transfers During the Current Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of previously deferred short-term gain now included in taxable income

    5. Column f - Amount of previously deferred long-term gain now included in taxable income

    6. Part III Indicator - If more than one row of tax data is present in Part III, edit a "1" in the right margin of Part III, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  7. Part IV - Total QOF Investments Due to Deferrals at Year End (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain invested in QOF

    5. Column f - Amount of long-term deferred gain invested in QOF

    6. Part IV Indicator - If more than one row of tax data is present in Part IV, edit a "1" in the right margin of Part IV, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  8. If Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, is attached, edit Return Processing Code (RPC) "9." See IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

Form 8936, Schedule A, Clean Vehicle Credit Amount

  1. Sequence up to two Form 8936, Schedule A’s,

  2. The following lines will be transcribed from the first two Form 8936, Schedule A’s attached.

    1. Part I, Line 2

    2. Part I, Line 3

    3. Part II, Line 9

    4. Part II, Line 11

    5. Part IV, Line 17

    6. Part V, Line 26

  3. If more than two Form 8936, Schedule A’s are attached, edit an indicator of "1" on the second Form 8936, Schedule A, in the bottom right margin.

  4. If there is an amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c for the Clean Vehicle credit (Form 3800, Part III, Lines 1y or 1aa) correspond for a Form 8936 or Form 8936, Schedule A if either is missing.

    Figure 3.11.16-26

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Consolidated Returns

  1. A consolidated return is defined as a single income tax return having combined financial data for a parent corporation and one or more subsidiary or affiliated corporations.

  2. The parent corporation files the return, and its name, which appears on the return, may include the words, "and subsidiaries," and "affiliated companies" , or similar notation.

  3. The parent corporation must submit Form 851, with Form 1120, on an annual basis.

    If... And... Then...
    Form 851 is missing or Form 851, Part I is not completed, After inspecting the return for possible attachments that may be a "substitute" Form 851,
    1. If a "substitute" Form 851 is found, do not correspond.

    2. If a "substitute" Form 851 is not found, correspond for missing Form 851 or completion of Form 851, Part I.

      Caution:

      Before corresponding for missing Form 851, research the parent corporation using Command Code INOLE. Do not correspond if subsidiaries are not shown.

  4. Form 1122 may also be attached to a consolidated return. See IRM 3.11.16.28.4, Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return.

  5. If there is a sign a subsidiary return has been detached from the parent corporation return (e.g., "Included in a Consolidated Return" or similar notation is on the tax return), research INOLES to determine if the tax return has an 1120-14 filing requirement.

    1. Route the tax return to AM if INOLES shows an 1120-14 filing requirement.

    2. Continue processing the tax return if INOLES does not show an 1120-14 filing requirement.

Consolidated Return - Mixed Components

  1. A Mixed Component is a consolidated return with a combination of Form 1120 and/or Form 1120-L (Life Insurance) and/or 1120-PC (Property and Casualty (Non-Life Insurance)) processed as either the parent or subsidiary return. There may also be a sign the return is for a "Life" and/or "Non-Life" insurance company.

  2. Do not search attachments for missing money amounts for pages 1, 2, and 4.

  3. Do not correspond for missing schedules for pages 1, 2, and 4.

  4. Do not correspond for income or deduction amounts if "see attached" is notated in the Income Section or Deduction Section of the return.

  5. Do not correspond for a missing Balance Sheet on a mixed component return that includes a Form 1120-L.

  6. Do not correspond for a missing Form 1120-L or 1120-PC Annual Statement if a re-entry mixed component return, Form 1120 was originally filed electronically.

  7. All other processing instructions will be followed.

Consolidated Returns - Required Information

  1. Supporting schedules showing in detail for each corporation included in the consolidation: income, deductions, and computations of taxable income; reconciliation of earned surplus; and assets and liabilities at the beginning and ending of the taxable year should be attached.

  2. If the supporting information for each corporation is in the form of separate returns for the parent corporation and the subsidiaries, do not detach or separate these documents from the consolidated return.

  3. If the Balance Sheets are included only for the parent corporation and subsidiaries, and the Consolidated Balance Sheet is not included, correspond.

  4. If a Consolidated Balance Sheet is not received, all Balance Sheet items should be input from the Balance Sheet of the parent Corporation; if the parent corporation cannot be found, Balance Sheet items should be input from the subsidiary with greatest Ending Assets.

Form 851 - Affiliations Schedule

  1. Consolidated returns may be filed on Form 1120, Form 1120-C, Form 1120-L, and Form 1120-PC only.

    Note:

    For Form 1120, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  2. If a Form 851 is attached to any other return, do not input Transaction Code (TC) "590" for the subsidiaries.

  3. A TC "590" with Closing Code "014" MUST be input for all subsidiaries shown on the Form(s) 851. This applies to both numbered and unnumbered returns.

  4. Subsidiaries NAICS Code information:

    1. Six digit codes are located on Page(s) 1, Part II, Lines 2 through 10 on the Form 851.

    2. If more than one Form 851 is present, enter the code in each subsidiaries individual transaction record.

    3. If any NAICS Codes are missing, use code "999000."

  5. Form 851 is unprocessable, if the total amount of Form 851, Line 1 does not agree with the sum of Form 1120, Schedule J, Lines 13,14 and 17 (Lines 12, 13 and 16 for 2017- 2011) or credits are claimed on Form 851, Lines 2 through 10.

    If... Then...
    Form 851, Line 1 "Portion of overpayment credits and estimated tax payments" does not agree with the total of Form 1120, Schedule J, Lines 13 and 14 (Lines 12 and 13 for 2017-2011)
    See Figure 3.11.16-27,
    1. Edit Action Code "342."

    2. Attach Form 4227, Intra-SC Reject or Routing Slip. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).

    Form 851, Line 1 "Portion of tax deposited with Form 7004," does not agree with the amount on Form 1120, Schedule J, Line 17 (Line 16 for 2017-2011),
    1. Edit Action Code "342."

    2. Attach Form 4227. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).

    Form 851, Lines 2 through 10 include credits for "Portion of overpayment credits and estimated tax payments" or "Portion of tax deposited with Form 7004,"
    1. Edit Action Code "342."

    2. Attach Form 4227. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).

    Note:

    For Form 1120-C, use the sum of Line 30(a), 30(b) ("Portion of overpayment credits and estimated tax payments" ), and 30(e) ("Portion of tax deposited with Form 7004" ) (Lines 29(a), 29(b) and 29(e) for 2017 and prior).
    For Form 1120-L, use the sum of Lines 28(a), (b), (c), (d) ("Portion of overpayment credits and estimated tax payments" ), and 28(g) ("Portion of tax deposited with Form 7004" ) ( Lines 29 (a), (b), (c), (d), and (g) for 2017 and prior).
    For Form 1120-PC, use the sum of Lines 15a), (b), (c), (d) ("Portion of overpayment credits and estimated tax payments" ), and 15(g) ("Portion of tax deposited with Form 7004" ) (Lines 14(a), (b), (c), (d), and (g) for 2017 and prior).

    Figure 3.11.16-27

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  6. (Clerical) An action trail must be notated on the return "TC-590-014 INPUT." See Figure 3.11.16-28.

  7. (Clerical) TC "590" - Closing Code "014" requires that:

    1. The parent corporations EIN and Name Control match the Master File (MF).

    2. The parent corporations BMF filing requirements are 01 for Form 1120, 20 for Form 1120-C, 03 for Form 1120-L, or 04 for Form 1120-PC.

    3. The subsidiary corporation's FYM must match the parent corporation's FYM.

    4. The subsidiary corporations EIN and Name Control match the MF.

    5. The subsidiary NAICS Code must be part of the transaction, see IRM 3.11.16.11.23, Schedule K, Line 2a - NAICS Code.

    Figure 3.11.16-28

    This is an Image: 33500034.gif

    Please click here for the text description of the image.

  8. (Clerical) For each subsidiary listed on the Form 851 or attached input the following under Command Code FRM49:

    1. Subsidiary EIN

    2. MFT

    3. tax period

    4. Subsidiary Corporate Name Control

    5. NAICS Code

  9. (Clerical) If the return is Numbered -

    1. Reject the document using Action Code "355."

    2. Prepare Form 4227 for Rejects.

    3. Use Command Code INOLE to verify the parent corporate name line and the filing requirement is 01 for a Form 1120, 20 for Form 1120-C, 03 for Form 1120-L, or 04 for Form 1120-PC, before inputting the TC 590-014.

    4. In the reason area of the Form 4227 write "Verify the Parent Corporations EIN, Name and filing requirement with MF, then input TC 590-014 for all subsidiaries listed on the Form(s) 851 and its attachments."

  10. (Clerical) If the return is Unnumbered -

    1. Verify the parent corporations EIN, Name, and filing requirement are correct on the Master File.

    2. Use Command Code INOLE to verify the parent corporate name line and the filing requirement is 01 for a Form 1120, filing requirement is 20 for Form 1120-C, filing requirement is 03 for Form 1120-L, or filing requirement is 04 for Form 1120-PC, before inputting TC 590-014.

  11. (Clerical) If the INOLE first name line and the parent consolidated return’s first name line do not agree (disregard subsidiaries) or if the parent is not established on the MF or its filing requirement is other than 01, 20, 03, or 04 (1120 / 1120-C / 1120-L / 1120-PC) or the parent corporation and the subsidiaries corporation FYM do not match:

    1. Route the return to Entity Control for a first name line change,

    2. Or route to Entity to establish it on the MF,

    3. And/or route to Entity to make a filing requirement change.

    4. Or route to Entity Control to have the subsidiary's FYM change to match the parent corporation's FYM.

  12. (Clerical) If the returns are received back from Entity Control for processing before the changes have posted to the MF, hold the returns and check IDRS after 2 cycles.

    1. Input TC 590-014 for the subsidiaries.

    2. If unable to input TC 590-014, continue processing the return.

  13. (Clerical) If any or all EINs are missing or are the same as the parent follow the steps in (a) through (e) below. When EINs are missing, check attachments and/or research IDRS to obtain them.

  14. (Clerical) If unable to obtain the EINs from IDRS research, route the return to Entity Control to have EINs assigned.

  15. (Clerical) Follow the steps in 5 and 6 above:

    1. If the subsidiary corporate name and EIN are the same as the common parent corporation, circle the name and EIN.

    2. If the EIN is the same as the common parent, circle the EIN.

    3. If there is a sign that the EINs are pending or applied for.

    4. If all the EINs are missing.

  16. (Clerical) If all the EINs are not obtained, correspond with the parent corporation to obtain the missing numbers. Upon receipt of a reply, input TC 590-014 for all EINs are furnished. There will be no further follow-up.

  17. (Clerical) When all EINs are obtained, input TC 590-014 for all the subsidiaries.

  18. (Clerical) If the subsidiaries EIN and Name Control do not match, an error message will appear on the screen when the TC 590-014 is input. When error message appears follow the procedures below:

    1. Research IDRS through Command Code EINAD or NAMEE to see if there is a different EIN listed for the corporation.

    2. If EINAD or NAMEE shows a different EIN than the one listed on the Form 851, use the one on EINAD or NAMEE.

  19. (Clerical) If EINAD or NAMEE does not provide a different EIN, research IDRS using Command Code INOLE to see what the entity is for the listed EIN. If the INOLE entity can be matched to the Form 851 subsidiary in some way (such as by a prior Name Control or a cross reference to the parent corporation EIN) use the INOLE Name Control for the TC 590-014 input.

Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return

  1. The presence of Form 1122 indicates a Consolidated Income Tax Return which is being filed for the first time as a consolidated return. Do not correspond for Form 1122 if it appears to be missing.

  2. If Form 1122 is present, Form 851 should also be present. Correspond for missing Form 851. Process Form 851 if present, see IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

    Note:

    Also see ABLM Code "010" instructions in IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

Form 1120-POL Filed on Form 1120

  1. A return for a Political Organization can usually be determined by the name. Form 1120 returns received from political organizations are to be transshipped to OSPC.

Form 1120-H Filed on Form 1120 (IRC 528)

  1. Apply the following general guidelines to IRC 528 filers who did not use Form 1120-H. The taxpayer must state "Section 528."

  2. Where the taxpayer is identified as an IRC 528 filer, and the return appears to be processable, transfer the data from the Form 1120 to Form 1120-H to the maximum extent possible.

  3. If the taxpayer is identified as an IRC 528 filer, but excludes a break-down of gross income (includable income cannot be identified), prepare an approved Correspondence Action Sheet, advising the taxpayer that he must file Form 1120-H.

  4. If taxpayer states that it is filing as an exempt organization specifically under IRC 501(c), prepare an approved Correspondence Action Sheet, advising the taxpayer to file Form 990.

Return Processing - Form 1120-A

  1. Form 1120-A, U.S. Short-Form Corporation Income Tax Return, must be converted to Form 1120. Follow Form 1120 procedures for processing Form 1120-A.

  2. If a taxpayer files a Form 1120-A, refer the return to the lead for conversion. Form 1120-A has been obsolete since 2006.

Return Processing - Form 1120-C (OSPC only)

  1. This subsection provides instructions for processing Form 1120-C, U.S. Income Tax Return for Cooperative Associations. Form 1120-C is valid for tax periods ending 200612 and later.

  2. Form 1120-C is processed only at the Ogden Campus.

  3. Form 1120-C can be filed on a calendar or fiscal year basis.

  4. Action Codes apply to Form 1120-C, see IRM 3.11.16.3.1, Action Codes.

  5. Form 1120-C is due on or before the 15th day of the 9th month after the end of tax period.

Form 1120-C- General Instructions

  1. To convert prior year tax returns, see Exhibit 3.11.16-4, Form 1120-C - Prior Year Conversion Chart.

Sequence - Form 1120-C

  1. Document Perfection is responsible for arranging Form 1120-C in the following order when transcription line entries are present:

    • Form 1120-C, Pages 1 through 5

    • Schedule N (Form 1120)

    • Schedule O (Form 1120) (Tax periods 201811 and prior only)

    • Form 4626 (Tax periods 201811 and prior only (2017 revision))

    • Form 4626 (Tax periods 2022 and later (Revision 2023))

    • Form 4136

    • Form 8978

    • Form 8941

    • Form 3800

    • Form 8936, Schedule A

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name and Address

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control, through IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. Code the tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return.

  2. If a return is for a short period, see IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date on Page 1 in the dotted portion of the Deduction Section, Lines 11 through 18, see IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Edit the applicable Computer Condition Codes to the dotted portion of Page 1, Lines 8 through 9, of Form 1120-C. Valid Computer Condition Codes for Form 1120-C are B, D, E, F, G, I, J, L, M, O, P, R, S, T, W, X, Y, 3, 5, 7, 8, and 9. For specific instruction, see IRM 3.11.16.9.1, Computer Condition Codes.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1c of Form 1120-C.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-C, Line 30f or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement, is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction, is attached.
    N Form 4626, Alternative Minimum Tax (Revision 2023 and later ) is attached or Form 1120-C, Schedule J, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII)and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.

Consolidated Return

  1. A consolidated Form 1120-C combines the tax information of a cooperative and its affiliates.

  2. Identify a consolidated return by one or more of the following:

    1. Box A1, Page 1, to the left of the entity section is marked or the return is marked "Consolidated."

    2. Form 851, Affiliations Schedule is attached with the Name, Address, EIN, and prepaid credits of each organization included on Form 851.

    3. One or more Form(s) 1122, Return of Information, Authorization, and Consent of Subsidiary Corporation in a Consolidated Return, is attached.

    4. A list of title holding corporations is attached.

  3. A consolidated Form 1120-C must submit Form 851 on an annual basis. Correspond if Form 851 is missing or the subsidiaries are not included on an attached Form 851.

    Note:

    Before corresponding for missing Form 851, research the parent corporation using Command Code INOLE. Do not correspond if subsidiaries are not shown.

  4. For Form 851 processing procedures, see IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

ABLM Code

  1. The ABLM Code is computer generated for Form 1120-C. No editing is required.

Schedule M-3 Checkbox - Item A2

  1. Edit Computer Condition Code "B" when Box A2, "Schedule M-3 attached" is marked or Schedule M-3 is attached to Form 1120-C.

  2. Do not correspond for Schedule M-3 if Item A2 is checked and Schedule M-3 is not attached.

Form 1120-C - Box C

  1. Two Codes are determined from the checkboxes in Box C , Page 1 of the entity section. See IRM 3.11.16.32.12.1, Type of Cooperative Code and IRM 3.11.16.32.12.2, Type of Organization Code.

Type of Cooperative Code
  1. No editing is required. Data transcribes this code from the checkbox entries in Box C.

    • Data enters a "1" if C(1) is marked.

    • Data enters a "2" if C(2) is marked.

Type of Organization Code
  1. The Type of Organization Code is also determined from the checkboxes marked in Box C, Page 1 of the entity section. The Type of Organization Code is edited in the margin to the right of Item C.

  2. Always edit a Type of Organization Code.

    If... Then...
    The Farmer's tax exempt cooperative Box, C(1) is marked, Edit code "6."
    The Nonexempt cooperative Box, C(2) is marked, Edit code "7."
    Neither box is marked or both boxes are marked, Edit code "7."

Additional Form 1120-C Perfection

  1. This subsection addresses the editing of additional Form 1120-C information. General Business Credits will be transcribed from Form 3800, see IRM 3.11.16.10, Additional Return Perfection.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-C near Line 12 when:

    1. Form 8844 is shown on Form 1120-C, Schedule J, Line 5c.

    2. Form 8844 is attached to the return even if dollar amounts are not present.

    3. Form 3800, Part III, Line 3 has an entry.


    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

Audit Codes
  1. Valid Audit Codes are "2," "3," and C. No editing is required for Audit Codes 2 and 3.

  2. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid within the unextended (original) ≡ ≡ ≡ ≡ ≡ period. When the precomputed interest does not pertain to the ≡ ≡ ≡ period but to some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Computer Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Installment Sale Indicator (Form 6252)
  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ), see IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

Income - Lines 1a through 10

  1. Line 1c - Gross receipts balance. If blank, do one of the following:

    1. Edit the sum of Line 1a minus Line 1b. Bracket if negative.

    2. Edit the sum of Line 2 plus Line 3. Bracket if negative.

  2. Line 2 - Cost of goods sold. If blank, edit from Form 1125-A, Line 8. Bracket if negative.

  3. Line 7 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

  4. Line 8 - Net gain or loss from Form 4797, Part II, line 17, if an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond.

  5. Line 10 - Total income. If blank, do one of the following:

    1. If there are entries on Lines 1a through 9, compute and edit Line 10. Bracket if negative.

    2. Double arrow Line 25c to Line 10 if Line 25c is the first dollar entry on Form 1120-C.

Deductions - Lines 11 through 26c

  1. Line 11 - Compensation of Officers (attach Form 1125-E). Accept taxpayer's entry.

  2. Line 12 - Salaries and wages. Accept taxpayer's entry.

  3. Line 13 - Bad debts. Accept taxpayer's entry.

  4. Line 22 - Section 199A(g) deduction (TY 2018 and later). Domestic Production Activities Deduction under section 199 (TY 2005 to 2017).

  5. Line 24 - Total deductions. If blank, edit the sum of Lines 11 through 23. Bracket if negative.

  6. Line 25b - Deductions and adjustments under IRC 1382. If blank, edit from Schedule H, Line 5. Bracket if negative.

  7. Line 26a - Net operating loss deduction. If blank, edit from attachments if possible.

  8. Line 26b - Special deductions. If blank, edit from Schedule C, Line 24 (Schedule C, Line 20 for 2017-2011).

Tax and Payments - Lines 27 through 34

  1. Line 27 - Taxable income. If blank, edit the sum of Line 10 minus Lines 24, 25b, 26a, and 26b.

  2. Line 28 - Total tax. If blank, edit from Schedule J, Line 9.

  3. Line 29 - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b):

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  4. Line 30c - If there is a significant entry on Line 30c, see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  5. Line 30d (Line 29d for 2017 and prior) - Balance of payments. If blank, edit the sum of Lines 30a and 30b minus Line 30c (Lines 29a and 29b minus Line 29c for 2017 and prior).

  6. Line 30e (Line 29e for 2017 and prior) - Tax deposit with Form 7004. Accept taxpayer's entry.

  7. Line 30f (Line 30f(1) for 2022 - 2018) (Line 29f(1) for 2017 and prior).

    1. (Tax Period 202201-202211) - If a significant amount is present for an "Elective or Deemed Payment Election," edit RPC "J."

    2. Credit from Form 2439

    If... Then...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Line 30f (Line 30f(1) for 2022 - 2018) (Line 29f(1) for 2017 and prior) Form 1120-C. Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

  8. Line 30g (Line 30 f(2) for 2022 - 2018) (Line 29f (2) for 2017 and prior) - Credit from Form 4136.

    1. Form 4136 must be attached if there is an amount on Line 30g (Line 30 f(2) for 2022 - 2018) (Line 29f (2) for 2017 and prior). Correspond for missing Form 4136 if Line 30f(2)(Line 29f(2) for 2017 and prior) has a significant amount.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  9. Line 30g - Reserved for future use.
    Line 30g - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 29g for 2017 and prior):

    If ... Then ...
    The amount on Line 30g (Line 29g for 2017 and prior)≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827

  10. Line 30h (Line 29h for 2017 -2008) - IRC 1383 credit. A schedule showing the credit computation must be attached. Correspond for the missing computation schedule ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  11. Line 30i - Elective Payment - Accept taxpayer's entry.

    1. For Tax Periods 201712 through 202012, follow the instructions in b) and c).

    2. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    3. Edit CCC "J" and Action Code "460."

  12. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

  13. Line 31 (Line 30 for 2017 and prior) - Estimated tax penalty. If blank and Form 2220 is attached with a significant entry on Line 38, edit this amount to Line 31 (Line 30 for 2017 and prior), Form 1120-C, see IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  14. Lines 32 and 33 (Lines 31 and 32 for 2017 and prior) - Amount owed/Overpayment. Edit the proper entry to Line 32 or 33 (Lines 31 and 32 for 2017 and prior) if both are blank. Do both of the following:

    1. For 2023 and later, add Lines 28 and 31 minus 30a through 30j credits.

    2. For 2022 - 2018, add Lines 28, 29 and 31, subtract Line 30j.

    3. For 2017 and prior, add Lines 28 and 30 minus Line 29j.

    4. Edit the positive result on Line 32 (Line 31 for 2017 and prior) or the negative result (do not bracket) on Line 33 (Line 32 for 2017 and prior).

  15. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 32 (Line 31 2017 and prior) or reduced Line 33 (Line 32 for 2017 and prior).

    If... Then...
    The amount on Line 32 (Line 31 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 32 (Line 31 for 2017 and prior).

    2. Delete the interest, penalty, or additional charge from the total.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 33 (Line 32 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 33 (Line 32 for 2017 and prior).

    2. Delete the interest, penalty, or additional charge from the total.

    3. Edit the correct Overpayment to the left of the original entry.

  16. Line 34 (Line 33 for 2017 and prior) - Credited to estimated tax.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Schedule G - Allocation of Patronage and Nonpatronage Income and Deductions

  1. Line 5, Column (a) - Total income. If blank, edit the sum of Column (a), Lines 3 and 4.

  2. Line 5, Column (b) - Total income. If blank, edit the sum of Column (b), Lines 3 and 4.

  3. Line 6c Column (a) - Total deductions. Accept taxpayer's entry.

  4. Line 6c, Column (b) - Total deductions. Accept taxpayer's entry.

  5. Line 9a, Column (a) - Net operating loss. Accept taxpayer's entry.

  6. Line 9a, Column (b) - Net operating loss. Accept taxpayer's entry.

  7. Line 9b, Column (a) - Special deductions. Accept taxpayer's entry.

  8. Line 9b, Column (b) - Special deductions. Accept taxpayer's entry.

  9. Line 12, Column (a) - Unused patronage loss. Accept taxpayer's entry.

  10. Line 13, Column (b) - Unused nonpatronage loss. Accept taxpayer's entry.

Schedule H - Deductions and Adjustments Under IRC 1382

  1. Lines 3a and 3b. Accept taxpayer's entry.

Schedule J, Line 1 - Controlled Group Code

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit "1" to the right of the checkbox on Line 1, if the box on Line 1 is marked.

  3. If the box on Line 1 is not checked, edit "1" to the right of the checkbox on Line 1 if both of the following apply:

    1. Page 1, Line 27 is more than $0.

    2. Schedule O (Form 1120) is attached with the cooperative portion of the group's allocation.

Schedule J, Tax Computation

  1. Line 1 (Line 2 for 2022 and prior) - Income tax. Accept taxpayer's entry.

  2. Line 2 (Line 3 for 2022 and prior) - Base Erosion Payments (201812 and later) and Prior year Alternative minimum tax, Form 4626 (Tax periods 201811 and prior only).

    If... Then...
    The tax period is 201811 and prior and Line 2 (Line 3 for 2022 and prior) has a significant entry, but Form 4626 (2017 revision) is not attached, Correspond.
    The tax period is 201811 and prior and Line 2 (Line 3 for 2022 and prior) is blank and Form 4626 is attached with an amount on Line 14, Edit the Line 14, Form 4626 amount to Schedule J, Line 2 (Line 3 for 2022 and prior).
    The tax period is 201812 and later and Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached, Do the following:
    1. Edit RPC "1."

    2. Edit the amount from Form 8991, Line 5e to Form 1120, Schedule J, Line 2.

    The tax period is 201812 and later and Schedule J, Line 2 (Line 3 for 2022 and prior) has a significant entry and Form 8991 is not attached, Correspond

  3. Line 3 - Corporate Alternative Minimum Tax (Form 4626 (2023 Revision). Correspond for Form 4626 if Line 3 has a significant entry and Form 4626 is not attached.

  4. Line 5a - Foreign tax credit, Form 1118:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit CCC "P."
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118 or similar statement is not attached, Correspond.

  5. Line 5b - Credits from Form 5735 and Form 8834:

    If... Then...
    There is an entry on a 2006 Form 1120-C, Line 5b ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 8834 is not attached, Correspond.
    There is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120-C, Line 5b and it can be determined the credit is from Form 8834, but Form 8834 is not attached, Correspond.
    There is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120-C, Line 5b and it can be determined the credit is from Form 5735, but Form 5735 is not attached, Correspond.
    There is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120-C, Line 5b and it cannot be determined if the credit is from Form 5735 or 8834, Correspond for missing Line 5b documentation.

  6. Line 5c - If an amount is present or Form 3800 is attached, follow the instructions in IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

  7. Line 5d - Credit for prior year minimum tax, Form 8827:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8827 is not attached, Correspond.

  8. Line 8a - Recapture of investment Credit (2023 and later)

    If... Then...
    The Line 8a entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but, Form 4255 is not attached, Correspond.
    Form 4255 is attached and the tax is not included on Line 8a, Edit the amount from Line 20, Form 4255 to Schedule J, Line 8a.

  9. Line 8b - Recapture of Low Income Housing Credit (2023 and later)

    If... Then...
    The Line 8b entry is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 8611 is not attached, Correspond.
    More than one Form 8611 is attached,
    1. Combine Form 8611, Line 14, amounts.

    2. Edit the total to Schedule J, Line 8b.

    Form 8611 is attached and the tax is not included on Schedule J, Line 8b, Edit the amount from Line 14, Form 8611 to line 8b.
  10. Line 8 - (Tax period 202201 through 202212) If a significant amount is present on Line 8 and the taxpayer writes" CAMT" or "IRA AMT" or indicates the amount is for Corporate AMT, continue processing, no action is required.

  11. Line 8 (Revision for 2022 and prior)

    If ... And ... Then ...
    Form 4255 or Form 8611 boxes are checked and the credit amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, The form is not attached. Correspond.
    Form 4255 box is checked, An amount is present on Form 4255 Line 20 Renumber Line 8 to Line 8a and enter the Form 4255 Line 20 amount.
    Form 8611 box is checked, An amount is present on Form 8611 Line 14, Renumber Line 8 to Line 8b and enter the Form 8611 Line 14 amount.
    More than one Form 8611 is attached,  
    1. Combine Form 8611, Line 14, amounts.

    2. Edit the total to Schedule J, Line 8b.

Schedule K, Line 2 - NAICS Code

  1. The Principal Business Activity (PBA) Code is based on the North American Industry Classification System Code (NAICS). These codes are a high priority to the Service. It is critical data for Statistics of Income, Examination, Research, and other Service organizations.

  2. The NAICS Code is a six digit code on Schedule K, Line 2a of Form 1120-C.

  3. A NAICS Code is required on all Form 1120-C returns.

    Exception:

    Do not edit a NAICS Code on "G" coded returns (amended returns).

  4. Only one NAICS Code can be used on the return. Edit the NAICS Code as follows:

    If... Then...
    A legible six digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    A legible four digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    There is more than one NAICS Code on Schedule K, Line 2a, Circle all but the first NAICS Code listed.
    Schedule K, Line 2a is blank, illegible or other than four or six digits, Edit NAICS Code "999999."

Schedule K, Question 5 - Is the Cooperative a Subsidiary in an Affiliated Group/Controlled Group

  1. If Question 5 meets one of the following conditions, a Name Control and EIN must be edited.

    If... Then...
    • Question 5 is checked "Yes,"

    • Both the "Yes" and "No" boxes are checked,

    • Question 5 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return,

    1. If something other than a corporation's name and/or EIN is present on Line 5, circle the name and/or EIN.

    2. If the name and/or EIN is the same as the tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Line 5. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the EIN on Line 5. If unable to find the EIN, edit "12-9999999."

    Question 5 is answered "No" or neither box is checked and a corporation's name and EIN are not present, No editing is required.
    Question 5 is answered "No" or neither box is checked and a corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

Schedule K, Line 8c - Number Form 5472(s)

  1. No entry is required for Schedule K, Line 8c unless Form 5472 is present.

  2. Edit Line 8c as follows:

    If... And... Then...
    A number is present for Schedule K, Line 8c,   No editing is required.
    Schedule K, Line 8c is blank, One or more Form 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line 8c.
    Form 5472 is attached, Schedule K is not present, Dummy a Schedule K and edit the number of Form 5472(s) to Schedule K, Line 8c.

Schedule K, Lines 20a, 20b and 20c (Corporate AMT)

  1. If Question 20b is marked "Yes" or Question 20c is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Schedule L - Balance Sheet

  1. Line 2a, Column (c) - Trade notes and accounts receivable. If there is no entry and:

    1. Line 2b, Column (c) has an entry, compute and enter Line 2a(c) by adding Lines 2b(c) to Line 2b(d).

    2. Line 2b, Column (c) is blank, edit the Line 2b(d) to Line 2a(c).

  2. Line 4, Columns (b) and (d) - Other current assets. Accept taxpayer's entry.

  3. Line 13, Column (d) - Total Assets. If blank, add Lines 1 through 12. Bracket if negative.

  4. Correspond for Form 1120-C, Schedule L if blank or missing.
    Exception, do not correspond if:

    1. The return is an "Amended" or "Final" return.

    2. There are no significant entries on Page 1, Lines 1 through 24.

    3. The "Cash" box is checked on Page 4, Schedule K, Line 1.

    4. The "Yes" box is checked on Page 4, Schedule K, Line 14.

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. For processing instructions, see IRM 3.11.16.11.37, Schedule N (Form 1120) - Foreign Operations of U.S. Corporation.

Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for Controlled Groups

  1. The instructions in this subsection (paragraphs 2 through 4) only apply to tax periods 201811 and prior. If a Schedule O is attached to a Form 1120-C for tax period 201812 and later, do the following:

    If ... Then ...
    Schedule O is in sequence order, Line through Schedule O, Parts II and III.
    Schedule O is not in sequence order, No action needed.

  2. This subsection includes instructions for processing Schedule O (Form 1120).

  3. Schedule O (Form 1120) replaces the Controlled Group tax computation previously included on Schedule J, Lines 2a(1) through 2b(2) for 2005 and prior.

  4. If Controlled Group Code "1" or "4" is edited on a 2005 or prior year return, dummy a Schedule O and edit significant positive amounts as follows:

    1. Schedule J, Line 2a(1) to Schedule O, Part II, Line 1, Column (c).

    2. Schedule J, Line 2a(2) to Schedule O, Part II, Line 1, Column (d).

    3. Schedule J, Line 2a(3) to Schedule O, Part II, Line 1, Column (e).

    4. Schedule J, Line 2b(1) to Schedule O, Part III, Line 1, Column (f).

    5. Schedule J, Line 2b(2) to Schedule O, Part III, Line 1, Column (g).

Taxable Income Apportionment - Part II, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Schedule O, Part II, Line 1 as follows:

    If... And... Then...
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (c), (d), and (e).
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (c), (d), and (e).

    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    Taxable income brackets are found on an attachment,
    (See Note below for examples.)
    Edit the positive taxable income bracket amounts to Schedule O, Line 1, Columns (c), (d), and (e). Dummy a Schedule O if needed.
    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    No taxable income brackets are found, Correspond for taxable income bracket amounts.

    Exception:

    Do not correspond if; there is no indication of an income tax liability on Form 1120-C, Schedule J, Line 2, the taxable income on Form 1120-C, Page 1, Line 27 is zero ("0" ) or a negative amount, or Schedule O (Form 1120), Page 1, Box 3c or Box 4a is checked.

    No Controlled Group Code was edited, see IRM 3.11.16.11.11(4), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation.   Delete Schedule O.

  3. Entries may be shown on an attached allocation/apportionment schedule. Some examples of the title of these schedules may be:

    • "apportionment plan"

    • "apportionment consent plan"

    • "consent to apportionment"

    • "controlled group tax apportionment plan"

    • "surtax apportionment plan"

    • "allocation schedule"

  4. The attachment may identify the amounts by the tax rate and/or taxable income bracket. Column (c) is the $50,000 taxable income bracket taxed at 15 percent, Column (d) is the $25,000 taxable income bracket taxed at 25 percent and Column (e) is the $9,925,000 taxable income bracket taxed at 34 percent.

  5. Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

Income Tax Apportionment - Schedule O, Part III, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Part III, Line 1 as follows:

    If... And... Then...
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (f) and (g).
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (f) and (g).

    A Controlled Group was edited, Part III, Line 1, Column (f) is blank, Check attachments for possible entry (additional 5 percent tax):
    1. If found, edit the positive amount to Line 1, Column (f).

    2. If not found, continue processing.

    A Controlled Group was edited, Part III, Line 1, Column (g) is blank, Check attachments for possible entry (additional 3 percent tax):
    1. If found, edit the positive amount to Line 1, Column (g).

    2. If not found, continue processing.

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Periods 202301 and later)

  1. The instructions in this subsection apply to tax periods 202301 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision) is attached. See IRM 3.11.16.32.8, Return Processing Code.

Form 4626 - Alternative Minimum Tax (Tax Periods 201811 and prior)
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Taxpayers may sometimes include more than one Form 4626 with the return. If more than one Form 4626 is present, compute the totals and edit the right transcription lines.

  3. If Form 4626 is attached, perfect the following lines, as necessary:

    1. Line 3 - Pre-Adjustment AMTI. If there is no entry on Line 3, but any of Lines 1 or Lines 2a through 2o have an entry, compute Line 3. Bracket if negative.

    2. Line 4e - ACE Adjustment. Accept taxpayer's entry.

    3. Line 6 - Alternative tax net operating loss deduction. Accept positive entry. "X" negative entry.

    4. Line 11 - Alternative minimum tax foreign tax credit. Accept positive entry. "X" negative entry.

Form 4136 - Credit for Federal Tax Paid on Fuel

  1. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total additional reporting year tax.

  6. Part II, Line 16 - Total penalties.

  7. Part III, Line 18 - Total interest.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, A significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Schedule J, Line 5c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Form 8936, Schedule A, Clean Vehicle Credit Amount

  1. Sequence up to two Form 8936, Schedule A’s.

  2. The following lines can be transcribed for the first two Form 8936, Schedule A’s attached.

    1. Part I, Line 2

    2. Part I, Line 3

    3. Part II, Line 9

    4. Part II, Line 11

    5. Part IV, Line 17

    6. Part V, Line 26

  3. If more than two Form 8936, Schedule A’s are attached, edit an indicator of "1" on the second Form 8936, Schedule A, to the bottom right margin.

  4. If there is an amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c for the Clean Vehicle credit (Form 3800, Part III, Lines 1y or 1aa) correspond for a Form 8936 or Form 8936, Schedule A if either is missing.

Return Processing - Form 1120-F (OSPC Only)

  1. This subsection provides instructions for processing Form 1120-F, U.S. Income Tax Return of a Foreign Corporation.

  2. Form 1120-F can be filed on a calendar or fiscal year basis.

  3. Action Codes apply to Form 1120-F, see IRM 3.11.16.3.1, Action Codes.

  4. Check for proper batching of returns and re-batch as required.

    1. If amounts are present on Form 1120-F, Section II, the return must be batched as Effectively Connected (Doc Code 67).
      Section II is located on Pages 4 and 5 (2016 and later) and Pages 3 and 4 (2015 and prior).

    2. All others must be batched as Non-Effectively Connected (Doc Code 66).

  5. Place Form 1120-F in a designated basket if Form 1042-S is attached, and Form 1042-S has any of the following conditions:

    • Fails to list any Withholding Agent information in Boxes 12a through 12i and claims withholding reported on Line 5i of Form 1120-F.

    • Includes a "Substantiating Evidence Form" header and may include a "Disclaimer" at the bottom.

  6. To convert prior year tax returns, see Exhibit 3.11.16-5, Form 1120-F - Prior Year Conversion Chart.

Foreign Payments Practice (FPP) Review

  1. For processing year 2017 and later, the Foreign Payments Practice (FPP) Review will take place after the Form 1120-F has been edited, numbered and transcribed. C&E will initiate the review by editing Action Code "440" and Rejects will send the return to FPP for review. Rejects will also make any corrections to the reviewed return, see IRM 3.11.16.33.39, Form 1120-F - Refund and Credit Elect Returns, for specific editing instructions.

Sequence - Form 1120-F

  1. Document Perfection is responsible for arranging Form 1120-F in the following order when transcription line entries are present:

    • Pages 1, 2, 3, 4, 5, 6, 7, and 8

    • Form 4626 (Tax periods 202301 and later (Revision 2023))

    • Form 1120, Schedule D

    • Form 8949

    • Form 8996

    • Form 4136

    • Form 8978

    • Form 8941

    • Form 3800

    • Form 8997

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control

  1. All returns must have the Name Control underlined, see IRM 3.11.16.6.3, Entity Perfection - Name Control.

Address

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses and IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format in the top right margin of the form, above the title. See IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the top left margin, above the Form 1120-F title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 1 through 4. See IRM 3.11.16.8, Received Date, and Exhibit 3.11.16-2 Due Date Charts.

Page 1, Line A - Country of Incorporation

  1. Edit Line A as follows:

    If... Then...
    The taxpayer has entered the name of a Foreign Country in Line A, Write the two letter "Country Code" in the dotted area of Line A if not present. If the Country Code is present, underline the Country Code. See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475.

    If Line A does not have an entry, or "US," "USA," "America"
    U.S. Possession or similar reference to the United States is present,
    Edit "Country Code," "OC."
    More than one Foreign Country is present, Edit the first entry only. See above for editing instructions.

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands.

Page 1, Question D(1) - Location of Books and Records and
Page 1, Question D(3) - Office or Place of Business

  1. If the address (city, province or state, and country) in Question D(1) is outside the U.S. (Foreign address, for example, XYZ LTD, London, England), or is a U.S. Possession enter Area Office Code "15" in the dotted area of Question D(1).

  2. If the address (city, province or state, and country) in Question D(1) is within the U.S. (domestic address), enter the right Area Office Code number. See Exhibit 3.11.16-1 Area Office Codes, (for example ABC Ltd., New York, NY enter "02" ) in the dotted area of Question D(1).

  3. If no address (city, province or state, and country) appears in Question D(1), or if "same as above" appears, then use the entity address data and follow step 1 or 2 above as appropriate.

  4. The checkbox in Question D(3) referring to an office or place of business in the U.S. requires special coding. Edit a U.S. Office Code Indicator as follows:

    1. If the box is checked, edit a "1" to the left of the checkbox in the dotted portion of Question D(3).

    2. If the box is not checked, edit a "2" to the left of the checkbox in the dotted portion of Question D(3).

      Note:

      This code establishes the correct due date for Form 1120-F. It is not necessary to edit CCC "R" or CCC "D."

    3. If Box D is not present (prior year returns) no action is required.

Computer Condition Codes

  1. Computer Condition Codes are edited vertically in the blank space to the right of Questions E through G (2015 and prior, H through L). Valid codes for Form 1120-F are B, C, D, E, F, G, H, I, L, M, O, R, S, T, V, W, X, Y, Z, 3, 5, 7, and 8. See IRM 3.11.16.9.1, Computer Condition Codes, and Figure 3.11.16-29.

    Figure 3.11.16-29

    This is an Image: 33500037.gif

    Please click here for the text description of the image.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-F.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    A Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached.
    B Form 5471, Schedule H, Current Earnings and Profits, is attached.
    C Form 5471, Schedule I-1 Information for Global Intangible Low-Taxed Income, is attached.
    D Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached.
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    H Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, Part VIII, Cost Sharing Arrangement (CSA), has an entry (e.g., description, checkbox marked, percent, or an amount).
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-F, Line 5 or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached.
    N Form 4626, Alternative Minimum Tax (Revision 2023 and later ) is attached or Form 1120-F, Schedule J, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached.

Schedule M-3 Checkbox

  1. Edit Computer Condition Code "B" when the "Schedule M-3 attached" box on Page 1 is marked or Schedule M-3 is attached to Form 1120-F.

  2. Do not correspond for Schedule M-3 if the "Schedule M-3 attached" box is marked and Schedule M-3 is not attached.

NAICS Code

  1. The Principal Business Activity (PBA) Code is based on the North American Industry Classification System Code (NAICS). These codes are a high priority to the Service. It is critical data for Statistics of Income, Examination, Research and other Service organizations.

  2. The NAICS Code is a four or six digit code on Page 1, Item F(1) of Form 1120-F.

  3. A NAICS Code is required on all Form 1120-F returns.

    Exception:

    Do not edit a NAICS Code on "G" coded returns (amended returns).

  4. Only one NAICS Code can be used on the return. Edit the NAICS Code as follows:

    If... Then...
    A legible six digit NAICS Code is shown on Page 1, Item F(1), No editing is required
    A legible four digit NAICS Code is shown on Page 1, Item F(1), No editing is required.
    There is more than one NAICS Code on Page 1, Item F(1), Circle all but the first NAICS Code listed.
    Page 1, Item F(1) is blank, illegible or, other than four or six digits, Edit NAICS Code "999999" .

Additional Form 1120-F Perfection

  1. This subsection addresses the editing of additional Form 1120-F information, see IRM 3.11.16.10, Additional Return Perfection.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-F near Line 2.
    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

Audit Codes
  1. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 2.

  2. Code "1" Inconsistent Filer Under IRC 6222(b) if:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request, is attached, or

    2. The return has an attachment with the statement "Notice of Inconsistent Treatment under IRC 6222(b)," or

    3. A statement showing the corporation is filing its return inconsistent with the way its partnership return was filed, or.

    4. Form 8275, Disclosure Statement, is attached, or a statement referring specifically to IRC 6662 (Disclosure).

  3. Audit Code "2" (International) will be computer generated for Form 1120-F returns. Do not edit Audit Code "2" in the left margin of the return.

  4. Code "3" if:

    1. "Unusual Refundable Credits" are claimed.

    2. Taxpayer quotes "Change of Accounting Period" under Headquarters "Grant Letter," or Revenue Procedure 2006-45 or 2006-46. Attach Form 4227, Intra-SC Reject or Routing Slip, to Examination (Audit) showing: "Taxpayer is changing accounting period pursuant to Headquarters "Grant Letter" or Revenue Procedure 2006-45 or 2006-46."

  5. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near Line 2 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. Edit "5 - 4" in the left margin near Line 2 if Form 2220 is attached and Part II, Box 8 (prior year Part I, Box 3) is shown for a large corporation.

Installment Sale Indicator Code (Form 6252)
  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 2 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ), see IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

Form 1120-F Indicator Code
  1. Edit "7 - 1" in the left margin near Line 2 if Form 1120-F has both Non-Effectively (Section I) and Effectively (Section II) Connected Income, (i.e., money amounts on line 1 and 2 that are greater than zero) see Figure 3.11.16-30.

  2. Form 1120-F has two categories of income:

    Categories of Income Line Numbers
    Not effectively connected - Income from U.S. sources not effectively connected with the conduct of a trade or business in the United States
    • Page 1, Line 1

    • Page 3, Section I, Line 11 (Page 2, Section I, Line 11, 2015 and prior)

    Effectively Connected - income effectively connected with the conduct of a trade or business in the United States,
    • Page 1, Line 2

    • Page 5, Section II, Schedule J, Line 9, (Page 4, Section II, Schedule J, Line 9, 2015 and prior)

    Figure 3.11.16-30

    This is an Image: 33500038.gif

    Please click here for the text description of the image.

Lines 1 through 5h - Computation of Tax Due or Overpayment

  1. Line 1 - Tax from Section I, Line 11, Page 3 (Page 2, 2015 and prior), on Income from U.S. Sources Not Effectively Connected. If blank, enter from Page 3, Section I, Line 11.

  2. Line 2 - Tax from Section II, Schedule J, Line 9, Page 5 (Page 4, 2015 and prior). If blank, enter from Page 5 (Page 4, 2015 and prior), Schedule J, Line 9.

  3. Line 3 - Tax from Section III, Lines 6 and 10, Page 6 (Page 5, 2015 and prior). If blank, compute and enter from Page 6 (Page 5, 2015 and prior), Section III, Lines 6 and 10.

  4. Line 4 - Total Tax.

    1. Compute and enter Line 4 when it is blank and there are entries on any of Lines 1 through 3.

    2. If pre-computed interest or delinquency penalty or an added charge is evident, ensure that it has not been included in Line 4.

      If... Then...
      The amount on Line 4 has pre-computed interest or penalty or additional charge,
      1. "X" the Line 4 amount.

      2. Delete the interest, penalty or additional charge from the Tax Due.

      3. Edit the correct Total Tax to the left of the original entry.

  5. Line 5c - If there is a significant entry on Line 5c, see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  6. Line 5d - Total of estimated tax payments. Compute and enter the total of Lines 5a and 5b, minus Line 5c on Line 5d.

  7. Line 5e - Form 7004 Credit.

  8. Line 5f - Regulated Investment Company Credit.

    If ... Then ...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Line 5f. Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

  9. Line 5g - Credit for Federal tax paid on fuels.

    1. If Line 5g has a significant entry and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  10. Line 5h - Reserved for future use.
    Line 5h - Refundable credits from Form 8827 (revisions 2019 and prior):

    If ... Then ...
    The amount on Line 5h ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827.

Line 5i - U.S. Income Tax Paid or Withheld at Source

  1. Line 5i - U.S. Income Tax Paid or Withheld at Source. The credit on Line 5i must be substantiated with a copy of:

    • Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons (Box 2).

    • Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax (Line 10).

    • Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding (Line 10).

    If... And... Then...
    Form 1042-S is used to substantiate the amount or part of the amount on Line 5i, The taxpayer's name is not listed as the recipient in Box 13a of the Form 1042-S,

    Note:

    Box 13a cannot be a withholding rate pool or if the recipient is "unknown."

    • Subtract the amount of the Form 1042-S from the amount on Line 5i.

    • Continue processing the return following the instructions below.

  2. When an amount is present on Line 5i, follow the instructions below:

    If... And... Then...
    An amount is claimed on Line 5i, Supporting withholding documentation (Form 1042-S, Form 8288-A or substantial evidence, or Form 8805) is not attached,

    Example:

    Substantial evidence includes closing documents or settlement statement which shows the amount of tax withheld.

    Correspond for supporting withholding documentation.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

    1. Attach an approved Correspondence Action Sheet.

    2. Edit Action Code "215."

      Note:

      If the address on Form 1120-F is domestic, edit Action Code "211."

    3. Continue processing.

    An amount is claimed on Line 5i, Form 1042-S, Form 8805, or a combination of these forms is attached and the total withholding substantiation is equal to or greater than the amount on Line 5i, Continue processing.

    Exception:

    If the Form 1042-S is a consolidated Form 1042-S edit Action Code "440."

    An amount is claimed on Line 5i, Form 1042-S, Form 8805, or a combination of these forms is attached and the total withholding substantiation is less than the amount on Line 5i, Correspond for supporting withholding documentation.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

    Note:

    Do not correspond if the difference is due to rounding.

    1. Attach an approved Correspondence Action Sheet.

    2. Edit Action Code "215."

      Note:

      If the address on Form 1120-F is domestic, edit Action Code "211."

    3. Continue processing.

  3. When FIRPTA credit Form 8288-A is claimed on Form 1120-F, Line 5i, or Form 8288-A is attached, the FIRPTA Unit must verify the credit. The verified FIRPTA credit will be entered on Form 13698, Credit Verification Slip.

    Caution:

    If FIRPTA credit is reported on a line other than Line 5i, move the FIRPTA amount to Line 5i and continue processing following the instructions below.

    If... And... Then...
    Only FIRPTA credit, Form(s) 8288-A or substantial evidence is attached and:
    1. The verified FIRPTA credit, Form(s) 8288-A is equal to or greater than Line 5i,

     
    1. "X" the credit amount on Line 5i.

    2. Move the Line 5i amount to the right of Line 5i.

    3. Edit action trail "CRV" to the lower left margin of the return.

    4. Continue processing.


    See Figure 3.11.16-31
    Only FIRPTA credit, Form(s) 8288-A or substantial evidence is attached and:
    1. The verified FIRPTA credit, Form(s) 8288-A is less than Line 5i, or

    2. No FIRPTA credit, Form(s) 8288-A is verified by the FIRPTA data base,

    The total of attached Form(s) 8288-A, Box 2 is equal to or greater than Line 5i,
    (Withholding substantiation is attached.)
    1. "X" the credit amount on Line 5i.

    2. Edit the verified FIRPTA amount (Form 13698) to the right of Line 5i if greater than zero ("0" ).

    3. Edit action trail "CRV" to the lower left margin of the return.

    4. Continue processing.

    Only FIRPTA credit, Form(s) 8288-A or substantial evidence is attached and:
    1. The verified FIRPTA credit, Form(s) 8288-A is less than Line 5i, or

    2. No FIRPTA credit, Form(s) 8288-A is verified by the FIRPTA data base,

    The total of attached Form(s) 8288-A, Box 2 is less than Line 5i,
    (Not all withholding substantiation is attached.)
    Correspond for supporting withholding documentation:
    1. Attach an approved Correspondence Action Sheet.

    2. Edit Action Code "215."

      Note:

      If the address on Form 1120-F is domestic, edit Action Code "211."

    3. Continue processing.

    Form(s) 1042-S, 8805, or a combination of these forms, is attached and Form(s) 8288-A or substantial evidence is also attached and:
    1. The FIRPTA credit Form 8288-A is fully verified by the FIRPTA data base,

    The total of attached Form 1042-S, Form 8805, and Form 8288-A is equal to or greater than Line 5i,
    (Withholding substantiation is attached.)
    1. "X" the credit amount on Line 5i.

    2. Edit the verified FIRPTA credit amount (Form 13698) to the right of Line 5i.

      Exception:

      If the verified FIRPTA amount is more than the Line 5i amount, move the Line 5i amount to the right of Line 5i.

    3. Subtract the verified FIRPTA credit amount from the Line 5i amount and edit the difference to the left of Line 5i if greater than zero ("0" ).

    4. Edit Action Trail "CRV" to the lower left margin of the return.

    5. Continue processing.

    Form(s) 1042-S, 8805, or a combination of these forms, is attached and Form(s) 8288-A or substantial evidence is also attached and:
    1. The FIRPTA credit Form 8288-A is fully verified by the FIRPTA data base,

    The total of attached Form 1042-S, Form 8805, and Form 8288-A is less than Line 5i,
    (Not all withholding substantiation is attached.)
    Correspond for withholding documentation:

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

    1. Attach an approved Correspondence Action Sheet.

    2. Edit Action Code "215."

      Note:

      If the address on Form 1120-F is domestic, edit Action Code "211."

    3. Continue processing.

    Form 1042-S, or Form 8805, or a combination of these forms is attached and one or more Form 8288-A or substantial evidence is also attached and:
    1. The FIRPTA credit, Form(s) 8288-A is not fully verified by the FIRPTA data base,

    The total of Form 1042-S, Form 8805, and Form 8288-A is equal to or greater than Line 5i,
    (Withholding substantiation is attached.)
    1. "X" the credit amount on Line 5i.

    2. Edit the verified FIRPTA credit amount (Form 13698) to the right of Line 5i.

      Exception:

      If the verified FIRPTA amount is more than the Line 5i amount, move the Line 5i amount to the right of Line 5i.

    3. Subtract the total of Form(s) 8288-A, Box 2 from the Line 5i amount and edit the difference to the left of Line 5i if greater than zero ("0" ).

    4. Edit Action Trail "CRV" to the lower left margin of the return.

    5. Continue processing.

    Form 1042-S, or Form 8805, or a combination of these forms is attached and one or more Form 8288-A or substantial evidence is also attached and:
    1. The FIRPTA credit, Form(s) 8288-A is not fully verified by the FIRPTA data base,

    The total of attached Form 1042-S, Form 8805, and Form 8288-A is less than Line 5i,
    (Not all withholding substantiation is attached.)
    Correspond for withholding documentation:

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

    1. Attach an approved Correspondence Action Sheet.

    2. Edit Action Code "215."

      Note:

      If the address on Form 1120-F is domestic, edit Action Code "211."

    3. Continue processing.

  4. Any questionable withholding verification documents are to be referred to Examination Classification for review before allowance of credit.

    Figure 3.11.16-31

    This is an Image: 33500124.gif

    Please click here for the text description of the image.

  5. Line 5z (Line 5jj,for 2022 and prior) - Total Payments - "X" any entry identified by the taxpayer as "Backup Withholding" and edit it to Line 5f.

  6. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

Line 5j - Elective Payment Election

  1. Line 5j - (Tax Period 202201-202211) - If a significant amount is present for an "Elective or Deemed Payment Election" , edit RPC "J."

  2. Line 5j - (Tax Period 202301 and later) - "Elective Payment Election" . Accept the taxpayer’s entry.

Lines 6 through 9 - Computation of Tax Due or Overpayment

  1. Line 6 - Estimated Tax Penalty. If blank, edit amount from Form 2220, Line 38. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  2. Lines 7 and 8a - Amount owed/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 7 or 8a if both are blank. Do all the following:

    1. Add Lines 4 and 6. Subtract Line 5z (5j for 2022 and prior).

    2. Edit the positive result on Line 7 or the negative result (do not bracket) on Line 8a.

    3. Edit Action Code "440" on Form 1120-F returns claiming a refund (overpayment) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for current and prior year returns. See IRM 3.11.16.33.39, Form 1120-F - Refund and Credit Elect Returns.

  3. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 7 or reduced Line 8a.

    If... Then...
    The amount on Line 7 has pre-computed interest or penalty or added charge,
    1. "X" Line 7 amount.

    2. Delete the interest, penalty or added charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 8a is reduced by pre-computed interest or penalty or added charge,
    1. "X" Line 8a amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  4. Line 8b - Amount of Overpayment Withheld under Chapter 3. Accept taxpayer's entry.

  5. Line 9 (left) - Credit to Next Year's ES Tax. Edit Action Code "440" on Form 1120-F returns claiming a credit to next year’s ES tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for current and prior year returns, see IRM 3.11.16.33.39, Form 1120-F - Refund and Credit Elect Returns, for additional instructions.

Total Assets - Ending

  1. Edit amount from Schedule L, Line 17, Column (d) (Line 15, Column (d) for 2006 and prior) to the bottom right corner of Page 1 in dollars only. Bracket if negative.

    1. If Line 17, Column (d) is blank, compute Lines 1 through 16 if present and enter the amount to the bottom right corner of Page 1.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator and IRM 3.11.16.11.9, Paid Preparer Section.

Page 2, Line M - Number of Forms 5472

  1. No entry is required for Line M unless Form 5472 is present.

  2. Edit Line M as follows:

    If... And... Then...
    A number is present for Line M,   No editing is required.
    Line M is blank, One or More Form 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line M.

Page 2, Question T - Name of Common Parent

  1. If Page 2, Question T meets one of the following conditions a Name Control and EIN must be edited:

    1. If... Then...
      • Question T is checked "Yes"

      • Both the "Yes" and "No" boxes are checked

      • Question T is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

      1. If something other than a corporation's name and/or EIN is present on Line T, circle it out.

      2. If the name and/or EIN is the same as the return name and/or EIN, circle the name and/or EIN.

      3. Underline or edit (from attachments) the Name Control on Line T. If unable to find a Name Control, edit "XXXX."

      4. Underline or edit (from attachments) the TIN on Line T. If unable to find the TIN, edit "12-9999999."

      Question T is answered "No" or neither box is checked and a corporation's name and EIN are not present, No editing is required.
      Question T is answered "No" or neither box is checked and a corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

Question CC (Qualified Derivatives Dealer)

  1. Edit CCC "C" when Form 1120-F, Page 2, Question CC is answered "Yes," or if both the "Yes" and "No" boxes are checked.

Question HH (Question II for 2022 and prior) (Form 8996 - Qualified Opportunity Fund)

  1. If Form 1120-F, Page 3, Question HH (Question II for 2022 and prior), "Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund" is answered "Yes," search attachments for Form 8996. If Form 8996 is attached with an amount in Part III, Line 15, edit the amount to Page 3, Question HH (Question II for 2022 and prior).

    Form 8996 Revisions

    Prior Year Revision Line
    2020 and later Part III, Line 15
    2019 Part III, Line 14
    2018 and 2017 Part III, Line 13
  2. See IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund for transcription lines.

  3. If Form 8996, Qualified Opportunity Fund, is attached, edit Return Processing Code (RPC) "6," see IRM 3.11.16.33.12, Return Processing Code (RPC), for more information.

Question JJ(1), JJ(2), and JJ(3) (Corporate AMT)

  1. If Question JJ(2) is marked "Yes" or Question JJ(3) is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached.

  2. No editing is required.

  3. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

Section II - Income and Deductions

  1. Line 1c - Gross receipts or sales less returns and allowances. Accept taxpayer's entry.

  2. Line 5 - Interest income. Accept taxpayer's entry.

  3. Line 6 - Gross rents. Accept taxpayer's entry.

  4. Line 8 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

  5. Line 9 - Net gain or (loss) from Form 4797, Part II, Line 17 - If there is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 or similar schedule is not attached, correspond.

  6. Line 11 - Total income. If blank, compute by adding Lines 3 through 10. Bracket if negative.

  7. Line 13 - Salaries and Wages. Accept taxpayer's entry.

  8. Line 28 - Total deductions. If blank, compute and enter Line 28 if there are entries on any of Lines 12 through 27. Bracket if negative.

  9. Line 29 - Taxable income before Net Operating Loss (NOL). If blank, and there are entries on either of Lines 11 or 28, compute by subtracting Line 28 from Line 11.

Schedule J - Tax Computation

  1. Line 3 - Corporate Alternative Minimum Tax (Form 4626 (2023 Revision)). Correspond for Form 4626 if Line 3 has a significant entry and Form 4626 is not attached.

  2. For tax periods 201811 and prior, edit Tax Preference Code "1" to the bottom center, Page 1 when adjustments and preferences items ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ are present on Lines 2a through 2o, Form 4626. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Take the following actions for Lines 3, 5a, 5b, 5c, 5d, 8a and 8b:

    If... Then...
    The return is for tax period 201811 and prior and the entry on Line 3 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4626 is missing, Correspond.
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1118 is missing, Correspond.
    There is an entry on Line 5b for General Business Credit, or Form 3800 is attached, See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
    (For Form 8834 See IRM 3.11.16.11.14.2, Schedule J, Line 5b - Form 8834 Credit and Form 5735).
    The entry on Line 5c is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is missing, Correspond.
    There is an entry on Line 5d for Form 8912, See IRM 3.11.16.11.15.4, Schedule J, Line 5e - Form 8912, Credit to Holders of Tax Credit Bonds.
    The tax period is 202201 through 202212 and a significant amount is present on Line 8 and the taxpayer writesCAMT or IRA AMT or indicates the amount is for Corporate AMT, Completely edit the return and give to the lead. The lead will:
    1. Notify P&A that a return has been found (P&A will scan the Form 1120-F, pages 1 through 8 and any attachment with the new AMT calculation and email a copy to an LB&I Point of Contact (POC)),

    2. Edit an action trail on the return.

    3. Rebatch the return with "CAMT" in the batch ID.

    4. Continue processing.

    The entry on Line 8a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡and Form 4255 is missing,
    For 2022 and prior - Line 8 and the Form 4255 box is checked,
    Correspond.
    The entry on Line 8b is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8611 is missing,

    For 2022 and prior - Line 8 and the Form 8611 box is checked,
    Correspond.

Schedule W - Overpayment Resulting from Tax Deducted and Withheld Under Chapter 3

  1. The Schedule W was previously a worksheet in the instructions of the Form 1120-F. It is now part of the form to aid in the calculations of the overpayments resulting from tax deducted and withheld under Chapter 3.

  2. If the Form 1120-F, Line 8b has a significant entry, edit Schedule W, Lines 1 and 3 as follows.

  3. Verify that Schedule W, Line 1 matches Form 1120 -F, Line 5i.

    If... Then...
    The total of Form 1120-F, Line 5i (including any amounts to the right and left of Line 5i) match the amount on the Schedule W, Line 1, No editing is required.
    The total of Form 1120-F, Line 5i (including any amounts to the right and left of Line 5i) do not match the amount on the Schedule W, Line 1, Edit the total of Form 1120-F, Line 5i (including any amounts to the right and left of Line 5i) to Schedule W, Line 1.
    See Figure 3.11.16-32.

  4. Accept the taxpayer's figure for Schedule W, Line 3.

  5. Dummy a missing Schedule W if there is an amount on Form 1120-F, Line 8b as follows:

    1. Edit the amount on Form 1120-F, Line 5i to Form 1120-F, Schedule W, Line 1.

    2. Sequence the Schedule W.

      Note:

      If correspondence is required for supporting withholding documentation for Line 5i and Schedule W is missing, correspond for Schedule W at the same time as the supporting withholding documentation.

    Figure 3.11.16-32

    This is an Image: 33500123.gif

    Please click here for the text description of the image.

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. The instructions in this subsection apply to tax periods 202301 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision) is attached. See IRM 3.11.16.33.11, Return Processing Code.

Form 1120 - Schedule D

  1. The checkbox above Part I is the only transcription line on Schedule D when attached to Form 1120-F.

Form 8949 - Sales and Other Dispositions of Capital Assets

  1. For processing instructions, see IRM 3.11.16.16, Form 8949 - Sales and Other Dispositions of Capital Assets.

Form 8996 - Qualified Opportunity Fund

  1. For processing instructions, see IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund.

Form 4136 - Credits for Federal Tax Paid on Fuel

  1. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A, will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978 ,Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978 , Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, a significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Schedule J, Line 5b - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. Form 8997 is valid for tax periods ending 201901 and later.

  2. Place Form 8997 in sequence order if the form is attached and significant entries are present in any of Parts I, II, III or IV.

  3. No editing is required except for the indicator in Parts I, II, III or IV. Transcription is from Row 1 of each part.

  4. Part I - Total QOF Investment Holdings Due to Deferrals before Beginning of Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part I Indicator - If more than one row of tax data is present in Part I, edit a "1" in the right margin of Part I, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  5. Part II - Current Tax Year Capital Gains Deferred by Investing in QOF (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part II Indicator - If more than one row of tax data is present in Part II, edit a "1" in the right margin of Part II, Row 2.

    7. Line 2, Column e Total amount

    8. Line 2, Column f Total amount

  6. Part III - QOF Investments for Which Gain Is Included During Current Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of previously deferred short-term gain now included in taxable income

    5. Column f - Amount of previously deferred long-term gain now included in taxable income

    6. Part III Indicator - If more than one row of tax data is present in Part III, edit a "1" in the right margin of Part III, Row 3.

    7. Line 2, Column e Total amount

    8. Line 2, Column f Total amount

  7. Part IV - Total QOF Investment Holdings at Year End Due to Deferrals (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain invested in QOF

    5. Column f - Amount of long-term deferred gain invested in QOF

    6. Part IV Indicator - If more than one row of tax data is present in Part IV, edit a "1" in the right margin of Part IV, Row 4.

    7. Line 2, Column e Total amount

    8. Line 2, Column f Total amount

  8. If Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, is attached, edit Return Processing Code (RPC) "9." See IRM 3.11.16.33.11 Return Processing Code (RPC),for more information.

Form 1120-F - Refund and Credit Elect Returns

  1. Edit an Action Code "440" on Form 1120-F returns claiming a:

    1. Line 8a Overpayment - Refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for current and prior year returns.

    2. Line 9 (left) - Credited to next year’s estimated tax ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for current and prior year returns.

Return Processing - Form 1120-FSC (OSPC only)

  1. This subsection provides instructions for processing Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation.

  2. Action Codes are not applicable to this form. Computer Condition Code "U" will continue to be used.

  3. To convert prior year tax returns, see Exhibit 3.11.16-6, Form 1120-FSC - Prior Year Conversion Chart.

Sequence - Form 1120-FSC

  1. Document Perfection is responsible for arranging Form 1120-FSC in the following order when transcription line entries are present:

    • Pages 1, 2, 3, 4, 5, and 6

    • Form 4136

    Note:

    It is not necessary to sequence Form 4136 if there are no transcription line entries.

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Entity Perfection - Name Control and "In-Care-Of" Name

  1. All returns must have the Name Control underlined, see IRM 3.11.16.6.3, Entity Perfection - Name Control and IRM 3.11.16.6.4, Entity Perfection - "In-Care-Of" Name.

Address

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses, and IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return, see IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-FSC title area in MMDDYY format on an Initial, Final or Short Period return, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Line 1, see IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Edit in the dotted portion of Line 4. Valid codes for Form 1120-FSC are A, B, C, D, E, F, G, L, M, N, O, R, S, T, U, W, X, Y, 1, 3, 7, and 8. See IRM 3.11.16.9.1, Computer Condition Codes.

NAICS Code - Page 2, Schedule A, Additional Information, Line 1(a)

  1. The Principal Business Activity (PBA) Code is based on the North American Industry Classification System Code (NAICS). These codes are a high priority to the Service. It is critical data for Statistics of Income, Examination, Research, and other Service organizations.

  2. The NAICS Code is a four or six digit code on Page 2, Schedule A, Additional Information, Line 1a of Form 1120-FSC.

  3. A NAICS Code is required on all Form 1120-FSC returns.

    Exception:

    Do not edit a NAICS Code on "G" coded returns (amended returns).

  4. Edit this code above the form title, Page 1 of Form 1120-FSC. See Figure 3.11.16-33.

    Figure 3.11.16-33

    This is an Image: 33500039.gif

    Please click here for the text description of the image.

  5. Only one NAICS Code can be used on the return. Edit the NAICS Code as follows:

    If... Then...
    A legible four or six digit NAICS Code is shown on Schedule A, Additional Information, Line 1a, Edit the NAICS Code on Page 1 above the form title.
    There is more than one NAICS Code on Schedule A, Additional Information, Line 1a, Edit the first NAICS Code listed on Page 1 above the form title.
    Schedule A, Additional Information, Line 1a is blank, illegible, other than four or six digits, Edit NAICS Code "999999."

Foreign Country/U.S. Possession - Box A

  1. Edit Box A as follows:

    If... Then...
    The taxpayer has entered the name of a Foreign Country or U.S. Possession in Box A, Edit the two letter "Country Code" to the right of Box D. See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475.


    See Figure 3.11.16-34.
    Line A does not have an entry, Edit "Country Code" "OC" to the right of Box D.
    More than one Foreign Country or U.S. Possession is present, Edit the "Country Code" of the first Foreign Country/U.S. Possession shown.

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands.

    Figure 3.11.16-34

    This is an Image: 33500040.gif

    Please click here for the text description of the image.

Type of Election - Box B

  1. Edit Code "1" to the left of Box B if the "FSC" Box is marked.

  2. Edit Code "2" to the left of Box B if the "Small FSC" box is marked.

  3. If Box B is blank or both boxes are marked, do not enter a code.

Name/Principal Shareholder - Line 1a and Name/Parent-subsidiary Controlled Group - Line 2a

  1. Underline the Name Control on Question 1a.

  2. Underline the Name Control on Question 2a. See Figure 3.11.16-35.

    Figure 3.11.16-35

    This is an Image: 33500041.gif

    Please click here for the text description of the image.

EIN/Principal Shareholder - Line 1b and Name/Parent-subsidiary Controlled Group - Line 2b

  1. Perfect the EIN on Questions 1b and 2b. If the EIN is missing check attachments. If not found, research on IDRS. If not found on IDRS, no action is required for Line 1b. An EIN is required on Line 2b if Question 2 is checked "Yes." See IRM 3.11.16.34.13, Parent-Subsidiary Controlled Group - Question 2, Page 1.

Parent-Subsidiary Controlled Group - Question 2, Page 1

  1. If Question 2, "Is the FSC a subsidiary in a parent-subsidiary controlled group?" meets one of the following conditions, a Name Control and EIN must be edited:

    If... Then...
    • Question 2 is checked "Yes" or

    • Both the "Yes" and "No" boxes are checked,

    • Question 2 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

    1. If something other than a corporation's name and/or EIN is present on Question 2, circle it out.

    2. If the name and/or EIN, is the same as the tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Question 2. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the TIN on Question 2. If unable to find the TIN, edit "12-9999999."

    Question 2 is answered "No" or neither box is checked and a corporation's name and EIN are not present, No editing is required.
    Question 2 is answered "No" or neither box is checked and a corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

Total Assets (Corporations Only) - Box 1d and
Total Assets (Consolidated) - Box 2d

  1. Perfect the total assets amount in dollars only.

    If... And... Then...
    The amount in Box 1d is greater than the amount in Box 2d, or
    Box 2d is blank, less than $1, negative, zero, dash, or none,
    Box 1d is $1 or more, "X" the amount in Box 2d and edit the Box 1d amount to Box 2d.
    The amount in Box 1d is greater than the amount in Box 2d, or
    Box 2d is blank, less than $1, negative, zero, dash, or none,
    Box 1d is less than $1, negative, zero, dash, or none, Edit the Box E, Total assets amount to Box 2d if the amount is $1 or more.
    The amount in Box 1d is greater than the amount in Box 2d, or
    Box 2d is blank, less than $1, negative, zero, dash, or none,
    Box E, Total assets is blank, less than $1, negative, zero, dash, or none, No action is required.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Additional Form 1120-FSC Perfection

  1. This subsection addresses the editing of additional Form 1120-FSC information. See IRM 3.11.16.10, Additional Return Perfection.

Audit Codes
  1. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 2 (e.g., "2 - 1" ).

  2. Code "1" (Inconsistent Filer Under Section 6222(b)) if:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request is attached, or

    2. The return has an attachment with the statement "Notice of Inconsistent Treatment under IRC 6222(b)," or

    3. A statement showing the corporation is filing the return inconsistent with the way the partnership return was filed, or.

    4. Form 8275 is attached, or a statement referring specifically to IRC 6662.

  3. Code "2" if Form 5472 is attached.

  4. Code "3" if:

    1. "Unusual Refundable Credits" are claimed.

    2. Taxpayer quotes "Change of Accounting Period" under Headquarters "Grant Letter," or Revenue Procedure 2006-45 or 2006-46. Attach Form 4227, Intra-SC Reject or Routing Slip, to Examination (Audit) showing: "Taxpayer is changing accounting period pursuant to Headquarters "Grant Letter" or Revenue Procedure 2006-45 or 2006-46."

  5. Code "4" if return is a Joint Committee Case. For a definition of a Joint Committee Case, see IRM 3.11.16.9.1.14, CCC "N" - Joint Committee Case.

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near Line 2 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. Edit "5 - 4" in the left margin near Line 2 if Form 2220 is attached and Part II, Box 8 (prior year Part I, Box 3) is shown for large corporation.

Installment Sale Indicator (Form 6252)
  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 2 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ). See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

Total Assets - Box E

  1. Compare the amount in Box E to the amount on Schedule L, Line 15, Column (d).

  2. If the amount to be edited will change, then resolve the difference in favor of the Schedule L amount and correct Box E. Bracket if negative. See Figure 3.11.16-36.

    Exception:

    The return is a "Final" return, resolve the difference in favor of the Box E amount.

    Figure 3.11.16-36

    This is an Image: 33500042.gif

    Please click here for the text description of the image.

  3. If Schedule L, Line 15, Column (d) is blank, then compute Lines 1 through 14, Columns (c) and (d) if present and compare with the amount in Box E.

  4. If Box E is blank, enter Total Assets in dollars only from Schedule L, Line 15, Column (d). Bracket if negative.

  5. No editing is required if Schedule L is not present or if there is no significant entry on Schedule L, Line 15, Column (d).

  6. If the amount in Box E is for cents only (e.g., $.01 - $.99), place an "X" to the left of the entry.

Tax Data Perfection, Page 1 - Tax and Payments

  1. Line 1 - Total tax.

    1. If blank, edit from Schedule J, Line 6.

    2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 1.

    If... Then...
    The amount on Line 1 has pre-computed interest or penalty or additional charge,
    1. "X" the Line 1 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct Total Tax to the left of the original entry.

  2. Line 2c - If there is a significant entry on Line 2c, refer to CCC "O" procedures. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  3. Line 2d - Total of estimated tax payments. If blank, compute and enter the total of Lines 2a and 2b, minus Line 2c on Line 2d.

  4. Line 2e - Tax deposited with Form 7004.

  5. Line 2f - Credit for Federal tax paid on fuels.

    1. If Line 2f has a significant entry and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions. See IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  6. Line 2g - Tax paid or withheld at source, Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.

    If... And... Then...
    Form 1042-S is used to substantiate the amount or part of the amount on Line 2g, The taxpayer's name is not listed as the recipient in Box 13a of the Form 1042-S,

    Note:

    Box 13a cannot be a withholding rate pool.

    • Subtract the amount of the Form 1042-S from the amount on Line 2g.

    • Continue processing the return following the instructions in paragraph (7) below.

    Form 1042-S is not attached to substantiate the amount on Line 2g,   Correspond for Form 1042-S.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

  7. When FIRPTA credit (Form 8288-A) is claimed on Form 1120-FSC, Line 2g, or Form 8288-A is attached, the FIRPTA unit must verify the credit. The verified FIRPTA credit will be entered on Form 13698, International Credit(s) Verification Slip:

    If... Then...
    The total amount of FIRPTA credit, Form 8288-A, claimed on Form 1120-FSC is verified by the FIRPTA International Unit, Accept the taxpayer's figure and edit the verified FIRPTA credit to the right of Line 2g.
    The total amount of FIRPTA credit, Form 8288-A, claimed is fully verified and Form(s) 1042/8805 credits are also present,
    1. "X" the amount on Line 2g and subtract the FIRPTA credit from the Form 1042-S credit.

    2. Edit the FIRPTA credit to the right of Line 2g.

    3. Edit the Form 1042-S credit to Line 2g.

    The total amount of FIRPTA credits, Form 8288-A, are not verified or are not fully verified and Forms 1042/8805 credits are also present, "X" the amount on Line 2g and subtract the unverified FIRPTA credit from the 2g amount.
    If Line 2g has any amount and is identified as FIRPTA or Form 8288-A credit and the Form 8288-A or substantial evidence is not attached, Correspond

  8. Line 3 - Estimated tax penalty. If blank, edit amount from Form 2220, Line 38 to Line 3. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  9. Lines 4 and 5 - Tax Due/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 4 or 5 if both are blank. Do both the following:

    1. Add Lines 1 and 3. Subtract Line 2h.

    2. Edit the positive result on Line 4 or the negative result (do not bracket) on Line 5.

  10. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 4 or reduced Line 5.

    If... Then...
    The amount on Line 4 has pre-computed interest or penalty or additional charge,
    1. "X" Line 4 amount.

    2. Delete the interest, penalty or additional charge from the Tax Due.

    3. Edit the correct Tax Due to the left of the original entry.

    The amount on Line 5 is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 5 amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  11. Line 6 (center) - Credit elect to next year tax.

Schedule B, Page 3, Line 18 - Taxable Income or (Loss)

  1. Schedule B, Page 3, Line 18 - Taxable Income or (loss) is edited in dollars only.

    1. If blank, total Lines 16 and 17 and enter on Line 18. Bracket if negative.

Schedule G, Page 5, Line 4 - Depreciation from Form 4562

  1. Line 4, Depreciation - Column (a), Using administrative pricing rules and Column (b), Not using administrative pricing rules.

Schedule J, Page 5, Tax Preference Code and Foreign Tax Credit

  1. For tax periods 201811 and prior, edit Tax Preference Code "1" to the bottom center margin, Page 1 if an amount is present on Schedule J, Line 3.

  2. Line 5 - If ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118, Foreign Tax Credit (Corporations), is missing, correspond.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For processing instructions. See IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Return Processing - Form 1120-H

  1. This Subsection provides instructions for processing Form 1120-H, U.S. Income Tax Return for Homeowners Associations. Form 1120-H is an ERS return; Action Codes .

  2. A condominium management association, residential real estate management association, or timeshare association files Form 1120-H to elect the application of section 528.

  3. Action Codes apply to Form 1120-H, see IRM 3.11.16.3.1, Action Codes.

  4. To convert prior year tax returns, see Exhibit 3.11.16-7, Form 1120-H - Prior Year Conversion Chart.

Sequence - Form 1120-H

  1. Document Perfection is responsible for arranging Form 1120-H in the following order when transcription line entries are present:

    • Page 1

    • Form 4136

    • Form 8978

    • Form 8941

    • Form 3800

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control and Address

  1. Underline the Name Control on all Form 1120-H returns. See IRM 3.11.16.6.3, Entity Perfection - Name Control, through IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return, see IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-H title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Edit the received date in the dotted portion of Line 11. See IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. See IRM 3.11.16.9.1, Computer Condition Codes.

  2. Valid codes for Form 1120-H are D, E, F, G, M, O, R, T, W, X, Y, 3, 7, and 8.

  3. Edit Computer Condition Codes in the dotted portion of Line 1.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-H.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-H, Line 23e or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.

Additional Form 1120-H Perfection

  1. This subsection addresses the editing of additional Form 1120-H information. See IRM 3.11.16.10, Additional Return Perfection.

Audit Codes
  1. Valid codes are "2" , "3," and C. No editing is necessary for codes 2 and "3."

  2. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

Penalty and Interest Code
  1. Edit the Penalty and Interest Code in the left margin next to Line 12 of Form 1120-H.

  2. Edit as "3 -" followed by the Penalty and Interest Code.

  3. Enter code "1" when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  4. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not code "1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. No editing required.

Timeshare Association Indicator

  1. When a Timeshare Association files Form 1120-H and checks the Timeshare Association box, edit the Timeshare Association Indicator of "1" in the right margin of Line A, Page 1, Form 1120-H. See Figure 3.11.16-37.

    Figure 3.11.16-37

    This is an Image: 33500043.gif

    Please click here for the text description of the image.

Gross Income Items - Lines 1 through 8

  1. Gross Income items can be positive or negative amounts.

  2. Line 1 - Dividends.

  3. Line 2 - Taxable interest.

  4. Line 3 - Gross rents.

  5. Line 4 - Gross royalties.

  6. Line 5 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

  7. Line 6 - Net gain or loss from Form 4797, Part II, line 17. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond.

  8. Line 7 - Other Income:

    1. If the only income is "Gross Income" on Line 8, double arrow the Line 8 amount to Line 7. Bracket if negative.

  9. Line 8 - Gross Income:

    1. Compute Line 8 if blank and there are entries on Lines 1 through 7. Bracket if negative.

Deduction Items - Lines 9 through 17

  1. Deduction items can be positive or negative amounts.

  2. Line 9 - Salaries and wages.

  3. Line 10 - Repairs and maintenance.

  4. Line 11 - Rents.

  5. Line 12 - Taxes and licenses.

  6. Line 13 - Interest.

  7. Line 14 - Depreciation.

  8. Line 15 - Other Deductions:

    1. If the only deduction is "Total Deductions" on Line 16, enter the Line 16 amount on Line 15. Bracket if negative.

  9. Line 16 - Total Deductions:

    1. Compute Line 16 if blank and there are entries on Lines 9 through 15. Bracket if negative.

  10. If Line 17 is the only entry then:

    1. Edit the Line 17 amount to Lines 7 and 8 if it is a positive amount.

    2. Edit the Line 17 amount to Lines 15 and 16 if it is a negative amount. Bracket negative amount.

Tax and Payments - Lines 21 through 26

  1. Line 21 - Tax credits:

    If... And... Then...
    There is an entry for Foreign Tax Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Form 1118 or similar statement is not attached, Correspond.
    There is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Form 3800 is missing, Correspond.
    There is an entry for fuel produced from a non-conventional source ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, The supporting statement is missing, Correspond.

  2. Line 22 - Total Tax:

    1. If Line 22 is blank, compute and enter by subtracting Line 21 from Line 20.

    2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 22.

      If... Then...
      The amount on Line 22 has pre-computed interest or penalty or additional charge,
      1. "X" the Line 22 amount.

      2. Delete the interest, penalty or additional charge from the total.

      3. Edit the correct Total Tax to the left of the original entry.

  3. Lines 23a - Preceding Year’s overpayment credited to the current year.

  4. Line 23b - Current year’s Estimated tax Payments.

  5. Line 23c - For 2022 and prior, if blank, add Lines 23a and 23b and enter on Line 23c.

  6. Line 23c (Line 23d for 2022 and prior) - Tax deposited with Form 7004.

  7. Line 23e (Tax Periods 202201-202211) - If a significant amount is present and "IRA22 DPE" is notated, edit RPC "J."

  8. Line 23d (Line 23e for 2022 and prior) - Credit from Regulated Investment Companies.

    If... Then...
    Line 23d (Line 23e for 2022 and prior) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 2439 is missing, Correspond for missing Form 2439.
    Form 2439 shows a larger amount than Line 23d (Line 23e for 2022 and prior), Form 1120-H and Line 23d (Line 23e for 2022 and prior) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.
    Line 2, Form 2439 shows a lesser amount than Line 23d (Line 23e for 2022 and prior) Form 1120-H, Edit the lesser amount to Line 23d (Line 23e for 2022 and prior), Form 1120-H.

  9. Line 23e (Line 23f for 2022 and prior) - Credit for Federal tax on fuels (Form 4136).

    1. If there is a significant entry on Line 23e (Line 23f for 2022 and prior) and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  10. Line 23f - Elective Payment Election. Accept taxpayer entry.

  11. Line 23g - Add Lines 23a (23c for 2022 and prior) through 23f,

    If... And... Then...
    The taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 23g, Form 1099 is not attached, Correspond using Letter 118C.

  12. Lines 24 and 25 - Tax due/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 24 or 25 if both are blank:

    1. If Line 22 is more than Line 23g, subtract Line 23g from Line 22 and enter on Line 24.

    2. If Line 22 is less than Line 23g, subtract Line 22 from Line 23g and enter on Line 25.

  13. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 24 or reduced Line 25.

    If... Then...
    The amount on Line 24 has pre-computed interest or penalty or additional charge,
    1. "X" Line 24 amount.

    2. Delete the interest, penalty or additional charge from the tax due.

    3. Edit the correct tax due to the left of the original entry.

    The amount on Line 25 is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 25 amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  14. Line 26 (center) - Credit elect.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978 Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, A significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 3800 - General Business Credit

  1. Transcription for Form 3800 when attached to Form 1120-H is as follows:

    Form 3800, Part III, Line Credit Form Form Title Column(s) transcribed
    1b Form 7207 Advanced Manufacturing Production Credit b, g, h, i, j
    1f Form 8835, Part II Renewable Electricity Production Credit b, g, j
    1g Form 7210, Clean Hydrogen Production Credit b, g, h, i, j
    1s Form 8911, Part II Alternative Fuel Vehicle Refueling Property Credit b, g, h, i, j
    1u Form 7213, Part II Nuclear Power Production Credit b, g, h, i, j
    1x Form 8933 Carbon Oxide Sequestration Credit b, g, h, i, j
    1aa Form 8936, Part V Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-In Electric Vehicles) b, h, i, j
    4e Form 8835, Part II Renewable Electricity Production Credit b, g, h, i, j

  2. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Amended Returns

  1. If the taxpayer is amending a previously filed Form 1120-H, enter CCC "G" and treat as any other amended return. See IRM 3.11.16.3.9, Amended Returns.

  2. If the taxpayer is using a Form 1120-H to amend a previously filed Form 1120, staple Page 1 of a current year Form 1120 to the face of the Form 1120-H. Transfer to the overlay the name, address, EIN, name control, tax period, received date, and CCC "G." Write "Amended Return" in large letters across the top of the overlay.

  3. If the taxpayer is using a Form 1120-H to amend a previously filed Form 990, accept Form 1120-H as an original Form 1120-H and process as such.

  4. If it cannot be determined what type of return is being amended, enter CCC "G" on the return.

Return Processing - Form 1120-L (OSPC only)

  1. This subsection provides instructions for processing Form 1120-L, U.S. Life Insurance Company Income Tax Return.

  2. Form 1120-L is processed only at the Ogden Campus.

  3. Form 1120-L can be included as subsidiaries in a consolidated corporate return. See IRM 3.11.16.28, Consolidated Returns.

  4. Form 1120-L can be filed on a calendar or fiscal year basis.

  5. Action Codes apply to Form 1120-L. See IRM 3.11.16.3.1, Action Codes.

  6. To convert prior year tax returns. See Exhibit 3.11.16-8, Form 1120-L - Prior Year Conversion Chart.

Sequence - Form 1120-L

  1. Document Perfection is responsible for arranging Form 1120-L in the following order when transcription line entries are present:

    • Pages 1 through 6

    • Form 4626 (Tax periods 202301 and later Revision 2023)

    • Schedule N (Form 1120)

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control and Address

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control, through IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format in the top right margin of the form, above the title. See IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-L title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Edit the received date in MMDDYY format in the dotted portion of Lines 10 and 11. See IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Edit in the dotted portion of Line 3.

  2. Codes valid for Form 1120-L are B, D, E, F, G, I, J, L, M, N, O, R, S, T, W, X, Y, Z, 3, 5, 6, 7, and 8. See IRM 3.11.16.9.1, Computer Condition Codes.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-L.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-L, Line 28g or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, on an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached
    N Form 4626, Alternative Minimum Tax (Revision 2023 and later ) is attached or Form 1120-L, Schedule K, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII)and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.

ABLM Code

  1. The ABLM Code is computer generated for Form 1120-L. No editing is required.

Schedule M-3 Checkbox

  1. Edit Computer Condition Code "B" when Box A3, "Schedule M-3 (Form 1120-L) attached" is marked or Schedule M-3 is attached to Form 1120-L.

  2. Do not correspond for Schedule M-3 if Box A3 is checked and Schedule M-3 is not attached.

Consolidated Returns

  1. Form 1120-L filers may file a Consolidated return. A Consolidated 1120-L filer is found by checking Box A(1) on Page 1 of Form 1120-L.

  2. A consolidated return is defined as a single income tax return having combined financial data for a parent corporation and one or more subsidiary or affiliated corporations.

  3. The parent corporation files the return, and its name, which appears on the return, may include the words, "and subsidiaries," "and affiliated companies" or the like.

  4. The parent corporation must submit along with the Form 1120-L a Form 851 on an annual basis. Correspond for missing or incomplete Form 851.

  5. Form 851 must be processed per the instructions in IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

  6. The presence of Form 1122 is another indication of a consolidated return. See IRM 3.11.16.28.4, Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return.

Additional Form 1120-L Perfection

  1. This subsection addresses the editing of additional Form 1120-L information. See IRM 3.11.16.10, Additional Return Perfection.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-L near Line 12.
    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

Audit Codes
  1. Edit a "2" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2-1" ).

  2. Valid Audit codes are 1, 2, 3, and C. See IRM 3.11.16.10.1, Audit Codes.

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Income Section

  1. Line 5 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120), is not attached, correspond.

Line 25 - Total Taxable Income

  1. Edit in dollars only.

  2. If Line 25 (Line 27 for 2017 and prior) is blank, and there are entries on Lines 23 and 24, (Lines 25 and 26 for 2017 and prior) add the entries on Lines 23 and 24 (Lines 24, 25, and 26 for 2017 and prior) and enter the total on Line 25 (Line 27 for 2017 and prior). Bracket if negative.

Tax and Payments

  1. This subsection provides editing instructions for Lines 26 through 32 (Lines 28 through 33 for 2017 and prior).

  2. Line 26 (Line 28 for 2017 and prior) - Total tax. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 26.

    If... Then...
    The amount on Line 26 (Line 28 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" the Line 26 (Line 28 for 2017 and prior) amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct Total Tax to the left of the original entry.

  3. Line 27c - Refund applied from Form 4466. If there is a significant entry, enter CCC "O." See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
    (Line 28d for 2022 -2018) (Line 29e for 2017 and prior)

  4. Line 27d - Total of payments. If blank, compute and enter total of Lines 27a, 27b minus 27c.
    (28e for 2022 - 2018) (Line 29f for 2017 and prior)
    (Add Lines 28a, 28b, and 28c minus 28d for 2022 - 2018) (Add Lines 29a, 29b, and 29c minus 29e for 2017 and prior).

  5. Line 27(e) - Tax deposited with Form 7004.
    (Line 28f for 2022-2018) (Line 29g for 2017 and prior)

  6. Line 27(f) - - Regulated Investment Co. Credit. (Line 28g(1) for 2022 - 2018)(Line 29h(1) for 2017 and prior)

    If ... Then ...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.

  7. Line 27g - Credit for Federal Tax on Fuels (Form 4136).
    (Line 28g(2) for 2022 - 2018)(Line 29h for 2017 and prior).

    1. If there is a significant entry on Line 27g and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  8. Line 27h - U.S. Income Tax Paid or Withheld at Source (Form 1042-S).
    (Line 28h for 2022 - 2018) (Line 29i for 2017-2006)

    If ... And ... Then ...
    The taxpayer has claimed Chapter 3 or 4 withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 27h (Line 28h for 2022 - 2018) (Line 29i for 2017 and prior), Form 1042-S is not attached, Correspond using Letter 118C.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

    The taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 1099 is not attached, Correspond using Letter 118C.

  9. Line 27i - Elective Payment Election -

  10. Line 29 (Line 30 for 2017 and prior) - Estimated tax penalty. Edit amount from Line 38, Form 2220 to Line 29 (Line 30 for 2017 and prior), Form 1120-L, if not already entered. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  11. Lines 30 and 31 (Lines 31 and 32 for 2017 and prior) - Amount owed/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 30 or 31 (Lines 31 and 32 for 2017 and prior) if both are blank. Do both of the following:

    1. For 202301 and later, Add Lines 26 and 29 minus Line 28.

    2. For 2022 - 2018, Add Lines 26, 27 and 29 minus Line 28K.

    3. For 2017 and prior, Add Lines 28 and 30 minus Line 29k.

    4. Edit the positive result on Line 30 (Line 31 for 2017 and prior) or the negative result (do not bracket) on Line 31 (Line 32 for 2017 and prior).

  12. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 30 (Line 31 for 2017 and prior) or reduced Line 31 (Line 32 for 2017 and prior).

    If... Then...
    The amount on Line 30 (Line 31 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 30 (Line 32 for 2017 and prior) amount.

    2. Delete the interest, penalty or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 31 (Line 32 for 2017 and prior) is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 31 (Line 31 for 2017 and prior) amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  13. Line 32 (center) (Line 33 (center) for 2017 and prior) - Credit to estimated tax.

Tax and Payment - Prior Year Line Instructions
  1. Line 27 - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  2. Line 28b - The instructions for this line only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed. If a return is for Tax Period 201812 and prior and the taxpayer notates "Section 847" or reports SETP on Line 28b (Lines 29b and/or 29d for 2017 and prior) or Form 8816 is attached, see IRM 3.11.16.3.10, IRC 847 Deduction.

  3. Line 28g (Tax Period 202301-202311) - If a significant amount is present for an "Elective or Deemed Payment Election" , edit RPC "J."

  4. Line 28i - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    2. Edit CCC "J" and Action Code "460."

  5. Line 28j - Reserved for future use.
    Line 28j - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 29j for 2017 and prior):

    If ... Then ...
    The amount on Line 28j (Line 29j for 2017 and prior) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Schedule B

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Schedule B, Line 6 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

Schedule F, Line 9c - Total Tax Exempt Interest and Increase in Policy Cash Value

  1. Line 9c - No editing necessary.

  2. The instructions in paragraphs (3) and (4) only apply to tax periods 201811 and prior.

  3. Line 9 - Gross investment income.

    If... Then...
    The amount on Page 2, Schedule B, Line 13 is not the same as the amount present on Schedule F, Line 9, "X" Schedule F, Line 9 and edit the amount from Schedule B, Line 13, to Schedule F, Line 9.

  4. Line 13 - Tax-exempt interest.

    If... Then...
    The sum of Page 2, Schedule B, Lines 9 and 10 is not the same as the amount present on Schedule F, Line 13, "X" Schedule F, Line 13 and edit the sum from Schedule B, Lines 9 and 10 to Schedule F, Line 13.

Schedule K, Line 3 - Corporate Alternative Minimum Tax (CAMT) (202301 and later)

  1. Corporate Alternative Minimum Tax (CAMT) is claimed on Schedule K, Line 3.

  2. If there is a significant amount on Schedule K, Line 3 for "Corporate Alternative Minimum Tax" and Form 4626 is not attached, correspond.

Schedule K, Line 3 - Tax Preference Code (201811 and prior)
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Tax Preference Code - Edit a "1" to the bottom center margin of Form 1120-L, if there is an amount on Schedule K, Line 3, Form 1120-L.

  3. If there is an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule K, Line 3 for "Alternative Minimum Tax" and Form 4626 is not attached, correspond.

Schedule K, Lines 5a through 9

  1. Line 5a - If Schedule K, Line 5a, has an entry, check for Form 1118, Foreign Tax Credit.

    If ... Then ...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118 is missing, Correspond.
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2."

  2. Line 5b - Form 8834 Qualified Electric Vehicle Credit. ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8834 is not attached, correspond.

  3. Line 5c - General Business Credit.

    1. If an amount is present or Form 3800 is attached, follow the instructions in IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

  4. Line 5d - Form 8827, Credit for Prior Year Minimum Tax - Corporations.

  5. Line 5e - Bonds credits from Form 8912. If the entry on Line 5e is ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the Form 8912 is missing, correspond.

  6. Line 9 - Other Taxes - For tax periods 202201 - 202211, If a significant amount is present on Line 9 and the taxpayer writes"CAMT" or"IRA AMT" or indicates the amount is for Corporate AMT, completely edit the return and give to the lead. The lead will:

    1. Notify P&A that a return has been found (P&A will scan the Form 1120-L, pages 1 through 5 and any attachment with the new AMT calculation and email a copy to an LB&I Point of Contact (POC)),

    2. Edit an action trail on the return.

    3. Rebatch the return with "CAMT" in the batch ID.

    4. Continue processing.

  7. Lines 9 and 10 - Other Taxes.

    If ... Then ...
    The entry on Line 9 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4255 is missing,
    (Form 4255 box is checked for 2022 and prior)
    Correspond.
    The entry on Line 10 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8611 is missing,
    (Line 9 and Form 8611 box is checked for 2022 and prior)
    Correspond.

    Reminder:

    Look for any Unusual Credits, see IRM 3.11.16.9.1.14, CCC "N" - Joint Committee Case, and IRM 3.11.16.10.1, Audit Codes.

Schedule L, Part I, Line 5 - Total Assets Ending

  1. Edit the amount from Schedule L, Part I, Line 5 Column (b) (Line 6 Column (b) for 2017 and prior), in dollars only to the bottom right hand corner of Page 1. Bracket if negative.

    1. If Line 5, Column (b) is blank, compute Lines 1 through 4 if present and edit on Page 1.

Schedule M, Question 6, 8 and 8c

  1. If Schedule M, Question 6 meets one of the following conditions, a Name Control and EIN must be edited:

    If... Then...
    • Question 6 is checked "Yes" or

    • Both the "Yes" and "No" boxes are checked

    • Question 6 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

    1. If something other than a corporation's name and/or EIN is present on Question 6, circle the name and/or EIN.

    2. If the name and/or EIN is the same as the tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Question 6. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the TIN on Question 6. If unable to find the TIN, edit "12-9999999."

    Question 6 is checked "No" or neither box is checked and no corporation's name and EIN is present, No editing is required.
    Question 6 is checked "No" or neither box is checked and the corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

  2. If Schedule M, Question 8 is answered "Yes," edit Audit Code "2."

  3. No entry is required for Schedule M, Line 8c unless Form 5472 is present. Edit Line 8c as follows:

    If... And... Then...
    A number is present for Schedule M, Line 8c,   No editing is required.
    Schedule M, Line 8c is blank, One or more Form 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line 8c.
    Form 5472 is attached, Schedule M is not present, Dummy a Schedule M and edit the number of Form 5472(s) to Schedule M, Line 8c.

Schedule M, Question 19a, 19b, and 19c (Corporate AMT)

  1. If Question 19b is marked "Yes" or Question 19c is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. The instructions in this subsection apply to tax periods 202301 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision) is attached. See IRM 3.11.16.36.7, Return Processing Code.

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. For processing instructions, see IRM 3.11.16.11.37, Schedule N (Form 1120) - Foreign Operations of U.S. Corporations.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978 , Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts

  1. Form 965-B is valid for tax periods ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount (other than the pre-printed date) is present on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, a significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Schedule K, Line 5c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Annual Statement - Form 1120-L

  1. Life insurance companies must include a copy of their annual statement with Form 1120-L. The annual statement must be in the format approved by the National Association of Insurance Commissioners (NAIC). The following reports/statements are not acceptable:

    • Annual Reports

    • Financial Statements

    • Financial Reports

    Note:

    The above list is not all inclusive.

  2. Verify that annual statements for life insurance companies are attached to return.

  3. If attached, continue normal processing of return.

  4. If an annual statement is not attached, use the following chart to determine if it is required:

    If... Then...
    The taxpayer indicates that the State does not require the firm to file an annual statement and a pro-forma annual statement is not attached, Correspond for a pro-forma annual Statement using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.
    • The taxpayer indicates "Bankruptcy" or "in receivership," or

    • Amended Form 1120-L,

    Do not correspond for the missing annual statement.
    A re-entry mixed component return was originally filed electronically, Do not correspond for the missing annual statement.
    See IRM 3.11.16.28.1, Consolidated Return - Mixed Components.

  5. If an annual statement is required and is missing, prepare an approved Correspondence Action Sheet requesting correspondence for the missing annual statement.

  6. Annotate in upper left margin of return, "Annual Statement Requested on ____," filling in the blank with the date correspondence was initiated.

  7. Photocopy Page 1 of Form 1120-L.

  8. Attach the photocopy of Page 1, Form 1120-L to the Correspondence Action Sheet and send to Correspondence.

  9. Continue normal processing of the Form 1120-L return. Return is not to be rejected or suspended for any correspondence regarding missing annual statements.

Return Processing - Form 1120-ND (OSPC only)

  1. This subsection provides instructions for processing Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons.

  2. Form 1120-ND returns can be filed on a calendar or fiscal year.

  3. Action Codes are not applicable to this form. Computer Condition Code "U" will continue to be used.

Sequence - Form 1120-ND

  1. Document Perfection is responsible for arranging Form 1120-ND in the following order when transcription line entries are present:

    • Pages 1, 2

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control

  1. The Name Control is obtained from the "Name of Fund" line, see IRM 3.11.16.6.3, Entity Perfection - Name Control.

  2. The "Name of Trustee" should be established as the second name line on the Entity Module. To achieve this: Input TC "016" on all Form 1120-ND returns if a name is present on the "Name of trustee or disqualified person" line.

  3. Notate "TC 016" in the upper left margin of the return. See Figure 3.11.16-38.

    Figure 3.11.16-38

    This is an Image: 33500044.gif

    Please click here for the text description of the image.

"In-Care-Of" Name

  1. See IRM 3.11.16.6.4, Entity Perfection - "In-Care-Of" Name.

Address

  1. Always underline complete address of filer including city, state and ZIP.

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return, see IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-ND title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 5 through 11, see IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Valid Codes for Form 1120-ND are C, D, E, F, G, M, O, R, T, U, W, X, Y, 1, 3, 7, and 8. See IRM 3.11.16.9.1, Computer Condition Codes.

  2. Edit in the dotted portion of Lines 1 through 4.

Additional Form 1120-ND Perfection

  1. This subsection addresses the editing of additional Form 1120-ND information. See IRM 3.11.16.10, Additional Return Perfection.

Audit Codes
  1. Audit Code "3" must be present on all Form 1120-ND returns and is the only valid code.

  2. Edit "2 - 3" in the left margin near the deduction section (Lines 5 through 11).

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near the Deduction section (Lines 5 through 11) when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Computer Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Lines 5 through 11 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Total Assets Ending

  1. Edit Total Assets in dollars only to the bottom right margin of Page 1, Form 1120-ND from Page 2, Schedule L, Line 6 (End of Year). Bracket if negative.

    1. If Line 6 (End of Year) is blank, compute Lines 1 through 5 if present and edit on Page 1.

Tax Data Perfection - Page 1

  1. Line 2 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

  2. Line 12 - Modified Gross Income:

    1. If blank, compute by subtracting Line 11 from Line 10. Do not edit zero. Bracket, if negative.

  3. Line 13 - Total Tax. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 13.

    If... Then...
    The amount on Line 13 has pre-computed interest or penalty or additional charge,
    1. "X" the Line 13 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct Total Tax to the left of the original entry.

  4. Line 14c - If there is a significant entry on Line 14c, refer to CCC "O" procedures. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  5. Line 14d - Estimated Tax Payments. If blank, enter the total of Lines 14a and 14b minus Line 14c.

  6. Line 14e - Form 7004 Credit.

  7. Line 14f - Total Payments. Add Lines 14d through 14e,

    If ... And ... Then ...
    The taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 14f, Form 1099 is not attached, Correspond using Letter 118C.

  8. Line 15 - Estimated Tax Penalty. If blank and Form 2220 is attached with a significant entry on Line 38, edit this amount to Line 15, Form 1120-ND. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  9. Line 16 and 17 - Tax due/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 16 or 17 if both are blank. Do both of the following:

    1. Add Lines 13 and 15. Subtract Line 14f.

    2. Edit the positive result on Line 16 or the negative result (do not bracket) on Line 17.

  10. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 16 or reduced Line 17.

    If... Then...
    The amount on Line 16 has pre-computed interest or penalty or additional charge,
    1. "X" Line 16 amount.

    2. Delete the interest, penalty, or additional charge from the tax due.

    3. Edit the correct tax due to the left of the original entry.

    The amount on Line 17 is reduced pre-computed interest or penalty or additional charge,
    1. "X" Line 17 amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  11. Line 18 (center) - Credit to next year tax.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Special Return Conditions

  1. If there are significant (other than zero) entries on Page 1, Part I and Page 2, Part II, the return is unprocessable.

  2. Edit CCC "U" and attach a Form 4227, Intra-SC Reject or Routing Slip to the face of the return. Check the Reject Correction box on Form 4227 and notate "Form 1120-ND with initial taxes on self-dealing."

Return Processing - Form 1120-PC (OSPC only)

  1. This subsection provides instructions for processing Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return.

  2. Form 1120-PC is processed only at the Ogden Campus.

  3. Form 1120-PC can be filed on a calendar or fiscal year basis.

  4. Action Codes apply to Form 1120-PC, see IRM 3.11.16.3.1, Action Codes.

  5. To convert prior year tax returns, see Exhibit 3.11.16-9, Form 1120-PC - Prior Year Conversion Chart.

Sequence - Form 1120-PC

  1. Document Perfection is responsible for arranging Form 1120-PC in the following order when transcription line entries are present:

    • Pages 1 through 9

    • Form 4626 (Tax periods 202301 and later (Revision 2023)

    • Schedule N (Form 1120)

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control/"In-Care-Of" Name

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control, and IRM 3.11.16.6.4, Entity Perfection - "In-Care-Of" Name.

Address

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses, and IRM 3.11.16.6.6, Entity Perfection - Foreign Address.

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return. See IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-PC title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 5 through 12. See IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Valid Codes for 1120-PC are B, D, E, F, G, I, J, L, M, N, O, R, S, T, W, X, Y, Z, 3, 5, 6, 7, and 8.

  2. Edit in the dotted portion of Lines 1 through 3. See IRM 3.11.16.9.1, Computer Condition Codes.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-PC.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-PC, Line 15j or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800 an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached.
    N Form 4626, Alternative Minimum Tax (Revision 2023 and later ) is attached or Form 1120-PC, Page 1, Line 6.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.

ABLM Code

  1. Do not edit the ABLM Code. It will be computer generated.

Schedule M-3 Checkbox

  1. Edit Computer Condition Code "B" when Box A3 (Box A2 for 2006), "Schedule M-3 (Form 1120-PC) attached" is marked or Schedule M-3 (Form 1120-PC) is attached to Form 1120-PC.

    Note:

    Audit Code "2" may also be required, see IRM 3.11.16.10.1, Audit Codes.

  2. Do not correspond for Schedule M-3 if Box A3 is checked and Schedule M-3 is not attached.

Consolidated Returns

  1. Form 1120-PC filers may file a Consolidated return. A Consolidated 1120-PC filer is identified by checking Box A(1) on Page 1 of Form 1120-PC.

  2. A consolidated return is defined as a single income tax return having combined financial data for a parent corporation and one or more subsidiary or affiliated corporations.

  3. The parent corporation files the return, and its name, which appears on the return, may include the words, "and subsidiaries," "and affiliated companies" , or the like.

  4. The parent corporation must submit along with the Form 1120-PC a Form 851 on an annual basis. Correspond for missing or incomplete Form 851.

  5. Form 851 must be processed per the instructions in IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

  6. The presence of Form 1122 is another indication of a consolidated return. See IRM 3.11.16.28.4, Form 1122 - Authorization and Consent of Subsidiary Corporation to be included in a Consolidated Income Tax Return.

Additional Form 1120-PC Perfection

  1. This subsection addresses the editing of additional Form 1120-PC information. See IRM 3.11.16.10, Additional Return Perfection.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-PC near Line 12.
    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

Audit Codes
  1. Edit a "2" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2-1" ).

  2. Valid Audit codes are 1, 2, 3, and C. See IRM 3.11.16.10.1, Audit Codes.

Penalty and Interest Code
  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Line 1 - Taxable Income

  1. If blank, edit Line 1 amount from Schedule A, Line 37. Bracket if negative.

Line 6 - Corporate Alternative Minimum Tax (CAMT) (202301 and later)

  1. Corporate Alternative Minimum Tax (CAMT)

  2. If there is a significant amount on Line 6 for "Corporate Alternative Minimum Tax" and Form 4626 is not attached, correspond.

Line 6 - Tax Preference Code (201811 and prior)

  1. For Tax Periods 201811 and prior:

    1. Enter Code "1" to Page 1, bottom center margin if a significant amount is present on Line 6.

    2. If there is an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 6 for "Alternative Minimum Tax" and Form 4626 is not attached, Correspond.

      Note:

      If an amount is present on Line 6 for tax period 201812 and later, this amount is for the base erosion minimum tax, no editing in necessary.

Lines 8a through 12z

  1. Line 8a - If Line 8a, has an entry, check for Form 1118., Foreign Tax Credit (Corporations).

    If ... Then ...
    The entry on Line 8a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1118. is missing, Correspond.
    There is an entry on Line 8a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code “2.”

  2. Line 8b - Form 8834, Qualified Electric Vehicle Credit. If Form 8834 is not attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond.

  3. Line 8c - General Business Credit.

    1. If an amount is present or Form 3800 is attached, follow the instructions in IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

  4. "Line 8d" - Form 8827, Credit for Prior Year Minimum Tax Corporations.

  5. Line 8e - Bonds credits from Form 8912. If the entry on Line 8e is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the Form 8912 is missing, correspond.

  6. Line 12 - For Tax period 202201 - 202212, if a significant amount is present on Line 12 and the taxpayer writes "CAMT" or "IRA AMT" or indicates the amount is for Corporate AMT, continue processing, no action is required.

  7. Lines 12a - 12z - Other Taxes

    If ... Then ...
    The entry on Line 12a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4255 is missing,
    (Line 12 and the Form 4255 box is checked, for 2022 and prior.}
    Correspond.
    The entry on Line 12b is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8611 is missing,
    (Line 12 and the Form 8611 box is checked, for 2022 and prior.}
    Correspond.

    Reminder:

    Look for any Unusual Credits. See IRM 3.11.16.9.1.14, CCC "N" - Joint Committee Case, and IRM 3.11.16.38.12.2, Audit Codes.

Lines 14 through 19 - Tax Computation and Payments

  1. Line 14 (Line 13 for 2022 and prior) - Total Tax.

    1. If blank and there are entries on Lines 9 through 13, add entries from Lines 9, 10, 11 and 13. For 2022 and prior, add lines 9 through 12 and edit on Line 13.

    2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 14 (Line 13 for 2022 and prior).

      If... Then...
      The amount on Line 14 (Line 13 for 2022 and prior) has pre-computed interest or penalty or additional charge,
      1. "X" the Line 14 (Line 13 for 2022 and prior) amount.

      2. Delete the interest, penalty, or additional charge from the total.

      3. Edit the correct Total Tax to the left of the original entry.

  2. Line 15c - If there is a significant entry on Line 15c, refer to CCC "O" procedures. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
    (Line 15e for 2022 -2018) (Line 14e for 2017 and prior)

  3. Line 15d - Total ES Credits. If blank and there are entries on Lines 15a through 15c, add Lines 15a and 15b minus Line 15c and enter on Line 15d.
    (Line 15f for 2022 - 2018) (Line 14f for 2017 and prior)
    For 2022 - 2018, add lines 5a through 5d minus Line 5e.
    For 2017 and prior, Add Lines 14a through 14c minus 14e.

  4. Line 15e - Form 7004 Credits.
    (Line 15g for 2022 - 2018) (Line 14g for 2017 and prior)

  5. Line 15f - Credit by Reciprocal for Tax Paid by Attorney-In Fact Under IRC 835(d) (Positive Only.)
    (Line 15h for 2022-2018) (Line 14h for 2017 and prior)

  6. Line 15g - Elective Payment Election.

  7. Line 15z - Other Refundable Credits and Payments.
    (Line 15i for 2022 - 2018) (Line 14i for 2017 and prior)

    If ... And ... Then ...
    The taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 15z Form 1099 is not attached, Correspond using Letter 118C.

  8. Line 17 - Estimated Tax Penalty. If blank and Form 2220 is attached with a significant entry on Line 38, edit this amount to Line 17 of Form 1120-PC. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.
    (Line 16 for 2022 - 2018) (Line 15 for 2017 and prior)

  9. Lines 18 and 19 - Amount owed/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 18 or 19
    (Lines 17 and 18 2022 - 2018) (Line 16 and 17 for 2017 and prior)
    If both are blank. Do both of the following:

    1. Add Lines 14 and 17 minus 16.
      For 2022-2018, add Lines 13, 14, and 16 minus 15k.
      For 2017 and prior, add Lines 13 and 15 minus Line 15k.

    2. Edit the positive result on Line 18 or the negative result (do not bracket) on Line 19 .

  10. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 18 or reduced Line 19 .

    If... Then...
    The amount on Line 18 has pre-computed interest or penalty or additional charge,
    1. "X" Line 18 amount.

    2. Delete the interest, penalty, or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 19 is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 19 amount.

    2. Compute the Overpayment amount without the interest, penalty, or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  11. Line 20 (center) - Estimated Tax Credit.
    (Line 19 (center) for 2022 - 2018) (Line 18 (center) for 2017 and prior)

Tax and Payments - Prior Year Returns
  1. Line 14 - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  2. Lines 15b -The instructions for this line only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed. If a return is for tax period 201812 and prior and the taxpayer notates "Section 847" or reports SETP on Line 15b (Lines 14b and/or 14d for 2017 and prior) or Form 8816 is attached. See IRM 3.11.16.3.10, IRC 847 Deduction.

  3. Line 15d - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    2. Edit CCC "J" and Action Code "460."

  4. Line 15j -
    Line 15j - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 14j for 2017 and prior):

    If ... Then ...
    The amount on Line 15j (Line 14j for 2017 and prior) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

Schedule A, Page 2

  1. Line 3b - Interest Exempt Under IRC 103.

    1. If there is a positive amount on Page 3, Schedule B, Line 1b, Column (a), edit the amount to Page 2, Schedule A, Line 3b, Column (a).

    2. Dummy a Page 2 if necessary.

    3. "X" if negative.

  2. Line 6 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond.

  3. Line 7- Net Gain or Loss from Form 4797. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond.

  4. Line 14 - If Line 14 is blank and there are entries on Lines 1 through 13, add Lines 1 through 13 and edit the amount on Line 14.

  5. Line 16 - Salaries and Wages, no editing is required.

Schedule C, Page 4 -
Dividends, Inclusions, Dividends-Received Deduction, and Other Special Deductions

  1. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 10, 11, 12a, 12b, 12c, 13, and/or 14 (Lines 3, 6, 7, 8, 10, 11, and/or 12 for 2017 and prior) edit Audit Code "2."

Schedule I, Page 7, Boxes 2a and 2b - Kind of Company Code

  1. Code "1" if Page 7, Schedule I, Box 2a is checked.

  2. Code "2" if Page 7, Schedule I, Box 2b is checked.

  3. Code "1" if neither box is checked or both boxes are checked.

  4. Edit the code to the right of Line 2. See Figure 3.11.16-39.

  5. If Page 7 of Form 1120-PC is not present, dummy a Page 7 and edit the right code.

    Figure 3.11.16-39

    This is an Image: 33500045.gif

    Please click here for the text description of the image.

Schedule I, Page 7, Question 4 - Name and EIN of Common Parent

  1. If Schedule I, Question 4 meets one of the following conditions, a Name Control and EIN must be edited:

    If... Then...
    • Question 4 is checked "Yes" , or

    • Both the "Yes" and "No" boxes are checked,

    • Question 4 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

    1. If something other than a corporation's name and/or EIN is present on Question 4, circle it out.

    2. If the name and/or EIN are the same as the tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Question 4. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the EIN on Question 4. If unable to find the EIN, edit "12-9999999."

    Question 4 is answered "No" or neither box is checked and a corporation's name and EIN are not present, No editing is required.
    Question 4 is answered "No" or neither box is checked and a corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

Schedule I, Line 6c - Number of Forms 5472

  1. No entry is required for Schedule I, Line 6c unless Form 5472 is present.

  2. Edit Line 6c as follows:

    If... And... Then...
    A number is present for Schedule I, Line 6c,   No editing is required.
    Schedule I, Line 6c is blank, One or more Forms 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line 6c.
    Form 5472 is attached, Schedule I is not present, Dummy a Schedule I and edit the number of Form 5472(s) to Schedule I, Line 6c.

Schedule I, Lines 20a, 20b, and 20c

  1. If Question 20b is marked "Yes" or Question 20c is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached.

  2. No editing is required.

  3. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

Total Assets Ending - Page 8

  1. Edit the amount from Schedule L, Line 15, Column (d) to the bottom right corner of Page 1.

    1. If Line 15, Column (d) is blank, compute Lines 1 through 14 if present and edit on Page 1.

Annual Statement - Form 1120-PC

  1. Property and Casualty insurance companies must include a copy of their annual statement with Form 1120-PC. The annual statement must be in the format approved by the National Association of Insurance Commissioners (NAIC). The following reports/statements are not acceptable:

    • Annual Reports

    • Financial Statements

    • Financial Reports

    Note:

    The above list is not all inclusive.

  2. Verify that annual statements for Property and Casualty insurance companies are attached to return.

  3. If attached, continue normal processing of return.

  4. If an annual statement is not attached, use the following chart to determine if it is required:

    If ... Then ...
    The taxpayer indicates that the State does not require the firm to file an annual statement and a pro-form annual statement is not attached, Correspond for a pro-forma annual Statement using Letter 118C.
    • The taxpayer indicates "Bankruptcy" or "in receivership," or

    • Amended Form 1120-PC,

    Do not correspond for the missing annual statement.
    A re-entry mixed component return was originally filed electronically, Do not correspond for the missing annual statement.
    See IRM 3.11.16.28.1, Consolidated Return - Mixed Components.

  5. If annual statement is required and is missing, prepare an approved Correspondence Action Sheet requesting correspondence for missing annual statement.

  6. Annotate upper left margin of return; "Annual Statement Requested on ____," filling in the blank with the date correspondence was initiated.

  7. Photocopy Page 1 of Form 1120-PC.

  8. Attach photocopy to the Correspondence Action Sheet and send to Correspondence.

  9. Continue normal processing of the return. Return is not to be rejected or suspended for any correspondence regarding missing Annual Statements.

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. The instructions in this subsection apply to tax periods 202212 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision) is attached. See IRM 3.11.16.38.8, Return Processing Code.

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. For processing instructions, see IRM 3.11.16.11.37, Schedule N (Form 1120) - Foreign Operations of U.S. Corporations.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A, will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, Schedule A , are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, , data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts

  1. Form 965-B is valid for tax periods ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount is present (other than the pre-printed date) on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, a significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Page 1, Line 8c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Return Processing - Form 1120-REIT

  1. This subsection provides instruction for processing Form 1120-REIT, Real Estate Investment Trust.

  2. Form 1120-REIT can be filed on a calendar or fiscal year basis.

  3. Action Codes apply to Form 1120-REIT. See IRM 3.11.16.3.1, Action Codes.

  4. To convert prior year tax returns. See Exhibit 3.11.16-10, Form 1120-REIT - Prior Year Conversion Chart.

Sequence - Form 1120-REIT

  1. Document Perfection is responsible for arranging Form 1120-REIT in the following order when transcription line entries are present:

    • Pages 1, 2, 3, 4, 5

    • Schedule N (Form 1120)

    • Form 1120, Schedule D

    • Form 8949

    • Form 8996

    • Schedule O (Form 1120) (Tax periods 201811 and prior only)

    • Form 4626 (Tax periods 201811 and prior only)

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

    • Form 8997

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control/"In-Care-Of" Name

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control, and IRM 3.11.16.6.4, Entity Perfection "In-Care-Of" Name.

Address

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses, and IRM 3.11.16.6.6, Entity Perfection - Foreign Address.

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return, see IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-REIT title area in MMDDYY format on an Initial, Final or Short Period return, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits, for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 9 through 22, see IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Valid Codes for Form 1120-REIT are D, E, F, G, J, L, M, O, P, R, S, T, W, X, Y, 1, 3, 7, 8, and 9.

  2. Edit to the dotted portion of Lines 1 through 8. See IRM 3.11.16.9.1, Computer Condition Codes.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-REIT.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-REIT, Line 25f(1) or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, Form 3800 or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached.
    2 Form 8992, U.S Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached.

ABLM Code

  1. Edit "001" to the left of Box B when:

    1. Page 1, Box B2 is checked.

    2. Page 3, Schedule J, Line 5 has an entry.

    3. Schedule PH (Form 1120) is attached.

Initial Return Code

  1. Edit in the margin to the right of Box D. See IRM 3.11.16.9.4, Initial Return Code.

Additional Form 1120-REIT Perfection

  1. This subsection addresses the editing of additional Form 1120-REIT information. See IRM 3.11.16.10, Additional Return Processing.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-REIT near Line 12.
    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

Audit Codes
  1. Edit a "2" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2 - 1" ).

  2. The valid Audit Codes are 1, 2, 3, 4, and C. See IRM 3.11.16.10.1, Audit Codes.

Penalty and Interest Code
  1. Enter a Code "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Computer Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Installment Sale Indicator (Form 6252)
  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ). See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

Total Assets - Box E

  1. Compare the amount in Box E to the amount on Schedule L, Line 13, Column (d).

  2. If the amount to be edited will change, then resolve the difference in favor of the Schedule L amount and correct Box E. Bracket if negative.

    Exception:

    The return is a "Final" return, resolve the difference in favor of the amount in Box E.

  3. If Schedule L, Line 13, Column (d) is blank, compute Lines 1 through 12, Columns (c) and (d) if present and compare with the amount in Box E.

  4. If Box E is blank, enter Total Assets from Schedule L, Line 13, Column (d). Bracket if negative.

  5. No editing is required if Schedule L is not present or if there is no significant entry on Schedule L, Line 13, Column (d). (If Line 13, Column (d) is blank, compute Lines 1 through 12, Columns (c) and (d) if present.)

Page 1 - Gross Income Items, Lines 1 through 8

  1. Line 1 - Dividends.

  2. Line 2 - Interest.

  3. Line 3 - Gross Rents from Real Property.

  4. Line 4 - Other Gross Rents.

  5. Line 5 - Capital Gain. For Schedule D processing instructions, see IRM 3.11.16.11.4.7, Line 8 - Capital Gain.

  6. Line 6 - Net gain or loss from Form 4797, Part II, line 17. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond.

  7. Line 7 - Other Income: If the taxpayer inserts "Other Income" items that should be on Line 7, but are on Lines 1 through 6.

    1. Add the items and edit the total to Line 7. Bracket if negative.

    2. "X" the "Other Income" items from Lines 1 through 6.

  8. Line 8 - Total Income:

    1. Compute and enter significant amount if blank. Bracket if negative.

    2. If the only income on the return is "Total Income" on Line 8 and no detailed schedule is found, enter the Line 8 amount on Line 7. Bracket if negative.

Page 1 - Deduction Items, Lines 9 through 21

  1. Line 9 - Compensation of Officers.

  2. Line 10 - Salaries and Wages (less employment Credits). Accept taxpayer’s entry.

  3. Line 11 - Repairs and Maintenance.

  4. Line 12 - Bad Debts.

  5. Line 13 - Rents.

  6. Line 14 - Taxes and licenses.

  7. Line 15 - Interest.

  8. Line 16 - Depreciation.

  9. Line 17 - Advertising.

  10. Line 18 - Energy Efficient Commercial Buildings Deduction - If Form 7205, Energy Efficient Commercial Buildings Deduction, is attached, edit RPC "M" See IRM 3.11.16.39.8, Return Processing Code.

  11. Line 19 (Line 18 for 2022 and prior) - Other deductions: If the taxpayer used "Other Deductions" on Lines 9 through 18.

    1. Add the items and edit the total to Line 19 (Line 18 for 2022 and prior), "Other Deductions." Bracket if negative.

    2. "X" the "Other Deductions" items from Lines 9 through 18 (Line 17 for 2022 and prior).

  12. Line 20 (Line 19 for 2022 and prior) - Total deductions:

    1. If missing or illegible, add Lines 9 through 19 and enter total on Line 20. Bracket if negative.

    2. If the only deduction entry is on Line 20 and no detailed schedules are found showing allocation of deductions, enter this amount on Line 19 as "Other Deductions." Bracket if negative.

  13. Line 22a (Line 21a for 2022 and prior) - Net Operating Loss Deduction.

  14. Line 22b (Line 21b for 2022 and prior) - Deduction for dividends paid.

  15. Line 22c (Line 21c for 2022 and prior) - IRC 857 Deduction.

Tax Computation - Lines 24 through 28

  1. Edit Line 24 (Line 23 for 2022 and prior) - Total Tax as follows:

    1. If blank, enter from Page 3, Schedule J, Line 11 (Line 8 for 2021 and 2022) (Line 7 for 2020 and prior).

    2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 24 (Line 23 for 2022 and prior) .

      If... Then...
      The amount on Line 24 (Line 23 for 2022 and prior) has pre-computed interest or penalty or additional charge,
      1. "X" the Line 24 (Line 23 for 2022 and prior) amount .

      2. Delete the interest, penalty, or additional charge from the total.

      3. Edit the correct Total Tax to the left of the original entry.

  2. Line 25c (Line 24c for 2017 and prior) - If there is a significant entry on Line 25c (Line 24c for 2017 and prior), refer to CCC "O" procedures, see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  3. Line 25d (Line 24d for 2017 and prior) - ES Credits. If blank, add Lines 25a and 25b (Line 24a and 24b 2017 and prior), subtract Line 25c (Line 24c for 2017 and prior) and enter the total amount on Line 25d (Line 24d 2017 and prior).

  4. Line 25e (Line 24e for 2017 and prior) - 7004 Credit.

  5. Line 25f(1) (Tax Periods 202201-202211) - If a significant amount is present and "IRA22 DPE" is notated, edit RPC "J."

  6. Line 25f - Undistributed long-term capital gains from both RICs and REITs.
    (Line 25f(1) for 2022 - 2018) (Line 24f for 2017 and prior)

    If ... Then ...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Line 25f. (Line 2f(1) for 2022 and prior) Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

  7. Line 25g - Credit for Federal tax on fuels (Form 4136).
    (Line 25f(2) for 2022 - 2018) (Line 24f for 2017 and prior)

    1. If there is a significant entry on Line 25g and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136- Credit for Federal Tax Paid on Fuels.

  8. Line 25h - Elective Payment Election

  9. Line 25i (Line 24h for 2017 and prior).

    1. If the taxpayer has included backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 25i (Line 24h for 2017 and prior) and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

  10. Line 26 (Line 25 for 2017 and prior) - Estimated Tax Penalty. Edit amount from Line 38, Form 2220 to Line 26 (Line 25 for 2017 and prior), Form 1120-REIT, if not already entered. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  11. Lines 27 and 28 (Lines 26 and 27 for 2017 and prior) - Tax Due/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 27 or 28 (Line 26 or 27 for 2017 and prior) if both are blank. Do both of the following:

    1. For 202301 and later, add lines 24 and 26 minus Line 25z.

    2. For 2022 -2018, Add Lines 23, 24, and 26 minus 25i,

    3. For 2017 and prior, Add Lines 23 and 25 minus Line 25i.

    4. Edit the positive result on Line 27 (Line 26 for 2017 and prior) or the negative result (do not bracket) on Line 28 (Line 27 for 2017 and prior).

  12. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 27 (Line 26 for 2017 and prior) or reduced Line 28 (Line 27 for 2017 and prior).

    If... Then...
    The amount on Line 27 (Line 26 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 27 (Line 26 for 2017 and prior) amount.

    2. Delete the interest, penalty, or additional charge from the tax due.

    3. Edit the correct tax due to the left of the original entry.

    The amount on Line 28 (Line 27 for 2017 and prior) is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 28 (Line 27 for 2017 and prior) amount.

    2. Compute the Overpayment amount without the interest, penalty, or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  13. Line 29 (center) (Line 28 (center) for 2017 and prior) - Credit to Estimated Tax.

Tax and Payments Prior Year Instructions
  1. Line 24 - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  2. Line 25h - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from the following lines from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    2. Edit CCC "J" and Action Code "460."

  3. Line 25g - Reserved for future use.
    Line 25g - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 24g for 2017 and prior):

    If ... Then ...
    The amount on Line 25g (Line 24g for 2017 and prior) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator and IRM 3.11.16.11.9, Paid Preparer Section.

Schedule J, Line 1 - Controlled Group Code

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit the right Controlled Group Code to the left of the box on Page 3, Schedule J, Line 1.

  3. Edit Controlled Group Code "4" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the tax return has any of the following criteria:

    1. The box on Page 3, Schedule J, Line 1 is checked.

    2. There is a sign on an attachment that the taxpayer is a member of a controlled group as defined in IRC 1561 or IRC 1563.

    3. A statement or attachment stating a surtax apportionment plan.

  4. Edit Controlled Group Code "1" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the tax return has any of the following criteria:

    1. The box on Page 3, Schedule J, Line 1 is checked.

    2. There is indication that the taxpayer is a member of a controlled group as defined in IRC 1561 or 1563.

    3. A statement or an attachment stating a surtax apportionment plan.

      Note:

      If there is any doubt whether an attachment is a surtax apportionment plan refer the document to the lead tax examiner.

  5. If Controlled Group Code "4" or "1" is edited, process Schedule O (Form 1120) per IRM 3.11.16.11.38, Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group.

  6. If neither Controlled Group Code "4" or "1" was edited, delete Schedule O (Form 1120), if present.

Schedule J, Lines 2b through 2g - Taxes

  1. Line 2b - Tax from Part II.

  2. Line 2c - Tax from Part III.

    Note:

    If the taxpayer attaches a statement of "reasonable cause" with regards to relief from failure to meet the gross income tests (Sections 856(c)(2) and 856(c)(3)), leave these documents attached to the return and take no action.

  3. Line 2d - Tax from Part IV.

  4. Line 2e - Tax imposed under IRC 857.

  5. Line 2f - Tax imposed under IRC 856(c)(7).

    Note:

    If the taxpayer attaches a statement of "reasonable cause" with regards to relief from failure to meet the asset tests (Sections 856(c)(7)) leave these documents attached to the return and take no action.

  6. Line 2g - Tax imposed under IRC 856(g)(5).

    Note:

    If the taxpayer attaches a statement of "reasonable cause" with regards to relief from failure to meet the asset tests (Sections 856(g)(5)) leave these documents attached to the return and take no action.

  7. Line 2g - Alternative minimum tax (AMT) (Tax periods 201811 and prior only).

    1. If the tax period is 201811 and prior and Schedule J, Line 2g (prior year revision) has an amount for AMT, edit the amount to the right margin of Schedule J, Line 2g.

    2. If the tax period is 201811 and prior and Schedule J, Line 2g (prior year revision) is blank and Form 4626 is attached with an amount on Line 14, edit the amount from Line 14, Form 4626 to the right margin of Schedule J, Line 2g.

    3. If the tax period is 201811 and prior and Schedule J, Line 2g (prior year revision) has a significant entry and Form 4626 is not attached, correspond for Form 4626.

  8. Line 2g (Line 2h for 2017 and prior) - Income tax. If blank, add significant amounts from Lines 2a through 2f (Line 2g for 2017 and prior) and enter on Line 2g (Line 2h for 2017 and prior). If the taxpayer has included backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 2g (Line 2h for 2017 and prior) and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

Schedule J, Line 3a - Foreign Tax Credit, Form 1118

  1. If Line 3a has an entry, check for attached Form 1118 or similar statement:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Edit CCC "P."
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118 is missing, Correspond.
    There is an entry on Line 3a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2."

Schedule J, Line 3b - Form 8834 Credit

  1. Line 3b - Form 8834, Qualified Electric Vehicle Credit. If Form 8834 is not attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond.

Schedule J, Line 3c - General Business Credit

  1. If Schedule J, Line 2g (Line 2h for 2017 and prior) shows no tax and there is a significant entry on Line 3c, "X" out the credits.

  2. If an amount is present or Form 3800 is attached, follow the instructions in IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

Schedule J, Line 5 - Schedule PH

  1. If Schedule J, Line 5, Personal Holding Company Tax has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule PH (Form 1120) is not attached, correspond.

    Note:

    A significant entry on Schedule J, Line 5 would also require editing of an ABLM Code "001." See IRM 3.11.16.39.9, ABLM Code.

Schedule J, Lines 6 and 7 - Interest on Deferred Tax Liability

  1. Line 6 - Interest on deferred tax liability for installments under section 453A(c). If a significant amount is present on Line 6 or the 453A(c) checkbox is checked (for 2022 and prior), enter a 1 in the right margin of Line 6. .

  2. Line 7 - Interest on deferred tax liability for installments under section 453(I)(3). If a significant amount is present on Line 7 or the 453A(I)(3) checkbox is checked (for 2022 and prior), enter a "1" in the right margin of Line 7.

  3. Add Lines 6 and 7 and edit the total on Line 7.

Schedule J, Lines 8 and 9- Recapture of Investment Credit

  1. Line 8 - See IRM 3.11.16.11.18.1, Schedule J, Line 9a - Recapture of Investment Credit (Form 4255). .

  2. Line 9 - See IRM 3.11.16.11.18.2, Schedule J, Line 9b - Recapture of Low-Income Housing Credit (Form 8611).

Schedule K, Question 3 - Name of Common Parent

  1. If Schedule K, Question 3 meets one of the following conditions, a Name Control and EIN must be edited:

    If... Then...
    • Question 3 is checked "Yes,"

    • Both the "Yes" and "No" boxes are checked,

    • Question 3 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

    1. If something other than a corporation's name and/or EIN is present on Line 3, circle the name/or EIN.

    2. If the name and/or EIN are the same as tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Line 3. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the TIN on Line 3. If unable to find the TIN, edit "12-9999999."

    Question 3 is answered "No" or neither box is checked and corporation's name and EIN are not present, No editing is required.
    Question 3 is answered "No" or neither box is checked and a corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

Schedule K, Line 5b and Line 5c

  1. Edit Line 5b as follows:

    If... Then...
    The taxpayer has entered the name or abbreviation of a Foreign Country or U.S. Possession on Line 5b, Edit the two letter "Country Code" to the left margin of Line 5b (right margin of Line 5b for 2017 and prior). See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475.

    If Schedule K, Question 5 is answered "Yes" and Line 5b does not have an entry, Edit "Country Code" "OC" to the left margin of Line 5b (right margin of Line 5b for 2017 and prior).
    More than one Foreign Country or U.S. Possession is present, Edit the "Country Code" of the first Foreign Country/U.S. Possession shown, to the left margin of Line 5b (right margin of Line 5b for 2017 and prior).

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands.

  2. Edit Line 5c as follows:

    If... And... Then...
    A number is present for Schedule K, Line 5c,   No editing is required.
    Schedule K, Line 5c is blank, One or more Form 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line 5c.
    Form 5472 is attached, Schedule K is not present, Dummy a Schedule K and edit the number of Form 5472(s) to Schedule K, Line 5c.

Schedule K, Question 10

  1. No editing is required.

Schedule K, Question 11

  1. No editing is required.

Schedule K, Question 12 (Qualified Opportunity Fund - Form 8996)

  1. If Form 1120-REIT, Schedule K, Question 12, "Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund" is answered "Yes," search attachments for Form 8996. If Form 8996 is attached with an amount in Part III, Line 15, edit the amount to Schedule K, Question 12.

    Prior Year Revision Line
    2020 and later Part III, Line 15
    2019 Part III, Line 14
    2018 and 2017 Part III, Line 13
  2. See IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund for transcription lines.

  3. If Form 8996, Qualified Opportunity Fund, is attached, edit Return Processing Code (RPC) "6." See IRM 3.11.16.39.8, Return Processing Code (RPC), for more information.

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. For processing instructions, see IRM 3.11.16.11.37, Schedule N (Form 1120 ) - Foreign Operations of U.S. Corporations.

Form 1120 - Schedule D

  1. The checkbox above Part I is the only transcription line on Schedule D when attached to Form 1120-REIT.

Form 8949 - Sales and Other Dispositions of Capital Assets

  1. For processing instructions, see IRM 3.11.16.16, Form 8949 - Sales and Other Dispositions of Capital Assets.

Form 8996 - Qualified Opportunity Fund

  1. For processing instructions, see IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund.

Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group

  1. The instructions in this subsection (paragraphs 2 through 4) only apply to tax periods 201811 and prior. If a Schedule O is attached to a Form 1120-REIT for tax period 201812 and later, do the following:

    If ... Then ...
    Schedule O is in sequence order, Line through Schedule O, Parts II and III.
    Schedule O is not in sequence order, No action needed.

  2. This subsection includes instructions for processing Schedule O (Form 1120).

  3. Schedule O (Form 1120) replaces the Controlled Group tax computation previously included on Schedule J, Lines 2a(1) through 2b(2) for 2005 and prior.

  4. If Controlled Group Code "1" or "4" is edited on a prior year return, dummy a Schedule O and edit significant positive amounts as follows:

    1. Schedule J, Line 2a(1) to Schedule O, Part II, Line 1, Column (c).

    2. Schedule J, Line 2a(2) to Schedule O, Part II, Line 1, Column (d).

    3. Schedule J, Line 2a(3) to Schedule O, Part II, Line 1, Column (e).

    4. Schedule J, Line 2b(1) to Schedule O, Part III, Line 1, Column (f).

    5. Schedule J, Line 2b(2) to Schedule O, Part III, Line 1, Column (g).

Taxable Income Apportionment - Part II, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Schedule O, Part II, Line 1 as follows:

    If... And... Then...
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (c), (d), or (e).
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation taxable income apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (c), (d), or (e).

    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    Taxable income brackets are found on an attachment,
    (See Note below for examples.)
    Edit the positive taxable income bracket amounts to Schedule O, Line 1, Columns (c), (d), and (e). Dummy a Schedule O if needed.
    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero "(0)" in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    No taxable income brackets are found, Correspond for taxable income bracket amounts.

    Exception:

    Do not correspond if; there is no indication of an income tax liability on Form 1120-REIT, Schedule J, Line 2h, the taxable income on Form 1120-REIT, Page 1, Line 22 is zero ("0" ) or a negative amount, or Schedule O (Form 1120, Page 1, Box 3c or Box 4a is checked.

    No Controlled Group Code was edited, see IRM 3.11.16.11.11(4), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation.   Delete Schedule O.

  3. Entries may be shown on an attached allocation/apportionment schedule. Some examples of the title of these schedules may be:

    • "apportionment plan"

    • "apportionment consent plan"

    • "consent to apportionment"

    • "controlled group tax apportionment plan"

    • "surtax apportionment plan"

    • "allocation schedule"

  4. The attachment may identify the amounts by the tax rate and/or taxable income bracket. Column (c) is the $50,000 taxable income bracket taxed at 15 percent, Column (d) is the $25,000 taxable income bracket taxed at 25 percent and Column (e) is the $9,925,000 taxable income bracket taxed at 34 percent.

  5. Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

Income Tax Apportionment - Part III, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Part III, Line 1 as follows:

    If... And... Then...
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (f) and (g).
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (f) and (g).

    A Controlled Group was edited, Part III, Line 1, Column (f) is blank, Check attachments for possible entry (additional 5 percent tax):
    1. If found, edit the positive amount to Line 1, Column (f).

    2. If not found, continue processing.

    A Controlled Group was edited, Part III, Line 1, Column (g) is blank, Check attachments for possible entry (additional 3 percent tax):
    1. If found, edit the positive amount to Line 1, Column (g).

    2. If not found, continue processing.

Form 4626 - Alternative Minimum Tax

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Taxpayers may sometimes include more than one Form 4626 with the return. If more than one Form 4626 is present, compute the totals and edit the right transcription lines.

  3. If Form 4626 is attached, perfect the following lines, as necessary:

    1. Line 3 - Pre-Adjustment AMTI. If there is no entry on Line 3, but any of Lines 1 or Lines 2a through 2o have an entry, compute Line 3. Bracket if negative.

    2. Line 4e - ACE Adjustment. Accept taxpayer's entry.

    3. Line 6 - Alternative tax net operating loss deduction. Accept positive entry. "X" negative amount.

    4. Line 11 - Alternative minimum tax foreign tax credit. Accept positive entry. "X" negative amount.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For Form 4136 processing instruction, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A., Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts

  1. Form 965-B is valid for tax periods ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount (other than the pre-printed date) is present on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

  4. Form 1120-REIT has the following additional transcription for Form 965-B:

    1. Part III, Line 1a, Column (b), Amount Elected to be Accounted for Over Time.

    2. Part III, Line 1b, Column (b), Amount Elected to be Accounted for Over Time.

    3. Part III, Line 2a, Column (b), Amount Elected to be Accounted for Over Time.

    4. Part III, Line 2b, Column (b), Amount Elected to be Accounted for Over Time.

    5. Part III, Line 3a, Column (b), Amount Elected to be Accounted for Over Time.

    6. Part III, Line 3b, Column (b), Amount Elected to be Accounted for Over Time.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, A significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Schedule J, Line 3c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. Form 8997 is valid for tax periods ending 201901 and later.

  2. Place Form 8997 in sequence order if the form is attached and significant entries are present in any of Parts I, II, III or IV.

    Note:

    Transcription is different for Form 1120-REIT than Form 1120.

  3. No editing is required except for the indicator in Part III.

  4. Part I - Total QOF Investment Holdings Due to Deferrals before Beginning of Tax Year (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

  5. Part II - Current Tax Year Capital Gains Deferred by Investing in QOF (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

  6. Part III - QOF Investments for Which Gain Is Included During Current Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of previously deferred short-term gain now included in taxable income

    5. Column f - Amount of previously deferred long-term gain now included in taxable income

    6. Part III Indicator - If more rows are present in Part III, edit a "1" in the right margin of Part III.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  7. Part IV - Total QOF Investment Holdings at Year End Due to Deferrals (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

  8. If Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, is attached, edit Return Processing Code (RPC) "9." See IRM 3.11.16.39.8, Return Processing Code (RPC), for more information.

Return Processing - Form 1120-RIC

  1. This subsection provides instructions for processing of Form 1120-RIC, Regulated Investment Companies.

  2. Form 1120-RIC can be filed on a calendar or fiscal year basis.

  3. Action Codes apply to Form 1120-RIC. See IRM 3.11.16.3.1, Action Codes.

  4. To convert prior year tax returns. See Exhibit 3.11.16-11, Form 1120-RIC - Prior Year Conversion Chart.

Sequence - Form 1120-RIC

  1. Document Perfection is responsible for arranging Form 1120-RIC in the following order when transcription line entries are present:

    • Pages 1, 2, 3, and 4

    • Schedule N (Form 1120)

    • Form 1120, Schedule D

    • Form 8949

    • Form 8996

    • Schedule O (Form 1120)(Tax periods 201811 and prior only)

    • Form 4626 (Tax periods 201811 and prior only)

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

    • Form 8997

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name Control/"In-Care-Of" Name

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control and IRM 3.11.16.6.4, Entity Perfection - "In-Care-Of" Name.

Address

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses and IRM 3.11.16.6.6, Entity Perfection - Foreign Address.

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return. See IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-RIC title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 9 through 22. See IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Valid codes for Form 1120-RIC are D, E, F, G, J, L, M, O, P, R, S, T, W, X, Y, 3, 7, 8, and 9.

  2. Edit to the dotted portion of Lines 1 through 8. See IRM 3.11.16.9.1, Computer Condition Codes.

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1 of Form 1120-RIC.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement, is attached.
    J For tax periods 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,, Form 1120-RIC Line 29f or on an attachment.
    1. Completely edit the return.

    2. Edit RPC "J."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.

    K For tax periods 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, on an attachment or at the top of the return.
    1. Completely edit the return.

    2. Edit RPC "K."

    3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

      Note:

      P&A will provide the pre-printed half-sheets for C&E to use.

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.

    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction is attached.
    2 Form 8992, U.S Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached.

ABLM Code

  1. Edit "001" to the left of the line between Box A and Box B when:

    1. Box F, Page 1 is checked.

    2. Schedule PH (Form 1120) is attached.

    3. Page 3, Schedule J, Line 5 has an entry.

Initial Return Code

  1. Edit in the margin to the right of Box D (determined from Box B).

  2. See IRM 3.11.16.9.4, Initial Return Code.

Additional Form 1120-RIC Perfection

  1. This subsection addresses the editing of additional Form 1120-RIC information. See IRM 3.11.16.10, Additional Return Perfection.

Form 8844 Indicator
  1. Edit "1 - 1" in the left margin of Form 1120-RIC near Line 12.
    See IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.,

Audit Codes
  1. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2 - 1" ).

  2. The valid Audit Codes are 1, 2, 3, 4 and C.

  3. For specific Audit Code requirements, follow the instructions in IRM 3.11.16.10.1, Audit Codes.

Penalty and Interest
  1. Enter a Code "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Installment Sale Indicator (Form 6252)
  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ). See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

Total Assets - Box D

  1. Compare the amount in Box D to the amount on Schedule L, Line 13, Column (d).

  2. If the amount to be edited will change, then resolve the difference in favor of the Schedule L amount and correct Box D. Bracket if negative.

    Exception:

    The return is a "Final" return, resolve the difference in favor of the Box D amount.

  3. If Schedule L, Line 13, Column (d) is blank, compute Lines 1 through 12, Columns (c) and (d) if present and compare with the amount in Box D.

  4. If Box D is blank, enter Total Assets from Schedule L, Line 13, Column (d). Bracket if negative.

  5. No editing is required if Schedule L is not present or there is no significant entry is on Schedule L, Line 13, Column (d).

Page 1 - Gross Income Items, Lines 1 through 8

  1. Line 1 - Dividends.

  2. Line 2 - Interest.

  3. Line 3 - Net Foreign Currency Gains.

  4. Line 4 - Payments with respect to securities loans.

  5. Line 5 - Excess of net short-term capital gain over net long-term capital loss. Positive only. If Line 5 is negative, see IRM 3.11.16.11.4.7, Line 8 - Capital Gain.

  6. Line 6 - Net Gain or Loss from Form 4797. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond.

  7. Line 7 - Other Income: If the taxpayer inserts Other Income items that should be on Line 7 but are on Lines 1 through 6.

    1. Add the items and edit the total to Line 7. Bracket if negative.

    2. "X" the "Other Income" items from Lines 1 through 6.

  8. Line 8 - Total Income:

    1. If blank, add Lines 1 through 7 and edit the total to Line 8. Bracket if negative.

    2. If the only income on the return is "Total Income" on Line 8 and no detailed schedule is found showing allocation of income, edit the Line 8 amount on Line 7.

Page 1 - Deduction Items, Lines 9 through 25

  1. Line 9 - Compensation of Officers.

  2. Line 10 - Salaries and Wages (less employment credits).

  3. Line 11 - Rents.

  4. Line 12 - Taxes and licenses.

  5. Line 13 - Interest.

  6. Line 14 - Depreciation.

  7. Line 15 - Advertising.

  8. Line 16 - Registration Fees.

  9. Line 17 - Insurance.

  10. Line 18 - Accounting and Legal Services.

  11. Line 19 - Management and Investment Advisory Fees.

  12. Line 20 - Transfer Agency, Shareholders Servicing and Custodian Fees.

  13. Line 21 - Report to Shareholders.

  14. Line 22 - Other Deductions. If the taxpayer inserts "Other Deduction" items on Lines 9 through 21:

    1. Add the items and edit the total to Line 22. Bracket if negative.

    2. "X" the "Other Deduction" items from Lines 9 through 21.

  15. Line 23 - Total Deductions:

    1. If blank, add Lines 9 through 22 and edit the total on Line 23. Bracket if negative.

    2. If the only deduction on the return is "Total Deductions" on Line 23 and no detailed schedule is found showing allocation of deductions, edit the Line 23 amount on Line 22. Bracket if negative.

  16. Line 25a - Deduction for Dividends Paid. If blank, edit the amount from Page 2, Schedule A, Line 8a for 2011 and prior change line 25 to 25a.
    (Line 25 for 2011 and prior).

  17. Line 25b - Section 851(d)(2) and section 851(i) deductions. If blank, edit the total of Schedule J, Lines 2c and 2d. If blank for 2022 and prior , edit the amount from Page 2, Schedule J, line 2c.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator and IRM 3.11.16.11.9, Paid Preparer Section.

Page 2 - Tax and Payments, Lines 27 through 33

  1. Line 27 - Total Tax.

    1. If blank enter the amount from Schedule J, Line 10 (Line 8 for 2021 and 2022) (Line 7 for 2020 and prior).

    2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 27.

      If... Then...
      The amount on Line 27 has pre-computed interest or penalty or additional charge,
      1. "X" the Line 27 amount.

      2. Delete the interest, penalty, or additional charge from the total.

      3. Edit the correct Total Tax to the left of the original entry.

  2. Line 28c - If there is a significant entry on Line 28c, refer to CCC "O" procedures. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
    (Line 29c for 2022 - 2018) (Line 28c for 2017 and prior)

  3. Line 28d - ES Credits. If blank, add Lines 28a and 28b, subtract Line 28c and enter on Line 28d.
    (Line 29d for 2022 - 2018) (Line 28d for 2017 and prior)

  4. Line 28e ( - 7004 Credit.
    (Line 29e for 2022 - 2018) (Line 28e for 2017 and prior)

  5. Line 29f (Tax Periods 202301-202311) - If a significant amount is present and "IRA22 DPE" is notated, edit RPC "J."

  6. Line 28f - Regulated Investment Co. Credit, Form 2439.
    (Line 29f for 2022 - 2018) (Line 28f for 2017 and prior)

    If ... Then ...
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Line 28f . Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

  7. Line 28g - Credit for Federal tax on fuels (Form 4136).
    (Line 29g for 2022-2018) (Line 28g for 2017 and prior)

    1. If there is a significant entry on Line 28g and Form 4136 is not present, correspond for the missing Form 4136.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  8. Line 29h - Elective Payment Election.

  9. Line 29 Total Payments and Credits
    (Line 29j for 2022 - 2018) (Line 28i for 2017 and prior).

    1. If the taxpayer has included backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 29 and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

  10. Line 30 (Line 29 for 2017 and prior) - Estimated Tax Penalty. If blank, edit the Estimated Tax Penalty from Line 39 (Line 38 for 2017-2008), Form 2220 to Line 30 (Line 29 for 2017-2008). See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  11. Line 31 (Line 30 for 2017 and prior) and 32 (Line 31 for 2017 and prior) - Amount owed/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 31 or 32 (Line 30 or 31 for 2017 and prior) if both are blank. Do both of the following:

    1. For 202301 and later, add Lines 27 and 30 minus Line 29.

    2. For 2022 - 2018, add Lines 27, 28 and 30 minus 29j.

    3. For 2017 and prior, add Lines 27 and 29 minus 28i.

    4. Edit the positive result on Line 31 (Line 30 for 2017 and prior) or the negative result (do not bracket) on Line 32(Line 31 for 2017 and prior).

  12. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 31 (Line 30 for 2017 and prior) or reduced Line 32 (Line 31 for 2017 and prior).

    If... Then...
    The amount on Line 31 (Line 30 for 2017 and prior) has pre-computed interest or penalty or additional charge,
    1. "X" Line 31 (Line 30 for 2017 and prior) amount.

    2. Delete the interest, penalty, or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.

    The amount on Line 32 (Line 31 for 2017 and prior) is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 32 (Line 31 for 2017 and prior) amount.

    2. Compute the Overpayment amount without the interest, penalty, or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  13. Line 33 (Line 32 for 2017 and prior) - Estimated Tax Credit.

Tax and Payments - Prior Year Instructions
  1. Line 28 - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  2. Line 29h - Reserved for future use.
    Line 29h - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 28h for 2017 and prior):

    If ... Then ...
    The amount on Line 29h (Line 28h for 2017 and prior)≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827.

  3. Line 29i - Reserved - For Tax Periods 201712 through 202012, follow the instructions in a) and b).

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    2. Edit CCC "J" and Action Code "460."

Schedule J, Line 1 - Controlled Group Code

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit the right Controlled Group Code on the dotted line portion of Page 2, Schedule J, Line 1.

  3. Edit Controlled Group Code "4" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the tax return has any of the following criteria:

    1. The box on Page 2, Schedule J, Line 1 is checked.

    2. There is indication that the taxpayer is a member of a controlled group as defined in IRC 1561 or IRC 1563.

    3. A statement or attachment stating a surtax apportionment plan.

  4. Edit Controlled Group Code "1" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the tax return has any of the following criteria:

    1. The box on Page 2, Schedule J, Line 1 is checked.

    2. There is indication that the taxpayer is a member of a controlled group as defined in IRC 1561 or IRC 1563.

    3. A statement or an attachment stating a surtax apportionment plan.

      Note:

      If there is any doubt whether an attachment is a surtax apportionment plan refer the document to the lead tax examiner.

  5. If Controlled Group Code "4" or "1" is edited, process Schedule O (Form 1120) per IRM 3.11.16.40.33, Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group.

  6. If neither Controlled Group Code "4" or "1" was edited, delete Schedule O (Form 1120) if significant entries are present.

Schedule J - Lines 2b through 2d

  1. Line 2b, Tax on undistributed net capital gain - If Line 2b is blank and Part II, Line 4 has an entry, edit the amount from Part II, Line 4 to Line 2b.

  2. Line 2c, Tax imposed under sections 851(d)(2) and 851(i) - accept the taxpayer’s figure.

  3. Line 2d - Tax imposed under Section 851i.

  4. Line 2d- Alternative Minimum Tax (tax periods 201811 and prior only).

    1. If the tax period is 201811 and prior and Schedule J, Line 2d (prior year revision) has an amount for AMT, edit the amount to the right margin of Schedule J, Line 2d.

    2. If the tax period is 201811 and prior and Schedule J, Line 2d (prior year revision) is blank and Form 4626 is attached with an amount on Line 14, edit the amount to the right margin of Schedule J, Line 2d.

    3. If the tax period is 201811 and prior and Schedule J, Line 2d (prior year revision) has a significant entry and Form 4626 is not attached, correspond for Form 4626.

  5. Line 2e (Line 2d for 2018 through 2022) - Income tax. If blank, add the significant amounts from Lines 2a through 2d (Line 2c for 2018 through 2022).

Schedule J, Line 3a - Form 1118

  1. If Line 3a has an entry, check for attached Form 1118 or similar statement:

    If... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit CCC "P."
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118 is missing, Correspond.
    There is an entry on Line 3a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2."

Schedule J, Line 3b - Form 8834, Qualified Electric Vehicle Credit

  1. Line 3b - Form 8834, Qualified Electric Vehicle Credit. If Form 8834 is not attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond.

Schedule J, Line 3c - General Business Credit

  1. If Schedule J, Line 2d shows no tax and there is a significant entry on Line 3c, "X" the credits.
    (Line 2e for 2012-2017).

  2. If an amount is present or Form 3800 is attached, follow the instructions in IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

Schedule J, Line 3d - Other Credits

  1. If Line 3d, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is shown and not attached, correspond.

Schedule J, Line 5 - Schedule PH

  1. If Schedule J, Line 5, Personal Holding Co. Tax has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule 1120-PH is not attached, correspond.

    Note:

    A significant entry on Schedule J, Line 5 would also require editing an ABLM Code "001." See IRM 3.11.16.40.9, ABLM Code.

Schedule J. Line 6 and 7 - Interest on Deferred Tax Liability

  1. Line 6 - Interest on deferred tax liability for installments under section 453A(c). If a significant amount is present on Line 6 or the 453A(c) checkbox is checked (for 2022 and prior), enter a "1" in the right margin of Line 6.

  2. Line 7 - Interest on deferred tax liability for installments under section 453(I)(3). If a significant amount is present on Line 7 or the 453A(I)(3) checkbox is checked (for 2022 and prior), enter a "1" in the right margin of Line 7.

  3. Add Lines 6 and 7 and edit the total on Line 7.

Schedule J, Line 8 - Form 4255

  1. Recapture of Investment Credit. This amount is entered on Form 1120-RIC, Schedule J, Line 8 and reported from Form 4255.

    1. If Schedule J, Line 8, has a significant amount or Form 4255 is attached and:

      If... Then...
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 4255 is not attached, Correspond.
      Form 4255 is attached and the tax is not entered on the return, Edit the amount from Line 20, Form 4255 to Schedule J, Line 8. (
      It appears the tax computed on Form 4255 has been offset by current year investment credit, Recompute the amounts reported on Schedule J, Line 3c and/or Line 8.

      Note:

      Current year investment credit cannot be used to offset Recapture of Investment Credit. Enter corrected amounts on Schedule J, Line 8.

Line 9 - Other Taxes

  1. Recapture of Low-Income Housing Credit. This amount is entered on Form 1120-RIC, Schedule J, Line 9 (Line 7 for 2022 and prior) and reported from Form 8611.

    1. If Schedule J, Line 9 (Line 7 for 2022 and prior), has an entry or Form 8611 is attached and:

      If... Then...
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8611 is not attached, Correspond.
      Form 8611 is included in a total for Schedule J, Line 9,
      1. "X" Line 9, Form 1120-RIC and if present, edit the total of the other taxes included on Schedule J, Line 9.

      2. Edit the Form 8611, Line 14 amount in the area to the left of Schedule J, Line 9.

      More than one Form 8611 is attached,
      1. Combine Form 8611, Line 14 amounts.

      2. Edit the total in the area to the left of Schedule J, Line 9.

      Schedule J, Line 9 indicates the tax is from Form 8611, or Form 8611 is attached, or the Form 8611 box is checked, Edit CCC "9."

  2. Recapture of Indian Employment Credit.

    1. This amount is entered on Form 1120-RIC, Schedule J, Line 9 (Line 7 for 2022 and prior).

    2. The taxpayer will note "IEC Recapture" on the dotted line to the left of Schedule J, Line 9 and include the amount in the total for Schedule J, Line 9.

  3. If Schedule J, Line 9, Other taxes box is checked for tax(es) imposed for relief from failure to meet the asset test and/or the gross income test accept the taxpayer’s figure.

    Note:

    If the taxpayer attaches a statement of "reasonable cause" with regards to relief from failure to meet the asset test (Section 851(d)(2)) and/or the gross income test (Section 851(i)), leave these documents attached to the return and take no action.

Schedule K, Question 3 - Subsidiary Member of a Controlled Group

  1. If Schedule K, Question 3 meets one of the following conditions, a Name Control and EIN must be edited:

    If... Then...
    • Question 3 is checked "Yes," or

    • Both the "Yes" and "No" boxes are checked,

    • Question 3 is checked "No" or neither box is checked but a corporation's name or EIN is present (must be different than that on the return),

    1. If something other than a corporation's name and/or EIN is present on Line 3, circle it out.

    2. If the name and/or EIN are the same as the tax return name and/or EIN, circle the name and/or EIN.

    3. Underline or edit (from attachments) the Name Control on Line 3. If unable to find a Name Control, edit "XXXX."

    4. Underline or edit (from attachments) the TIN on Line 3. If unable to find the TIN, edit "12-9999999."

    Question 3 is answered "No" or neither box is checked and corporation's name and EIN are not present, No editing is required.
    Question 3 is answered "No" or neither box is checked and corporation's name and/or EIN are the same as the return name and/or EIN, No editing is required.

  2. No editing is required unless one of the conditions in (1) above is present.

Schedule K, Line 5(b)(2)

  1. Edit Line 5b(2), Owner's Country as follows:

    If... Then...
    The taxpayer has entered the name or abbreviation of a Foreign Country or U.S. Possession on Line 5b(2), Edit the two letter "Country Code" to the left margin of Line 5b(2). See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475.

    If Schedule K, Question 5b is answered "Yes" and Line 5b(2) does not have an entry, Edit "Country Code" "OC" to the left margin of Line 5b(2).
    More than one Foreign Country or U.S. Possession is present, Edit the "Country Code" of the first Foreign Country/U.S. Possession shown, to the left margin of Line 5b(2).

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands.

  2. Edit Line 5(b)(2), Number of Forms 5472 as follows:

    If... And... Then...
    A number is present for Schedule K, Line 5(b)(2),   No editing is required.
    Schedule K, Line 5(b)(2) is blank, One or more Form 5472 is attached, Edit the number of Form 5472(s) in the dotted line area of Line 5(b)(2).
    Form 5472 is attached, Schedule K is not present, Dummy a Schedule K and edit the number of Form 5472(s) to Schedule K, Line 5(b)(2).

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. For processing instructions, see IRM 3.11.16.11.37, Schedule N (Form 1120) - Foreign Operations of U.S. Corporations.

Form 1120, Schedule D

  1. The checkbox above Part I is the only transcription line on Schedule D when attached to Form 1120-RIC.

Form 8949 - Sales and Other Dispositions of Capital Assets

  1. For processing instructions, see IRM 3.11.16.16, Form 8949 - Sales and Other Dispositions of Capital Assets.

Form 8996 - Reserved for Future Use

  1. No action is needed for Form 8996 on Form 1120-RIC.

Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group

  1. The instructions in this subsection (paragraphs 2 through 4) only apply to tax periods 201811 and prior. If a Schedule O is attached to a Form 1120-RIC for tax period 201812 and later, do the following:

    If ... Then ...
    Schedule O is in sequence order, Line through Schedule O, Parts II and III.
    Schedule O is not in sequence order, No action needed.

  2. This subsection includes instructions for processing Schedule O (Form 1120).

  3. Schedule O (Form 1120) replaces the Controlled Group tax computation previously included on Schedule J, Lines 2a(1) through 2b(2) for 2005 and prior.

  4. If Controlled Group Code "1" or "4" is edited on a prior year return, dummy a Schedule O and edit significant positive amounts as follows:

    1. Schedule J, Line 2a(1) to Schedule O, Part II, Line 1, Column (c).

    2. Schedule J, Line 2a(2) to Schedule O, Part II, Line 1, Column (d).

    3. Schedule J, Line 2a(3) to Schedule O, Part II, Line 1, Column (e).

    4. Schedule J, Line 2b(1) to Schedule O, Part III, Line 1, Column (f).

    5. Schedule J, Line 2b(2) to Schedule O, Part III, Line 1, Column (g).

Taxable Income Apportionment - Part II, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Schedule O, Part II, Line 1 as follows:

    If... And... Then...
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (c), (d), or (e).
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation taxable income apportionment amounts as Line "1" .

    2. "X" any negative entries on Line 1, Columns (c), (d), or (e).

    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    Taxable income brackets are found on an attachment,
    (See Note below for examples.)
    Edit the positive taxable income bracket amounts to Schedule O, Line 1, Columns (c), (d), and (e). Dummy a Schedule O if needed.
    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e) or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    No taxable income brackets are found, Correspond for taxable income bracket amounts.

    Exception:

    Do not correspond if; there is no indication of an income tax liability on Form 1120-RIC, Schedule J, Line 2e, the taxable income on Form 1120-RIC, Page 1, Line 26 is zero ("0" ) or a negative amount, or Schedule O (Form 1120), Page 1, Box 3c or Box 4a is checked.

    No Controlled Group Code was edited, see IRM 3.11.16.11.11(4), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation,   Delete Schedule O.

  3. Entries may be shown on an attached allocation/apportionment schedule. Some examples of the title of these schedules may be:

    • "apportionment plan"

    • "apportionment consent plan"

    • "consent to apportionment"

    • "controlled group tax apportionment plan"

    • "surtax apportionment plan"

    • "allocation schedule"

  4. The attachment may identify the amounts by the tax rate and/or taxable income bracket. Column (c) is the $50,000 taxable income bracket taxed at 15 percent, Column (d) is the $25,000 taxable income bracket taxed at 25 percent and Column (e) is the $9,925,000 taxable income bracket taxed at 34 percent.

  5. Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

Income Tax Apportionment - Part III, Line 1
  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Edit Part III, Line 1 as follows:

    If... And... Then...
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (f) and (g).
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on a line other than Line 1,
    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1" .

    2. "X" any negative entries on Line 1, Columns (f) and (g).

    A Controlled Group was edited, Part III, Line 1, Column (f) is blank, Check attachments for possible entry (additional 5 percent tax):
    1. If found, edit the positive amount to Line 1, Column (f).

    2. If not found, continue processing.

    A Controlled Group was edited, Part III, Line 1, Column (g) is blank, Check attachments for possible entry (additional 3 percent tax):
    1. If found, edit the positive amount to Line 1, Column (g).

    2. If not found, continue processing.

Form 4626 - Alternative Minimum Tax

  1. The instructions in this subsection only apply to tax periods 201811 and prior.

  2. Taxpayers may sometimes include more than one Form 4626 with the return. If more than one Form 4626 is present, compute the totals and edit the right transcription lines.

  3. If Form 4626 is attached, perfect the following lines:

    1. Line 3 - Pre-Adjustment AMTI. If there is no entry on Line 3, but any of Lines 1 or Lines 2A through 2o have an entry, compute Line 3. Bracket if negative.

    2. Line 4e - ACE Adjustment. Accept taxpayer's entry.

    3. Line 6 - Alternative tax net operating loss deduction. Accept positive entry. "X" if negative.

    4. Line 11 - Alternative minimum tax foreign tax credit. Accept positive entry. "X" if negative.

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for tax periods ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for tax periods 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If ... And ... Then ...
    Only Form 8978 is attached, One or more of the boxes are checked. Edit:
    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.

    Form 8978 and Form 8978, , Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total Increase/decrease to reporting year tax.

  6. Part II, Line 16 - Total Penalties.

  7. Part III, Line 18 - Total Interest.

Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts

  1. Form 965-B is valid for tax periods ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount is present on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. For prior year revisions edit as follows:

    If... And... Then...
    2013 and 2012 revisions, A significant amount is present on Line 1a or an EIN is present on Line 1b,
    • Change Line 1a to Line 1.

    • Change Line 1b to Line B.

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when a significant amount is present on Schedule J, Line 3c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount is present on Form 3800, Part III for any of lines/credits 1a through 4z, follow the instructions below for each credit claimed:

    If... And... Then...
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, Part IV, Columns e, f, or g have entries (Part III, Box C, D, or G are checked for 202212 and prior), No action is needed. The credit is for a carryover, and the form is not required.
    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The credit is for a pass-through entity (Part III, Column (d) (Column (b) for 202212 and prior) has an EIN listed), No action is needed. The credit is from a pass-through entity, and the form is not required.

    Exception:

    If a credit is claimed on Lines 1a, 1d, 1o, 4a or 4k, Form 3468must be attached. If a credit is claimed on lines 1l or 1ff Form 8864must be attached.

    The sum of column (e) and (f), for any credit claimed in Part III, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the supporting form is not attached, The situations above do not exist, Correspond.

  4. See IRM 3.11.16.11.15, Line 5c - General Business Credit and Exhibit 3.11.16-14, Form 3800 - Prior Year Conversion Chart.

Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. Form 8997 is valid for tax periods ending 201901 and later.

  2. Place Form 8997 in sequence order if the form is attached and significant entries are present in any of Parts I, II, III or IV.

    Note:

    Transcription is different for Form 1120-RIC than Form 1120.

  3. No editing is required except for the indicator in Part III.

  4. Part I - Total QOF Investment Holdings Due to Deferrals before Beginning of Tax Year (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

  5. Part II - Current Tax Year Capital Gains Deferred by Investing in QOF (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

  6. Part III - QOF Investments for Which Gain Is Included During Current Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of previously deferred short-term gain now included in taxable income

    5. Column f - Amount of previously deferred long-term gain now included in taxable income

    6. Part III Indicator - If more rows are present in Part III, edit a "1" in the right margin of Part III.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  7. Part IV - Total QOF Investment Holdings at Year End Due to Deferrals (Row 1)

    1. Line 2, Column e - Total amount

    2. Line 2, Column f - Total amount

Return Processing - Form 1120-SF (OSPC Only)

  1. This subsection provides instructions for processing Form 1120-SF, U.S. Income Tax Return for Settlement Funds.

  2. Form 1120-SF can be filed on a calendar or fiscal year basis.

  3. Action Codes are not applicable to this form. Computer Condition Code "U" will continue to be used.

Sequence - Form 1120-SF

  1. Document Perfection is responsible for arranging Form 1120-SF in the following order when transcription line entries are present:

    • Pages 1, 2

EIN of Fund

  1. Perfect EIN in the upper right box under the tax year on Form 1120-SF. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

Name of Fund

  1. All returns must have the Name Control underlined. See IRM 3.11.16.6.3, Entity Perfection - Name Control.

Address of Fund

  1. See IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses.

Tax Period

  1. Edit tax period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return. See IRM 3.11.16.7.1, Tax Period - Ending.

  2. Edit the Tax Period Beginning to the left of Form 1120-SF title area in MMDDYY format on an Initial, Final or Short Period return. See IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

  3. See IRM 3.11.16.7.3, Early Filed Returns - Full Year and Short Period through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits for editing Short Period returns.

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date in the dotted portion of Lines 7 through 8. See IRM 3.11.16.8, Received Date.

Computer Condition Codes

  1. Edit in the dotted portion of Lines 1 through 6. Valid codes for Form 1120-SF are C, D, E, F, G, M, N, O, R, T, U, W, X, Y, 1, 3, 7, and 8. See IRM 3.11.16.9.1, Computer Condition Codes.

Additional Form 1120-SF Perfection

  1. This subsection addresses the editing of additional Form 1120-SF information. See IRM 3.11.16.10, Additional Return Perfection.

Audit Codes
  1. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2 - 1" ).

  2. Edit Audit Code "1" Inconsistent Filer Under IRC 6222(b) if Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request, is attached, or;

    1. The return has an attachment with the statement "Notice of Inconsistent Treatment under IRC 6222(b)(b)" ; or

    2. A statement showing the corporation is filing its return inconsistent with the way its partnership return was filed, or

    3. Form 8275, Disclosure Statement is attached.

  3. Edit Audit Code "3" if:

    1. "Unusual Refundable Credits" are claimed on Lines 16a through 16e. For a list of these credits, see IRM 3.11.16.9.1.14, CCC "N" - Joint Committee Case.

    2. Taxpayer quotes "Change of Accounting Period" under Headquarters "Grant Letter" , or Revenue Procedure 2006-45 or 2006-46. Attach Form 4227, Intra-SC Reject or Routing Slip to Examination (Audit) showing: "Taxpayer is changing accounting period pursuant to Headquarters "Grant Letter" , or Revenue Procedure 2006-45 or 2006-46. "

Penalty and Interest Code
  1. Enter a Code "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Computer Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

Reserve Code
  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator and IRM 3.11.16.11.9, Paid Preparer Section.

Total Assets End

  1. Edit the amount from Page 2, Schedule L, Line 6 (End of Year) in dollars only to the bottom right corner of Page 1. Bracket if negative. Figure 3.11.16-40.

    If... Then...
    Schedule L, Line 6 (End of Year) is blank, Compute Lines 1 through 5 if present and edit the amount to the bottom right corner of Page 1.

    Figure 3.11.16-40

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    Please click here for the text description of the image.

Income and Deductions of Fund - Line 14

  1. Line 14 - Modified Gross Income. Line 14 is edited in dollars only.

  2. If blank, compute by subtracting Line 13 from Line 6. Bracket if negative. Do not edit a "0" if the result is zero.

Tax Computation - Lines 15 through 20

  1. Line 15 - Total Tax. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 15.

    If... Then...
    The amount on Line 15 has pre-computed interest or penalty or additional charge,
    1. "X" the Line 15 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct Total Tax to the left of the original entry.

  2. Line 16c - Refund of overpaid estimated tax applied for on Form 4466. If there is a significant entry on Line 16c, refer to CCC "O" procedures. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  3. Line 16d - Total estimated payments. If blank, subtract Line 16c from the total of Lines 16a and 16b and enter the total amount on Line 16d. For CCC "O" instructions. See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  4. Line 16e - Tax deposited with Form 7004.

    Reminder:

    Look for any Unusual Credits, see IRM 3.11.16.9.1.14, CCC "N" - Joint Committee Case and IRM 3.11.16.41.8.1, Audit Codes.

  5. Line 17 - Estimated Tax Penalty. Edit amount of Estimated Tax Penalty from Form 2220, Line 38 to Line 17, if not already entered. See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  6. Lines 18 and 19 - Tax due/Overpayment. Edit as positive only. If the taxpayer enters a negative amount, do not bracket. Edit the proper entry to Line 18 or 19 if both are blank. Do both of the following:

    1. Add Lines 15 and 17. Subtract Line 16f.

    2. Edit the positive result on Line 18 or the negative result (do not bracket) on Line 19.

  7. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 18 or reduced Line 19.

    If... Then...
    The amount on Line 18 has pre-computed interest or penalty or additional charge,
    1. "X" Line 18 amount.

    2. Delete the interest, penalty or additional charge from the tax due.

    3. Edit the correct tax due to the left of the original entry.

    The amount on Line 19 is reduced by pre-computed interest or penalty or additional charge,
    1. "X" Line 19 amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

  8. Line 20 (center) - Overpayment Credit to Estimated Tax.

Schedule L, Page 2 - Balance Sheet

  1. Do not correspond for missing or incomplete Schedule L (Balance Sheet) on Form 1120-SF. Edit in dollars only.

  2. Line 6, Total Asset - Column (a), Beginning of Year.

  3. Line 6, Total Asset - Column (b), End of Year. If blank, add Lines 1 through 5, Column (b).

  4. Line 9, Total - Column (a), Beginning of Year.

  5. Line 9, Total - Column (b), End of Year. If blank, add Lines 7 and 8, column (b).

Additional Information, Page 2

  1. Line 1a - Amount of Transfers.

  2. Line 2 - Tax Exempt Interest.

  3. Line 3b - Direct and Indirect Distributions.

  4. Line 4a - Distributions to Transferor.

  5. Line 5a - Liability (or Liabilities). Edit the applicable Codes to the left of the box checked. Codes 1 through 5 may be entered.

    1. Tort - Code 1

    2. Breach of Contract - Code 2

    3. Violation of Law - Code 3

    4. CERCLA - Code 4

    5. Other - Code 5

    Note:

    More than one code can be edited.

Form 4876-A - Election To Be Treated as an Interest Charge DISC (KCSPC Only)

  1. This subsection provides instructions for the processing of Form 4876-A, Election to be treated as an Interest Charge DISC.

  2. Form 4876-A is processed only at the Kansas City Processing Center.

  3. When corresponding with the corporation, use Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404.

Form 4876-A and Form 1120-IC-DISC "Data File"

  1. Maintain a "Data File" to capture pertinent information related to the processing of Form 4876-A and Form 1120-IC-DISC.

  2. The "Data File" should include (but not limited to) the following information for all processed Form 4876-A and Form 1120-IC-DISC:

    1. Name of corporation

    2. EIN

    3. Received date - Form 4876-A

    4. Received date - Form 1120-IC-DISC

    5. Tax period - Form 1120-IC-DISC

    6. DLN - Form 1120-IC-DISC

    7. Notate and "date" any action(s) taken (e.g., Form 1120-IC-DISC sent to Entity to delete Filing Requirement, correspondence issued to taxpayer).

Filing Requirements

  1. Time for making Election:

    1. If it is the corporation's first tax year, Form 4876-A must be filed within 90 days after the beginning of the tax year.

    2. If it is not the corporation's first tax year, Form 4876-A must be filed during the 90-day period immediately preceding the first day of that tax year.

    3. ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" does not apply to time for filing Form 4876-A. See LEM III, 3113.

    4. If the election is not timely made, treat as a disapproved election.

  2. Ineligible Corporations - The following corporations shall not be eligible to be treated as an interest charge DISC. If an ineligible corporation files, treat as a disapproved election.

    1. A corporation exempt from tax by reason of IRC 501 (Form 990).

    2. A personal holding company, IRC 542 (Form 1120).

    3. A financial institution, IRC 581 or IRC 593.

    4. An insurance company subject to tax imposed by Subchapter L (Form 1120-L).

    5. A regulated investment company as defined in IRC 851(a) (Form 1120-RIC).

    6. An S Corporation (Form 1120-S).

Document Perfection

  1. Shareholders Consents - For the election to be valid, all shareholders must consent. The consents must be attached to or appear in Part II of Form 4876-A. If a shareholder failed to consent timely to the election but then showed to the satisfaction of the service center that there was reasonable cause for such failure, and if such shareholder then files a proper consent to the election within the extend period of time as may be granted by the Service, the service center can treat the election as valid.

  2. The consents will appear on a separate statement attached to Form 4876-A or filed as a separate statement within the time specified for the filing of a consent. (See Part II on Form 4876-A.)

  3. Statement of consent shall state:

    1. The name, address, and identification number of the corporation and each of the shareholders.

    2. The number of shares the shareholder owned (or expects to own) at the beginning of the tax year the election takes effect.

    3. The number of stock shares owned by shareholder when making the consent.

  4. Submission Processing can grant extension of time for filing consents in certain circumstances.

    1. If the shareholder who failed to consent at the time of the election consents and demonstrates reasonable cause for the failure.

    2. If shares are transferred before a consent is filed, the transferee shareholder may consent to the IC-DISC election as long as the transfer occurs and the consent is filed with-in the 90 days of the tax year.

    3. If shares are transferred more than 90 days after the tax year began, an extension can be granted only if the transferror was eligible for one.

    4. In any event, any extension of time for filing of a consent by any shareholder shall not extend beyond the day before the last day of the first taxable year to which a corporation's election to be treated as an interest charge DISC applies.

  5. Supplemental Form 4876-A - If between the date the election is filed and the date it takes effect, the corporation issues more stock or the stock ownership changes, it must file a supplemental Form 4876-A, with "SUPPLEMENTAL" written across the top of the form. The form must be filed within the first 90 days of the tax year the election takes place. If not timely disapprove the election.

    1. The supplemental form will include all the information from the earlier form except for the list of owners claimed in Parts I and II. Only the owners of the new or additional shares with their consents will be reported in Part I, and in Part II. Each new shareholder or holder of additional shares must consent to the IC-DISC election for the Supplemental Form 4876-A to be valid.

  6. Eligibility - Ensure that the election is signed by an authorized officer of the corporation, that the corporation is eligible to be treated as an interest-charge DISC, that it is accompanied by (or was supplemented with) a complete set of shareholder consents, and that it was timely filed.

  7. Other data to be examined - Verify that all questions on the election are answered. Use the Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404 for all correspondence where the election is incomplete. The taxpayer will be given 30 days to respond. Suspense for 45 days.

    If... Then...
    The corporation provides the requested information, Approve the election.
    No reply, or information requested was not provided, Treat as a disapproved election.

Approved Elections

  1. When an election is approved, correspond to inform the taxpayer of the approval. See IRM 3.11.16.42.8, Taxpayer Notification of Action Taken On Form 4876-A. Attach the suspense copy of the letter to the back of the Form 4876-A.

  2. Research the Business Master File (BMF).

    1. If no filing requirements are found, take no action.

    2. If Form 1120 filing requirements are found, prepare Form 4227, Intra SC Reject or Routing Slip to Entity Control and attach to a photocopy of Form 4876-A (notate "COPY" on the photocopy). Include a brief notation on Form 4227, "1120-IC-DISC election approved, delete Form 1120 filing requirement."

Disapproved Elections

  1. When an election is not approved, correspond to inform the taxpayer of the disapproval.

  2. Prepare Form 4227, Intra-SC Reject or Routing Slip.

    1. Include the taxpayer's name and EIN, along with a brief notation to Entity Control to research the BMF and establish the Form 1120 filing requirements for the corporation if needed.

    2. Attach a copy of the taxpayer's response to the back of the Form 4876-A.

Termination of Election

  1. A corporation can revoke its election for any taxable year of the corporation after the first taxable year for which the election is effective. The revocation can be made as follows:

  2. The corporation must file a statement that it revokes its election under IRC 992(b) of the IR Code to be treated as an interest charge DISC.

  3. The statement must include the corporation's name, address, employer identification number (EIN), and the first taxable year of the corporation for which the revocation is to be effective.

  4. The statement shall be signed by any person authorized to sign a corporation return under IRC 6062.

  5. Years for which this revocation is effective:

    1. For the taxable year in which the revocation was made and for all taxable years thereafter, if the revocation was made during the first 90 days of that year.

    2. For the taxable year following in which the revocation was made, and for all succeeding taxable years thereafter, if the revocation was made after the first 90 days of that year.

  6. Submission Processing Centers receiving the revocation must route the revocation to KCSPC via Form 4227, Intra-SC Reject or Routing Slip. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer IRS sent the revocation to Kansas City.

  7. If a corporation is not an IC-DISC every year for five consecutive taxable years of a corporation for which an election is effective, the election shall be terminated and not be in effect for any taxable year of the corporation after such 5th year. The corporation may make a new IC-DISC election, subject to applicable requirements.

  8. The sale of stock to another shareholder does not require an "Amended" election. The election remains in effect until terminated.

  9. The failure of an IC-DISC to meet the requirements outlined in, IRM 3.11.16.42.2, Filing Requirements, in any one year does not terminate the election. When it qualifies in a succeeding taxable year, the corporation is titled "Former IC- DISC."

  10. When an election is revoked or terminated, correspond to determine the taxpayer's liability and filing requirements (e.g., whether the Form 1120-IC-DISC was terminated, intends to file as a corporation), if the taxpayer has not already done so.

  11. If the taxpayer's reply indicates that the IC-DISC election was terminated, but they will continue to file corporation (or other) returns:

    1. Research the BMF to establish or reopen the filing requirement, if it was previously deleted.

    2. Attach a copy of the reply to the Form 4876-A.

  12. If the taxpayer's reply indicates that both the IC-DISC election and the business were terminated, attach a copy of the reply to the Form 4876-A. Take no other action.

  13. If the taxpayer does not reply, research the BMF.

    1. If BMF research shows that the business was terminated, take no action.

    2. If BMF research does not show the business to have been terminated, prepare Form 4227, Intra-SC Reject or Routing Slip. Include the taxpayer's name and EIN, along with a brief notation to Entity to research the BMF and establish the corporation's Form 1120 filing requirement (see IRM 20.1).

    3. Attach the revocation or termination notice to the back of the corporation's Form 4876-A.

    Reminder:

    Current IRS Regulations Section 1.992-2 mention revocations initiated by the corporation as well as terminations of elections resulting from circumstances under which the corporation that has elected to be treated as an IC-DISC does not qualify as an IC-DISC (and is not treated as an IC-DISC pursuant to IRC 1.992-1(g)) for each of any 5 consecutive taxable years. The procedures in this IRM only apply to voluntary revocations submitted by the corporate entities.

Form 4876-A Files

  1. Maintain the Form 4876-A in Document Perfection.

    1. File "approved" elections in an "Approved" file. The "approved" file is organized by tax period ending date and then alphabetically.

    2. File "disapproved" elections alphabetically in a "Disapproved" File.

    3. File revoked or terminated elections alphabetically in a "Revoked" file.

    4. If a corporation has filed its "final" Form 1120-IC-DISC, then file Form 4876-A alphabetically in a "Final" file.

    5. Maintain other Form 4876-A files as needed.

  2. Form 4876-A will be used as a validation file when the returns are subsequently received.

Taxpayer Notification of Action Taken on Form 4876-A

  1. When an election is approved, initiate correspondence to inform the taxpayer that:

    1. The election has been approved; and

    2. The beginning and ending dates of the first tax period and;

    3. The correct EIN to be used by the IC-DISC.

  2. When an election is disapproved, initiate correspondence to inform the taxpayer the election has not been approved, include:

    1. The reason(s) for disapproval:

    2. That other correct returns should be filed; and

    3. That an election for a subsequent tax period (or, if time remains, for the same tax period) may be filed.

  3. When an election is terminated, initiate correspondence to inform the taxpayer that the election has been terminated. Include the following:

    1. The effective date of termination; and

    2. The reason for termination.

Form 4876-A File Review

  1. Review the Form 4876-A file monthly, pulling those which have been tagged with the delinquency check month (e.g., a Form 1120-IC-DISC is due in the month being checked).

  2. If the data file has not been updated to indicate receipt of a return for the right period, check the taxable year ending date to determine if a Form 1120-IC-DISC is due. If the taxable year ending is unknown or blank, check the taxable year beginning date. The latest return due date is twenty and one-half months following the beginning of the taxable year (or, the 15th day of the 9th month following the close of the tax year). If the taxpayer has not filed Form 1120-IC-DISC, treat as follows:

    1. Perform research to determine whether the taxpayer filed Form 1120, U.S. Corporation Income Tax Return, for the current tax year.

    2. If a Form 1120 has been filed, update the data file to reflect Form 1120 was filed for which tax period. No further action is required.

    3. If Form 1120 has not been filed, correspond with the taxpayer to request submission of the return. Include a paragraph asking why the return was not filed and if he/she plans to file future returns.

    4. If the taxpayer responds and gives reasonable cause that meets the criteria in IRM 20.1.1, Introduction and Penalty Relief, attach the response to the back of the return and continue processing.

    5. If the taxpayer does not reply, follow procedures as outlined in (f) through (h), below.

    6. Photocopy the Form 4876-A, Election to Be Treated as an IC-DISC.

    7. Prepare Form 3465, Adjustment Request and attach the Form 4876-A photocopy. Notate on Form 3465 that "the taxpayer has failed to file a Form 1120-IC-DISC - Assess Civil Penalty per IRC 6686."

    8. Route Form 3465 and attached photocopy to Accounts Management (Adjustments).

  3. Dispose of Form 4876-A, ten years after the election is effective, if the corporation has not filed a Form 1120-IC-DISC for any of the taxable years that the election was effective. DO NOT DISPOSE OF ANY Form 4876-A, IF A CORPORATION HAS EVER FILED A Form 1120-IC-DISC.

Form 1120-IC-DISC - Interest Charge Domestic International Sales - Corporation Return
(KCSPC Only)

  1. This subsection provides instructions for the examination of Form 1120-IC-DISC, Interest Charge Domestic International Sales Corporation Return.

  2. Form 1120-IC-DISC is processed only at the Kansas City Processing Center.

  3. When corresponding with the taxpayer, use Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S or Letter 599C, Request for Additional Information for Form 1120-IC-DISC, Form 4876-A and Form 8404.

  4. References to Computer Condition Codes, Audit Codes and Transaction Codes in Exhibit 3.11.16-17, Routing Guide for Attachments, are not applicable to Form 1120-IC-DISC.

  5. Update the "Data File" with any pertinent information related to the processing of Form 1120-IC-DISC. See Form 4876-A and IRM 3.11.16.42.1, Form 4876-A and Form 1120-IC-DISC"Data File."

Due Date

  1. Form 1120-IC-DISC must be filed on or before the 15th day of the 9th month following the close of the taxable year. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. No extension of time to file Form 1120-IC-DISC will be granted.

  3. If it is determined that Form 1120-IC-DISC is delinquent, correspond with the taxpayer using Letter 599C to determine why the return was late. Suspend the Form 1120-IC-DISC for 45 days.

  4. If the taxpayer responds and gives reasonable cause that meets the criteria in IRM 20.1, Penalties, attach the response to the back of the return and continue processing.

  5. If the taxpayer responds and does not meet the criteria in IRM 20.1.1, or the taxpayer does not respond, attach a copy of the reply or the suspense copy of the correspondence to the return as right and continue processing. Also, follow the failure to supply information instructions in IRM 3.11.16.43.7, Civil Penalty - IRC 6686.

Eligibility Determination

  1. If the words "Former DISC" or "Former IC-DISC" appear across the top of the return, check the Form 4876-A files for all Form 1120-IC-DISC returns for verification of eligibility and to prevent delinquency notices.

  2. A former DISC is a corporation that was a DISC on or before December 31, 1984 but failed to qualify as a DISC sometime before December 31, 1984, or did not elect to be a Form 1120-IC-DISC after 1984; and at the beginning of the year, it had undistributed income that was previously taxed on accumulated DISC income. A former IC-DISC is a corporation that was an IC-DISC in an earlier year but did not qualify as an IC-DISC for the current tax year, and at the beginning of the current tax year, it had undistributed income that was previously taxed or accumulated IC-DISC income.

  3. Page 1 and the schedules for figuring taxable income need not be completed by a former DISC or former IC-DISC. "X" any taxable income items on "Former Form 1120-IC-DISC" or "Former Form 1120-IC-DISC" returns. Schedules J, L, M, and K must be completed. If not, follow the following correspondence guidelines:

    1. Issue Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404, to secure the completed Schedules J, L, M, and K. Suspend the Form 1120-IC-DISC for 45 days.

    2. If the taxpayer responds and/or has provided the missing schedules, continue processing the return.

    3. If it has been determined that the taxpayer's response is incomplete, issue a follow-up Letter 599C for the missing information. Inform the taxpayer that penalties are assessed for failure to provide information. Attach a copy of the reply or the suspense copy of the correspondence to the return.

    4. If the taxpayer does not respond, follow procedures for Civil Penalty - IRC 6686. (Penalties of $100 are assessed for failure to provide information.) Attach the suspense copy of the correspondence to the return, see IRM 3.11.16.43.7, Civil Penalty - IRC 6686.

  4. Accept Form 1120-IC-DISC filed to show distribution of a "Former DISC" as long as the correct schedules are completed.

  5. Accept short period liquidating "Former DISC" returns.

  6. For other returns, verify that the corporation is eligible to file Form 1120-IC-DISC.

  7. Search the "Accepted" file or data file. If an accepted Form 4876-A is on file, update the "Data File" to indicate that a return was received for that corporation.

  8. If an accepted Form 4876-A is not found, search for a "Revoked" Form 4876-A. If the Form 4876-A has been "Revoked" , advise the corporation that the election has been terminated, the effective date of the termination, and the reason for the termination.

  9. If neither an accepted or revoked Form 4876-A can be found, initiate correspondence with the corporation to determine if Form 4876-A was filed. Request a photocopy of Form 4876-A and the acceptance letter when corresponding. Suspend the Form 1120-IC-DISC for 45 days.

    1. When a reply is received:

      If... Then...
      The corporation provides a copy of the acceptance letter,
      1. File the acceptance letter in the "Accepted" file.

      2. Process Form 1120-IC-DISC.

      3. Update the "Data File."
        See IRM 3.11.16.42.1, Form 4876-A and Form 1120-IC-DISC"Data File."

      The corporation provides a completed, eligible Form 4876-A election and a copy of a Certified Mail Receipt, with the receipt date making the election timely filed, Process the Form 4876-A election and the Form 1120-IC-DISC normally. Update the Data File appropriately.
      The corporation failed to file a Form 4876-A or does not provide a copy of the acceptance letter, Treat as an ineligible filer.

  10. Examine the following data on the return and schedules. A corporation may not qualify as an 1120-IC-DISC if:

    1. Either Question 2a or Question 2b (Schedule O) is answered "No, " and 2c (Schedule O) is also answered "No."

    2. Question "3" is answered "Yes."

    3. Question "4" is answered "No."

    4. Question 2c is answered "No." IMPORTANT: If Question 2c is blank, but the taxpayer has indicated "No" to Questions 2a and/or 2b, correspond for the missing information, using Letter 599C. Continue processing the return as correct, upon receipt of the taxpayer's reply. If the taxpayer fails to reply, follow procedures for Civil Penalty - IRC 6686. (Penalties of $100 are assessed for failure to provide information.) Attach a copy of the reply or the suspense copy of the correspondence to the return, see IRM 3.11.16.43.7, Civil Penalty - IRC 6686.

      If... And... Then...
      • The responses to Question 2a or Question 2b is answered "No" and 2c is also answered "No,"

      • The response to Question 4 is answered "No,"

      1. Page 1, Line 1 has no significant entry and Schedule L, Column (a) (Beginning of tax year) is blank, or

      2. Page 1, Line 1 has no significant entry and Schedule J, Part III, Line 3 has no significant entry,

      Process Form 1120-IC-DISC as an eligible filer.
      The responses to any of the questions above indicates ineligibility,  
      1. Correspond with the corporation to verify the response.

      2. Suspend Form 1120-IC-DISC for 45 days.

      The response to correspondence explains that the corporation qualifies as an IC-DISC even though the response to question 2(c) indicates ineligibility (such a response may quote IRC 992 or Treas. Reg. 1.992-2 or -3)   Process Form 1120-IC-DISC as an eligible filer.
      The response to correspondence confirms the initial responses to the questions above,   Treat Form 1120-IC-DISC as an ineligible filer.
      There is no reply to the correspondence,   Treat Form 1120-IC-DISC as an ineligible filer.

Ineligible Filers

  1. If a corporation files as an IC-DISC but does not qualify as an IC-DISC, initiate correspondence to return any inappropriately filed Form 1120-IC-DISC and explain to the corporation why it does not qualify as an IC-DISC. Also, indicate any other tax returns that should be filed as a result of this ineligibility. (A former DISC or former IC-DISC must file a Form 1120-IC-DISC in addition to any other return required.

Document Perfection

  1. Examine all returns for timeliness and completeness. The name, address, EIN, and tax period of the corporation must be present along with a signature.

  2. If Line F, Box 2, Page 1 of Form 1120-IC-DISC is checked or there is a sign this is a "Final" return, research INOLES for filing requirement.

  3. If no 1120-IC-DISC filing requirement was established, correspond to determine the taxpayer’s liability and filing requirement (e.g., was the IC-DISC election terminated, does the taxpayer intend to file as a corporation).

  4. If the taxpayer's reply indicates that the IC-DISC was terminated but they will continue to file corporate (or other) returns then:

    1. Send the information to Entity to establish an 1120 filing requirement. Update the "Data File."

    2. Attach a copy of the reply to Form 4876-A.

    3. Continue processing the "Final" return.

  5. If the taxpayer's reply indicates that both the Form 1120-IC-DISC and the business were terminated, attach letter to Form 4876-A. Take no further actions.

  6. Verify that the other questions under "Other Information" on Page 7 (Schedule O) are answered and that the required schedules (or attachments) are present and properly completed.

  7. If Schedule J indicates a deemed or actual distribution to Shareholders (Part I, Line 24; Part III, Line 3; Part IV, Lines 4(a), 4(b) or 4(d); or Part V, Line 3) there must be Schedule(s) K present. Correspond for Schedule K if missing.

  8. If there are any export receipts in Columns b and d, Lines 1c, 2a, 2b, 2c, and 2d on Schedule B of Form 1120-IC-DISC, verify that Schedule(s) N, Export Gross Receipts of the Form 1120-IC-DISC and Related U.S. Persons is attached and completed. Initiate correspondence action if Schedule N is missing or incomplete. Schedule N requires at least the following:

    1. There is at least one product code number and percent of export receipts entered on Line 1. If the percent of export receipts is less than 100 percent, Line 2 must also be complete.

    2. An amount is present on Line 2a.

  9. If Question G(1) Page 1, Form 1120-IC-DISC, is answered "Yes," then at least one line below Question G(1) must be completed. Correspond for missing entries only if correspondence is initiated for another reason. Do not correspond if only Question G(1) is incomplete.

  10. If correspondence is necessary, suspend the Form 1120-IC-DISC for 45 days. If no response, attach the suspense copy of the correspondence to the return and continue processing. Also, follow the failure to supply information instructions in IRM 3.11.16.43.7, Civil Penalty - IRC 6686.

Math Verification

  1. For any of the following math verifications, correspond if it is necessary to obtain additional information. Only correspond with the taxpayer for missing amounts and/or if the tax examiner cannot compute the correct amount with the information given.

  2. Verify that the amounts, if any, on the following lines on Page 1 have been correctly computed and carried forward from the proper schedules or attachments. Verify Lines 1, 2, 4, 6a, 6b, and Box E in the upper right corner of Page 1.

  3. Line 3 - Math verify the total by subtracting the amount on Line 2 from Line 1.

  4. Line 5 - Math verify by subtracting Line 4 from Line 3.

  5. Line 6c - Math verify by adding Lines 6a and 6b.

  6. Line 7 - Math verify by subtracting Line 6c from Line 5.

  7. Line 8 - If an amount is entered on Line 8, math verify the attached Form 4136, Column (d). Verify the amounts in Column (d) are equal to Form 1120-IC-DISC, Line 8.

  8. Math verify Schedule A as follows:

    1. Verify Line 6 by adding the amounts on Lines 1 through 5.

    2. Verify Line 8 by subtracting Line 7 from Line 6.

  9. Math verify Schedule B as follows:

    1. Verify Line 1c, Column (e) by adding the amounts in Columns (c) and (d), Lines 1a(i), 1a(ii), 1a(iii), 1a(iv), 1b(i), and 1b(ii).

    2. Verify Line 2k, Column (e) by adding the amounts in Columns (c) and (d), Lines 2a through 2j.

    3. Verify Line 3g, Column (e) by adding the amounts in Columns (c) and (d), Lines 3a through 3f.

    4. Verify Line 4 by adding Lines 1c, 2k, and 3g Column (e).

  10. Math verify Schedule C as follows:

    1. Verify Line 9 by adding the amounts on Lines 1 through 8.

    2. Verify Line 18 (Line 14 for 2017 and prior) by adding the amounts on Lines 9 through 16, Column a (Lines 1 through 13, Column a for 2017 and prior).

    3. Verify Line 21 by adding line 9, 10, 12(a), 14, and 17 Column (c) (For 2017 and prior: verify Line 16 by subtracting Line 15 from Line 14).

  11. Math verify Schedule E as follows:

    1. Verify Line 1n by adding amounts Lines 1a through 1m.

    2. Verify Line 2h by adding amounts Lines 2a through 2g.

    3. Verify Line 3 by adding amounts on Lines 1n and 2h.

  12. Math verify Schedule L as follows:

    1. Verify Line 3, Total assets, Column B, by totaling the amounts in the respective columns (the line for "Less allowance for bad debts" and the line for "Less accumulated depreciation" are minus amounts).

    2. Verify Line 15, Column B, by totaling Lines 4 through 14 in the respective columns (Line 14 is a minus amount).

  13. If math verification from the information given is not possible, correspond for missing or incorrect amounts ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  14. Suspend Form 1120-IC-DISC for 45 days. Attach a copy of the reply or the suspense copy of the correspondence to the return.

  15. When the taxpayer responds, perfect the return and continue processing.

  16. If the taxpayer fails to respond, follow the Civil Penalty procedures, see IRM 3.11.16.43.7, Civil Penalty - IRC 6686.

Disposition of Documents

  1. Sort the returns into the following groups in EIN order:

    1. Returns with a refund due.

    2. All others.

  2. To complete the processing of Form 1120-IC-DISC, take the following actions:

    1. Hand carry returns to the Control unit.

    2. Hand carry returns to the Numbering unit.

      Note:

      Numbering will hand carry returns back to C&E.

    3. Record the Form 1120-IC-DISC DLN in the data file. See IRM 3.11.16.42.1, Form 4876-A and Form 1120-IC-DISC"Data File."

    4. Hand carry returns to Accounting.

  3. Update the data file to reflect Form 1120-IC-DISC processing information. See IRM 3.11.16.42.1, Form 4876-A and Form 1120-IC-DISC"Data File."

Civil Penalty - IRC 6686

  1. IRC 6686 enacted by the Revenue Act of 1971 provides for a penalty to be imposed on any person required to supply information or to file a return under IRC 6011(c) and who fails to supply information or file a return at the time prescribed, or who files a return which does not show the information required. The penalties provided under IRC 6686 are subject to reasonable cause provisions. The penalties are calculated as follows:

    1. $100 for each failure to supply information (the total amount imposed for all failures during any calendar year shall not exceed $25,000).

    2. $1,000 for each failure to file a return.

  2. When it is determined the taxpayer has failed to file Form 1120-IC-DISC, treat as follows:

    1. Research to determine whether taxpayer filed Form 1120, U.S. Corporation Income Tax, for the period in question.

    2. If a Form 1120 has been filed, notate on the Form 4876-A, "Form 1120 filed for the tax year." No further action is required.

  3. If Form 1120 has not been filed, follow procedures as outlined in (a) through (d), below.

    1. Photocopy the Form 4876-A, Election To Be Treated as an IC-DISC.

    2. Prepare Form 3465, Adjustment Request and attach the Form 4876-A photocopy.

    3. Notate on Form 3465 that "the taxpayer has failed to file a Form 1120-IC-DISC - possible Civil Penalty per IRC 6686."

    4. Route Form 3465 and attached photocopy to Accounts Management Non-Master File (AM NMF).

  4. When it is determined that AM NMF should assess the penalty under IRC 6686 for failure to supply information or for late filing, treat as follows:

    1. Hand carry the Form 1120-IC-DISC for blocking and numbering.

    2. Photocopy Page 1 of the numbered return and annotate the copy "Copy, DO NOT Process."

    3. Prepare Form 3465 and attach the copy. Indicate on the Form 3465 why the penalty may need to be accessed.

      Example:

      "Late filed return possible Civil Penalty per IRC 6686."

    4. Indicate on the Form 1120-IC-DISC"Form 3465 prepared."

    5. Route the Form 3465 and attached photocopy to AM NMF.

    6. Continue processing the Form 1120-IC-DISC and then route to Non-Master File (NMF) Accounting.

Taxable Year of Form 1120-IC-DISC

  1. The first Form 1120-IC-DISC filed by a corporation will establish the taxable year ending date. Verify the date is the same as shown on the election form. The tax year must conform to the tax year of the majority shareholder.

  2. If the tax year is the same, continue processing the return.

  3. If the tax year is not the same and there is a sign the tax year is being changed to meet the tax year requirements of IRC 441(h), continue processing the return.

  4. If the tax year is not the same and there is no indication the tax year is being changed to meet the tax year requirements of IRC 441(h), issue Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404. to inform the taxpayer that the return must be re-submitted so that the tax year is the same as stated on the election form.

    1. Attach a blank Form 1120-IC-DISC and a copy of the election form on file.

    2. Suspend for 45 days.

    3. Attach a copy of the correspondence to the back of the election form.

  5. If the taxpayer submits a return with the correct tax period, attach a copy of the reply to the back of the return and process as directed.

  6. If the taxpayer fails to respond, or fails to file a return with the correct tax period, treat as an ineligible filer. See IRM 3.11.16.43.3, Ineligible Filers.

Amended Returns and Secured Form 1120-IC-DISC

  1. In some cases, Submission Processing Centers may receive amended copies of Form 1120-IC-DISC.

    If... Then...
    Research indicates that a Form 1120-IC-DISC was previously filed, Send the amended return to Accounts Management for processing.
    Research indicates that a Form 1120-IC-DISC was not previously filed, Process the amended return as an original. Notate "Process as an original" on the top of the return.

  2. In some cases, Document Perfection may receive Form 1120-IC-DISC with a "599" or "TC-599" in the margin. These may be forms received by Collection from the taxpayer as proof that he/she has filed his/her return. It is possible that Collection may have asked the taxpayer to file a Form 1120 to meet the filing requirement on record with the service, since it may not have been deleted when the taxpayer's Form 4876-A was approved.

    1. Search the "Accepted" file or the "Data File" to verify the corporation is eligible to file Form 1120-IC-DISC.

      If... Then...
      An "Accepted" Form 4876-A is on file,
      1. Update the "Data File" to indicate a Form 1120-IC-DISC was received.

      2. Route Form 1120-IC-DISC to Files.

      1. Prepare Form 9856, Attachment Alert.

      2. Use the Form 1120 DLN, EIN, name control, form, and tax period in the applicable boxes of Form 9856., Attachment Alert

      A Form 4876-A is not on file, the corporation is not eligible to file Form 1120-IC-DISC, Follow Ineligible Filers procedures.
      See IRM 3.11.16.43.3, Ineligible Filers.

Form 8404, Interest Charge on DISC-Related Deferred Tax Liability

  1. This subsection has instructions for Document Perfection handling of Form 8404, Interest Charge on DISC-Related Deferred Tax Liability.

  2. Address - Ensure that a 5-digit ZIP Code is present. If it is not present, research the ZIP Code Directory and edit the right code. See Look Up a Zip Code.

  3. Tax Period - Ensure the tax year is in YYMM format and edited under the Office of Management and Budget (OMB) number of the form.

  4. Verify the taxpayer's computation of the interest charge amount following the instructions below. Edit any corrections needed.

    1. Line 4 - Add Lines 1, 2, and 3. If the taxpayer has erroneously figured his income (sum of Lines 1, 2, and 3), correspond using Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404.

    2. Line 7 - Subtract Line 6 from Line 5.

    3. Line 8 - If not present, and the return is a calendar year, 365-day return, edit the base period Treasury bill (T-Bill) rate factor as follows:

      Tax Year Base Period T-Bill Rate
      2022 .017246634
      2021 .000800319
      2020 .007306546
      2019 .023470459
      2018 .020813051
      2017 .010151036
      2016 .005414566
      2015 .002402874
      2014 .001100604

      Note:

      The entry on Line 8 of Form 8404 for a fiscal year filer is determined by an annual revenue ruling that is referenced in the instructions for Line 8.

    4. Line 9 - Multiply Line 7 by Line 8.

      Caution:

      SPECIAL TO LINE 9 (Interest Charge Due). If the amount on Line 9 exceeds the product of Line 7 multiplied by Line 8, it may be due to the inclusion of additional interest owed by the taxpayer to the Service. DO NOT "X" THIS AMOUNT. This might result in an erroneous refund to the taxpayer. Instead, do as follows:

      If... Then...
      Line 9 exceeds the product of Line 7 multiplied by Line 8,
      1. Flag the return.

      2. Make a notation in the bottom margin of Form 8404 alerting NMF Accounting that additional interest needs to be assessed. Include the following in the notation:

      1. The amount Line 9 would be by multiplying Line 7 by Line 8.

      2. The amount of additional interest paid (excess of the product of Lines 7 and 8).

  5. Check for signature, correspond if missing. See (6) below for correspondence instructions.

  6. When corresponding with the taxpayer, correspond for all missing information using Letter 599C, Request for more information for Form 1120-IC-DISC, Form 4876-A and Form 8404 or Letter 131C, Information Insufficient or Incomplete for Processing Inquiry. DO NOT CORRESPOND MORE THAN ONCE.

    1. When corresponding for missing information only, advise the taxpayer the information requested is needed to complete processing of the return.

    2. Advise the taxpayer additional interest may be charged on the unpaid interest from the due date until the date the interest is paid.

  7. If there is no reply to correspondence, process the return using the information provided.

  8. If the Form 8404 tax period exceeds 12 months, allow the excess by creating a dummy Form 8404 to cover the excess months. Attach the dummied Form 8404 to the back of the original Form 8404 with a note explaining the circumstances and follow instructions in either (9) or (10), below, as correct. DO NOT IGNORE ANY TAXPAYER DATA.

  9. Send all other edited non-remit Form 8404 to the Numbering function.

  10. Send numbered with-remit Form 8404 to NMF Accounting.

  11. See Exhibit 3.11.16-21, Form 8404, Interest Charge on DISC-Related Deferred Tax Liability for an example of Form 8404.

Return Processing - Form 990-C

  1. All Form 990-C, Farmers' Cooperative Association Income Tax Returns, must be converted to Form 1120-C. Follow Form 1120-C procedures for processing Form 990-C.

  2. If a taxpayer files a Form 990-C, refer the return to the lead for conversion. Form 990-C has been obsolete since 2005.

Area Office Codes

The following table provides a list of Area Office Codes.

State Abbreviation Area Office
Alabama AL 08
Alaska AK 12
Arizona AZ 11
Arkansas AR 08
California

Note:

California is the only state that has been broken out by post of duty and is covered by Areas 13, 14, and 16.
Use Area Office 13 if a code cannot be determined from the list provided.

CA 13
Bakersfield
Bishop
Chico
Eureka
Fresno
Modesto
Nevada City
Oakland
Peninsula
Redding
Redwood City
Sacramento
Salinas
San Francisco
San Jose
San Rafael
Santa Cruz
Santa Rosa
South Lake
Tahoe
Ukiah
Vallejo
Visalia
Walnut Creek
Yuba City
    14
Anaheim
Blythe
Chino
El Cajon
El Centro
High Desert
Irvine
Laguna Niguel
Long Beach
Los Alamitos
Low Desert
Poway
Riverside
San Bernadino
San Diego
San Marcos
Santa Ana
Torrance
    16
Beverly Hills
Carson
Crenshaw
Culver City
El Monte
El Monte 1
El Monte/LaMirada
Fairfax
Glendale
Griffith Park
Hawthorne
Hollywood
Huntington Park
LaMirada
Lancaster
Los Angeles
North Hollywood
Oxnard
Pasadena
San Fernando
San Luis Obispo
Santa Barbara
Santa Maria
Van Nuys
West Los Angeles
Wilshire
Colorado CO 11
Connecticut CT 01
Delaware DE 04
District of Columbia DC 04
Florida FL 05
Georgia GA 08
Hawaii HI 12
Idaho ID 12
Illinois IL 07
Indiana IN 07
Iowa IA 09
Kansas KS 09
Kentucky KY 06
Louisiana LA 08
Maine ME 01
Maryland MD 04
Massachusetts MA 01
Michigan MI 06
Minnesota MN 09
Mississippi MS 08
Missouri MO 09
Montana MT 11
Nebraska NE 09
Nevada NV 11
New Hampshire NH 01
New Jersey NJ 03
New Mexico NM 11
New York NY 02
North Carolina NC 04
North Dakota ND 09
Ohio OH 06
Oklahoma OK 10
Oregon OR 12
Pennsylvania PA 03
Rhode Island RI 01
South Carolina SC 04
South Dakota SD 09
Tennessee TN 08
Texas TX 10
Utah UT 11
Vermont VT 01
Virginia VA 04
Washington WA 12
West Virginia WV 06
Wisconsin WI 07
Wyoming WY 11
A/C International   15
Foreign Addresses   15
Puerto Rico PR 15
U.S. Possessions   15

Due Date Charts

Public Law 114-41 changed the return due date for C Corporations to the 15th day of the fourth month following the close of the corporations tax year. The change affects all Forms 1120 except Form 1120-S, Form 1120-C and Form 1120-IC-DISC.

Exception:

The due date for a corporation that ends its tax year on June 30 remains due on or before the 15th day of the third month.

Note:

Certain non-farm Cooperative ("Co-Op" ) returns are filed on Form 1120 instead of the usual Cooperative Form 1120-C. These filers are entitled to a return due date of eight and one half months following the end of the tax year. See IRM 3.11.16.9.1.18, CCC "R" - Reasonable Cause for Failing to Timely File Return.

New due dates are reflected in the tables below:

Due Date Chart for Forms 1120, 1120-F (Box D(3) checked), 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-SF, 1120-REIT, and 1120-RIC (Due by the 15th day of the 4th month after the tax period ends)

Tax Period Ending Date Return Due Date
(weekends and holidays considered)
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Extended Due Date, 6 - Months

Exception:

Fiscal filers with a tax period ending of June 30, have a 7 - month extension.

Sept. 2023 1-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 7-15-2024
Oct. 2023 2-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 8-15-2024
Nov. 2023 3-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 9-16-2024
Dec. 2023 4-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 10-15-2024
Jan. 2024 5-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 11-15-2024
Feb. 2024 6-17-2024 ≡ ≡ ≡ ≡ ≡ ≡ 12-16-2024
Mar. 2024 7-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 1-16-2025
Apr. 2024 8-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 2-17-2025
May 2024 9-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ 3-17-2025
Jun. 2024 9-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ 4-15-2025
Jul. 2024 11-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 5-15-2025
Aug. 2024 12-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 6-16-2025
Sept. 2024 1-16-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 7-15-2025
 

Due Date Chart for Forms 1120-C and 1120-IC-DISC (Due the 15th day of the 9th month after its tax period ends)

Tax Period Ending Date Return Due Date
(weekends and holidays considered)
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Extended Due Date, 6 - Months

Exception:

Form 1120-IC-DISC is not allowed an extension. Form 1120-C fiscal year filers with a tax period ending on June 30, have a 7 - month extension.

Sept. 2023 6-17-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 12-16-2024
Oct. 2023 7-15-2024 ≡ ≡ ≡ ≡ ≡ 1-16-2025
Nov. 2023 8-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 2-17-2025
Dec. 2023 9-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 3-17-2025
Jan. 2024 10-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 4-15-2025
Feb. 2024 11-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ 5-15-2025
Mar. 2024 12-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 6-16-2025
Apr. 2024 1-16-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 7-15-2025
May 2024 2-17-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 8-15-2025
Jun. 2024 3-17-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 10-15-2025
Jul. 2024 4-15-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 10-15-2025
Aug. 2024 5-15 -2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 11-17-2025
Sept. 2024 6-16-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 12-15-2025
 

Due Date Chart for Form 1120-F (Box D(3) is not checked (Due the 15th day of the 6th month after its tax period ends)

Tax Period Ending Date Return Due Date
(weekends and holidays considered)
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Extended Due Date, 6 - Months

Exception:

Fiscal filers with a tax period ending of June 30, have a 7 - month extension.

Sept. 2023 3-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ 9-16-2024
Oct. 2023 4-15-2024 ≡ ≡ ≡ ≡ ≡ 10-15-2024
Nov. 2023 5-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 11-15-2024
Dec. 2023 6-17-2024 ≡ ≡ ≡ ≡ ≡ ≡ 12-16-2024
Jan. 2024 7-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 1-16-2025
Feb. 2024 8-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 2-17-2025
Mar. 2024 9-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ 3-17-2025
Apr. 2024 10-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 4-15-2025
May 2024 11-15-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 5-15-2025
June 2024 12-16-2024 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 7-15-2025
Jul. 2024 1-16-2025 ≡ ≡ ≡ ≡ ≡ ≡ 7-15-2025
Aug. 2024 2-17-2025 ≡ ≡ ≡ ≡ ≡ ≡ 8-15-2025
Sept. 2024 3-17-2025 ≡ ≡ ≡ ≡ ≡ ≡ ≡ 9-15-2025

Form 1120 - Prior Year Conversion Chart

  • 2022-2018

    Schedule J
    Line through Part III
    Change Line 2 to Line 1
    Change Line 3 to Line 2

  • 2020 - 2018

    Schedule J
    Change Line 9f to Line 9g

  • 2017 - 2012

    Page 1
    Change Line 32 to 33
    Change Line 33 to 34
    Change Line 34 to 35
    Change Line 35 to 36
    Change Line 36 to 37

    201811 and prior - Schedule J, Part I

    If ... And ... Then ...
    201811 and prior, The return is a personal service corporation, Edit the Personal Service Corporation Code.
    See IRM 3.11.16.11.11, Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation.

    Note:

    The computer will need this code to determine the correct tax (35%) for the prior year.

    201811 and prior, The return is a part of a controlled group, Edit a Controlled Group Code.
    See IRM 3.11.16.11.11, Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation.

    Note:

    The computer will need this code to determine the correct tax (Schedule O, tax brackets) for the prior year.

    201811 and prior, The return has an entry on Schedule J, Line 3 - Alternative Minimum Tax, See IRM 3.11.16.11.12, Schedule J, Line 3 - Alternative Minimum Tax or Tax on Base Erosion Payments.
     
    Page 3, Schedule J
    Change Part I, Line 9f to Line 9g
    Change Part II, Line 12 to Part III, Line 13
    Change Part II, Line 13 to Part III, Line 14
    Change Part II, Line 14 to Part III, Line 15
    Change Part II, Line 15 to Part III, Line 16
    Change Part II, Line 16 to Part III, Line 17
    Change Part II, Line 17 to Part III, Line 18
    Change Part II, Line 18 to Part III, Line 19
    Change Part II, Line 19a to Part III, Line 20a
    Change Part II, Line 19b to Part III, Line 20b
    Change Part II, Line 19c to Part III, Line 20c
    Change Part II, Line 19d to Part III, Line 20d
    Change Part II, Line 20 to Part III, Line 21
    Change Part II, Line 21 to Part III, Line 23

Form 1120-C - Prior Year Conversion Chart

  • 2022-2018

    Schedule J
    Change Line 2 to Line 1
    Change Line 3 to Line 2

  • 2017 - 2011

    Page 1
    Change Line 29a to 30a
    Change Line 29b to 30b
    Change Line 29c to 30c
    Change Line 29d to 30d
    Change Line 29e to 30e
    Change Line 29f to 30f
    Change Line 29g to 30g
    Change Line 29h to 30h
    Change Line 30 to 31
    Change Line 31 to 32
    Change Line 32 to 33
    Change Line 33 to 34
    If ... And ... Then ...
    201811 and prior, The return is a part of a controlled group, Edit a Controlled Group Code.
    See IRM 3.11.16.32.20, Schedule J, Line 1 - Controlled Group Code.

    Note:

    The computer will need this code to determine the correct tax (Schedule O, tax brackets) for the prior year.

    201811 and prior, The return has an entry on Schedule J, Line 3 - Alternative Minimum Tax, See IRM 3.11.16.32.21, Schedule J, Lines 2 through 8.

Form 1120-F - Prior Year Conversion Chart

  • 2022 and prior

    Schedule K
    Change Line 2 to Line 1
    Change Line 3 to Line 2
    Other Information
    Change Line II to HH

Form 1120-FSC - Prior Year Conversion Chart

  • No recent changes to Form 1120-FSC

Form 1120-H - Prior Year Conversion Chart

  • 2022 and prior

    Page 1
    Lines 23a and 23b are now transcribed rather than Line 23c
    Change Line 23d to Line 23c
    Change Line 23e to Line 23d
    Change Line 23f to Line 23e

Form 1120-L - Prior Year Conversion Chart

  • 2022-2018

    Page 1
    Change Line 28e to Line 27d
    Change Line 28f to Line 27e
    Change Line 28g(1) to 27f
    Change Line 28h to Line 27h

  • 2017-2007

    Page 1
    Change 27 to 25
    Change Line 28 to 26
    Line through Line 29a
    Line through Line 29b
    Line through Line 29c
    Line through Line 29e
    Change Line 29f to 27d
    Change Line 29g to 27e
    Change Line 29h to 27f
    Change Line 29i to 27h
    Line through Line 29j
    Change Line 30 to 29
    Change Line 31 to 30
    Change Line 32 to 31
    Change Line 33 to 32

Form 1120-PC - Prior Year Conversion Chart

  • 2022-2018

    Page 1
    Change Line 6 to Line 5
    Change Line 13 to 14
    Change Line 15f to 15d
    Change Line 15g to 15e
    Change Line 15h to Line 15f
    Change Line 15i to Line 15z
    Change Line 16 to Line 17
    Change Line 17 to Line 18
    Change Line 18 to Line 19
    Change Line 19 to Line 20

  • 2017-2007

    Page 1
    Line through Line 14a
    Line through Line 14b
    Line through Line 14c
    Line through Line 14e
    Change Line 14f to Line 15d
    Change Line 14g to Line 15e
    Change Line 14h to Line 15f
    Change Line 14i to Line 15z
    Change Line 14j to Line 15j
    Change Line 15 to Line 17
    Change Line 16 to Line 18
    Change Line 17 to Line 19
    Change Line 18 to Line 20

Form 1120-REIT - Prior Year Conversion Chart

  • 2022-2018

    Pages 1 and 2
    Change Line 18 to 19
    Change Line 19 to 20
    Change Line 21a to 22a
    Change Line 21b to 22b
    Change Line 121c to 22c
    Change Line 23 to 24
    Schedule J
    Number box 856(c)(7) to 2f
    Number box 856(g)(5) to 2g
    Change Line 2g to 2h
    Number box 453(c) to Line 6
    Number box 453(I)(3) to Line 7
    Number box Form 4255 to Line 8
    Number box Form 8611 to Line 9

  • 2020-2018

    Schedule J
    Change Line 6 to Line 7

  • 2017-2008

    Schedule J
    Change Line 6 to Line 7
    Page 1
    Change Line 24a to Line 25a
    Change Line 24b to Line 25b
    Change Line 24c to Line 25c
    Change Line 24d to Line 25d
    Change Line 24e to Line 25e
    Change Line 24f to Line 25f
    Change Line 24g to Line 25g
    Change Line 25 to Line 26
    Change Line 26 to Line 27
    Change Line 27 to Line 28
    Change Line 28 to Line 29
    Schedule J
    Change Line 2h to Line 2g
    If ... And ... Then ...
    201811 and prior, The return is a part of a controlled group, Edit a Controlled Group Code.
    See IRM 3.11.16.39.17, Schedule J, Line 1 - Controlled Group Code.

    Note:

    The computer will need this code to determine the correct tax (Schedule O, tax brackets) for the prior year.

    201811 and prior, The return has an entry on Schedule J, Line 2g - Alternative Minimum Tax, See IRM 3.11.16.39.18, Schedule J, Lines 2b through 2g.

Form 1120-RIC - Prior Year Conversion Chart

  • 2022-2018

    Page 2
    Change Line 29d to Line 28d
    Change Line 29e to Line 28e
    Change Line 29f to Line 28f
    Schedule J
    Number box 851(d)(2) Line 2c
    Number box 851(i Line 2d
    Change Line 2d to 2e
    Number box 453(c) Line 6
    Number box 453(I)(3) Line 7
    Number Form 4255 Line 8
    Change Line 8 to Line 9
    Change Line 9 to Line 10

  • 2020-2018

    Schedule J
    Change line 6 to Line 7

  • 2017-2012

    Schedule J
    Change line 6 to Line 7
    Page 2
    Change Line 28a to Line 29a
    Change Line 28b to Line 29b
    Change Line 28c to Line 29c
    Change Line 28d to Line 29d
    Change Line 28e to Line 29e
    Change Line 28f to Line 29f
    Change Line 28g to Line 29g
    Change Line 28h to Line 29h
    Change Line 29 to Line 30
    Change Line 30 to Line 31
    Change Line 31 to Line 32
    Change Line 32 to Line 33
    Schedule J
    Delete Line 2d and edit the prior year AMT amount in the right margin
    If ... And ... Then ...
    201811 and prior, The return is a part of a controlled group, Edit a Controlled Group Code.
    See IRM 3.11.16.40.17, Schedule J, Line 1 - Controlled Group Code.

    Note:

    The computer will need this code to determine the correct tax (Schedule O, tax brackets) for the prior year.

    201811 and prior, The return has an entry on Schedule J, Line 2d - Alternative Minimum Tax, See IRM 3.11.16.40.18, Schedule J, Lines 2b through 2d.

Form 8941 - Prior Year Conversion Chart

  • 2013 and 2012

    Page 1
    Change Line 1a to Line 1
    Change Line 1b to Line B

Form 8996 - Prior Year Conversion Chart

  • 2020 and 2019

    Part II
    Change Line 6 to 7
    Change Line 7 to 8
    Change Line 9 to 10
    Change Line 10 to 11
    Part III
    Change Line 13 to Line 14
    Change Line 14 to Line 15

  • 2018 and 2017

Part II
Change Line 5 to 7
Change Line 6 to 8
Change Line 8 to 10
Change Line 9 to 11
Part III
Change Line 12 to Line 14
Change Line 13 to Line 15

Form 3800 - Prior Year Conversion Chart

For prior year returns, transcription of some credits is no longer needed. If a prior year return has amounts on Lines 1d, 1g, 1o, 1q, 1u, 1v, 1z, 1aa or 1bb, no editing is required.

The other credits are either new for 202301 and later or are the same.

Change Part III Column C to Part III, Column J.

If a prior year Form 3800 has multiple copies of Form 3800, Page 3, attached, follow the instructions below:

If... And... Then...
More than one copy of Form 3800, Page 3, is attached, Box I is checked on one copy of Page 3,
  1. Place copy with Box I checked behind Form 3800, Page 2.

  2. Staple all copies of Page 3 together.

  3. Change Column c to Column j.

More than one copy of Page 3, Form 3800 is attached, Box I is checked on more than one copy of Page 3,
  1. Place first copy of Page 3 with Box I checked behind Page 2, Form 3800.

  2. Staple all copies of Page 3 together.

  3. Change Column c to Column j.

More than one copy of Form 3800, Page 3, is attached, Box I is not checked on any copy of Page 3, Staple all copies of Page 3 to Page 2. No transcription of Page 3 is necessary.

♦Potential Frivolous Arguments for Examination Review♦

Potential Frivolous Argument Description
Alleged Churches/First Amendment Income from non-religious sources and may claim a vow of poverty.
Altered Form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/UCC (Uniform Commercial Code) 1-207 or UCC 1-308. Return has income and deductions but the jurat was altered or stricken. May include reference to UCC 1-207/ UCC 1-308 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 843 Claim Amended return or a Form 843 filed to obtain a total refund of all taxes paid in prior years, based on a tax avoidance argument.
C-Fillings This frivolous position includes the following four categories:
  1. Files a return claiming several types of deductions, credits, or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.

  2. Files a return having the filers identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.

  3. Files a return with several types of rambling dialogue or arguments that no one could reasonably view as a good faith attempt to comply with the law.

  4. Files a return that attempts to send some type of message or protest to the IRS, but does not to include sufficient identifying information for the IRS to either determine the identity of the taxpayer or correspondent or return address.

Challenges to Authority/Due Process Questions several administrative authorities such as delegation orders, summons authority, Privacy Act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named.
Collections Issues Files frivolous documents contending that several collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests) because they are not filed and signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due," making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.
Form 1099-OID (Original Issue Discount) An individual or business files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and claims a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID (Original Issue Discount) attached and some have Form 1096. Other false forms or financial instruments may be filed in the place of or in addition to the Form 1099-OID such as Form 2439, promissory notes, bonds, sight drafts, etc.
IRC 861 Business Employment Tax (BMF 861) Argument targets employers and advises them that wages are exempt from withholding. Based on 26 Code of Federal Regulations (CFR) Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a "new world order."
Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC 7701(a)(14).
Obscene, Vulgar, Harassing Submits documents or other materials showing that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "straw man" and any tax obligations are exclusively those of the "straw man."
Taxes are Voluntary/Law Does Not Require Submits a return, amended return or correspondence that argues income taxes are voluntary.
U.S. v. Long Submits a return with zero money amounts. To explain the zeros inserted on the return, the individual references "U.S. v. Long."
Unsigned Returns The individual completes a return but does not sign a statement showing disagreement with the tax system is attached or added to the return.
Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
Zero Returns Submits a return with zero money amounts on all or most line items on the form (e.g., IRC 861, Form 2439, OID and other BMF filings that claim no income and request refunds). See Revenue Ruling 2004-34. A statement is attached claiming there is no section of the Internal Revenue Code that established an income tax liability. The statement may also have arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable."

Note:

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡"≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Other All others including those in Notice 2010-33 or any later superseding Notice. See also http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Introduction on irs.gov. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.

Note:

Frivolous arguments citing "Collection Due Process" (CDP) must be reviewed by Collections for possible referral to Appeals. Refer to IRM 5.19.8, Collection Appeal Rights, for more information.

Province, Foreign State and Territory Abbreviations

Australia State

Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
 

Brazil State

Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Espirito Santo ES
Goias GO
Maranhao MA
Mato Grasso MT
Mato Grosso do Sul MS
Minas Gerais MG
Para PA
Paraiba PB
Parana PR
Pernambuco PE
Piaui PI
Rio de Janeiro RJ
Rio Grande do Norte RN
Rio Grande do Sul RS
Rondonia RO
Roraima RR
Santa Catarina SC
Sao Paulo SP
Sergipe SE
Tocantins TO
 

Canada Province/Territory

Canada Province/Territory Abbreviation
Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT
 

Cuba Province

Cuba Province Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad de La Habana CH
Granma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matanzas MT
Municipio Especial Isla de La Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
 

Italy Province

Italy Province Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Bari BA
Belluno BL
Benevento BN
Bergamo BG
Biella BI
Bologna BO
Bolzano Bozen BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanissetta CL
Campobasso CB
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CZ
Crotone KR
Cuneo CV
Enna EN
Ferrara FE
Firenze FI
Foggia FG
Forli FO
Frosinone FR
Genoa GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova MN
Massa-Carrara MS
Matera MT
Messina ME
Milan MI
Modena MO
Napoli NA
Novara NO
Nuoro NU
Oristano OR
Padova PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Ravenna RA
Reggio de Calabria RC
Reggio nell'Emilia RE
Rieti RI
Rimini RN
Roma RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino TO
Trapani TP
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia VE
Verbania VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vicenza VI
Viterbo VT
 

Mexico State

Mexico State Abbreviation
Aguascalientes AGS
Baja California Norte BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana Roo QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
 

The Netherlands Province

The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Limburg LB
North Brabant NB
North Holland NH
Overijssel OV
South Holland ZH
Ultrecht UT
Zeeland SLD

♦Routing Guide for Attachments♦

Review all attachments to the tax return before the return can be considered processable.

  1. Only detach attachments when specifically instructed.

    Note:

    Consider a return or document an "original" if it has an original signature or has been stamped "Process as Original."

  2. Edit Action Trail(s) (e.g., "2848 DETACHED" ) in the lower left corner of the return going vertically up the side of the return.

Note:

Edit the name and EIN (if not present) on the detached document. Also, edit the return received date (e.g., Rec’d MM/DD/YY) in the lower left margin of the detached document before routing.

Caution:

The Attachment Guide is included as an exhibit only for use in assisting in the identification of possible forms or conditions that require action or routing to other functions. The guide should not be used in place of the completed IRM section governing those conditions, since space limitations do not always allow for full instructions in the Attachment Guide.

Follow the general guidelines below for each attachment:

Form/Document Applicable Return Detach Descriptions/Actions
CP 259 or CP 959 (Spanish version)

Note:

Do not route to Statute Control Unit for clearance. See IRM 3.11.16.3.7, Statute Returns, for more information.

All No Correspondence is attached or taxpayer’s response indicates:
  • Taxpayer disagrees that they must file the return.

  • Only page one of the return is attached.

  • EIN on notice does not match EIN on return.

  • Return requested on notice not the same as return submitted.

  • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

  • Case involves any other IRS action(s) C&E not trained to complete.

Then, Route to Compliance Services Collection Operations (CSCO). Use return address on CP notice:
  • Brookhaven - Stop #662

  • Memphis - Stop #81

  • Philadelphia - 4-N31.142


If none of the above apply, correspondence or written response to the notice is not attached and/or, "599" is notated:
  1. Move the notice to the back of the return.

  2. Continue processing the return.

Note:

If the return is unsigned, but the taxpayer signed the CP notice under the jurat, it is not necessary to correspond for the signature.

CP 259 A through h All No OSPC BMF Entity
Mail Stop 6273.
CP 504/ CP 504B All No
  1. Pull CP 504/ CP 504B to the front.

  2. Route notice and return to Accounts Management.

CP 518

Note:

Do not route to Statute Control Unit for clearance. See IRM 3.11.16.3.7, Statute Returns, for more information.

All No Correspondence is attached or taxpayer’s response indicates:
  • Taxpayer disagrees that they must file the return.

  • Only page one of the return is attached.

  • EIN on notice does not match EIN on return.

  • Return requested on notice not the same as return submitted.

  • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

  • Case involves any other IRS action(s) C&E not trained to complete.

Then, Route to Compliance Services Collection Operations (CSCO). Use return address on CP notice:
  • Brookhaven - Stop #662

  • Memphis - Stop #81

  • Philadelphia - 4-N31.142


If none of the above apply, correspondence or written response to the notice is not attached and/or, "599" is notated:
  1. Move the notice to the back of the return.

  2. Continue processing the return.

Note:

If the return is unsigned, but the taxpayer signed the CP notice under the jurat, it is not necessary to correspond for the signature.

For Tax Periods 202201 -202212, if "IRA22DPE" or "IRA22TRE" is written on the return or attachments. 1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.2.13, Elective or Deemed Payment Election and Credit Transfers
Letters 112C, 282C, 2255C or 2284C

Note:

Do not route to Statute Control Unit for clearance. See IRM 3.11.16.3.7, Statute Returns, for more information.

All No
  1. Identify which organization initiated the letter to the taxpayer (e.g., what organization signed the letter?).

  2. Route letters initiated by Accounts Management (AM) to Accounts Maintenance Research (AMRH):

    • Ogden - Mail Stop 6712

    • Kansas City - N2 6800

  3. Route letters initiated by Collections as follows:

    1. If correspondence is attached or taxpayer’s response indicates any of the following:

      • Taxpayer disagrees that they must file the return.

      • Only page one of the return is attached.

      • EIN on letter does not match EIN on return.

      • Return requested on letter not the same as return submitted.

      • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

      • Case involves any other IRS action(s) C&E not trained to complete.

      Then, Route to Compliance Services Collection Operations (CSCO). Use return address on letter:
      • Brookhaven - Stop #662

      • Memphis - Stop #81

      • Philadelphia - 4-N31.142

    2. If none of the above apply, correspondence or written response to the letter is not attached and/or, no "599" is notated:
      Then, Move the letter to the back of the return and continue processing.

Note:

If the return is unsigned, but the taxpayer has signed the letter under the jurat, it is not necessary to correspond for the signature.

Letter 2030
Letter 2531
All No Put letter in front of return and route both to BMF Automated Underreporter (AUR) in Compliance.
Includes tax liability for Multiple Tax Periods or Types of Tax All No • Numbered Return - Route to Rejects.
• Unnumbered Return - Prepare a dummy return if possible; otherwise, correspond.
Other Tax Returns (Original Signature) All Yes
  1. Edit the received date to the detached return.

  2. Route to right function unless specifically directed otherwise.

Exception:

Subsidiary Returns attached to a consolidated return will NOT be detached. Conversions of Form 1120-S to Form 1120 will NOT be detached.
See IRM 3.11.16.5.2, Conversion of Form 1120-S to Form 1120.

Petitions in opposition of tax law provisions All Yes

Note:

Do not edit an action trail when detaching a petition.

Route to:
IRS
≡ ≡ ≡ ≡ ≡ ≡ ≡
1111 Constitution Avenue, NW
Washington, DC 20224
IRC 965 Transition Tax Statement (or similar Language) 1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit CCC "J" and Action Code "460" on the return and continue processing. Do not issue correspondence on the return. ERS will correspond for any missing information.
See IRM 3.11.16.2.12, Section 965 Returns (201712 through 202012).
Statement establishing Election to be subject to the Tonnage Tax Regime - Sect 1354 All No Route a copy of the election to:
Brenda E. Sarini,
Internal Revenue Agent
1719 C. Route 10
Parsippany, NJ 07054-4507
Pro Forma Form 1120 for New York State or Blank (no tax data) Form 1120 with a Form 5472 attached All No See IRM 3.11.16.11, Return Processing - Form 1120.
Statement establishing Reasonable Cause for delinquent filing All No
  1. Send Letter 1382C, Penalty Removal Request Incomplete.

  2. Continue editing the return.

  3. See IRM 3.11.16.9.1.18, CCC "R" - Reasonable Cause for Failing to File a Timely Return and IRM 3.11.16.3.4.2, Issuing Correspondence.

Remittance found All No Immediately hand carry return and remittance to supervisor.
Request for Acknowledgement All No No action required.
Request for e-File Waiver
Statement notating: "Form 1120 e-File Waiver Request"
1120 Yes "Yes:" Ogden - Route request to:
Mail Stop 1057.
Requests for Installment Agreement All Yes Route as follows:
  • Ogden - Route to Collections Mail Sop 5500.

  • Kansas City - Route to Mail Stop P4 5000.

Request for Form 8109, Deposit Slips, or Coupon Books All No No action required.
Request for Forms or Schedules All No
  • If requesting current year forms:

    1. Prepare Form 4190.

    2. Forward to National Distribution Center for processing.

  • If requesting prior year forms:

    1. Prepare Form 6112.

    2. Send to National Distribution Center for processing.

 

Note:

Use the write-in sections of Form 4190 and Form 6112 for all BMF forms and schedule requests.

Request for Information or Inquiries All Yes
  1. Photocopy any data necessary to process the return.

  2. Attach the photocopy to the return.

  3. Route original attachment to the proper office for necessary action.

Request for Adjustment to Another Document All Yes Route to right function. Attachment must have Name, Address, EIN, and received date. Edit if missing.
Request for Money Transfer All No/Yes
  • No - Taxpayer notates transfer of money TO the tax return being processed:

    1. Prepare Form 3465, Adjustment Request and:

      1. Indicate in the "Routing" box "Rejects."

      2. Notate "See attached money transfer request" in the "Remarks" box.

    2. Edit Action Code "450" to route the request to Rejects for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. All others edit CCC "U."

  • Yes - Taxpayer notates transfer of money FROM the tax return being processed:

    1. Edit CCC "X" to freeze overpayment.

    2. Detach transfer request.

    3. Prepare Form 3465 and:

      1. Indicate in the "Routing" box "Adjustments."

      2. Notate the requested action in the "Remarks" box.

    4. Attach Form 3465 to the request and route to Accounts Management.

    5. Continue editing the return.

State Tax Returns
Original or copy with an original signature
All Yes Route to Receipt and Control (R&C).
State Tax Returns Photocopy, facsimile or no signature All No Leave attached.
Indication of FINAL return All No Enter CCC "F."
See IRM 3.11.16.9.1.6, CCC "F" - Final Return.
NOTICES - Payment Agreement or Disagreement with notice amount All   Follow local Submission Processing Center procedures. May involve inputting a STAUP and routing attachment to another function.
Form SS-4,
Application for Employer ID Number
All Original -
Yes
Copy -
No
  • Original: Route to Entity.

  • Copy: No action required.

Schedule D, Form 1120 1120
1120-H
1120-REIT
1120-RIC
No Form 1120
  • Perfect necessary lines.

  • Place in sequence order.


See IRM 3.11.16.11.4.7, Line 8 - Capital Gain and IRM 3.11.16.14, Schedule D - Capital Gains and loses.
Form 1120-H, Form 1120-REIT and Form 1120-RIC
See IRM 3.11.16.11.4.7, Line 8 - Capital Gain.
Schedule F (Form 1040),
Profit or Loss From Farming
1120 No Transfer data to Form 1120.
See IRM 3.11.16.11.4.10, Line 11 - Total Income and IRM 3.11.16.11.5.16, Line 27 - Total Deductions
See Exhibit 3.11.16-18, Schedule F Transfer Lines.
Schedule M-3 (Form 1120),
Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More
1120 No
  • Edit CCC "B."

  • Audit Code "2," "7" and/or "8" may be required.

  • See IRM 3.11.16.9.1.2, CCC "B" - Schedule M-3 and IRM 3.11.16.10.1, Audit Codes.


Form 1120-PC:
  • Edit CCC "B."

  • Audit Code "2" may be required.

  • See IRM 3.11.16.9.1.2, CCC "B" - Schedule M-3 and IRM 3.11.16.10.1, Audit Codes.


Forms 1120-C, 1120-F and 1120-L:
Edit CCC "B."
See IRM 3.11.16.9.1.2, CCC "B" - Schedule M-3.

All Others:
No action required.
Schedule N (Form 1120),
Foreign Operations of U.S. Corporations
1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No
  • Editing may be required.

  • See IRM 3.11.16.11.37, Schedule N (Form 1120 ) - Foreign Operations of U.S. Corporations.
    Edit Audit Code "2" if Questions 1a, 3, 4a (2019 and prior revisions), 5 or 7a are checked "Yes."

  • See IRM 3.11.16.10.1, Audit Codes



All Others:
No action required.
Schedule O (Form 1120),
Consent Plan and Apportionment Schedule for a Controlled Group
1120
1120-C
1120-REIT
1120-RIC
No Follow the instructions below for tax periods 201811 and prior only:
  1. Possible Controlled Group Code.
    IRM 3.11.16.11.11, Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation.

  2. Editing may be required. IRM 3.11.16.11.38, Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group



All Others:
No action required.
Schedule PH (Form 1120),
U.S. Personal Holding Company Tax
1120
1120-RIC
1120-REIT
No Edit ABLM Code "001."
See IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

All Others:
No action required.
Schedule UTP (Form 1120),
Uncertain Tax Position Statement
1120
1120-F
1120-L
1120-PC
No
  • This is a high priority form.

  • Edit CCC "Z" if attached and not blank.

  • IRM 3.11.16.9.1.26, CCC "Z " Form 1120 , (Schedule UTP), Uncertain Tax Position Statement.)

Form T (Timber),
Forest Activities Schedule
All No No action required.
Form 56,
Notice concerning Fiduciary Relationship
All Yes
  1. Edit received date.

  2. Route to Entity Control.

Form 433-B,
Collection Information Statement for Businesses
All Yes Route as follows:
  • Ogden - Route to Collections.

  • Kansas City - Route to Mail Stop P4 5000.

Form 433-D,
Installment Agreement
All Yes
Parts 1, 2 or 3
Route as follows:
  • Ogden - Route to Collections.

  • Kansas City - Mail Stop P4 5000.

  • If present, leave Parts 2 and/or 3 attached to Part 1 when routing.

Form 637,
Application for Registration (For Certain Excise Tax Activities)
All Yes/No
  • Yes: TC 150 has not posted to the tax module:

    1. Edit received date.

    2. Route to:
      Department of the Treasury Internal Revenue Service
      Excise Operations Unit - Form 637
      , Mail Stop 5701G.
      Cincinnati, Ohio 45999.

  • No: TC 150 has posted to the tax module:

    1. Route Form 637 and return to:
      Department of the Treasury Internal Revenue Service
      Excise Operations Unit - Form 637
      , Mail Stop 5701G.
      Cincinnati, Ohio 45999

Form 843,
Claim for Refund and Request for Abatement
All Yes
  1. Edit received date.

  2. Route to Accounts Management.

Form 851,
Affiliations Schedule
1120 No
  • Edit ABLM Code "010."

  • See IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  • Input TC "590" with Closing Code "014."

  • See IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.



Forms 1120-C, 1120-L and 1120-PC
Input TC "590" with Closing Code "014."
See IRM 3.11.16.28.3, Form 851 - Affiliations Schedule.

All Others:
No action required.
Form 872,
Consent to Extend Statute of Limitations
990-C Original
Yes, if not signed by the Area Director -
Copy -
No
Original that is not signed by the Area Director -
Detach and route to KCSPC.

Copy
Do not detach.
No action required.
Form 911,
Request for Taxpayer Advocate Service Assistance
(Prior year revision dated 3-2000), Application for Taxpayer Assistance Order (ATAO) Taxpayer's Application for Relief from Hardship
All Yes Send to Taxpayer Advocate Service (TAS).
Form 926,
Return by Transferor of Property to a foreign Corp., Foreign Estate or Trust or Foreign Partnership
1120
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit codes.

All Others:
No action required.
Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System 1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit CCC "J" and Action Code "460" on the return and continue processing. Do not issue correspondence on the return. ERS will correspond for any missing information.
See IRM 3.11.16.2.12, Section 965 Returns (201712 through 202012).
Form 965,
  • Schedule A

  • Schedule B

  • Schedule C

  • Schedule D

  • Schedule E

  • Schedule F

  • Schedule G

  • Schedule H

1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No For Tax Periods 201712 through 202012, edit CCC "J" and Action Code "460" on the return and continue processing. Do not issue correspondence on the return. ERS will correspond for any missing information.
See IRM 3.11.16.2.12, Section 965 Returns (201712 through 202012).
Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts 1120
1120-L
1120-PC
1120-REIT
1120-RIC
No Form 1120, Form 1120-L, Form 1120-PC, Form 1120-RIC:
See IRM 3.11.16.21, Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts.
Form 1120-REIT :
See IRM 3.11.16.39.38, Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts.
All Others:
No Action Required.
Form 966,
Dissolution Indicator
All No Possible CCC "F."
See IRM 3.11.16.9.1.6, CCC "F" - Final return.
Form 1042,
Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
All Yes
  • KSPC - Route to OSPC.

  • OSPC - Route to Receipt and Control.

Form 1042-S,
Foreign Person's US Source Income Subject to Withholding
All No
  • Form 1120: See IRM 3.11.16.11.6.5, FIRPTA, Form 1042-S , Form 8805 , and Form 8288-A Credits.

  • Form 1120-F: See IRM 3.11.16.33.16, Line 5i - U.S. Income Tax Paid or Withheld at Source.

  • Form 1120-FSC: IRM 3.11.16.34.18, Tax Data Perfection, Page 1 - Tax and Payments.

  • Form 1120-L: See IRM 3.11.16.36.14, Tax and Payments.

  • All Others: No Action Required.

Form 1096,
Annual Summary and Transmittal Returns of U.S. Information
All Yes Route to Receipt and Control.
Form 1099,
Information Return of Income and Payments
(Copy A only)
All Yes Route to Receipt and Control.
Form 1116,
Foreign Tax Credit (Individual, Fiduciary or Nonresident Alien Individual)
1120
1120-L
1120-PC
1120-REIT
1120-RIC
No Form 1120
  • Edit Audit Code "2" if foreign tax credit on Part IV, Line 29 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  • Edit Audit Code "7" if foreign tax credit on Part IV, Line 29 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  • See IRM 3.11.16.10.1, Audit codes.


Forms 1120-L, 1120-PC, 1120-REIT and 1120-RIC:
Edit Audit Code "2" if foreign tax credit on Part IV, Line 29 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
See IRM 3.11.16.10.1, Audit codes.
Form 1118,
Computation of Foreign Tax Credit (Corporations)
1120
1120-C
1120-F
1120-FSC
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No Form 1120:
  • See IRM 3.11.16.11.14.1, Schedule J, Line 5a - Form 1118, Foreign Tax Credit


Form 1120-C:
  • See IRM 3.11.16.32.21, Schedule J, Lines 2 through 8


Form 1120-F:
  • See IRM 3.11.16.33.27, Page 5, Schedule J - Tax Computation Tax Preference Code


Form 1120-FSC:
  • See IRM 3.11.16.34.21, Schedule J, Page 5, Tax Preference Code and Foreign Tax Credit


Form 1120-H:
  • See IRM 3.11.16.35.12, Tax and Payments - Lines 21 through 26


Form 1120-L:
  • See IRM 3.11.16.36.19, Schedule K, Lines 5a through 9


Form 1120-PC:
  • See IRM 3.11.16.38.16, Lines 8a through 12


1120-REIT:
  • See IRM 3.11.16.39.19, Schedule J, Line 3a - Foreign Tax Credit, Form 1118


1120-RIC:
  • See IRM 3.11.16.40.19, Schedule J, Line 3a - Form 1118

Form 1120-POL,
501(c) U.S. Income Tax Return for Certain Political Organizations
All Yes Route to OSPC.
Form 1120-X,
Amended U.S. Corporation Income Tax Return
All No Route the entire return to Accounts Management.
Form 1122,
Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return
1120 No
  • Edit ABLM Code "010."

  • See IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  • Correspond for Form 851 if not present.

  • See IRM 3.11.16.28.3, Form 851 - Affiliations Schedule and IRM 3.11.16.28.4, Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return.



All Others:
No action required.
Form 1125-A, Cost of Goods Sold All No See IRM 3.11.16.11.4.2, Line 2 - Cost of Goods Sold and IRM 3.11.16.18 Form 1125-A - Cost of Goods Sold.
Form 1128,
Application to Adopt, Change or Retain a Tax Year
All  
  • APPROVED - See
    IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

  • NOT APPROVED. See
    IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).

  • NO INDICATION of Approval or Disapproval. See
    IRM 3.11.16.7.7, Short Period Returns - Editing Form 1128 With no Indication of Approval or Disapproval.

Form 1138,
Extension of Time for Payment of Taxes by a Corporation Expecting a Net Loss Carryback
All Yes
  1. Edit received date and route to Accounts Management.

  2. Disallow the credit if included on Form 1120, Schedule J, Line 17 (Line 16 2017-2010).

    • IRM 3.11.16.11.21.3, Schedule J, Part III, Line 17 - Tax Deposited with Form 7004.

Form 1139,
Corporation Application for Tentative Refund
1120  
  • Form 1139 is attached to a complete Form 1120 (Pages 1 - 5):

    1. TC 150 Posted:
      Attach Form 1139 to the front of Form 1120 and route to Image Control Team (ICT).

    2. TC 150 Not Posted:
      Attach Form 1139 to a copy of Form 1120, Page 1 and route to Image Control Team (ICT).

  • Form 1139 is attached to Form 1120, Page 1 or Pages 1 and 2 only:

    1. Attach Form 1139 to the front of Form 1120 and route to Image Control Team (ICT).

Note:

If multiple tax periods are present, route with one Form 1139.

Form 2220,
Underpayment of Estimated Tax by Corporations
1120 Series

Exception:

Form 1120-H, Reserve Code" 4" does not apply.

No
  • Conditions may require editing CCC "8" and/or Reserve Code "4."
    See IRM 3.11.16.9.1.33, CCC "8" - Waiver of Estimated Tax Penalty and IRM 3.11.16.10.3, Reserve Code.

  • May need to edit Line 38, Form 2220 to right Estimated Tax Penalty line on the return if no entry is present.
    See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

Form 2438,
Undistributed Capital Gains Tax Return
All No No action required.
Form 2439,
Notice to Shareholder of Undistributed Long-Term Capital Gains
1120
1120-C
1120-F
1120-H
1120-L
1120-REIT
1120-RIC
No
  • Form 1120,
    See IRM 3.11.16.11.21.6, Schedule J, Part II, Line 20a - Regulated Investment Co. Credit, Form 2439

  • Form 1120-C,
    See IRM 3.11.16.32.16, Tax and Payments - Lines 27 through 34.

  • Form 1120-F,
    See IRM 3.11.16.33.15, Lines 1 through 5h - Computation of Tax Due or Overpayment.

  • Form 1120-H,
    See IRM 3.11.16.35.12, Tax and Payments - Lines 21 through 26

  • Form 1120-L, See IRM 3.11.16.36.14, Tax and Payments.

  • Form 1120-REIT, See IRM 3.11.16.39.15, Tax Computation - Lines 23 through 28.

  • Form 1120-RIC, See IRM 3.11.16.40.16, Page 2 - Tax and Payments, Lines 27 through 33.

Form 2553,
Election by a Small Business Corporation
All Yes/No
  • Yes:

    1. Original - Route to Entity.

  • NO:

    1. Copy - No action required.

Form 2848,
Power of Attorney and Declaration of Representative
All Yes/No Route as follows:
  • Yes:

    1. Ogden - route to Stop 6737.

    2. Kansas City - route to:
      Internal Revenue Service
      5333 Getwell Road Mail Stop 8423
      Memphis, TN 38118.

  • NO:

    1. No action is required if a General Power of Attorney, Durable Power of Attorney, or Tax Information Authorization is submitted on any document other than Form 2848 or Form 8821.

Form 3115,
Application for Change in Accounting Method
All No Form 1120:

Edit Audit Code "6."
See IRM 3.11.16.10.1, Audit codes.
All:
  • Original stays with the return. If a copy of the original is present, route the copy to:
    CC:PA:LPD:DRU
    Ben Franklin Station
    P.O. Box 7604
    Washington, DC 20044.

  • For Private Delivery Carriers:
    Internal Revenue Service
    Attn: CC:PA:LPD:DRU
    Room 5336
    1111 Constitution Ave., NW
    Washington, DC 20224.

  • Duplicate Form 3115 attached to a subsidiary should also be pulled and routed to the address above. Original stays with return.

Form 3468,
Computation of Investment Credit
1120
1120-F
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 3520,
U.S. Information Return - Creation of or Transfers to Certain Foreign TrustsForm 3520-A,
Annual Return of Foreign Trust with U.S. Beneficiaries
All Original -
Yes
Copy -
No
Original:
All Forms:
Edit Audit Code "2."
Route to OSPC.

Copy:
Forms 1120, 1120-L, 1120-PC, 1120-REIT and 1120-RIC:
Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit codes.

All Others:
No action required.
Form 3753,
Manual Refund Posting Voucher
All No Possible CCC "O."
See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
Form 3800,
General Business Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No Place in sequence order. See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 3949,
Information Report Referral
All Yes
  • Route Form 3949 according to page 2 of Form 3949 to CI, Exam, Disclosure, etc., following local procedures.

  • Continue processing the return.

Form 3949-A,
Information Referral
All Yes Route as follows:
Ogden -
  • Route Form 3949-A to Receipt & Control.

  • Continue processing the return.

Kansas City -
  • Route Form 3949-A to Ogden Service Center.

  • Continue processing the return.

Form 4136,
Credit for Federal Tax Paid on Fuel
1120
1120-C
1120-F
1120-FSC
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No Perfect necessary lines. Place Form 4136 in sequence order.
See IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.
Forms 1120-SF and 1120-ND:
No action required.
Form 4255,
Recapture of Investment Credit
1120
1120-C
1120-RIC
1120-REIT
No Edit Line 20 of Form 4255 to Schedule J, Line 9a if blank.
See IRM 3.11.16.11.18.1, Schedule J, Line 9a - Recapture of Investment Credit (Form 4255 ).
Form 4466,
Corporation Application for Quick Refund of Overpayment of Estimated Tax
All No No action required.
Form 4571,
Explanation for Filing Late or Paying Tax Late
All No No action required.
Form 4626, Alternative Minimum Tax (2023 Revision) 1120
1120-C
1120-F
1120-L
1120-PC
No Sequence Form 4626 if transcription lines are present. See IRM 3.11.16.13, Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later).
Form 4626,
Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior)
All No Follow the instructions below for tax periods 201811 and prior only:
  • If more than one Form 4626, compute totals and edit to form.

  • Perfect transcription lines.
    See IRM 3.11.16.13.1, Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior).


Forms 1120-F, 1120-FSC, 1120-L, 1120-PC:
Possible Tax Preference Code "1."
See IRM 3.11.16.33.27, Page 5, Schedule J - Tax Computation Tax Preference Code and Page 5, Schedule J - Lines 3, 5a, 5b, 5c, 5d and 8.
(1120-F),
See IRM 3.11.16.34.21, Schedule J, Page 5, Tax Preference Code and Foreign Tax Credit.
(1120-FSC),
See IRM 3.11.16.36.18, Schedule K, Line 3 - Alternative Minimum Tax.
(1120-L)
See IRM 3.11.16.38.14, Line 6 - Tax Preference Code(1120-PC) , IRM 3.11.16.39.35, Form 4626 - Alternative Minimum Tax
Forms 1120-H, 1120-ND, 1120-SF:
No action required
Form 4684.
Casualties and Thefts
1120 Series No See IRM 3.11.16.11.4.8, Line 9 - Net Gain or Loss from Form 4797.
Form 4797,
Sales of Business Property
1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-RIC
1120-REIT
No Support for Form 1120, Line 9 (or applicable line on other corporate returns).
See IRM 3.11.16.11.4.8, Line 9 - Net Gain or Loss from Form 4797.
See IRM 3.11.16.15, Form 4797 - Sales of Business Property (Form 1120 Only)
Forms 1120-FSC, 1120-ND, 1120-SF:
No action required
Form 4810,
Prompt Assessment
All Yes/No Yes: TC 150 Not Posted:
Unnumbered and Numbered - Route a copy of the return and original Form 4810 to the Examination Function. Process the original return.
See IRM 3.11.16.3.11, Prompt Assessment (Form 4810)/Prompt Determination.
No:TC 150 Posted:
Unnumbered - Route Form 4810 and return to the Examination Function.

Numbered - Edit Action Code "370."
See IRM 3.11.16.3.11, Prompt Assessment (Form 4810 ) / Prompt Determination.
Form 4848,
Annual Employer's Return for Employee’s Pension or Profit Sharing Plan
All Yes Route to Files.
Form 5471,
Information Return of U.S. Persons With Respect to a Certain Foreign Corporation
(Including 5471 Schedules J, M, N and O)
1120
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit codes.
(Form 1120, Form 1120-PC, Form 1120-REIT, Form 1120-RIC, Form 1120-L:
Edit the Number of Forms 5471 to Line 4b, Schedule N if blank.
Dummy a Schedule N if not present and edit the number of Forms 5471 to Line 4b.
See IRM 3.11.16.11.37.4, Schedule N, Line 4 - Form 5471 , Controlled Foreign Corporation.

All Others:
No action required.
Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, 1120
1120-F
No Edit RPC "A." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 5471, Schedule G-1, Cost Sharing Arrangement, 1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit RPC G.
See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 5471, Schedule H, Current Earnings and Profits, 1120
1120-F
No Edit RPC "B." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, 1120
1120-F
No Edit RPC "C." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, 1120
1120-F
No Edit RPC "D." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 5472,
Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code)
1120
1120-C
1120-F
1120-FSC
1120-L
1120-PC
1120-REIT
1120-RIC
No Form 1120:
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.

  • Possible RPC Code "H."
    See IRM 3.11.16.9.2, Return Processing Code (RPC).

  • See IRM 3.11.16.11.25, Schedule K, Line 7c - Number of Form 5472.

  • See IRM 3.11.16.11, Return Processing - Form 1120.


1120-C:
  • See IRM 3.11.16.32.24, Schedule K, Line 8c - Number Form 5472(s)


Form 1120-F
  • Possible RPC Code "H."
    See IRM 3.11.16.9.2, Return Processing Code (RPC).

  • See IRM 3.11.16.33.22, Page 2, Line M - Number of Forms 5472 for editing of Line M.


Form 1120-FSC:
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.


Form 1120-L:
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.

  • See IRM 3.11.16.36.21, Schedule M, Question 6, 8 and 8c


Form 1120-PC:
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.

  • See IRM 3.11.16.38.23, Schedule I, Line 6c - Number of Forms 5472.


Form 1120-REIT:
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.

  • See IRM 3.11.16.39.26, Schedule K, Line 5b and Line 5c.


1120-RIC
  • Audit Code "2."
    See IRM 3.11.16.10.1, Audit codes.

  • See IRM 3.11.16.40.28, Schedule K, Line 5(b)(2).


Forms 1120-SF, 1120-H and 1120-ND:
No action required.
Form 5500,
Annual Return/Report of Employee Benefit Plan
All Yes Route to the right area or Submission Processing Center. Attach Form 4227, Intra-SC Reject or Routing Slip with the following information:
  • Type of return,

  • DLN,

  • received date,

  • Notation of either "original" or "substitute" return.

Form 5713,
International Boycott Report
All No Keep original and copy attached.
Form 1120:
Edit Audit Code "2" if both questions on Line 7(f), Form 5713 are answered Yes.
Edit Audit Code "7" if both questions on Line 7(f) are not answered Yes.
See IRM 3.11.16.10.1, Audit codes.
Forms 1120-PC, 1120-REIT, 1120-RIC:
Edit Audit Code "2" if both questions on Line 7(f), Form 5713 are answered "Yes."
See IRM 3.11.16.10.1, Audit codes.
All Others:
No action required.
Form 5735,
Revision Date March 2007 - American Samoa Economic Development Credit
Revision Date April 2003 - Computation of Possessions Corporation Tax Credit Allowed Under Section 936
1120
1120-C
1120-L
1120-PC
No Supports Schedule J, Line 5b (or applicable line).
See IRM 3.11.16.11.14.2, Schedule J, Line 5b - Form 8834 Credit and Form 5735.

All Others:
No action required.
Form 5792,
Request for IDRS Generated Refund (IGR)
All No Possible CCC "O."
See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
Form 5884,
Work Opportunity Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 5884-A
Employee Retention Credit
For 2006 Revision - Credits for Employers Affected by Hurricane Katrina, Wilma, or Rita
All No No Action Required.
Form 5884-B,
New Hire Retention Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No For 2010 and 2011, place in sequence order if a significant entry is present on Line 10 or 11.
For 201212 and later, see IRM 3.11.16.23, Form 5884-B - New Hire Retention Credit.
Form 6252,
Installment Sale Income
1120
1120-C
1120-F
1120-FSC
1120-REIT
1120-RIC
No Form 1120: Sequence Form 6252 if transcription lines are present. See IRM 3.11.16.25 - Form 6252 - Installment Sale Income.
Edit Installment Sale Indicator Code.
See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).
Form 1120-C, Form 1120-F, Form 1120-FSC, Form 1120-REIT, Form 1120-RIC:
Edit Installment Sale Indicator Code
See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

All Others:
No action required.
Form 6478,
Biofuel Producer Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 6765,
Credit for Increasing Research Activities
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 6781,
Gains and Losses from Section 1256 Contracts and Straddles
All No Form 1120, 1120-C, 1120-F, 1120-L, 1120-PC:

Edit CCC "I."
See IRM 3.11.16.9.1.9, CCC - "I" Form 6781, Gains and Losses from Section 1256 Contracts and Straddles.
Forms 1120-FSC, 1120-H, 1120-ND, 1120-REIT, 1120-RIC, 1120-SF:
No action required.
Form 7004,
Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
All Yes/No Yes: If Form 7004 is for other than the tax return or tax period being filed, route to Receipt and Control.
No: If Form 7004 is for the tax return being filed.
Form 7204, Consent To Extend the Time To Assess Tax Related To Contested Foreign Income Taxes— Provisional Foreign Tax Credit Agreement. 1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit RPC L. See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 7205, Energy Efficient Commercial Buildings Deduction. 1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit RPC M. See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 7207. Advanced Manufacturing Production Credit. 1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 7208, Excise Tax on Recapture of Corporate Stock All No No Action Required
Form 8023,
Elections Under Section 338 for Corporations Making Qualified Stock Purchases.
1120 Series No Possible indication of Proof of Entitlement for a Short Period.
See IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.
Form 8027,
Employer's Annual Information Return of Tip Income and Allocated Tips
Form 8027-T,
Transmittal for Form 8027
All Yes Route to Ogden Submission Processing Center.
Form 8050,
Direct Deposit of Corporate Tax Refund
1120 No Place in page order if entries are present, and continue processing.
See IRM 3.11.16.11.1, Sequence - Form 1120.

All Others:
No action required.
Form 8082,
Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR)
1120-C
1120-H
1120-ND
No No action required.

All Others:
Edit Audit Code "1."
See IRM 3.11.16.10.1, Audit codes.
Form 8275,
Disclosure Statement
Form 8275-R,
Regulated Disclosure Statement
1120-C
1120-H
1120-ND
No No action required.

All Others:
Edit Audit Code "1."
See IRM 3.11.16.10.1, Audit codes.
Form 8283,
Non-Cash Charitable Contribution
1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No
See IRM 3.11.16.10.1, Audit codes.
Form 8288,
U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests
All Original -
Yes/Copy - No
Original:Ogden - Route to C&E Foreign/FIRPTA Team.
Kansas City- Route to OSPC.
Copy: No action required.
Form 8288-A,
Statement of Withholding on Certain Dispositions by Foreign Persons
All No Ogden - Route to C&E Foreign/FIRPTA Team.
See IRM 3.11.16.11.6.5, FIRPTA, Form 1042-S, Form 8805, and Form 8288-A Credits.
Kansas City - Route to OSPC.
Form 8288-B,
Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests
All Original -
Yes/Copy - No
Original - Ogden - Route to C&E Foreign/FIRPTA Team.
Kansas City- Route to OSPC.
Copy: No action required.
Form 8302,
Direct Deposit of Tax Refund of $1 Million or More
1120-C
1120-F
1120-FSC
1120-H
1120-L
1120-ND
1120-PC
1120-REIT
1120-RIC
1120-SF
No Notate "Form 8302 attached" on Form 4227, Intra-SC Reject or Routing Slip and:
- Enter Action Code "341" for Form 1120-C, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.
- Enter CCC "U" for all other 1120 series return.
Form 8404,
Interest-Charge on DISC-Related Deferred Tax Liability
All Yes KSPC: Route to R&C.
OSPC: Route to Kansas City.
Form 8586,
Low-Income Housing Credit
1120
1120-C
1120-REIT
1120-RIC
No Possible CCC "9."
See IRM 3.11.16.9.1.34, CCC "9" - Low-Income Housing Credit
Form 8594,
Asset Acquisition Statement
1120
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "3" if Form 8594 has an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in Box 3.
See IRM 3.11.16.10.1, Audit Codes.

Forms 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-SF:
No action required.
Form 8609,
Low-Income Housing Credit Allocation and Certification
Form 8609-A, Annual Statement for Low-Income Housing Credit
1120
1120-C
1120-REIT
1120-RIC
No Edit CCC "9."
See IRM 3.11.16.9.1.34, CCC "9" - Low-Income Housing Form.
Form 8611,
Recapture of Low-Income Housing Credit
1120
1120-C
1120-REIT
1120-RIC
No Form 8611and 4255 amounts are included in Other Taxes. See IRM 3.11.16.11.18.2,
Form 1120:
See IRM 3.11.16.32.21. Form 1120-C:
See IRM 3.11.16.39.24Form 1120-REIT: See IRM 3.11.16.40.25Form 1120-RIC:
Edit CCC "9."
See IRM 3.11.16.9.1.34, CCC "9" - Low-Income Housing Form.
All Others:
Edit CCC "9."
See IRM 3.11.16.9.1.34, CCC "9" - Low-Income Housing Form.
Form 8621,
Information Return by a Shareholder of a Passive Foreign Investment Co. or Qualified Electing Fund
1120 No Edit Audit Code "2" if Part V, Line 15a-16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
Edit Audit Code "7" if Part V Line 15a-16f entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
See IRM 3.11.16.10.1, Audit codes.

Forms 1120, 1120-L, 1120-PC, 1120-REIT and 1120-RIC:
Edit Audit Code "2" if Part V, Line 15a -16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
See IRM 3.11.16.10.1, Audit codes.

All Others:
No action required.
Form 8697(Refund),
Interest Computation Under the Look-Back Method for Completed Long-Term Contracts
All Yes Edit tax period and EIN on Form 8697 and route to AM if a refund is shown on Part I, Line 9 or Part II, Line 10 of Form 8697.
Form 8697(Balance Due),
Interest Computation Under the Look-Back Method for Completed Long-Term Contracts
1120 No Possible CCC "K."
See IRM 3.11.16.9.1.11, CCC "K" - Form 8697.
Verify the amount owed, Part I, Line 10 or Part II, Line 11 of Form 8697, is included in Other Taxes.
See IRM 3.11.16.11.18.3, Schedule J, Line 9c - Interest Computation Under the Look-Back Method for Completed Long-Term Contracts (Form 8697).

All Others:
No action required.
Form 8716,
Election to Have A Tax Year Other Than a Required Tax Year
1120 Series No If "ACCEPTED," edit CCC "Y."
See IRM 3.11.16.9.1.25, CCC "Y" - Short Period Return for Change of Accounting Period and IRM 3.11.16.7.5, Short Period Returns - Missing Proof of Entitlement.
Form 8752,
Required Payment of Refund Under Section 7519
All Yes/No Kansas City and Ogden:
Yes: Original - Route to Receipt and Control.

No:Copy - No action required.
Form 8816,
Special Loss Account and Special Estimated Tax Payments for Insurance Companies
1120,
1120-L
1120-PC
No Refer to IRC 847 Deduction instructions if the tax period is 201812 and prior and there are entries on:
- Form 1120, Schedule J, Part III Line 14 (Part II, Line 13 2017-2010) .
- Form 1120-L, Line 28b (Lines 29b and/or 29d for 2017 and prior).
- Form 1120-PC, Line 15b (Lines 14b and/or 14d for 2017 and prior).
See IRM 3.11.16.3.10
(The presence of Form 8816 is also a sign of a IRC 847 Deduction.)

All Others:
No action required.
Form 8820,
Orphan Drug Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8821,
Tax Information Authorization
All Yes/No Route as follows:
Ogden - Route to Stop 6737.
Kansas City - Route to:
Internal Revenue Service
5333 Getwell Road Mail Stop 8423.

Note:

No action is required if a "General Power of Attorney," "Durable Power of Attorney," or "Tax Information Authorization(TIA) " is submitted on any document other than Form 2848 or Form 8821.

Form 8822,
Change of Address, or
Form 8822-B,
Change of Address or Responsible Party -Business
All Yes/No Yes: Route Form 8822 or Form 8822-B to Entity if any of the following applies:
  • Mailing address information is different.

  • Location address is listed on Form 8822 or Form 8822-B, Line 7.

  • An entry is listed on Form 8822-B, Lines 8 or 9.


No: No action is needed if all the following applies:
  • Mailing address information is the same.

  • No location address is listed on Form 8822 or Form 8822-B, Line 7.

  • No entry on Form 8822-B, Lines 8 or 9.

Form 8824,
Like-Kind Exchanges
1120
1120-FSC
1120-SF
1120-ND
1120-REIT
No Edit CCC "1" if Form 8824 is attached.
IRM 3.11.16.9.1.27, CCC "1" - Like-Kind Exchange.

All Others:
No action required.
Form 8825,
Rental Real Estate Income and Expenses of a Partnership or an S-Corporation
All No No action required.
Form 8826,
Disabled Access Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8827,
Credit for Prior Year Minimum Tax - Corporations
All No Credit is valid for tax periods 8812 and later.
See IRM 3.11.16.11.15.3, Schedule J, Line 5d - Form 8827, Credit for Prior Year Minimum Tax - Corporations.
Form 8830,
Enhanced Oil Recovery Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8832,
Entity Classification Election
1120
1120-PC
1120-REIT
1120-RIC
No
Edit Audit Code "2" if either Box 6(d), (e), or (f) is checked.
See IRM 3.11.16.10.1, Audit Codes.
Form 8833,
Treaty-Based Return Position Disclosure
1120
1120-C
1120-F
1120-FSC
1120-L
1120-PC
1120-REIT
1120-RIC
No For Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-L, 1120-PC, 1120-REIT and 1120-RIC: Edit CCC "L."
See IRM 3.11.16.9.1.12, CCC "L" - Treaty Based Positions.

For Forms 1120, 1120-L, 1120-PC, 1120-REIT and 1120-RIC:
Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit Codes.
All Others:
No action required.
Form 8834,
Qualified Electric Vehicle Credit
All No See IRM 3.11.16.11.14.2, Schedule J, Line 5b - Form 8834 Credit and Form 5735.
Form 8835,
Renewable Electricity Production Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8842,
Election to Use Different Annualization Periods for Corporate Estimated Tax
All No No action required.
Form 8844,
Empowerment Zone Employment Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No
Possible line editing on Form 3800.
Edit "1 - 1."
IRM 3.11.16.11.15.1, Form 8844, Empowerment Zone Employment Credit.

All Others:
No action required.
Form 8845,
Indian Employment Credit
All No No Action Required.
Form 8846,
Credit for Employer Social Security and Medicare Taxes Paid on Employee Tips
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8858,
Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs)
1120
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "2."
IRM 3.11.16.10.1, Audit Codes.

All Others:
No action required.
Form 8864,
Biodiesel, Renewable Diesel or Sustainable Aviation Fuel Mixture Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8865,
Return of U.S. Persons with Respect to Certain Foreign Partnerships
1120
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit Codes
Edit the number of Forms 8865 to Line 2 of the Schedule N.
Dummy a Schedule N if not present and edit the number of Forms 8865 to Line 2, Schedule N.
See IRM 3.11.16.11.37.2, Schedule N, Line 2 - Number of Forms 8865.

All Others:
No action required.
Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c) All No Edit RPC "E." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c) All No Edit RPC "F." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8866 (Refund),
Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method
All Yes Edit tax period and EIN on Form 8866 and route to AM if a refund is shown on Line 9, Form 8866.
Form 8866 (Balance Due),
Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method
All No If an amount is present on Form 8866, Line 10, edit the amount to Form 1120, Schedule J, Line 9d.
Form 8869,
Qualified Subchapter S Subsidiary Election
All Original
Yes
Copy
No
Original
Detach
Route to Entity
Copy
If a copy is present or Form 8869 is stamped IRS Accepted, IRS Approved, (or similar language), then no action required.
Form 8870,
Information Return for Transfers Associated with Certain Personal Benefit Contracts
All Yes Route to:
EO Entity
IRS Ogden Campus
Mail Stop 6273.
Form 8871,
Political Organization Notice of Section 527 Status
All Yes Route to Receipt and Control to be re-batched.
Form 8872,
Political Organization Report of Contributions and Expenditures
All Yes Route to Receipt and Control to be re-batched.
Form 8873,
Extraterritorial Income Exclusion
ALL No Forms 1120, 1120-C. 1120-L, 1120-PC, 1120-REIT and 1120-RIC,
See IRM 3.11.16.11.37.9, Form 8873 - Extraterritorial Income Exclusion, for Schedule N editing.

See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion, for TC 971 input.
See IRM 3.11.16.10.1, Audit Codes.
All Others:
See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion for TC 971 input.
Form 8874,
New Markets Tax Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8875,
Taxable REIT Subsidiary Election
All Yes/No KSPC and OSPC:
Yes: Original - Route to OSPC BMF Entity - Mail Stop 6273.
No: Copy - No action required.
Form 8881,
Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Retirement Plan
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8882,
Credit for Employer-Provided Child Care Facilities and Services
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8883,
Asset Allocation Statement Under Section 338
1120
1120-C
1120-F
1120-FSC
1120-L
1120-PC
1120-REIT
1120-RIC
No Forms 1120, 1120-PC, Form 1120-REIT and 1120-RIC:
Edit CCC "S" if Form 8883 is attached.

Edit Audit Code "3" if Form 8883 is attached ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
See IRM 3.11.16.10.1, Audit Codes and See IRM 3.11.16.9.1.19, CCC "S" - Form 8883, Asset Allocation Statement.

All Others:
No action required.
Form 8886,
Reportable Transaction Disclosure Statement
All No Edit CCC "T" and Edit Audit Code "1."
See IRM 3.11.16.9.1.20, CCC "T" Form 8886 , Reportable Transaction Disclosure Statement and IRM 3.11.16.10.1, Audit Codes.
Form 8896,
Low Sulfur Diesel Fuel Production Credit

All
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8900,
Qualified Railroad Track Maintenance Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8902,
Alternative Tax on Qualified Shipping Activities
1120
1120-PC
1120-REIT
1120-RIC
No Edit Audit Code "2."
See IRM 3.11.16.10.1, Audit Codes.

Forms 1120, 1120-C and 1120-F
Support for Schedule J, Line 9e (or equivalent line).
Edit the tax from Line 30 to Schedule J, Line 9e (or equivalent line) if not already entered.

All Others:
No action required.
Form 8903,
Domestic Production Activities Deduction
1120 No Support for Line 25, Form 1120.
Delete the deduction if the tax period beginning date is before 01/01/2005.
See IRM 3.11.16.11.5.14, Line 25 - Reserved for Future Use.

All Others:
No action required.
Form 8904,
Credit for Oil and Gas Production from Marginal Wells
1120 No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit .
Form 8906,
Distilled Spirits Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8907,
Nonconventional Source Fuel Credit
All No No Action Required.
Form 8908,
Energy Efficient Home Credit
All No No Action Required.
Form 8909,
Energy Efficient Appliance Credit
All No No Action Required.
Form 8910,
Alternative Motor Vehicle Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8911,
Alternative Fuel Vehicle Refueling Property Credit
All No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8912,
Credit to Holders of Tax Credit Bonds
All No See
IRM 3.11.16.11.15.4, Schedule J, Line 5e - Form 8912, Credit to Holders of Tax Credit Bonds.
Form 8923,
Mine Rescue Team Training Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No No Action Required.
Form 8931, Agricultural Chemicals Security Credit 1120
1120-F
No No Action Required.
Form 8932, Credit for Employer Differential Wage Payments 1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8933,
Carbon Oxide Sequestration Credit
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8936,
Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-In Electric Vehicles)
1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8936-A, Qualified Commercial Clean Vehicle Credit. 1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.
Form 8936, Schedule A 1120
1120-C
  See IRM 3.11.16.27, Form 8936, Schedule A, Clean Vehicle Credits.
Form 8938,
Statement of Specified Foreign Financial Assets
1120 No Edit CCC "2" if attached. See IRM 3.11.16.11.37.10, Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets

All Others:
No action required.
Form 8941,
Credit for Small Employer Health Insurance Premiums
1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No Place in sequence order if significant entries are present. See IRM 3.11.16.22, Form 8941 - Credit for Small Employer Health Insurance Premiums.
Form 8949, Sales and Other Dispositions of Capital Assets All No Forms 1120, 1120-F, 1120-REIT and 1120-RIC: Sequence Form 8949.
See IRM 3.11.16.16 - Form 8949 - Sales and Other Dispositions of Capital Assets.
and IRM 3.11.16.9.1.13, CCC "M" - Opportunity Zones.
All Others: Possible CCC "M."
See IRM 3.11.16.9.1.13, CCC "M" - Opportunity Zones.
Form 8978 - Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments),
1120
1120-C
1120-F
1120-FSC
1120-H
1120-L
1120-ND
1120-PC
1120-REIT
1120-RIC
1120-SF
No Sequence Form 8978 on forms:
Form 1120
Form 1120-C
Form 1120-F
Form 1120-H
Form 1120-L
Form 1120-PC
Form 1120-REIT
Form 1120-RIC
See IRM 3.11.16.20, Partner’s Additional Reporting Year Tax.
Edit CCC "C" on forms:
Form 1120-FSC
Form 1120-ND
Form 1120-SF
See IRM 3.11.16.9.1.3, CCC "C" - Qualified Derivatives Dealers (Form 1120-F) or Partner’s Additional Reporting Year Tax (Forms 1120-FSC, 1120-ND or 1120-SF).
Form 8990, Limitation on Business Interest Expense IRC 163(j) 1120
1120-C
1120-F
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit RPC "7."
See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts 1120
1120-C
1120-F
1120-L
1120-PC
No Form 1120: See IRM 3.11.16.11.12, Schedule J, Line 3 - Alternative Minimum Tax or Base Erosion Minimum Tax and IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 1120-C: See IRM 3.11.16.32.21, Schedule J, Lines 2 through 8 and IRM 3.11.16.9.2, Return Processing Code (RPC).
For Form 1120-F, Form 1120-L and 1120-PC:
See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI) 1120
1120-C
1120-L
1120-PC
1120-REIT
1120-RIC
No Edit RPC "2," See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8993, Section 250 Deduction for Foreign- Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) 1120
1120-C
1120-L
1120-PC
No Edit RPC "3." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8994,
Employer Credit for Paid Family and Medical Leave
1120
1120-C
1120-F
1120-H
1120-L
1120-PC
1120-REIT
1120-RIC
No See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 8996, Qualified Opportunity Fund 1120
1120-F
1120-REIT
1120-RIC
No Sequence Form 8996 if significant entries are present.
See IRM 3.11.16.17 - Form 8996 - Qualified Opportunity Fund
Edit RPC "6." See IRM 3.11.16.9.2, Return Processing Code (RPC). Also See
  • Form 1120 - IRM 3.11.16.11.31, Schedule K, Question 25 (Form 8996 - Qualified Opportunity Fund).

  • Form 1120-F - IRM 3.11.16.33.24, Page 3, Question II (Form 8996 - Qualified Opportunity Fund)

  • Form 1120-REIT - IRM 3.11.16.39.29, Schedule K, Question 12 (Qualified Opportunity Fund - Form 8996).

  • Form 1120-RIC - , Form 8996 - Qualified Opportunity Fund.

    Note:

    Transcription and RPC editing is different for Form 1120-RIC.

Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached. 1120
1120-F
1120-REIT
1120-RIC
No Form 1120: and Form 1120-F: See IRM 3.11.16.26, Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments.
Form 1120-REIT and Form 1120-RIC: See IRM 3.11.16.33.38, Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments.
Edit RPC "9." See IRM 3.11.16.9.2, Return Processing Code (RPC).
Form 9358,
Information About Your Tax Return
All Yes Route to SC Collections.
Form 9465,
Installment Agreement Request
All Yes Route as follows:
  • Ogden - Route Form 9465 and any Pre-Assessed Installment Agreement to Collections.

  • Kansas City - Route to Mail Stop P4 5000.

Form 12857,
Refund Transfer Posting Voucher
All No Possible CCC "O."
See IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.
Form 14039-B, Business Identity Theft Affidavit All No If a specific function is shown by the envelope address or an IRS CP notice or IRS letter, place the Form 14039-B on top and route Form 14039-B and the return to the specific function.

If Kansas City or Ogden, receives a Form SS-4, Application for Employer ID Number and Form 14039-B route the returns to:
Ogden BMF Entity, Mail Stop 6273.

For the following returns:
  • Loose Form 14039-B.

  • No correspondence attached (e.g., no IRS CP notice or IRS letter).

  • The envelope is not addressed to a specific function.


Place the Form 14039-B on top of the return and route to the local Image Control Team (ICT).
Ogden - Mail Stop 6552.
Kansas City - Mail Stop C1 6525.
Form 14157, Complaint: Tax Return Preparer All Yes Route to:
Attn: Return Preparer Office
401 W. Peachtree Street NW
Mail Stop 421-D
Atlanta, Georgia 30308.

Schedule F - Transfer Lines

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U.S. Possessions ZIP Codes

American Samoa (AS)

American Samoa (AS) City American Samoa (AS) ZIP Code
Faga'itua 96799
Leone 96799
Olosega Manua' 96799
Pago Pago 96799
 

Federated States of Micronesia (FM)

Federated States of Micronesia (FM) City Federated States of Micronesia (FM) ZIP Code
Chuuk 96942
Kosrae 96944
Pohnpei 96941
Yap 96943
 

Guam (GU)

Guam (GU) City Guam (GU) ZIP Code
Agana 96910
Inarajan 96917
Merizo 96916
Tamuning 96931
Umatac 96915
Yona 96915
 

Marshall Islands (MH)

Marshall Islands (MH) City Marshall Islands (MH) ZIP Code
Ebeye 96970
Majuro 96960
 

Northern Marianna Islands (MP)

Northern Marianna Islands (MP) City Northern Marianna Islands (MP) ZIP Code
Capitol Hill 96950
Rota 96951
Saipan 96950
Tinian 96952
 

Palau (PW)

Palau (PW) City Palau (PW) ZIP Code
Koror 96940
Palau 96940
 

Puerto Rico (PR)

Puerto Rico (PR) City Puerto Rico (PR) ZIP Code
Adjuntas 00601
Aguada 00602
Aguadilla 00603
Aguas Buenas 00703
Aguirre 00704
Aibonito 00705
Anasco 00610
Angeles 00611
Arecibo 00612
Arroyo 00714
Bajadero 00616
Barceloneta 00617
Barranquitas 00794
Barrio Obrero Station 00935
Bayamon 00956
Boqueron 00622
Cabo Rojo 00623
Caguas 00725
Camuy 00627
Canovanas 00729
Caparra Heights 00920
Carolina 00982
Catano 00962
Cayey 00736
Ceiba 00735
Cerro Gordo 00754
Ciales 00638
Cidra 00739
Coamo 00769
Comerio 00782
Condado 00907
Corozal 00783
Coto Laurel 00780
Culebra 00775
Dorado 00646
Ensenada 00647
Esperanza 00765
Fajardo 00738
Fernandez Juncos 00936
Florida 00650
Fort Buchanan 00934
Garrachales 00652
Guanica 00653
Guayama 00784
Guayanilla 00656
Guaynabo 00965
Gurabo 00778
Hatillo 00659
Hato Rey 00936
Hormigueros 00660
Humacao 00791
Isabela 00662
Jayuya 00664
Juana Diaz 00795
Juncos 00777
La Cumbre 00926
Lajas 00667
La Plata 00786
Lares 00669
Las Marias 00670
Las Piedras 00771
Levittown 00949
Loiza 00772
Loiza Street Station 00936
Luquillo 00773
Manati 00674
Maricao 00606
Maunabo 00707
Mayaguez 00680
Mercedita 00715
Minillas Center 00936
Moca 00676
Morovis 00687
Naguabo 00718
Naranjito 00719
Orocovis 00720
Palmer 00721
Patillas 00723
Penuelas 00624
Ponce 00731
Puerta de Tierra 00936
Puerta Real 00740
Punta Santiago 00741
Quebradillas 00678
Ramey 00603
Rincon 00677
Rio Blanco 00744
Rio Grande 00721
Rio Piedras 00927
Rosario 00636
Sabana Grande 00637
Sabana Hoyos 00688
Sabana Seca 00952
Saint Just 00978
Salinas 00751
San Antonio 00690
San Francisco 00927
San German 00683
San Juan 00936
San Lorenzo 00754
San Sebastian 00685
Santa Isabel 00757
Santurce 00936
Toa Alta 00953
Toa Baja 00949
Trujillo Alto 00976
University 00936
Utuado 00641
Vega Alta 00692
Vega Baja (Box 1 - 9049) 00694
Vieques 00765
Villalba 00766
Yabucoa 00767
Yauco 00698
 

Virgin Islands - U.S. (VI)

Virgin Islands - U.S. (VI) City Virgin Islands - U.S. (VI) ZIP Code
Charlotte Amalie 00802
Christiansted 00820
Cruz Bay 00830
Downtown 00840
Frederiksted 00840
Kingshill 00850
Saint Croix 00820
Saint John 00830
Saint Thomas 00805
Sunny Isle 00850
Veterans Annes 00820

USPS.com Track and Confirm

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Form 8404, Interest Charge on DISC-Related Deferred Tax Liability

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Terms/Definitions/Acronyms

For Terms, Definitions and acronyms see the following tables:

Interpretation Words

Word Definition Example
Fair Accurate and professional service to all persons without regard to personal bias. Taxpayers have the right to expect a fair and just tax system.
Significant entry Any entry other than zero or blank. If line 1 has a significant entry, edit CCC A.
Usually Exceptions when something is not required or what would create the unusual circumstance. A return for a Political Organization can usually be determined by the name.
Timely Coming early or at the right time. Taxpayers have the right to receive help from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels.
 

Acronyms and Abbreviations

Acronyms and Abbreviations Definition
ACE Adjusted Current Earning
ADP Automatic Data Processing
AM Accounts Management
AMRH Accounts Maintenance Research
AMTI Alternative Minimum Taxable Income
APO Army Post office
AUR Automated Underreporter
BMF Business Master File
C&E Code and Edit
CC Chief Counsel
CCC Computer Condition Code
CDP Collection Due Process
CI Criminal Investigation
CII Correspondence Imaging Inventory
C/O Care of
CP Computer Paragraph
CRN Credit Reference Number
CSCO Compliance Services Collection Operations
CTW Chapter Three Withholding
DLN Document Locator Number
DPO Diplomatic Post Office
DPO Document Perfection Operation
EEFax Enterprise Electronic Fax
E-File Electronic Filing
e.g. For Example
EIN Employer Identification Number
ERS Error Resolution System
etc. Et Cetera
Exam Examination
FAX Facsimile
FIRPTA Foreign Investment in Real Property Tax Act
FDII Foreign Derived Intangible Income
FPO Fleet Post Office
FPP Foreign Payments Practice
FRP Frivolous Return Program
FTF Failure To File
ICS Integrated Collection System
ICT Image Control Team
ID Identification or Identity
IDRS Integrated Data Retrieval System
IMF Individual Master File
IRC Internal Revenue Code
IRS Internal Revenue Service
ISRP Integrated Submission and Remittance Processing
ITIN IRS Individual Taxpayer Identification Number
KSPC Kansas City Submission Processing Center
LB&I Large Business and International
MeF Modernized Electronic Filing
MFT Master File Tax
MMDDYY Month Month Day Day Year Year
NAICS North American Industry Classification System
NCOA National Change of Address
NMF Non-Master File
N/A Not Applicable
OC Other Country
OID Original Issue Discount
OMB Office of Management and Budget
OSPC Ogden Submission Processing Center
PBA Principal Business Activity
PTIN Preparer Tax Identification Number
P.O. Post Office
QOF Qualified Opportunity Fund
R&C Receipt and Control
Rec’d Received
RO Revenue Officer
RPC Return Processing Code
SB/SE Small Business/Self-Employed
SCAMPS Service Center Automated Mail Processing System
SERP Servicewide Electronic Research Program (SERP)
SETP Special Estimated Tax Payments
SFR Substitute for Return
SLA Service Level Agreement
SOI Statistics of Income
SP Submission Processing
SSN Social Security Number
TAC Taxpayer Assistance Center
TAS Taxpayer Advocate Service
T-Bill Treasury Bill
TBOR Taxpayer Bill of Rights
TC Transaction Code
TE Tax Examiner
TEGE Tax Exempt Government Entities
TIA Tax Information Authorization
TPE Tax Period Ending
TY Tax Year
UCC Uniform Commercial Code
U.S. United States
USPS United States Postal Service
W&I Wage and Investment
ZIP Zone Improvement Plan