3.0.101 Schedule K-1 Processing

Manual Transmittal

November 07, 2017

Purpose

(1) This transmits revised IRM 3.0.101, General, Schedule K-1 Processing.

Material Changes

(1) Editorial, spelling corrections throughout this IRM.

(2) IRM 3.0.101.1 Program Scope, added as required in IRM 1.11.2.2.5, Address Management and Internal Controls. All subsequent sections in the IRM were updated to reflect the addition.

(3) IRM 3.0.101.1.1 revised Background information

(4) IRM 3.0.101.1.2 revised Authority information for this IRM

(5) IRM 3.0.101.1.3 revised Roles and Responsibilities

(6) IRM 3.0.101.1.4 revised Program Management and Review

(7) IRM 3.0.101.1.5 revised Program Controls

(8) IRM 3.0.101.1.6 added/revised Terms/Definitions/Acronyms

(9) IRM 3.0.101.1.7 added/revised Related Resources

(10) IRM 3.0.101.4 (2) (c) added instruction to the bullet list for prior year Schedule K-1

(11) IRM 3.0.101.4 (2) (e) added additional instructions for prior year Schedule K-1

(12) IRM 3.0.101.5 (3) revised statement to define when to not correspond

(13) IRM 3.0.101.5 (4) updated the Example to reference current processing year

(14) IRM 3.0.101.5(7) removed these instructions, they are no longer required

(15) IRM 3.0.101.5.1(1) updated the criteria for unprocessable Schedule K-1

(16) IRM 3.0.101.5.2 (1) changed the word to recipient to Payee

(17) IRM 3.0.101.5.2 (2) changed the word to recipient to Payee

(18) IRM 3.0.101.5.3 (3) changed the word to recipient to Payee

(19) IRM 3.0.101.5.4 (4) changed the word to recipient to Payee

(20) IRM 3.0.101.6 (1) updated the table to include current year plus 2 prior year Schedule K-1

(21) IRM 3.0.101.6.1 (1) updated the table to include current year plus 2 prior year Schedule K-1

(22) IRM 3.0.101.8.1 (1) added additional instructions for prior year Schedule K-1

(23) IRM 3.0.101.11 (2) added additional instructions for prior year Schedule K-1

(24) IRM 3.0.101.13.3.2 (1) updated the name of the labels for Part I and Part II of 1041 Schedule K-1

(25) IRM 3.0.101.13.3.2 (2) updated the name of the labels for Part II and added the name of the label for Part I of 1065 Schedule K-1

(26) IRM 3.0.101.13.3.2 (3) updated the name of the labels for Part II and added the name of the label for Part I of 1120S Schedule K-1

(27) IRM 3.0.101.13.6 corrected the reference title

(28) IRM 3.0.101.13.6.2 element (4) updated the Example and added/moved the Caution

(29) IRM 3.0.101.13.6.2 element (5) updated the titles for where the Name Line information is entered from

(30) IRM 3.0.101.13.6.3 element (2) updated the titles for where the Address information is entered from

(31) IRM 3.0.101.13.6.4 added elements (12) and (13) to instruct for the new added fields BEGTAXPR and ENDTAXPR

(32) IRM 3.0.101.13.6.5 added elements (15) and (16) to instruct for the new added fields BEGTAXPR and ENDTAXPR

(33) IRM 3.0.101.13.6.6 added elements (14) and (15) to instruct for the new added fields BEGTAXPR and ENDTAXPR

(34) IRM 3.0.101.13.6.7 element (2) updated the titles for where the Payer Name Line information is entered from

(35) IRM 3.0.101.14.1 updated and added additional instructions for prior year Schedule K-1

(36) IRM 3.0.101.15 moved the SCRIPS Terms and Definitions table to IRM 3.0.101.1.6

(37) IRM 3.0.101.15.2 updated the description column in the table.

(38) IRM 3.0.101.15.5.1 updated the description and caption of Figure 3.0.101-3

(39) IRM 3.0.101.15.5.2 (1) added additional instructions to the line

(40) IRM 3.0.101.15.5.2 (1) updated the table

(41) IRM 3.0.101.15.6.1 (3) added the menu options

(42) IRM 3.0.101.15.7.1 (3) added the menu options

(43) IRM 3.0.101.15.8.2 (1) updated the information for the Payee Information and Payer Information for 1041 Schedule K-1

(44) IRM 3.0.101.15.8.2 (2) updated the information for the Payee Information and Payer Information for 1065 Schedule K-1

(45) IRM 3.0.101.15.8.2 (3) updated the information for the Payee Information and Payer Information for 1120S Schedule K-1

(46) IRM 3.0.101.15.9 added new Subsection to include Tax Year and Tax Period Dates Instructions and the remaining Subsections were renumbered accordingly

(47) IRM 3.0.101.15.10 (10) updated the instruction under the Exception

(48) IRM 3.0.101.15.10 (14) corrected the instructions for scanned name lines

(49) IRM 3.0.101.15.11 (6) re-ordered the bullets

(50) IRM 3.0.101.15.11 (6) corrected the Note

(51) IRM 3.0.101.15.11 (8) corrected the Alpha Designator instructions

(52) IRM 3.0.101.15.12 updated all instructions for Percentages

(53) IRM 3.0.101.15.12 revised the Percentages table

(54) IRM 3.0.101.15.13 (2) revised the instructions for when the Payer EIN is different

(55) IRM 3.0.101.15.16.1 added the 3 new processing fields to the Transcription Sheet

(56) IRM 3.0.101.15.16.2 added the 3 new processing fields to the Transcription Sheet

(57) IRM 3.0.101.15.16.2 corrected the Name Line 1 instruction column

(58) IRM 3.0.101.15.16.3 added the 3 new processing fields to the Transcription Sheet

(59) IRM 3.0.101.15.16.3 corrected the Name Line 1 instruction column

(60) IRM 3.0.101.15.16.7 retitled and moved the information from IRM 3.0.101.15.16.7.1

(61) IRM 3.0.101.15.16.7.1 moved to IRM 3.1.101.15.16.7

(62) IRM 3.0.101.15.16.7.2 moved to IRM 3.0.101.15.16.8

(63) IRM 3.0.101.15.16.7.3 moved to IRM 3.0.101.15.16.9

(64) IRM 3.0.101.17 removed the Reserved subsection and the remaining Subsections were renumbered accordingly

(65) IRM 3.0.101.20.1.3 (3) updated the Location of Check Box column for 1041 Schedule K-1

(66) Exhibit 3.0.101-10 Function Key List updated various elements throughout the chart to reflect change in Function Key mapping to the new standard keyboard

(67) Exhibit 3.0.101-10 Function Key List updated the F11 key information

(68) IPU 17U0899 issued 05-24-2017 IRM 3.0.101.5(6) these instructions are no longer required and are also being removed from IRM 3.11.217 and IRM 3.11.15

(69) IPU 17U0888 issued 05-22-2017 IRM 3.0.101.15.11 - removed the extra decimal point change it should read 10.

(70) IPU 17U0840 issued 05-11-2017 IRM 3.0.101.15.11 - change No 1 in the chart from 100. to 10.

(71) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1 added the Purpose Scope and Objectives

(72) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1.1 added Background information

(73) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1.2 added Authority information for this IRM

(74) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1.3 added Responsibilities or Roles and Responsibilities

(75) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1.4 added Program Management and Review

(76) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.1.5 added Program Controls

(77) IPU 17U0730 issued 04-24-2017 IRM 3.0.101.5.2(1) Standard Schedule K-1 - edited the third bullet, removed husband and wife and added "spouse's"

Effect on Other Documents

IRM 3.0.101 dated November 15, 2016 (effective January 01, 2017) is superseded. The following IRM Procedural Updates (IPUs), issued from April 24, 2017 through May 24, 2017, have been incorporated into this IRM: IPU 17U0730, IPU 17U0840, IPU 17U0888 and IPU 17U0899.

Audience

Wage and Investment, Submission Processing Employees

Effective Date

(01-01-2018)

Linda J. Brown
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. Purpose: Daily processing of processable paper filed Schedule K-1 on the Service Center Recognition/Image Processing System (SCRIPS) and the Integrated Submission and Remittance Processing (ISRP) are covered in this IRM. This processing will convert the taxpayer data reported to electronic data records for further validations to be applied to determine if the filers information return submission is acceptable to fulfill the filers filing requirement.

  2. Audience: The users of the IRM are Submission Processing Data Transcribers; Data Conversion Operation and their support staff which includes but is not limited to the following: peripheral scanner operators, clerks, leads and supervisors. These instructions apply to all campuses.

  3. Policy Owner: The Director of Submission Processing.

  4. Program Owner: Paper Processing Branch, Mail Management/Data Conversion (an Organization within Submission Processing).

  5. Primary Stakeholders: Service and Enforcement, ACA Implementation, Compliance Strategy and Policy and Small Business/Self Employed (SB/SE), Operations Business Support, Office of Servicewide Penalties are affected by the completion of these data records to posting.

  6. Program Goals: Integrated Submission and Remittance Processing (ISRP) and Service Center Recognition/Image Processing System (SCRIPS) are applications designed to capture, format, and forward information related to tax submissions and remittances in electronically readable formats to downstream IRS systems. Any remittances received with a tax document are forwarded and processed for deposit to the ‘Remittance Processing’ function.

Background

  1. Paper Schedules are sent to the Service by filers to fulfill their requirement to file a paper return with the Service and provide their taxpayer identification number (TIN). The returns must be converted to an electronic data record for use by the Service. Input of data present and validation of the data records during conversion of these paper returns to electronic data records is required.

Authority

  1. The following provide authority for the procedures in this IRM to be performed in support of completing compliance functions to make credits or refunds of any internal revenue tax, processing of non-revenue forms, and administrative support forms.

    1. Title 26 of the United States Code (USC) or more commonly known as the Internal Revenue Code (IRC).

    2. All policy statements for Submission Processing are contained in IRM 1.2.12, Servicewide Policies and Authorities, Policy Statements for Submission Processing Activities:

    • Code sections which provide the IRS with the authority to issue levies.

    • Congressional Acts which outline additional authorities and responsibilities like the Travel and Transportation Reform Act of 1998 or the Tax Reform Act of 1986.

    • Policy Statements that provide authority for the work being done.

    Note:

    The above list may not be all inclusive of the various updates to the IRC.

Roles and Responsibilities

  1. The Operations manager is responsible for securing, assigning and providing training for the staff needed to perform the task required throughout this instruction.

  2. The Planning and Analysis Staff is responsible for providing feedback and support to local management to achieve and effectively monitor scheduled goals.

  3. The team manager is responsible for and assigning, monitoring and controlling the work flow to accomplish timely completion of the tasks required throughout this IRM.

  4. The employee is responsible for applying the instruction present to the assigned task on the ISRP or SCRIPS systems to accurately convert paper data to electronic data record for proper posting for use by the Service.

Program Management and Review

  1. Program Goals: The goal of this program is to convert processable Schedule K-1 filed on paper media to electronic data records.

  2. Program Reports: Below are a list of reports to use to show receipts, production and inventory for the paper return to electronic data conversion process. These reports will be utilized to report and monitor daily and weekly status of the program to completeness.

    • IPS0083, Workstation Operator Statistics Program and Function Summary Report

    • IPS01119, Run Balance Report

    • IPS06440, Throughput Statistics Report

    • PCC 2240, Daily Production Report - Program Sequence

    • PCC 6040, SC WP&C Performance and Cost Report

    • PCC 6240, SC WP&C Program Analysis Report

    • PCB 0440, Daily Workload and Staff hours Schedule

    • PCB 0540, Weekly Workload and Staffing Schedule

  3. Program Effectiveness: Goals will be measured utilizing standard managerial reports by documents processed per hour and completion of each function compared to the established schedule for completion each week. Each functionality is expected to retain or exceed schedule prior to the program completion date stated in IRM 3.30.123, Work Planning and Control Processing Timeliness: Cycles, Criteria, and Critical Dates.

  4. Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration. This may be included under responsibilities for a manager.

Program Controls

  1. Local reports may be utilized to establish additional information for maintaining daily program control. Local reports do not replace the established official reports and required production reporting.

Terms/Definitions/Acronyms

  1. The following is a list of the acronyms that are used in this IRM section, this IRM uses prompts for data entry and are defined in the charts.

    Acronyms Definition
    ABC Alphanumeric Block Control
    BMF Business Master File
    CC Command Code
    CCC Computer Condition Code
    DLN Document Locator Number
    EIN Employer Identification Number
    EOP Entry Operator
    ERS Error Resolution System
    FUTA Federal Unemployment Tax Act
    IMF Individual Master File
    IRM Internal Revenue Manual
    ISRP Integrated Submission and Remittance Processing System
    KV Key Verification
    MCC Major City Code
    OE Original Entry
    PCD Program Completion Date
    SSN Social Security Number
    T Lines Transcription Lines
    TIN Taxpayer Identification Number
  2. Listed below are terms and their definitions related to SCRIPS processing.

    Term Definition
    Alpha Character A character (letter) of the alphabet.
    Alphanumeric Field A field that accepts both alpha and numeric characters.
    Application Refers to the form type being processed (e.g., Schedule K-1 or IRP).
    Block A group of Schedule K-1 documents identified with consecutive DLNs. The output program creates a block by combining documents from various units of work that share a block DLN.
    Block DLN An 11-digit DLN that consists of a two-digit File Location Code, tax class (always 5 for Schedule K-1), a two-digit document type, a three-digit Julian date and a three-digit block number.
    Block Number Also called "blocking series" . The 9th, 10th and 11th digits in a DLN. Up to 100 sequence numbers may be associated with one block number 00 through 99.
    Capture The process of obtaining images of a document for character recognition and operator use.
    Character Any symbol or alpha (special or numeric), that represents information.
    Character Recognition The process of converting information from payer to digital form.
    Cursor A vertical line showing the position where the next entry will be keyed.
    Data Fields Those fields that do not include entity fields (e.g. money amounts, dates, etc.,).
    DLN A 14-digit Document Locator Number that consists of a two-digit File Location Code, tax class , a two-digit document type, a three-digit Julian date and a three-digit block number, two-digit sequence number and a year digit.
    EIN An Employer Identification Number (a nine-digit number) typically identifies an entity such as a corporation, or trust. Usually in nn-nnnnnnn format.
    Entity/Entity Fields That portion of the document that deals with TIN, name and address information.
    Field Specific area provided for data entry.
    Flag A question mark used to "mark" an unrecognizable character, or an error within a field.
    Function Keys The upper row of keys on the keyboard. The function keys are <F1> through <F12>.
    Highlighting A three-dimensional shadowing of a template field used to direct attention to the field. Used in OE to show the current cursor position. Used in DV to show the current field containing an error.
    Image Strip A section of the true and complete image. Each strip corresponds to a particular field.
    Key Combination Keystroke commands that require two or more simultaneous keystrokes. For example, press <Ctrl>-<P> for post-to-close means to press and hold the <Ctrl> key and then press the <P> key before releasing the <Ctrl> key.
    Menu A list of operations/options from which the workstation operator makes a selection.
    Message Window A window that appears within the main window. It usually appears in the center of the screen. The system uses these windows to relay messages to the operator.
    NABR Name and Address Block Reader. NABR compares the address captured from the scanner and the United States Postal Service database of addresses.
    Non-Conforming Form A form the scanner cannot recognize.
    Numeric Character A number ranging from 0 to 9.
    Payee A recipient of money amounts issued by the payer. A filer may identify a payee on the form as one of the following: Beneficiary, Partner, Shareholder.
    Payer An issuer of money amounts to a payee. A form may identify the payer as one if the following: Parent, Fiduciary, Estate, Partnership, Corporation.
    Prompt A message or statement displayed that requires an operator response.
    Reverse Video A reversed display of the black and white on an image (i.e. black becomes white and white becomes black).
    Sequence Number/Serial Number A two-digit number within the DLN that uniquely identifies the document.
    Sight-Verify Examine a highlighted field in DV. If correct, release the field. If incorrect, correct the field. Also called "verify " .
    Special Characters (symbols) *, &, /, %, #, ?, etc.
    SSN Social Security Number, a nine digit number issued to an individual by the Social Security Administration. Usually in nnn-nn-nnnn format.
    Status Line A strip of information found along the bottom right side of the main working window below the prompt area.
    Template A window that contains fields for data entry. The template mirrors the actual form layout, to the extent possible. The system always displays it in the right side of the monitor screen.
    TIN Taxpayer Identification Number. Either an EIN or an SSN.
    Transmittal A Form 1332SC Block and Selection Record/Breaker Sheet.
    True and Complete Image The black and white image that the system displays for data entry or validation purposes. If available, the system will always display it on the left half of the monitor screen. It is similar to a photocopy.
    Unit-of-Work (UW) A group of Schedule K-1 documents containing one transmittal and the Schedule K-1s.

Related Resources

  1. The following table lists the IRM primary sources of guidance on the processing of paper filed Form 941 , Employer's Quarterly Federal Tax Return

    IRM Title Guidance on
    IRM 3.10.5 Campus Mail and Work Control - Batch/Block Tracking System (BBTS) utilizing BBTS to drop unit production cards for daily incoming receipts and production
    IRM 3.10.72 Campus Mail and Work Control - Receiving, Extracting, and Sorting receiving, extracting, sorting, and routing mail within the Submission Processing campuses
    IRM 3.10.73 Campus Mail and Work Control - Batching and Numbering batching and numbering with a document locator number (DLN) of documents
    IRM 3.11.14 Returns and Documents Analysis, Income Tax Returns for Estates and Trusts, (Forms 1041, 1041-QFT, and 1041-N) document perfection to code and edit (perfect) 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)
    IRM 3.11.15 Returns and Documents Analysis - Return of Partnership Income document perfection to code and edit (perfect) 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)
    IRM 3.11.217 Returns and Documents Analysis, Form 1120S Corporation Income Tax Returns document perfection to code and edit (perfect) 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)
    IRM 3.41.274 OCR Scanning Operations, General Instructions for Processing via SCRIPS workstation functions, workstation keyboard, windows environment and general instruction for entering data for tax returns and related data through SCRIPS
    IRM 3.41.275 OCR Scanning Operations, Scanner Operations on SCRIPS scanning returns on SCRIPS
  2. The IRS adopted the Taxpayer Bill of Rights in June 2014. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3) , and the following site for additional information about the Taxpayer Bill of Rights.

Purpose

  1. The IRM 3.0.101 is intended to provide instructions regarding the processing of Schedule K-1 through Integrated Submission and Remittance Processing (ISRP) and Service Center Recognition/Image Processing System (SCRIPS).

Scope

  1. These instructions supersede all instructions in other IRM's regarding the processing of Schedule K-1.

  2. IRM Deviations - Must be submitted in writing following instructions from IRM 1.11.2.2., Internal Management Documents System - Internal Revenue Manual (IRM) Process Standards, and elevated through appropriate channels for executive approval.

Program Codes

  1. The program codes listed below should be used when performing the functions involved with processing Schedule K-1 through ISRP, unless otherwise instructed:

    Return Type Program Code Tax Class/Doc Code Parent
    Tax Class/Doc Code
    1041 Schedule K-1 44380 566 244
    1065 Schedule K-1 44381 565 265
    1120S Schedule K-1 44382 567 316
  2. The program codes listed below should be used when processing Schedule K-1 through SCRIPS, unless otherwise instructed:

    Return Type Program Code Tax Class/Doc Code Parent
    Tax Class/Doc Code
    1041 Schedule K-1 44386 566 244
    1065 Schedule K-1 44387 565 265
    1120S Schedule K-1 44388 567 316
  3. The program codes listed below should be used when processing Schedule K-1 through E-File, unless otherwise instructed.

    Return Type Program Code Tax Class/Doc Code Parent
    Tax Class/Doc Code
    1041 Schedule K-1 44390 566 236
    1065 Schedule K-1 44360 565 265
    1120S Schedule K-1 44370 567 316
    1. Code and Edit: should use the parent return program codes for coding both the parent returns and the Schedule K-1. Donot use a 4438X - program code when coding the Schedule K-1.

    2. Batching/Numbering: should use the Schedule K-1 program codes for time spent batching and numbering Schedules K-1.

    3. Data Conversion: should use the parent return program code when transcribing the parent return and the Schedule K-1 program code when transcribing Schedule K-1. (See program codes listed above that should be used.)

    4. Bob Register Transcription: should use program code 44930.

    5. Error Resolution (ER): should use function/program code 340–44380.

    6. BOB Register: should use function/program code 620–44380.

Extracting and Sorting

  1. Because Schedule K-1 will be attached to the parent returns during the sorting function, no sorts will be performed on the Schedule K-1. However, because of Schedule K-1 processing, parent returns will require additional sorts.

  2. The parent returns will be sorted in the following categories:

    1. Remittance versus Non-remittance

    2. Refund versus Non-refund

    3. Tax period

      • Current timely filed calendar year (current processing year minus 1)

      • One Year Prior (current processing year minus 2)

      • Two Years Prior (current processing year minus 3)

      • Prior Year (current processing year minus 4 or more)

      • Current fiscal and delinquent current year (current processing year minus 1)

      • Future Years (current processing year)

    4. Current forms and future Form 1041 with Schedule K-1 attached versus without Schedule K-1 attached.

    5. Code and Edit will detach current year, one year prior to current year and two years prior to current year Schedule K-1. Always detach future year K-1. DO NOT detach Schedule K-1 that are three or more years prior to current year.

      Note:

      When a future return with Schedule K-1 attached are found in a current year batch, pull the return and re-batch.

Code and Edit

  1. This section contains instructions for processing Parent returns with Schedule K-1 through Code and Edit.

  2. Schedule K-1 editing in Cincinnati Submission Processing Center (CSPC) and Ogden Submission Processing Center (OSPC) will be done in Red ink.

  3. If the return is for three or more years prior to current year, do not research or correspond for missing or incomplete Schedule K-1's.

  4. If the pre-printed year of the Schedule K-1 is different from the tax year ending of the parent return, correct the pre-printed tax year on the first Schedule K-1 by lining through the last two digits of the pre-printed year and editing the correct year digit to the right of the lined through digit.

    Example:

    The parent return is for a calendar year ending in 2017 and the Schedule K-1 year is any other year from 2005 through 2016, line through the last two digits (20//) and edit a 17 to the right of the tax year, or
    The parent return is for a fiscal year ending in 2017 and the Schedule K-1 year is any other year 2005 through 2016, line through the last two digits (20//) and edit a 17 to the right of the tax year.

    1. When making this correction be sure to edit to the right of the printed tax year in the document locator number (DLN) area.

    2. When future returns with Schedule K-1 attached are found in current year batch, pull the return and re-batch.

  5. If an exact duplicate of a Schedule K-1 has been filed with the parent return, process one Schedule K-1 and cross out the duplicate Schedule K-1 with an X and leave the duplicate attached to the parent return.

  6. Do not bracket negative amounts. (See IRM 3.0.101.7 for Money Amount Fields instructions)

  7. If the Individual Master File (IMF) Payee Social Security Number (SSN) or Business Master File (BMF) Payee Employer Identification Number (EIN) is not located in the correct box but it is in the name and address box, re-write the SSN/EIN in the SSN/EIN box.

  8. A payer TIN must be present on at least the first Schedule K-1. If not present, enter the TIN from the parent return in the Employer Identification Number/ Social Security Number (EIN/SSN) box. If the TIN on the parent return has changed, enter the new parent TIN on the Payer TIN Line.

  9. If the words "amended" or "corrected" are present on the parent return of the Schedule K-1 and the amended box is not checked, edit a check mark or "X" in the box. Detach from parent and continue processing.

  10. When Schedule K-1 is received in continuous formats (e.g. computer listings, and typed listings) correspond requesting separate Schedule K-1. Do not dispose of the listing as it is an attachment to a tax return.
    When correspondence is required for the paragraph above, any one of the following letters should be used:

    • Letter 177C for 1041 Schedule K-1.

    • Letter 1355C for 1065 Schedule K-1.

    • Letter 118C for 1120S Schedule K-1.

  11. Do not correspond for the missing, incomplete, or incorrect Schedule K-1 for Form 1065 on the following types of returns:

    • Sec. 6020(b) returns

    • Sec. 501(d) returns, Religious and Apostolic Organizations

    • Returns filed under a Common Trust

    • Sec. 761(a) returns

    • Nominee returns

    • Inactive returns

    • IRC 1.736.1 (Payments to a retiring partner)

    • Final returns

    • If foreign box is checked, then it is accepted as a foreign return

    • Amended ("G" coded) returns

    • Payer is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

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

    • Returns filed for three or more years prior to current year.

      Note:

      Correspond for missing, incomplete, incorrect Schedule K-1 or number of partners (Line I) on current year, one year prior to current year and two years prior to current year returns.

  12. When reviewing 1065 Schedule K-1 and the partnership has indicated that the number of Schedule K-1 is "1" and/or the Schedule K-1 attached to the return has 100% interest in the partnership then follow the instructions in IRM 3.11.15.16 (6), Line I - Number of Schedules K-1 (or Number of Partners).

  13. When the 1065 Schedule K-1 shows two names listed in the partner’s name and address section:

    • Correspond requesting separate Schedule K-1 using Letter 1355C or approved local correspondence procedures.

    • Notate the letter sent in the lower right margin of Form 1065.

    • Continue editing the return.

  14. Do not correspond for missing, incomplete, or incorrect Schedule K-1 for Form 1120S on the following types of returns:

    • Sec. 6020(b) returns

    • Examination Secured Substitute for Return (SFR) returns

    • Re-entry returns

    • Amended ("G" coded) returns

    • Payer is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

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

    • Returns filed for three or more years prior to current year.

      Note:

      Correspond for missing, incomplete or incorrect Schedule K-1 on current year, one year prior to current year and two years prior to current year returns.

  15. Do not correspond for missing Schedule K-1 for Form 1041 on the following types of returns:

    • Sec. 6020(b) returns

    • Examination Secured Substitute For Return (SFR) returns

    • Re-entry returns.

    • Amended ("G" coded) returns

    • Electing Small Business Trust (ESBT), Grantor Type Trust, or Bankruptcy Estate.

    • Payer is a foreign entity

    • Return is being reprocessed as an original return and has a Form 13596 attached

    • Section 642(i) Trust (Maintenance of Cemetery Property or Number of Gravesites)

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

    • Returns filed for three or more years prior to current year.

      Note:

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

  16. Form 1041, Non -Taxable Grantor Trust Filers are not required to file Schedule K-1. Do not process or detach any Schedule K-1 attached to a Non-taxable Grantor Trust. These are trusts that will be edited with a Fiduciary Code of 4 and a Trust Code of 3. See IRM 3.11.14.12.4 ,Grantor Trusts, for updated instructions concerning Grantor Trust returns.

Unprocessable Schedule K-1

  1. The criteria for unprocessable Schedule K-1 are as follows:

    • The tax period is more than 2 years prior to current year.

    • The payer information indicates a different entity than the parent entity.

    • The form is a 1065B Schedule K-1 or Schedule K-1 is attached to a Form 1065B

    • Schedule K-1 attached to Form 1041 for Non-taxable and Taxable Grantor Trust.

  2. Discontinue processing any Schedule K-1 if income reported is for a different tax year than the form.

Standard Schedule K-1

  1. To be processable, the Schedule K-1 must meet all of the following requirements:

    • Must be for the parent return it is attached to, e.g., if attached to Form 1065 the Schedule K-1 must be a 1065 Schedule K-1.

    • Schedule K-1 must contain the Payer and Payee’s name, address and SSN/EIN.

    • Each taxpayer’s information must be on a separate Schedule K-1 form.

      Exception:

      Do not correspond if a spouse’s (same last name) are filing a Schedule K-1 as "one Beneficiary, Partner, or Shareholder" in a "Trust, Partnership or Corporation" .

    • The amount of each partner, shareholder or beneficiary share cannot be combined as one total.

  2. If the Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found, research Integrated Data Retrieval System (IDRS). If unable to locate the missing information, and the Payee is not a foreign entity correspond requesting a valid Schedule K-1, using Form 3696. As of October 29, 2008 returns will no longer be sent back to taxpayer for missing information/signature per Chief Counsel opinion issued in September, 2008.

    Exception:

    There must be an EIN/SSN in the Payee entity area to research IDRS. If the EIN/SSN is not present, and only a name OR only an address is present, DO NOT research IDRS. There is not enough information to find the correct Payee. Either process the Schedule K-1 as it is or correspond for the missing information if the K-1’s are required.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. See Exhibit 3.0.101-1,1041 Schedule K-1 ,Exhibit 3.0.101-2, 1065 Schedule K-1 and/or Exhibit 3.0.101-3, 1120S Schedule K-1 ; for examples of standard Schedule K-1.

Substitute Schedule K-1

  1. Schedule K-1 can be submitted in substitute format (e.g., 2D Bar Code).

  2. Edit Section 16 to tell data transcribers where to put Payer information.

  3. To be processable, substitute Schedule K-1 must meet all of the following requirements:

    • Schedule K-1 must contain the Payer and Payee’s name, address and SSN/EIN.

    • Each taxpayer's information must be on a separate Schedule K-1 form.

      Exception:

      Do not correspond if a husband and wife (same last name) are filing a Schedule K-1 as "one Beneficiary, Partner or Shareholder" in a "a Trust, Partnership or Corporation" .

    • The amount of each partner, shareholder or beneficiary share cannot be combined as one total.

  4. If the substitute Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found research IDRS. If unable to locate the missing information, and the Payee is not a foreign entity correspond requesting a valid Schedule K-1, using Form 3696. As of October 29, returns will no longer be sent back to taxpayer for missing information/signature per Chief Counsel opinion issued in September, 2008.

    Exception:

    Do not correspond if Schedule K-1 is not required per IRM 3.0.101.5, Code and Edit.

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Non- Standard Schedule K-1

  1. Schedule K-1 can be submitted in non-standard format. A non-standard Schedule K-1 will be missing lines.

  2. Edit Section 16 to tell data transcribers where to put payor information.

  3. For all processable non-standard Schedule K-1, DO NOT black out the Forms Identification Number found in the upper right corner of the Schedule K-1.

  4. To be processable, non-standard Schedules K-1 must meet all of the following requirements:

    • Schedule K-1 must contain the Payer and Payee’s name, address and SSN/EIN.

    • Line items may be missing, however, line items that are present must be in the same order as those on the official form

    • Each taxpayer's information must be on a separate Schedule K-1 form.

      Exception:

      Do not correspond if a husband and wife (same last name) are filing a Schedule K-1 as "one Beneficiary, Partner or Shareholder" in a "Trust, Partnership or Corporation" .

    • The amount of each partner, shareholders or beneficiary share cannot be combined as one total.

  5. If the non-standard Schedule K-1 does not meet the requirements listed above, research the return and attachments, if information is not found research IDRS. If unable to locate the missing information, and the Payee is not a foreign entity correspond requesting a valid Schedule K-1, using Form 3696. As of October 29, returns will no longer be sent back to taxpayer for missing information/signature per Chief Counsel opinion issued in September, 2008.

    Exception:

    Do not correspond if Schedule K-1 is not required per IRM 3.0.101.5, Code and Edit.

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Loose Schedule K-1

  1. If loose Schedule K-1 are received in Code and Edit, research for the parent return DLN and proceed as follows:

    If parent return DLN and Schedule K-1 Then
    Is found and is for either current year, one year prior to current year, two years prior to current year or future year
    1. Write the parent DLN in the upper left of the Schedule K-1.

    2. If the DLN is for an electronic filed return File location Code(FLC) of DLN (first two digits) are 14, 16, 22, 35, 38, 41, 43, 52, 64, 65, 72, 75, 76, 92, 93 or 95) destroy the Schedule K-1 using Service Center Procedures.

    3. Place the Schedule K-1 in a gusset folder and label the folder "Loose Schedule K-1 " .

    4. Forward the folder, with the Schedule K-1 to Batching/Numbering to continue processing

    Is found and is for 3 or more years prior to current year
    1. Prepare an attachment slip requesting the Schedule K-1 be attached to the parent return, if the parent return is not an electronic filed DLN.

    2. If parent return is an electronic filed DLN, destroy the Schedule K-1 as classified waste.

    Is not found and is for either current, one year prior to current year, two years prior to current year or future year
    1. Hold in suspense and monitor weekly for parent return DLN.

      • Current Year: Hold until six weeks after parent return Processing Completion Date (PCD).

      • One Year Prior to Current Year: Hold until six weeks after parent return Processing Completion Date (PCD).

      • Two Years Prior to Current Year: Hold until six weeks after parent return Processing Completion Date (PCD).

      • Future Year: Hold for six weeks (research ERS suspense and Master File, weekly, for parent DLN).

    2. If parent DLN is found follow procedures above.

    3. If parent DLN is not found, route to Accounts Management as a loose schedule.

      Note:

      All Schedule K-1 need to be suspended for research of parent DLN for a minimum of six weeks.

    Is not found and is for 3 or more years prior to current year Destroy the Schedule K-1 in classified waste.

Loose Schedule K-1 for Electronic File Returns

  1. When a loose Schedule K-1 is received from Code and Edit, research to determine if the Schedule K-1 was filed electronically with the parent return.

    IF AND THEN
    All Schedule K-1 were filed with the parent return. Schedule K-1 are for current, one year prior to current year, two years prior to current year future or prior year. Destroy the Schedule K-1 as classified waste.
       
    1. Destroy any Schedule K-1, as classified waste, if it is a duplicate of an electronic filed Schedule K-1

    2. Place all other Schedule K-1 in a gusset folder and label the folder Loose Schedule K-1 . Make sure the parent DLN is clearly written in the upper left margin of the first Schedule K-1 for that parent DLN

    3. Forward the gusset folder, with the Schedules K-1 to Batching/Numbering to continue processing

      Schedule K-1 is for 3 or more years prior to current year Destroy Schedules K-1 as classified waste.

Schedule K-1 Received in Suspense/Rejects

  1. Schedule K-1 are form specific and should not be converted to match the parent return (i.e., Form 1065 must have a 1065 Schedule K-1, Form 1041 must have a 1041 Schedule K-1, or Form 1120S must have an 1120S Schedule K-1). If the Schedule does not match the parent form, do not send the Schedule K-1 for processing. Take the necessary steps to have them attached to the parent return.

  2. For all others do the following when correspondence is received in Error Resolution.

    1. Separate the Schedule K-1 from the rest of the correspondence.

    2. Write the parent return DLN in the upper left corner of the first Schedule K-1.

    3. Place the Schedule K-1 in a gusset folder and label the folder "Loose K-1" .

    4. Forward the folder, with the Schedule K-1, to Numbering/Batching to continue processing.

    5. If there are attachments (other than the actual Schedule K-1), attach them to the parent return.

    6. If there are attachments (other than the actual Schedule K-1), and you do not have the parent return, prepare an "attachment slip" requesting the documents be stapled the parent return.

    7. If the Schedules are for other than the above returns i.e., Form 1065B, Form 8865) leave attached to the parent return.

    8. If the Schedules are for other than the above returns (i.e., Form 1065B, Form 8865) and you do not have the parent return, prepare an attachment slip requesting the document be attached to the parent return.

Money Amounts Fields

  1. Do not bracket negative amounts.

  2. If taxpayer enters a negative amount in a positive only field, "X" the negative amount. See table below for positive only fields for each Schedule K-1.

    Note:

    Lines with multiple entries, edit the first line only

    Form 1065

    Line Number and Title
    Line 4 - Guaranteed Payments
    Line 12 - Section 179 deduction
     

    Form 1120S

    Line Number and Title
    Line 11 - Section 179 deduction
    Line 13 - Credits and Credit recapture
     

    Form 1041

    Line Number and Title
    Line 3 - Net Short-Term Capital Gain
    Line 4a - Net Long-Term Capital Gain
    Line 8 - Other Rental Income
     
  3. Amounts are transcribed in dollars only. If taxpayer enters a positive or negative $.49 or less, "X" the amount. If taxpayer enters a positive or negative $.50 to $.99, edit a $1 or -$1, respectively.

  4. A Schedule K-1 with zeros, blanks or dashes in the entire money amount T-Lines are considered a "Zero Balance Schedule K-1" and are valid, continue processing.

  5. Ogden Campus Only

    • Foreign documents – if a circled "U." is edited to the right of the name on name line 1, enter "U." in the 2nd TIN Notification field in Section 02. The "U " code is valid with File Location Code 60 (Ogden) only.

    • When transcribing money amounts, the equivalent U.S. cents amount should not be transcribed. Many Europeans currencies use commas for decimals and decimals for commas. Do not transcribe punctuation. Do not transcribe the last two numeric digits of a foreign money amount if that amount is preceded by either a decimal or a comma e.g., Deutsche Marks may be written as "DM 2.941,18" ; only 2941 should be transcribed).

Converting Schedule K-1 Forms

  1. Schedules K-1 are form specific and should not be converted to match the parent return, (i.e., Form 1065 must have a 1065 Schedule K-1, Form 1041 must have a 1041 Schedule K-1, and Form 1120S must have an 1120S Schedule K-1.

Non-Standard or Prior Year Format for Schedules K-1 through ISRP

  1. All current year, one year prior to current year and two years prior to current year Schedule K-1 on a prior year form must be reformatted to current year format. See Exhibit 3.0.101-8, Conversion Chart.

  2. If the Schedule K-1 is on other than current year format (may be either a prior year or non-standard form) and the lines cannot be numbered to agree with the current year Schedule K-1, correspond with the taxpayer.

Prior Year Format for Schedules K-1 through SCRIPS

  1. All current year, one year prior to current year and two years prior to current year Schedule K-1 on a prior year form must be reformatted to current year format. See Exhibit 3.0.101-8, Conversion Chart.

  2. If there is a bar code present on the prior year revision (2012 and prior for 1120S Schedule K-1, 1065 Schedule K-1 and 1041 Schedule K-1), using a marker, black out the straight lines on both sides of the bar code. See Figure 3.0.101-1, Black Out Bar Code On Prior Year Documents.

    Figure 3.0.101-1

    This is an Image: 33347033.gif
     

    Please click here for the text description of the image.

Moving Processable Schedule K-1

  1. Separate processable Schedule K-1 from the parent return.

  2. Staple the parent return, attachments, unprocessable Schedule K-1 and envelope together.

  3. Move the processable Schedule K-1, un-stapled, to the back of the parent return.

Numbering Parent Returns

  1. When numbering the parent return, the numbering function will:

    1. Separate Schedule K-1 from the parent return and make sure the first Schedule K-1 reflects the tax year ending of the parent return if other than calendar year.

    2. Assign and stamp a DLN on the parent return on the upper right side of document. Stamp this same DLN in the upper left corner (at least 2 inches from the edge) on the first Schedule K-1 for that parent. If there is no room in the upper margin stamp DLN in the right-side margin. Do Not use the Entity area. See Figure 3.0.101-2, DLN Stamp Location.

      Note:

      It is very important that the parent DLN is clearly stamped on the first Schedule K-1 as it is used during SCRIPS processing of the Schedule K-1.

    3. Stamp or write the parent block DLN on the gusset folder, place the parent returns in the folders and put the folders on the batch cart, in DLN order and forward to Data Conversion.

    4. Place the Schedule K-1 into box in parent DLN numbered order.

    5. Place parent transmittal in the same slot holding folder 1 and transfer the numbered parent documents and numbered Schedule K-1 to the final tech's work area.

      Note:

      Although the parent documents are in folders and Schedule K-1 are in a box, they both need to remain with the transmittal.

      Note:

      When your work is left in the final tech area, it is picked up by Quality Review (QA), when they complete their review, they transfer it to the final tech area. Then the work is checked, recorded and moved to Data Conversion.

      Figure 3.0.101-2

      This is an Image: 33347020.gif
       

      Please click here for the text description of the image.

Batching

  1. Line up Schedule K-1 boxes according to program (1041 Schedule K-1 with 1041 Schedule K-1 etc.) making sure to keep multiple boxes (1 of 2 and 2 of 2) together.

  2. It is very important to keep current and future year Schedule K-1 in different batches. The year is input once for each batch and it is repeated for each return in the batch.

    • Current = Current processing year minus 1

    • One Year Prior = Current processing year minus 2

    • Two Years Prior = Current processing year minus 3

    • Future = Current processing year (fiscal years)

  3. Input information in Batch Block Tracking System (BBTS) to create the new batch, and then record new batch #"1" .

  4. On the Schedule K-1 box line through the old parent program and batch, and write the new schedule K-1 program and batch as well as the cycle number of boxes (i.e., 1 of 1, 1 of 2, and 2 of 2).

  5. Document count will be 80 documents for each block. You can allow BBTS to default to the number of blocks or change the count to "1" .

  6. Box is ready for Pre Doc Prep Unit.

Loose Schedule K-1

  1. Batching will keep loose Schedule K-1 in a colored folder, and notate "Re-file" on the outside, route to Pre Doc Prep Unit.

Numbering Schedule K-1

  1. When Numbering the Schedule K-1 for ISRP processing, the Numbering function will:

    1. Assign and stamp a Schedule K-1 DLN on each processable Schedule K-1.

    2. Edit the two-digit year at the top right-hand corner of the Form 1332.

    3. Number the Schedule K-1 from 00–99 in upper right hand margin as normal.

    4. If there are more than 100 Schedules K-1 create a new block and write the parent DLN on the first Schedule K-1 of the new block in the upper left of the Schedule K-1.

    5. Count the number of parent return DLNs cross-referenced in the Schedule K-1 block and annotate the Form 1332 in the transaction code box with PF count.

    6. Place the Schedule K-1 in a separate gusset folder keeping the Schedule K-1 in parent return DLN order.

    Exception:

    Schedule K-1 that will be processed through SCRIPS will be sent to the Doc- Prep -Unit.

    Note:

    Ensure document "00" is blocked correctly, and there is information in Payer Section.

Preparing Schedule K-1 for Processing Through SCRIPS

  1. Prepare the Schedule K-1 folders or SCRIPS breaker sheets the same time the parent returns are numbered.

    1. Assign and stamp a DLN on the parent return.

    2. Stamp this same DLN in the upper left of the first Schedule K-1 from that parent return as a cross-reference.

    3. Stamp the parent return gusset folder and the Schedule K-1 gusset/blue folder or SCRIPS breaker sheet with the (FLC), tax class and document code then write the block number on both folders.

      Note:

      If Service Center is not using gusset/blue folders for the Schedule K-1, place a SCRIPS breaker sheet between each parent block DLN.

    4. Place Schedule K-1 (in folders or with SCRIPS breaker sheet) on batch cart or in stat boxes.

    5. If batch of work is for future year, notate on the Form 9382, Batch Transmittal "Future Year" .

    6. Forward to the Pre Doc prep Unit.

Schedule K-1 Processing Through ISRP

  1. This section provides instructions for entering data using the Integrated Submission and Remittance Processing System (ISRP).

Forms/Program Numbers/Tax Classes/Doc. Codes

  1. When transcribing Form 1332, ensure the Tax Class and Doc. Code matches the document type being transcribed.

    Return Type Program Code Tax Class/Doc Codes Parent
    Tax Class/Doc Code
    1041 Schedule K-1 44380 566 244
    1065 Schedule K-1 44381 565 265
    1120S Schedule K-1 44382 567 316
  2. If Tax Class or Document Code is different, contact lead or supervisor.

Document Blocking

  1. All documents in any given block should be of the same type, (i.e. all 1041 Schedule K-1 present in the same block). If documents are mixed, consult your supervisor.

Specific Instructions for Entry of Data in ISRP

  1. This section provides specific instructions for entering data.

Required Sections
  1. Original Entry (OE)– Section 01 and 06 are always required.

  2. Key Verification (KV)– Sections 01 and 06 can be key verified at management's discretion.

Schedule K-1 Name and Address Information
  1. Form 1041 Schedule K-1

    • Payee (Sections 01 and 02)-- Transcribe name(s) and address information from Part II; the box labeled "Beneficiary's name, address, city, state and ZIP Code" .

    • Payer (Section 16) -- Transcribe Payer Name Line 1 from Part I; the box labeled "Estate’s or trust’s name" . Transcribe Payer Name Line 2 and address information from the box labeled "Fiduciary's name, address, city, state and ZIP code" .

  2. Form 1065 Schedule K-1

    • Payee (Sections 01 and 02) -- Transcribe name(s) and address information from Part II; the box labeled "Partnership's name, address, city, state and ZIP code" .

    • Payer (Section 16) -- Transcribe name(s) and address information from Part I; the box labeled" Partner's name, address, city, state and ZIP code" .

  3. Form 1120S Schedule K-1

    • Payee (Sections 01 and 02) -- Transcribe name(s) and address information from Part II; the box labeled "Shareholder's name, address, city, state and ZIP code" .

    • Payer (Section 16) -- Transcribe name(s) and address information from Part I; the box labeled "Corporation's name, address, city, state and ZIP code" .

Name Entries - BMF and IMF
  1. Except as noted below, enter the information exactly as shown with as many characters as permitted and then press <Enter>. Refer to Exhibit 3.0.101-4, Standard Abbreviations ,for a list of standard abbreviations. DO NOT ENTER THE" #" SIGN.

    Example: Enter as:
    (a) Iris Frank IRIS FRANK
    (b) Estate of Lilly Family ESTATE OF LILLY FAMILY
  2. Space before and after an ampersand (&). In the Payer name line enter "and" or "&" as shown.

    Example: Enter as:
    (1) Jim Lime and Joe Doe, PTRS JIM LIME AND JOE DOE PTRS
    (2) Example: J. Elm & R. Ash, Inc J ELM & R ASH INC
  3. Omit punctuation, except for hyphens (-). The hyphen will be keyed using the MINUS (-) Field Termination key.

    Example: Enter as:
    (a) O'Tulare OTULARE
    (b) Maple-Pecan MAPLE-PECAN
  4. Space within a true last name if shown:

    Example: Enter as:
    De Pine DE PINE
  5. Do not enter the Partner number if present.

    Example: Enter as:
    Example: Jon Oak Partner #1 Enter as: JON OAK
  6. If account number is present enter as shown

    Example: Enter as:
    Harry Maple Account # 14675 HARRY MAPLE ACCT 14675
  7. If the In Care of (%) falls in the middle of name line 2 enter as shown

    Example: Enter as:
    John Oak JOHN OAK
    Grandchildren's Trust GRANDCHILDRENS TRUST
    FBO Alexis Maple % Mary FBO ALEXIS MAPLE %
    Oak TREE MARY OAK TREE
  8. In the second name line change "and" to "&" .

    • Roger Banana % Amalgamated Trucking and Moving Corporation

      Entry Name Line Placement
      ROGER BANANA (First Name Line)
      % AMALGAMATED TRUCKING & MOVING CORP (Second Name Line)
  9. IMF Only

    • Do not enter titles such as MR., MRS, CAPT., DR, REV, etc. in any individual's name in Section 01.

      Exception:

      Enter "MRS" or "MR" if it precedes a masculine name, initials or a first name which could be masculine or feminine.

    • If the name appears with the last name first, and the first name last, enter the first name first and the last name last.

    Example: Enter as:
    Birch, John A JOHN A BIRCH
  10. BMF Only

    • Abbreviate name information only when it is abbreviated on the document, except for standard abbreviations: CO for company, CORP. for corporation and INC. for incorporated. (See Exhibit 3.0.101-4, Standard Abbreviations, for a list of valid abbreviations)

    • For the "¢" symbol enter "CENT " .

    • For the "+" symbol enter "PLUS"

    • For the "@" symbol enter "AT"

    • For the "$" symbol enter "DOLLAR"

    • For ".com" enter a space instead of the "."

    • If initials are DBA, CPA, LLC, MD, PC, etc. you do not need spaces or periods. The initials must be run together.

    • If a city or state is shown as part of the first name line, enter the complete name of the city or state, no abbreviations.

      Example: Enter as:
      First Bank of GA FIRST BANK OF GEORGIA
    • If the name begins with the word "the" and has more than one word following "the" DO NOT enter "the" .

      Example: Enter as:
      The First National Bank FIRST NATIONAL BANK
    • If the name begins with the word "the" and has only one word following "the" , enter "the" .

      Example: Enter as:
      The Hideaway THE HIDEAWAY
Address Elements
  1. Enter standard abbreviations for street abbreviations as shown in Exhibit 3.0.101-5, Street Address Abbreviations.

    • If the address begins with "PO BOX" , press <F11> in place of "PO BOX" .

      Note:

      You do not need to space between pressing <F11> and entering the box number.

    • If the address is missing or illegible, enter "Z" and press <Enter>.

  2. Enter the Major City Code if the city is in the designated district. For a list of the Major City Codes see Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

  3. Enter standard abbreviations for states and territories as shown in Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

  4. Enter all city, state and ZIP Code elements if present. If the city is missing or illegible, enter "ZZZ" and press <Enter>. If the state or ZIP Code is missing leave the field blank.

  5. For APO, DPO and FPO instructions see IRM 3.24.38, ISRP System, BMF General Instructions.

  6. If address field overflows, enter as many characters as permitted for the field, using the standard abbreviations when possible and then press <Enter>. DO NOT ENTER THE # SIGN.

  7. If two complete addresses (address, city, state, and ZIP) are present take the following actions:

    If Then
    1. One of the addresses is a PO Box Enter the PO Box, city, state, and ZIP.
    2. Both are street addresses Enter the first address, city, state and ZIP.
  8. If two addresses with the same city, state and ZIP are present take the following action:

    If Then
    1. One of the addresses is a PO Box Enter the PO Box, city state, and ZIP.
    2. Both are street addresses Enter the first address, city, state and ZIP.
Foreign Address
  1. The foreign street address should be transcribed in the NAME2 field (2nd Name Line, Section 01). (See Exhibit 3.0.101-4, Standard Abbreviations and Exhibit 3.0.101-5, Street Address Abbreviations, for standard abbreviations)

  2. The IRM 3.24.38, ISRP System, BMF General Instructions, general address rules apply for this field except that the hyphen (-), slash (/) and pound sign (#) are allowed.

  3. This field should NOT be used for "In Care Of" information. Omit any "In Care Of" information.

  4. The foreign city, state, territory or province, and mailing code, if present, should be transcribed in the ADDR field (Street Address, Section 02). Spell out the city, state, territory or province, if abbreviated. (SeeExhibit 3.0.101-11 through Exhibit 3.0.101-15).

    Note:

    If the city, state, territory or province name exceeds 32 spaces (leave the last three positions for a space and the postal code), input only the first 32 characters.

  5. The foreign country code should be transcribed in the CITY field. If it can not be determined enter "XX." Spell out the country, if abbreviated by the taxpayer. (SeeExhibit 3.0.101-11 through Exhibit 3.0.101-15)

  6. Always enter a period (.) in the first position of the ST field (State).

Amount Fields

  1. Amount box field numbers correspond to the preprinted number on each document, except when changed by Code and Edit.

  2. On other than standard forms, the amount box field numbers will be edited.

  3. If an amount is illegible, or more than one amount is entered in one amount box, press the <F12> key on the keyboard. It may or may not be necessary to press <Enter>.

  4. If the taxpayer enters a negative amount in a positive only field, enter "0" (zero). Negative amounts can be identified by a minus sign or being enclosed in parentheses.

  5. If the taxpayer enters a positive or negative $.49 or less, enter a zero. If the taxpayer enters a positive or negative $.50 to $.99, enter a $1 or -$1, respectively.

  6. If the taxpayer files a state Schedule K-1, and it has a column with the federal information, transcribe the information form the federal column.

  7. All fields will be dollars only. A space and a dollar sign following the prompt (i.e., LN2 $) denotes dollars only fields.

  8. Ogden Campus Only

    • Foreign documents - if a circled "U" is edited to the right of the name on name line 1, enter U in the 2nd TIN Notification field in Section 02. The "U" code is valid with File Location Code 60 only.

    • When transcribing money amounts, the equivalent U.S. cents amount (e.g. Euro Dollars.) should not be transcribed. Many Europeans currencies use commas for decimals and decimals for commas. Do not transcribe punctuation. Do not transcribe the last two numerics of a foreign money amount if that amount is preceded by either a decimal or a comma. (e.g. Deutsche Marks may be written as "DM 2.941,18" ; only 2941 should be transcribed).

MUST ENTER Fields

  1. Some fields require entry of data. These fields are referred to as MUST ENTER fields. They are indicated in the Transcription Operation Sheets by the presence of stars (★★★★★★) See IRM 3.24.38, ISRP System, BMF General Instructions, for procedures related to MUST ENTER fields.

ISRP Transcription Sheets

  1. The following tables represent specific data entry procedures.

Block Header Data Entry Form 1332
  1. The following table contains specific data entry procedures for Block Header Data Entry Form 1332.

    Elem No. Data Element Name Prompt Fld Term. Instructions
    (1) SC Block Control ABC <ENTER> The screen displays the ABC that was entered in the End of Phrase (EOP) Dialog box. It cannot be changed.
    (2) Block DLN DLN <ENTER> Enter the first 11 digits as shown:
    1. Form 1332- from the "Document Locator No" . box.

    2. The KV EOP will verify the DLN from the first document of the block.

    (3) Batch Number BATCH <ENTER> Enter the batch number as follows:
    1. Form 1332 - from the Batch Control Number box.

    2. If not present, secure the number from the batch sheet.

    (4) Document Count COUNT <ENTER> Enter the document count as follows:
    1. Form 1332- the circled serial number. If a full block (100 documents) or if a number is not circled, enter 100.

    (5) Credit Amount CR <ENTER> No entry required. Press <Enter> only.
    (6) Debit Amount DB <ENTER> No entry required. Press <Enter> only.
    (7) Tax Year Indicator TRCODE <ENTER> Enter the last two digits of the tax year as follows:
    1. Form 1332 - two digits from the upper right corner.

    2. Always present for Schedule K-1.

    (8) Account Type Code
    Amend Doc Code
    Count Code
    IRPACC <ENTER>
    ★★★★★★
    Enter the alpha-numeric digits from the "Trans. Code" box. Do not enter a hyphen (-), if present.
    (9) MFT Code MFT <ENTER> Press <Enter> only.
    (10) Secondary Amount SECAMT <ENTER> No entry required. Press <Enter> only.
    (11) Source Code SOURCE <ENTER> No entry required. Press <Enter> only.
    (12) Year Digit YEAR <ENTER> No entry required. Press <Enter> only.
Section 01 ALL DOCUMENTS
  1. The following table contains specific data entry procedures for Section 01 All Documents.

    Elem No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT:   Section "01" will always be generated. No entry is required.
    (2) DLN Serial Number SER#   Enter the last two digits of the 13-digit DLN from the upper portion of the form.
    (3) TIN of Payee TIN <ENTER> Enter the nine digit TIN.
    1. If not present, press <Enter> only.

    2. If less than nine digits, enter the digits shown followed by period (s)

    3. If more than nine digits, enter the first eight followed by a period.

    4. If two or more TINs are shown, enter 9 periods.

    (4) Delete Indicator DELE <ENTER> Enter a "D" in this field and end the document whenever it is determined that a document is mis-blocked.

    Example:

    1120S Schedule K-1 mixed with a block of 1041 Schedule K-1.

    Caution:

    DO NOT REMOVE THE DOCUMENT FROM THE BLOCK.

    (5) First Name Line NAME1 <ENTER> Enter the full name as shown from the following area:
    • 1041 Schedule K-1- Beneficiary’s name, address, city, state and ZIP code.

    • 1065 Schedule K-1- Partner’s name, address, city, state and ZIP code.

    • 1120S Schedule K-1- Shareholder’s name, address, city, state and ZIP code.

    (6) Second Name Line NAME2 <ENTER> Enter Second Name Line items as follows:
    1. For in care of names, enter the percent sign (%), space, and the name.

    2. See special instructions in IRM 3.0.101.13.3.3.

    3. Use this field for a foreign street address.

    4. See IRM 3.0.101.13.3.4.1 for Foreign Address procedures.

Section 02 ALL DOCUMENTS
  1. The following table contains specific data entry procedures for Section 02 all documents.

    Elem. No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT: <ENTER> <Enter> If already present on the screen; otherwise enter "02" always.

    Note:

    See IRM 3.0.101.13.3.4 for address and foreign address procedures

    (2) Street Address ADDR <ENTER> Enter the street from the following area:
    • 1041 Schedule K-1 - Beneficiary’s name, address, city, state and ZIP code.

    • 1065 Schedule K-1 - Partner’s name, address, city, state and ZIP code.

    • 1120S Schedule K-1- Shareholder’s name, address, city, state and ZIP Code.

    1. If the address is missing or illegible enter "Z."

    2. Use this field for foreign city, state or province, and mailing code.

    (3) City CITY <ENTER> Enter the city from the appropriate entity area.
    1. Use Major City Codes if appropriate.

    2. If the city is missing, illegible, enter "ZZZ" and Press <Enter>.

    3. For foreign addresses see IRM 3.0.101.13.3.4.1.

    (4) State Code ST <ENTER> Enter the state code.
    1. Press <Enter> only if a Major City Code was used.

    2. If foreign address, use the first position of this field for the period (.).

    (5) ZIP Code ZIP <ENTER> Enter the ZIP Code.
    (6) Payer Account Number Payee PACCT# <ENTER> Press <Enter> only.
    (7) 2nd TIN Notification 2NDTIN <ENTER> OSPC only. If a circled "U" is edited to the right of the name on name line 1, enter "U" in the 2nd TIN Notification field in Section 02. Enter a "1" if the 2nd TIN Not. box is checked at the bottom of the form. Otherwise, leave blank.
    (8) Amended Doc. Code ADC <ENTER> Enter a "G" if the "Amended K-1" box is marked. The box is located above Part III.
Section 06 1041 Schedule K-1 (Program 44380)
  1. The following table contains specific data entry procedures for Section 06 for 1041 Schedule K-1.

    Elem. No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT: <ENTER> Press <Enter> if already present on the screen; otherwise enter "06" always.
    (2) Interest Income LN1 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 1.
    (3) Ordinary Dividends LN2A $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 2a.
    (4) Net Short-Term Capital Gain LN3 $ <ENTER>
    ★★★★★★
    Enter the amount from line 3.
    (5) Long Term Capital Gain LN 4A $ <ENTER>
    ★★★★★★
    Enter the amount from line 4a
    (6) Other Portfolio Income and non-business income LN5 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 5.
    (7) Ordinary Business Income LN6 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 6.
    (8) Net Rental Real Estate Income LN7 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 7.
    (9) Other Rental Income LN8 $ <ENTER>
    ★★★★★★
    Enter the amount from line 8
    (10) Line 14 Alpha Designated 14 ALPHA <ENTER>
    ★★★★★★
    Enter valid character to the left of line 14. Valid characters are (A-Z),(*) or blank
    (11) Other Information LN14 $ <ENTER>
    ★★★★★★
    Enter the amount from line 14. (First Line)
    (12) Beginning Tax Period BEGTAXPR <ENTER>
    ★★★★★★
    Enter the Beginning Tax Period date in YYYYMM format from the Tax Year Beginning Date Box at the top of form.
    (13) Ending Tax Period ENDTAXPR <ENTER>
    ★★★★★★
    Enter the Ending Tax Period date in YYYYMM format from the Tax Year Ending Date Box at the top of form.
Section 06 1065 Schedule K-1 (Program 44381)
  1. The following table contains specific data entry procedures for Section 06 for 1065 Schedule K–1.

    Elem. No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT: <ENTER> Press <Enter> if already present on the screen; otherwise enter "06" always.
    (2) Line I2 Checkbox I2 CKBX <ENTER> if the box is checked, enter an X, otherwise leave blank
    (3) Part II Line J Capital Beginning % LJ BEG <ENTER>
    ★★★★★★
    Enter the percentage from Line J, Beginning.
    (4) Line J Capital Ending % LJ END <ENTER>
    ★★★★★★
    Enter the percentage from Line J, Ending.
    (5) Ordinary Business Income(Loss) LN1 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 1.
    (6) Net Rental Real Estate Income(Loss) LN2 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from Line 2.
    (7) from Other Rental Activities Income(Loss) LN3 $ <ENTER>
    MINUS(-)
    ★★★★★★
    Enter the amount from line 3.
    (8) Guaranteed Payments LN4 $ <ENTER>
    ★★★★★★
    Enter the amount from line 4.
    (9) Interest Income LN5 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 5.
    (10) Ordinary Dividends LN6A <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 6a
    (11) Royalties. LN7 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 7.
    (12) Net Short-Term Capital Gain(Loss) LN8 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 8.
    (13) Net Long-Term Capital Gain(Loss) LN9A $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 9a.
    (14) Section 179 Deduction LN12 $ <ENTER>
    ★★★★★★
    Enter the amount from line 12.
    (15) Beginning Tax Period BEGTAXPR <ENTER>
    ★★★★★★
    Enter the Beginning Tax Period date in YYYYMM format from the Tax Year Beginning Date Box at the top of form.
    (16) Ending Tax Period ENDTAXPR <ENTER>
    ★★★★★★
    Enter the Ending Tax Period date in YYYYMM format from the Tax Year Ending Date Box at the top of form.
Section 06 1120S Schedule K-1 (Program 44382)
  1. The following table contains specific data entry procedures for Section 06 for 1120S Schedule K-1.

    Elem. No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT: <ENTER> Press <Enter> if already present on the screen; otherwise enter "06" always.
    (2) Part II Line F % of stock Ownership LF % <ENTER>
    ★★★★★★
    Enter the percentage from line F, Part II
    (3) Ordinary Business Income(Loss) LN1 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 1.
    (4) Net Rental Real Estate Income (Loss) LN2 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 2.
    (5) Other Net Rental Income (Loss) LN3 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 3.
    (6) Interest Income LN4 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 4.
    (7) Ordinary Dividends LN5A $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 5a.
    (8) Royalties LN6 $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 6.
    (9) Net Short-Term Capital Gain(Loss) LN7$ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 7.
    (10) Net Long-Term Capital Gain(Loss) LN8A $ <ENTER>
    MINUS (-)
    ★★★★★★
    Enter the amount from line 8a.
    (11) Section 179 Deduction LN11 $ <ENTER>
    ★★★★★★
    Enter the amount from line 11.
    (12) Line 13 Alpha Designator 13 ALPHA <ENTER>
    ★★★★★★
    Enter the character from the left of line 13, if shown.
    (13) Credits LN13 $ <ENTER>
    ★★★★★★
    Enter the amount from line 13.( First Line)
    (14) Beginning Tax Period BEGTAXPR <ENTER>
    ★★★★★★
    Enter the Beginning Tax Period date in YYYYMM format from the Tax Year Beginning Date Box at the top of form.
    (15) Ending Tax Period ENDTAXPR <ENTER>
    ★★★★★★
    Enter the Ending Tax Period date in YYYYMM format from the Tax Year Ending Date Box at the top of form.
Section 16 ALL DOCUMENTS
  1. Only enter section 16 on documents with a new parent DLN present.

    Elem. No. Data Element Name Prompt Fld. Term. Instructions
    (1) Section Number SECT: <ENTER> Press <Enter> if already present on the screen; otherwise enter "16" always.
    (2) Payer Name Line 1 NAME1 <ENTER> Enter the Payer Name Line 1 from the following area:
    • 1041 Schedule K-1 - Estate’s or trust’s name.

    • 1065 Schedule K-1 - Partnership's name, address, city, state and ZIP Code.

    • 1120S Schedule K-1- Corporation's name, address, city, state and ZIP Code.

    1. If illegible or not present, press <Enter>.

    (3) Payer Name Line 2 NAME2 <ENTER> Enter the Payer Name Line 2 shown on the form.
    1. If illegible or not present, press <Enter>.

      Note:

      Foreign addresses should NOT be entered in this section.

    2. If foreign address is present, enter "Z" and press <Enter>.

    (4) Payer Street Address ADDR <ENTER> Enter the Payer Street Address shown on the form.
    1. See IRM 3.0.101.13.3.4 for address procedures.

    2. If the address is missing or illegible enter "Z" and press <Enter>.

    (5) Payer City CITY <ENTER> Enter the Payer City shown on the form.
    1. Use Major City Code if appropriate.

    2. If the city is missing or illegible enter "ZZZ" and press <Enter>.

    (6) Payer State ST <ENTER> Enter the Payer State shown on the form.
    1. Press <Enter> only if a Major City Code was used.

    2. If illegible or not present, press <Enter>.

    (7) Payer ZIP ZIP <ENTER> Enter the Payer ZIP Code shown on the form.
    1. If illegible or not present, press <Enter>.

    (8) TIN Group TIN <ENTER> Enter the 9 digit Payer Identifier TIN shown on the form as follows:
    1. If not, present, press <Enter> only.

    2. If less than nine digits, enter the digits shown followed by enough period (s) to fill the field.

    3. If more than nine digits, enter the first eight followed by a period.

    4. If two are more TINs are shown, enter 9 periods.

    5. For all foreign documents, where the TIN is missing, illegible, or incomplete, enter nine "9 " (s).

    (9) Payer DLN PDLN <ENTER> Press <Enter> only.
    (10) Foreign Country Code FORE <ENTER> The two character alpha code will be located immediately below the Payer Name.

Schedule K-1 Pre-Document Preparation

  1. When preparing Schedule K-1 for the scanner, the most critical area for repair is the right side of the Schedule K-1.

  2. The Pre Doc Prep function is responsible for the following:

    1. Removing staples from the Schedule K-1, if present

    2. Ensure all pages are oriented in the correct direction to be scanned.

    3. Remove all Schedule K-1, with tax periods 2015 or prior, write the parent DLN on the top left corner if not already present, and return back to the Code and Edit function.

    4. Remove all attachments, write the parent DLN on the upper left corner, and give to lead or manager

    5. ALL damage on the right side must be repaired prior to sending to the scanner function.

    6. Repair any rips, tears or holes prior to sending to the scanner function and make sure document is laid out flat for scanning

    7. If Code and Edit has put a slash (/) or "X" through the entire form, pull the form, write the parent DLN on the top left corner if not already present, and return back to the Code and Edit function.

Loose Schedule K-1

  1. Loose Schedule K-1 will be received from Batching in a colored folder.

  2. Sort by document type, then sort each document type by future year, current year, one year prior to current year and two years prior to current year.

    • Batch

    • Follow all Pre Doc Prep Procedures in IRM 3.0.101.14.

    • Place in blue gusset folder and label the box as "RE-FILE "

  3. After preparing Schedule K-1, route to SCRIPS.

Duplex Schedules K-1

  1. Duplex (Carbon Copy) Schedule K-1, cannot be processed through the SCRIPS System. When received take the following actions:

    1. Photocopy the duplex Schedule K-1,

    2. Staple the duplex Schedule K-1 together by parent EIN.

    3. Place stapled duplex Schedule K-1 in a folder and place in front of the block.

    4. Place photocopied Schedule K-1 in the block to be processed through SCRIPS.

Schedule K-1 Processing Through SCRIPS

  1. This section provides instructions for entering data using the Service Center Recognition/Image Processing System (SCRIPS).

Forms/Program Numbers/Tax Classes/Doc. Codes

  1. The program codes listed below should be used when entering Schedule K-1 through SCRIPS.

    Return Type Program Number Tax Class/Doc Code Parent
    Tax Class/Doc Code
    1041 Schedule K-1 44386 566 244, 236 and 254
    1065 Schedule K-1 44387 565 265 and 254
    1120S Schedule K-1 44388 567 316 and 354

    Note:

    SCRIPS allows management to override the established Unit Task Priority.

  2. The input year will be determined from the tax year ending present on the form. If the tax year ending is blank, input the form year.

Work Prioritization
  1. The system will automatically set the Unit Task Prioritization using the following criteria:

    Program Number Return Type Description based on cycle
    44388 1120S Schedule K-1 Prior (by cycle, then batch #), then Current Cycle (by batch #)
    44386 1041 Schedule K-1 Prior (by cycle, then batch #), then Current Cycle (by batch #)
    44387 1065 Schedule K-1 Prior (by cycle, then batch #), then Current Cycle (by batch #)
    44388 1120S Schedule K-1 Future Cycle (by cycle then batch #)
    44386 1041 Schedule K-1 Future Cycle (by cycle then batch #)
    44387 1065 Schedule K-1 Future Cycle (by cycle then batch #)
  2. The system will automatically re-prioritize the work every time the cycle on the system changes.

  3. 1120S Schedule K-1 must be batched and processed on cycle. They cannot be shelved.

  4. 1065 Schedule K-1 and 1041 Schedule K-1 can be shelved. However, they must be processed by Program Completion Date (PCD).

Scanner Reject

  1. The scanner will print a one-character reject code to the left of the DLN area on any form that is routed to the Reject Bin. The rejected form will then be sent back to Batching.

    Note:

    Prior to sending to Batching, write the parent DLN in the upper left margin of the Schedule K-1.

    Form Reject Code Description
    44386 (1041 Schedule K-1)
    44387 (1065 Schedule K-1)
    44388 (1120S Schedule K-1)
    M Mixed document type within a unit-of-work. (e.g. 1041 Schedule K-1 within a 1065 Schedule K-1 unit-of-work)

Loose Schedule K-1

  1. Loose Schedule K-1 will be received in a colored folder.

  2. After scanning, the SCRIPS operators will place back in blue gusset folders labeled "RE-FILE" and send to Post Doc Prep.

Workstation Operations

  1. Refer to the IRM 3.41.274,General Instructions for Processing via SCRIPS, for a description of these and other items:

    • Keyboard Layout

    • Login/Logoff

    • Operator Statistics

    • Post-to-Close

    • Interrupt/Resume

    • Suspend/Resume

    • Status Line

  2. Whenever the IRM 3.41.274,, General Instructions for Processing via SCRIPS, and this IRM conflict, this IRM will take precedence.

Form Identification (FI) Function

  1. The scanner will not recognize all documents. These documents are called non-conforming forms. They range from photocopies of official documents, that might be official forms but for some reason do not meet the official specification for measurement, homemade documents of varying formats, to non-Schedule K-1 forms. The FI function allows the workstation operator to identify the form to avoid rework at the scanner. The FI screen has an image on the left and an entry template on the right. The entry template permits the operator to select what form type the image is, or to delete a single image or an entire submission from further processing. The menus shown on the screen will vary depending on how your supervisor profiled you. For instance, if you are not profiled for the FI function, this option will not be present on the OE Function Menu.

FI QUICK START
  1. From the Workstation Main Menu, select Original Entry (OE).

  2. From the Original Entry (OE) Image Selection Menu, select the Forms Identification Selection Menu. See Figure 3.0.101-3.

    Figure 3.0.101-3

    This is an Image: 33347040.gif
     

    Please click here for the text description of the image.

  3. From the Forms Identification Selection Menu, Select 1041 K-1 Form Identification, 1065 K-1 Form Identification or 1120S K-1 Form Identification.

  4. The first group of images from a Unit of Work (UW) requiring identification opens.

  5. If you need to stop FI:

    • Press the <Ctrl>–<P> key combination (post-to-close) to end FI after completing the current UW.

    • Press the <Ctrl>-<P> followed by <F9> to suspend the block immediately.

    Note:

    For a complete list of key functions, see Exhibit 3.0.101-10, Key Function Table.

  6. The system returns you to the Schedule K-1 Forms Identification Selection Menu when you complete the last image in the UW.

FI Processing
  1. If you can identify the image, make the appropriate letter or number selection from the form template. Depending on the form type selected (1041, 1065, or 1120S), one of the following Menus will appear:

    1041 K-1 Form Type
    1 - Current Year 1041 K-1 (661117)
    2 - Prior Year 1041 K-1 (611113)
    3 - Breaker Sheet (F1332)
    X - Remove

    Note:

    If you receive an unrecognized Breaker Sheet (Form 1332), press <X> to remove the document from further processing.

    The <Enter> key must be pressed to complete a selection.

  2. If you cannot identify the image, press <F9> to suspend the document for research. Some documents are scanned backwards. These will require research to determine exactly which document type they are. If the image is unprocessable, press <X> to remove the document from further processing.

  3. To end a session, press the <Ctrl>-<P> key combination to set post-to-close. The system returns you to the Schedule K-1 Forms Identification Selection Menu when you complete the last image in the UW.

Original Entry (OE) Function

  1. The OE function is used to manually key enter data from both scanned images and from paper documents. The menus shown on the screen will vary depending on how your supervisor profiled you. For instance, if you are not profiled for the OE function, this option will be grayed on the Workstation Main Menu.

OE From Image QUICK START
  1. From the Workstation Main Menu, select Original Entry (OE).

  2. From the Original Entry (OE) Selection Menu, select OE Image Selection Menu.

  3. From the OE Image Selection Menu, select one of the following:

    • All K-1s OE Image

    • 1041 K-1 OE Image

    • 1065 K-1 OE Image

    • 1120S K-1 OE Image

  4. The first whole unit-of-work, or first individual document (because an entire unit-of-work may not require OE from image) requiring OE opens. Refer to IRM 3.0.101.15.15.1 through 3.0.101.15.15.7.3 when entering data.

  5. If an incorrect option was selected, press the <Ctrl>-<P> key combination and then <F9> to suspend this unit of work. Notify your supervisor.

  6. If you are not on the last field after entering data, press the <F6> key to release a document and display the next template.

  7. Press the <Ctrl>-<P> key combination (post-to-close) to end OE from Image.

  8. The system will return you to the Original Entry (OE) Selection Menu when you complete the last document in the current unit-of-work.

OE From Image Processing
  1. The Status Line at the bottom of the screen displays the following information:

    1. The Program field shows one of the following: "44386" , "44387" , or "44388" for Schedule K-1 documents.

    2. The DLN field shows the DLN of the document being displayed.

    3. The Document field shows the relative count of the document. For example, if it is the first document in a unit-of-work that contains 90 documents, the Document field shows a count of "1 of 90" .

    4. The Num field shows either "Nu" or blank, indicates a numeric field, or if the shift key is pressed in an alpha/numeric field. See Figure 3.0.101-4, Num Field Location.

    Figure 3.0.101-4

    This is an Image: 33347041.gif
     

    Please click here for the text description of the image.

  2. In OE from image, you manually enter information into the template using a scanned image of the return as the source.

OE From paper QUICK START
  1. From the Workstation Main Menu, select Original Entry (OE).

  2. From the Original Entry (OE) Selection Menu, select OE Paper Selection Menu.

  3. From the OE Paper Selection Menu, select one of the following:

    • 1041 K-1 OE Paper

    • 1065 K-1 OE Paper

    • 1120S K-1 OE Paper

      Note:

      The program printed in the middle of the BBTS Batch Transmittal will indicate which form you are inputting. (44386=1041 K-1, 44387=1065 K-1 or 44388 =1120S K-1).

  4. If an incorrect option was selected press <Esc>, you will be returned to OE paper select menu.

OE From Paper Processing
  1. In OE from Paper, the workstation operators will manually enter the information into the system and eliminate all transport processing.

  2. The reason a document is processed using OE Paper is because it cannot be scanned, (e.g. multiple pages, writing too light, substitute forms, half pages, etc.).

  3. These documents should be batched separately and the BBTS Transmittal clearly marked as "OE Paper" .

  4. Once the Workstation Operator has successfully completed steps 1 through 3 above, they will get a window labeled "Schedule K-1 Block Input" . They will input the following information:

    • BBTS Batch ID = this is the four digit Batch Number located in the upper right corner of the BBTS Transmittal.

    • Tax Year = this is two digits and will be taken from the first document in the block and will be either the year in the Tax Period Ending area of the document or the form year, if the tax period ending is missing.

    • DLN = this will be taken from the first document in the block and MUST contain 14 digits for example (84566102790000).

  5. The appropriate prompt for the first required field will be displayed for the first document in the block. You will input the information from the document and when finished you will press<F6> to get the next document.

  6. You will be asked for the sequence number (located in the 12th and 13th position of the DLN) for each additional document input (01, 02, 03, etc.). A sequence number cannot be skipped or repeated.

  7. Once all the documents have been input you will press the <Esc> and <F8> keys to end OE from paper or press <Ctrl>-<P> (Post-to-Close) while entering, but before releasing the last document in the UW.

  8. Note: The system will return you to the Original Entry (OE) Selection Menu if you used <Ctrl>-<P> (Post-to-Close) on the last document in the UW.

  9. The Status Line at the bottom of the monitor screen contains the following information:

    • The Program field shows 44386, 44387 or 44388 for Schedule K-1 documents.

    • The DLN field shows the DLN of the current document.

    • The Document field shows the relative count of the document. The field will show "1 of 1" if this is the first document in the block. As each subsequent paper document is processed this will increase to "2 of 2" , "3 of 3" , etc.

    • The Num Field either shows "Nu" or is blank, depending on whether you have activated the embedded numeric keypad or not.

Image and Paper Processing Releasing a Unit-of-Work in Original Entry (OE)
  1. For OE Image, when you release the last document in a unit-of-work, the UW is released.

    1. If <Ctrl>-<P> has been pressed before releasing the UW, the OE Selection Menu will open.

    2. If <Ctrl>-<P> has not been pressed, another UW will open.

  2. For OE Paper, press the <Esc> then <F8> key to release (close) the UW.

    1. If you answer "NO" to the question window that opens, a template appears for additional Schedule K-1 entry.

    2. If you answer "YES" to the question window, and have not issued a post-to-close (<Ctrl>-<P>), a Schedule K-1 template appears to begin a new unit-of-work.

    3. If you answer "YES" to the question window, and have issued a post-to-close (<Ctrl>-<P>), the OE Selection Menu will open.

Selecting a Specific Unit-of-Work in Original Entry (OE)
  1. A specific Schedule K-1 unit-of-work may be selected for OE by following these steps:

    1. From the OE Selection Menu, enter the numeric code for OE Select Block function, The menus shown on the screen will vary depending on how your supervisor profiled you. For instance, if you are not profiled for the OE function, this option will not display on the menu.

    2. If an incorrect option is selected from the OE Selection menu, press the <Ctrl>-<P> key combination and then <F9> to suspend the unit of work.

    3. From the Enter Block/UW window, enter the first 11-digits of the DLN from the Schedule K-1.

    4. Press the <Enter> key.

    5. The designated Schedule K-1 opens. Enter data using instructions found in IRM 3.0.101.15.8 , General Correction Procedures; as needed.

Data Validation (DV) Function

  1. The DV function is used to manually correct data from scanned images and paper documents. The menus shown on the screen will vary depending on how your supervisor profiled you. For instance, if you are not profiled for the DV function, this option will be grayed on the menu Workstation Main Menu.

Data Validation (DV)From Image QUICK START
  1. From the Workstation Main Menu, select Data Validation (DV).

  2. From the Data Validation (DV) Selection Menu, select DV Selection Menu.

  3. From the DV Selection Menu, select one of the following:

    • All K-1s DV

    • 1041 K-1 DV

    • 1065 K-1 DV

    • 1120S K-1 DV

  4. The first unit-of-work opens and the cursor stops at the first highlighted field. Make the necessary corrections following instructions found in IRM 3.0.101.15.8, General Correction Procedures.

  5. Press the <Ctrl>-<P> (post-to-close) key combination to end the current unit-of-work upon completion of DV from Image.

  6. The system will return you to the Data Validation (DV) Selection Menu when you release the last document.

Data Validation (DV)From Paper QUICK START
  1. From the Workstation Main Menu, select Data Validation (DV).

  2. From the Data Validation (DV) Selection Menu, select DV Select Block.

  3. From the "Enter Block/Unit of Work" window, enter the first 11-digits of the DLN stamped on the Schedule K-1 in the unit-of-work.

  4. The selected unit-of-work opens and the cursor stops at the first highlighted field. Make the necessary corrections following instructions found in IRM 3.0.101.15.8, General Correction Procedures.

  5. The "Open Block/Unit of Work" window is displayed when you release the unit of work. If you want to continue Data Validation (DV) from paper go back to step 3. Otherwise press the <Esc> key to return to the DV Selection Menu.

Selecting a Specific Unit-of-Work in Data Validation (DV)
  1. To begin DV on a specific UW of Schedule K-1 documents, open that UW by doing the following:

    1. From the Workstation Main Menu, select the numeric code for Data Validation (DV). The Workstation Main Menu closes, and the Data Validation (DV) Selection menu opens.

    2. In the DV Selection Menu window, type the numeric code for Select Block. The DV Selection Menu window closes and an "Open Block/UW" window opens.

    3. Enter the first 11-digits of the DLN from the batch transmittal.

    4. Press the <Enter> key. The Open Block/UW window closes and the selected UW opens.

    5. A suspended block in DV will require the operator to restore the "Auto ON" mode.

  2. The procedures for performing DV from Select Block on Schedule K-1 documents are identical to performing DV from Image of Schedule K-1 documents once the UW is opened. See the instructions found in IRM 3.0.101.15.8, General Correction Procedures.

General Correction Procedures

  1. Use these procedures as a guide during the Original Entry (OE) and Data Validation (DV) functions. Not all the items will always apply to specific situations in either function. If the scanned information is correct, no action is necessary. If the scanner reads the information and it is incorrect, or if scanned information was put into the wrong field, remove from incorrect field and input the information in the correct field.

  2. If you reach the maximum field length while entering data, the cursor, in most cases, will automatically move to the next field. Therefore, incorrect characters can be inadvertently entered into the next field. Remove or correct these characters. Use standard abbreviations as shown in Exhibit 3.0.101-4, Standard Abbreviations and Exhibit 3.0.101-5, Street Address Abbreviations, to avoid this situation.

  3. Error Messages-Error messages with information are often helpful to correct the error and may be found in the Status Line. Most error messages are two lines with the first line being the error message and the second line containing information that may help resolve the error condition.

  4. When validating an address change, ensure the system read the correct ZIP Code. If addresses, city, and state changes were made and a correct ZIP Code is not present on the template, correct the information to match what is on the image.

  5. If a document is received and appears totally blank (No Payer/Payee Entity or tax data) Suspend unit of work.

  6. The <Ctrl>-<F7> combination key function provides the operator the ability to access the last edited field or the last flagged field of the previous document.

  7. After DV is complete the system will run a verification of Parent DLN's. If the Parent DLN is missing from any of the documents within the unit of work the error message "Blank Parent DLN still exists after DV. Press <Enter> to review possible parent matched" . Another window will appear stating "Possible Parent Match 1 of (however many) is this the same payer?" . If the operator selects "YES " , SCRIPS will populate the Payer information. If the operator selects "NO" , the system will continue to ask until it has gone through all payers in the unit-of-work.

    Note:

    The valid parent return File Location Codes (FLC) for Cincinnati are 17, 31 34, 60 or 78.

    Note:

    The valid parent return File Location Codes (FLC) for Ogden are 29, 60, 78, 81, 82, 83, 85, 87, or 88.

    Note:

    The valid parent return File Location Codes (FLC) for Kansas City are 09, 36, 39, 41, or 43.

  8. For additional information on Function Keys refer to IRM 3.41.274, Exhibits 1 and 2.

Poor Quality Image
  1. Occasionally the Image of the return presented to the OE or DV Operator is unreadable. Some reasons for this are:

    • Writing on image is too light

    • Image is too dark to read writing

    • Image is illegible, or

    • Image is incomplete, etc.

  2. When working in OE or DV, if you cannot determine the data for ANY field (except the Name, Street Address, City, State, or ZIP Code) from the Image, suspend the Unit-of-Work (UW) as "Poor Quality Image " . (<F9>; press "S" ; select "Poor Quality Image" ).

    Note:

    Payer Name 1 must be suspended for "Poor Quality Image".

  3. The Lead Data transcriber/designated employee will review the Work Status Report for suspended "Poor Quality Image" and pull the document from the block and give to the employee that suspended the UW.

  4. The employee will resume the suspended block, correct the data using the paper document or release the document leaving the field blank, if unable to determine the data.

  5. The employee will then give the document back to the Lead Data Transcriber/designated employee.

  6. The Lead Data Transcriber/designated employee will re-file the document in its original block.

Schedule K-1 Name and Address Information
  1. 1041 Schedule K-1

    • Payee Information - Transcribe name(s) and address information from Part II; Beneficiary’s" name, address, city, state and ZIP code" .

    • Payer Information - Transcribe Payer Name Line 1 from Part I, the box labeled "Estate’s or trust’s name" . Transcribe Payer Name Line 2 and address information from the box labeled "Fiduciary’s name, address, city, state and ZIP code" .

  2. 1065 Schedule K-1

    • Payee Information- Transcribe name(s) and address information from Part II; "Partner's name, address, city, state and ZIP code" .

    • Payer Information - Transcribe Payer Name(s) from Part I, the box labeled "Partnership’s name, address, city, state and ZIP code " .

  3. 1120S Schedule K-1

    • Payee Information - Transcribe name(s) and address information from Part II;" Shareholder’s name, address, city, state and ZIP code."

    • Payer Information - Transcribe name(s) and address information from Part I, the box labeled "Corporation’s name, address, city, state and ZIP code" .

  4. In certain situations the scanner may read a name, address or city without spaces. If the name and/or address can be determined leave as is.

Edit Marks
  1. Edit Marks(-) and their descriptions are below:

    EDIT MARK DESCRIPTION
    "X"
    • The "X" is used to delete tax data or to indicate that an item is not to be transcribed.

    • For money amounts, enter the amount written to the left of the "X" , when applicable.

    "/" (Slash) or "X through the entire page."
    • A "/" (slash) or "X " through the entire page indicates the page is to be deleted.

    • If the form contains a "/" (slash) or "X" through the entire page, delete the page as "Unprocessable Attachment" .

Tax Year and Tax Period Entries

  1. Tax Year and Tax Period dates must meet the following criteria:

    • Current timely filed calendar year

    • One Year Prior to current calendar year

    • Two Years Prior to current calendar year

    Note:

    Tax Period must be transcribed in MMYY format and Tax Year must be transcribed in YY format.

Name Entries

  1. Except as noted below, enter the information as shown with as many characters as permitted. Refer to Exhibit 3.0.101-4 for a list of standard abbreviations. If the scanned information is correct, no action is necessary.

  2. If a partner number or SSN number is shown, do not enter.

  3. If an account number is shown above or to the right of the 1st name line, enter it on the 1st name line. (See example below)

    Entry Point Enter as:
    1st Name Line: MR & MRS JOHN Q. WILLOW ACCT 14542
    2nd Name Line: % DONALD BIRCH INTERNATIONAL
    Street Address: 123 ADAMS AVE
    City: LITTLE ROCK
    State: AR
    Zip: 72201
  4. If a city or state is shown as part of the first name line, enter the complete name of the city or state, no abbreviations.

    Example Enter as:
    First Bank of GA FIRST BANK OF GEORGIA
  5. Enter a space before and after an ampersand (&). In the payer name line enter "and" or "&" as shown.

    Example: Enter as:
    (1) Jim Lime and Joe Doe, Ptrs JIM LIME AND JOE DOE PTRS
    (2) J. Elm & R. Ash, Inc J ELM & R ASH INC
  6. Omit punctuation, except for hyphens (-). Do not enter a space before or after hyphens.

    Example: Enter as:
    (1) O'Tulare: OTULARE
    (2) Maple-Pecan MAPLE-PECAN
  7. Remove all periods. Do not leave a space unless the period is removed from an initial or an internet name such as "Flower.com," which should be entered as "Flower (space) com" .

  8. If there are initials in the name line and the scanner reads the initials correctly, however it does not leave the spaces, leave the name the way it was picked up by the scanner. If you need to make any corrections or re-input the name line, use the spaces between the initials.

  9. Abbreviate name information only when it is abbreviated on the document, except for standard abbreviations: CO for Company, CORP for Corporation and INC for Incorporated. (See Exhibit 3.0.101-4, Standard Abbreviations and Exhibit 3.0.101-5, Street Address Abbreviations; for a list of valid abbreviations).

    • For the "¢" symbol enter "CENT "

    • For the "+" symbol enter "PLUS"

    • For the "@" symbol enter "AT"

    • For the "$" symbol enter "DOLLAR"

    • For ".com" enter a space instead of the "."

    • If initials are DBA, CPA, LLC, MD, PC, etc. you do not need spaces or periods. The initials must be run together. If the scanner leaves spaces, you can leave as is unless another correction is necessary.

  10. Omit a slash (/), if shown between two names (e.g. John Pine/Mary Birch). Leave a space.

    Exception:

    If a date is present in the Name lines replace the slash (/) with a hyphen (-). Convert dates to MM-DD-YY format. Do not enter date/dated/dtd or the alpha month.

  11. If an "In-Care-Of Name" is present, enter "%" , space, and the name. If information is already present on Name Line 2, include as much as possible after the In-Care-Of-Name information is input.

    Note:

    If two or more in care of name lines are present. enter the first In-Care-Of-Name.

  12. Enter Name Line 2 as shown. If a foreign address is present in entity information, use Name Line 2 for foreign information only.

  13. If additional names are present, ignore the information.

  14. If the name appears with the last name first, and the first name last, leave the name the way it was picked up by the scanner. If any corrections needs to be made, the name line has to be re-input or if working in OE Image/OE Paper, enter the first name first and the last name last.

  15. If the Name Line 1 begins with the word "the" and has more than one word following "the" do not enter "the."

  16. If the Payer name line is illegible, suspend for "Poor Quality Image" .

  17. If Payer name is missing, leave blank.

  18. If Payer or Payee Name Line 2 is illegible or not present, leave blank.

  19. If Payee name is missing or illegible, enter a "Z" in the Payee name line field.

Address Elements
  1. If the scanned information is correct, no action is necessary.

    Note:

    NABR (Name and Address Block Reader) will change the address to agree with the Postal Data Base in an attempt to correct spelling and/or recognition errors. When a match is found they update the record and flag it for the operator to verify. When it can be determined the scanned information presented for verification is from NABR, leave the generated data. If the Zip code is incorrect, enter data from the Schedule K-1 image. See examples below:

    Return Postal Data Base Update Comments
    2121 SE FOOTHILL
    SANTA ANA, CA 92708
    2121 FOOTHILL BLVD
    SANTA ANA, CA 92708
    Removed SE and put BLVD
    112 BID A WEE CT
    PANAMA CITY BCH, FL 32413
    112 BID A WEE CT
    PC BEACH, FL 32413
    Abbreviated city and spelled out Beach
    14658 ARNDT RD NE
    AURORA, OR 97002
    14658 NE ARNDT RD
    AURORA OR 97002
    Moved NE from the end of the line to after the numbers
    1705 SW HERON CIRCLE
    BEAVERTON, OR 97007
    1075 SW HERON CIR
    BEAVERTON OR 97007
    Abbreviated Circle
  2. Do not enter periods in the Address Field.

  3. Enter standard abbreviations and street abbreviations as shown in Exhibit 3.0.101-4 and Exhibit 3.0.101-5.

  4. If an ampersand (&) is present in the Address Field, spell out as "and" .

  5. If two Street Addresses are present with the same City, State and Zip code, enter the first street address.

  6. If two addresses are present with different City, State and Zip code, enter the first street address.

  7. If a document has a PO BOX or Post Office Box, or PO Drawer, enter the Post Office box or an asterisk (*) followed by a space.

    Example: Enter As:
    PO Box #24 *(space) 24
  8. If a document has a Street Address and a PO Box, enter both on the Street Address Line with the PO Box or (*) entered first. If the combination is too long, the PO Box takes precedence. Enter as much of the street address as possible using abbreviations as necessary to limit this entry to 35 positions. (See Exhibit 3.0.101-5 for Street Abbreviations).

  9. If the Street Address is missing or illegible, enter "Z" in the Address Field.

  10. If the "In-Care-Of" is in front of a name on the Address Line move to Name Line 2.

  11. If the City is missing or illegible, enter "ZZZ" in the City Field.

  12. If City is present it must be alpha. For example, enter 29 Palms as TWENTY NINE PALMS.

  13. Enter Standard Abbreviations for states and territories as shown in Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Codes.

  14. If there is no State but a ZIP code is present, press the <Enter> key in the ZIP Code Field. This will generate the State code for this ZIP Code in the Status Line. Follow the screen prompts to accept this code or to enter a different code.

  15. If there is no ZIP Code but a State is present, press the <Enter> key in the ZIP code field. The system will generate the default ZIP code for that State.

  16. If the State does not match the ZIP code presented, delete the ZIP code and generate the default ZIP code for this State.

  17. If both the State and ZIP code are blank, leave both blank.

  18. APO, DPO or FPO addresses must be transcribed with the appropriate two-character State code followed by the corresponding unique five-digit ZIP code.

    1. When APO, DPO, or FPO is used, do not any other data in the City Field

    2. If the State code is missing, refer to the existing ZIP code for the valid State code. See Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Codes.

    3. If the ZIP code is missing, refer to the existing State code for the valid ZIP code. See Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Codes.

    4. When APO, DPO or FPO is to be transcribed in the City Field, the State Field must correspond with the following:

      ADDRESS ABBREVIATION LOCATION ZIP CODE
      APO AA Americas 340
      DPO AA Americas 340
      FPO AA Americas 340
      APO AE Europe 090-098
      DPO AE Europe 090-098
      FPO AE Europe 090-098
      APO AP Pacific 962-966
      DPO AP Pacific 962-966
      FPO AP Pacific 962-966
    5. Enter all APO/DPO/FPO addresses as follows:

      Example Enter As
      APO New York, N.Y. 091XX APO AE 091XX
      FPO San Francisco, CA 962XX FPO AP 962XX
    6. If the ZIP code is out of range on APO, DPO, or FPO. press <ENTER> and the system will generate the default Zip code.

Foreign Address
  1. Operators are responsible to perfect all entity information on all foreign Schedule K-1s.

  2. Foreign Addresses on Schedule K-1 documents are entered as follows:

    1. Enter the foreign street address in the Name Line 2. Omit any existing Name Line 2 information.

    2. Enter the Foreign City, State, Province or Territory, and Mailing code, if present, in the Street Address Field. Spell out the City, State, Province or Territory, if abbreviated (See Exhibit 3.0.101-11 through Exhibit 3.0.101-15. Separate the Postal code from the Foreign City or Province with a space. Example: London 02.

      Note:

      Accept what the taxpayer has put on the line unless the line is too long, then, use the Province or Territory abbreviation. This will allow the Postal code to fit in the field.

    3. Enter the Foreign Country in the City Field. Spell out the Country if abbreviated by the taxpayer. If the Country is missing or illegible, use Exhibit 3.0.101-11 through Exhibit 3.0.101-15 to determine the Country. If you are unable to determine the Country, enter "ZZZ" .

      Example:

      CA is Canada. See Exhibit 3.0.101-11 through Exhibit 3.0.101-15 for complete list of Foreign Country codes.

      Note:

      If the Foreign Country exceeds 22 characters, input only the first 22 characters.

    4. Enter a period (.) in the first position of the State field to identify the address as foreign.

    5. Leave the ZIP code blank.

Money Amount Fields

  1. Amounts are transcribed in DOLLARS ONLY.

  2. If a negative money amount appears in a positive only field, press <F3>, to clear the field and press <Enter>. Negative amounts can be identified by a minus sign or being enclosed in parentheses or brackets.

  3. If the taxpayer enters a positive or negative $.49 or less, <F3>, <Enter>. If the taxpayer enters a positive or negative $.50 to $.99, enter $1 or -$1 respectively.

  4. If the taxpayer files a State Schedule K-1, and it has a column with the federal information, transcribe the information from the federal lines.

  5. Enter negative amounts, where allowed, by leading the amount with a hyphen (-).

    Note:

    Negative money amounts require a double <Enter>

  6. The following lines will be presented for verification:

    • 1041 Schedule K-1 = Lines 1 and 2a

    • 1065 Schedule K-1 = Lines 5, 6a and 7

    • 1120S Schedule K-1 = Lines 4, 5a and 6

    Note:

    Status Line will display "Is this amount correct?"

  7. If two dollar amounts are present on the same line, manually add together and enter total amount.

  8. Alpha Designators are located in boxes in front of the first money lines. Valid Alpha Designator characters consist of A-Z, asterisk (*) and blank. Enter the amount from the first line only. Alpha Designators could be found on the following:

    • 1041 Schedule K-1 = Line 14 (Other Information)

    • 1120S Schedule K-1 = Line 13 (Credit)

Percentage Field Instructions

  1. Should be input and validated as a seven position field and must be in the format XXX.XXX.

  2. Must be positive only.

  3. If negative percentage is in field, press <F3> to clear the field and then press <Enter>. Leave the field blank

  4. Must be between 000-100.

  5. Percentage fields can be blank.

  6. If there are more than 3 numerics to the left of the decimal point enter 100.; If there are more than 3 numerics to the right of the decimal point, enter the first 3 numerics closest to the decimal point.(See examples 6 and 7 below).

  7. If decimal point is not recognized, enter the decimal point after the numerics presented (with decimal point no further then fourth position). For validation purposes, the decimal point must be entered so the system can zero fill the percentage correctly.(See examples 1 and 3 below).

  8. If the percentage has a fraction, ignore the fraction and enter the number only. (See example 8 and 9 below).

    No Percentage Recognized as Invalid = send for verification/correction Valid = not sent to Operator Operator to enter/verify
    1 10 missing decimal point   10.
    2 95.1   Valid  
    3 100 missing decimal point   100.
    4 101.123 percentage is > 100   100.
    5 15.123   Valid  
    6 15.0876 too many numbers to the right of decimal   15.087
    7 1201 percentage is >100.00 and to many numbers to the left of the decimal

    Note:

    If percentage is more than 100 input 100.

      100.
    8 33 1/2 Ignore the fraction; enter the whole number only   33.
    9 14 7/8 Ignore the fraction; enter the whole number only   14.

Deleting a Block

  1. Always delete a block if the tax year cannot be determined.

Prior Year Form Revision Processing

  1. If a prior year Schedule K-1 is processed by the scanner. SCRIPS operators will:

    1. Assume Schedule K-1 is current year.

    2. Convert transcription lines using Exhibit 3.0.101-8, Conversion Chart.

    3. Continue processing.

Payer General Instructions

  1. If the Payer EIN is the same as the previous document, the system will copy the Payer information into the document and then the next Schedule K-1 will be presented.

  2. If the Payer EIN is different, the Payer Entity fields will appear and the operator is to enter Payer Entity Information.

SCRIPS Transcription Sheets

  1. The following tables represent specific SCRIPS entry procedures.

Payee Information - 1041 Schedule K-1
  1. Enter from Part II, Information About the Beneficiary on 1041 Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    Tax Year Tax Year Enter the Tax Year from the Top Center of the form in YY format

    Note:

    The tax year must be 2015, 2016 or 2017.

    Beginning Tax Period Date from the Tax Year Beginning Date Box at the top of form. Enter the Beginning Tax Period date in MMYY format. This is a Must Enter Field
    Ending Tax Period Date from the Tax Year Ending Date Box at the top of form. Enter the Ending Tax Period date in MMYY format. This is a Must Enter Field
    [F] Beneficiary ID Beneficiary ID from Part II box F.
    1. Input or correct the 9 digit TIN, or "APPLD FOR" .

      Note:

      Must hold the <Shift> Key to enter alpha.

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. If illegible leave blank and press enter.

    [G] Name 1 (Beneficiary) Name from box G.
    1. Enter or correct Beneficiary Name Line 1 from box G.

    2. If missing, or illegible, enter "Z" and press <Enter> per IRM 3.0.101.15.10 (19).

    [G] Name 2 (Beneficiary) Name from box G.
    1. If an "In-Care-Of " name is present, enter "%" , space and then the name.

    2. If information is present on Name Line 2, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1 .

    [G] Address (Beneficiary) Address from box G.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z " then press <Enter>.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [G] City (Beneficiary) City from box G.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1

    [G] State (Beneficiary) State from box G.
    1. Enter the State Code.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1

    [G] ZIP CODE(Beneficiary) ZIP Code from box G.
    1. Enter the ZIP code.

    2. If missing, press <Enter> to generate the generic ZIP code.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1

    K-1 Amended Amended K-1 box located above Part III.
    1. Enter an "X " if the box is marked.

    2. If box has been mis-read, clear the box (<F3>) and press <Enter>.

Payee Information - 1065 Schedule K-1
  1. Enter from Part II, Information About the Partner, on 1065 Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    Tax Year Tax Year Enter the Tax Year from the Top Center of the form in YY format

    Note:

    The tax year must be 2015, 2016 or 2017.

    Beginning Tax Period Date from the Tax Year Beginning Date Box at the top of form. Enter the Beginning Tax Period date in MMYY format. This is a Must Enter Field
    Ending Tax Period Date from the Tax Year Ending Date Box at the top of form. Enter the Ending Tax Period date in MMYY format. This is a Must Enter Field
    [E] Partner TIN TIN from Part II box E.
    1. Input or correct the 9 digit TIN, or "APPLD FOR"

      Note:

      You must hold down the <Shift> key for Alpha.

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. if illegible, leave blank and press enter.

    [F] Name 1 (Partner) Name from box F.
    1. Enter or correct Partner Name Line 1 from box F.

    2. If missing, or illegible, enter "Z " and press <Enter> per IRM 3.0.101.15.10 (19).

    [F] Name 2 (Partner) Name from box F.
    1. If an "In-Care-Of" name is present, enter "%," space and then the name.

    2. If information is present on Name Line 2, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [F] Address (Partner) Address from box F.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z" then press <Enter>.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1 .

    [F] City (Partner) City from box F.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ" then press <Enter>.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [F] State (Partner) State from box F.
    1. Enter the state abbreviation.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [F] Zip code (Partner) ZIP Code from box F.
    1. Enter the ZIP code.

    2. . If missing, press <Enter> to generate the generic ZIP code,

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    K-1 Amended Amended K-1 box located above Part III.
    1. Enter an "X " if the box is marked.

    2. If box has been mis-read, clear the box (<F3>) and press <Enter>.

Payee Information - 1120S Schedule K-1
  1. Enter from Part II, Information About the Shareholder, on 1120S Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    Tax Year Tax Year Enter the Tax Year from the Top Center of the form in YY format.

    Note:

    The tax year must be 2015, 2016 or 2017.

    Beginning Tax Period Date from the Tax Year Beginning Date Box at the top of form. Enter the Beginning Tax Period date in MMYY format.
    Ending Tax Period Date from the Tax Year Ending Date Box at the top of form. Enter the Ending Tax Period date in MMYY format.
    [D] Shareholder TIN TIN from Part II box D.
    1. Input or correct the 9 digit TIN or "APPLD FOR" .

      Note:

      Must hold down the <Shift> key to enter Alpha

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. If illegible, leave blank and press enter.

    [E] Name 1 (Shareholder) Name from box E.
    1. Enter or correct Shareholder Name Line 1 from box E.

    2. if missing or illegible, enter a "Z" and press <Enter> per IRM 3.0.101.15.10 (19).

    [E] Name 2 (Shareholder) Name from box E.
    1. If an "In-Care-Of" name is present, enter "%" , space and then the name.

    2. If information is present on Name Line 2, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [E] Address (Shareholder) Address from box E.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z" then press <Enter>.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [E] City (Shareholder) City from box E.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ " then press <Enter>.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [E] State (Shareholder) State from box E.
    1. Enter the state abbreviation.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [F] ZIP CODE(Shareholder) ZIP Code from box E.
    1. Enter the Zip code.

    2. If missing, press <Enter> to generate the generic ZIP code.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    K-1 Amended Amended K-1 box located above Part III.
    1. Enter an "X" if the box is marked.

    2. If box has been mis-read, clear the box (<F3>) and press <Enter>.

Money Amounts - 1041 Schedule K-1 (Program 44386)
  1. 1041 Schedule K-1 Transcription Sheet:

    OE/DV Screen Prompt Description Instructions
    [1] Interest Income Line 1 (+/-) Enter the amount from Line 1.
    [2a] Ordinary Dividends Line 2a (+/-) Enter the amount from Line 2a.
    [3] Net Short-Term Capital Gain Line 3 (+) Enter the amount from Line 3.
    [4a]) Net Long-Term Capital/Total For Year Line 4a (+) Enter the amount from Line 4a.
    [5] Other Portfolio Income Line 5 (+/-) Enter the amount from Line 5.
    [6] Ordinary Business Income Line 6 (+/-) Enter the amount from Line 6.
    [7] Net Rental Real Estate income Line 7 (+/-) Enter the amount from Line 7
    [8] Other Rental Income Line 8 (+) Enter the amount from Line 8.
    [14] Alpha Designator Line 14 Alpha Designator Code

    Note:

    located to the left of Line 14 money amount

    Alpha Designator two position field consisting of A-Z, Asterisk (*), or blank (s)
    [14] Other Information Line 14 (+/-) Enter the amount from Line 14 (first line only).
Money Amounts - 1065 Schedule K-1 (Program 44387)
  1. 1065 Schedule K-1 Transcription Sheet:

    OE/DV Screen Prompt Description Instructions
    Is this partner a retirement plan Line I2 CKBOX If the box is checked, enter an X, otherwise leave blank.
    Beginning Capital Gain J Capital beginning (+) Enter % from Capital beginning line J. See instructions in IRM 3.0.101.15.12, Percentage Field Instructions.
    Ending Capital Gain J Capital ending (+) Enter % from Capital ending line J. See instructions in IRM 3.0.101.15.12, Percentage Field Instructions.
    [1] Ordinary Business Income(Loss) Line 1 (+/-) Enter the amount from Line 1.
    [2] Net Rental Real Estate Income (Loss) Line 2(+/-) Enter the amount from Line 2.
    [3] Other Net Rental Income (Loss) Line 3 (+/-) Enter the amount from Line 3.
    [4] Guaranteed Payments Line 4(+) Enter the amount from Line 4.
    [5] Interest Income Line 5 (+/-) Enter the amount from Line 5.
    [6a] Ordinary Dividends Line 6a (+/-) Enter the amount from Line 6a.
    [7] Royalties Line 7 (+/-) Enter the amount from Line 7.
    [8] Net Short-Term Capital Gain(Loss) Line 8(+/-) Enter the amount from Line 8.
    [9a] Net Long term Capital Gain (Loss) Line 9a (+/-) Enter the amount from Line 9a.
    [12] Section 179 Deduction Line 12 (+) Enter the amount from Line 12.
Money Amounts -1120S Schedule K-1 (Program 44388)
  1. 1120S Schedule K-1 Transcription Sheet:

    OE/DV Screen Prompt Description Instructions
    F Stock Ownership F Shareholder % of Stock Ownership (+) Enter % from line F. See instructions in IRM 3.0.101.15.12, Percentage Field Instructions.
    [1] Ordinary Business Income(Loss) Line 1(+/-) Enter the amount from Line 1.
    [2] Net Rental Real Estate Income (Loss) Line 2 (+/-) Enter the amount from Line 2.
    [3] Other Net Rental Income (Loss) Line 3 (+/-) Enter the amount from Line 3.
    [4] Interest Income Line 4 (+/-) Enter the amount from Line 4.
    [5a] Ordinary Dividends Line 5a (+/-) Enter the amount from Line 5a.
    [6] Royalties Line 6 (+/-) Enter the amount from Line 6.
    [7] Net Short-Term Capital Gain(Loss) Line 7 (+/-) Enter the amount from Line 7.
    [8a] Net Long-term Capital Gain(Loss) Line 8a (+/-) Enter the amount from Line 8a.
    [11] Section 179 Deduction Line 11 (+) Enter the amount from Line 11.
    [13] Alpha Designator Line 13 Alpha Designator Code

    Note:

    located to the left of Line 13 money amount

    Alpha Designator two position field consisting of A-Z, Asterisk (*), or blank (s)
    [13] Credits Line 13 (+) Enter the amount from Line 13 (first line only).
Payer Information - 1041 Schedule K-1
  1. Enter from Part I, Information About the Estate or Trust, on 1041 Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    [A] Estate/Trust ID Parent Return ID.
    1. Correct or verify the 9 digit TIN.

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. If illegible suspend UW for Poor Quality Image per IRM 3.0.101.15.8.1.

    Parent DLN The 14-digit Document Locator Number (DLN) will be stamped in the upper left margin.
    1. Correct or verify the 14-digit DLN if missing or invalid. If unable to correct, clear the field (<F3>), if necessary and press <Enter> twice.

    2. If illegible, suspend for poor quality

    3. If File Location Code (FLC) is 78 or 60 (CSPC only) clear the field and press <Enter> twice.

    [B] Name 1 (Estate/Trust) Name from box B.
    1. Enter or correct Payer Name Line 1 from box B.

    2. If missing, leave blank and press <Enter>.

    3. If illegible, suspend UW for poor quality image.

      Note:

      Refer to IRM 3.0.101.15.8.1 for poor quality image.

    4. After pulling document to read from paper, if still unable to determine information leave blank.

    [C] Name 2 (Fiduciary) Name from box C
    1. If an "In-Care-Of" name is present, enter "%" , space and then the name.

    2. If information is present on Name Line, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [C] Address (Fiduciary) Address box C.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [C] City (Fiduciary) City from box C.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [C] State (Fiduciary) State from box C.
    1. Enter the state abbreviation.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [C] ZIP Code (Fiduciary) ZIP Code from box C.
    1. Enter the ZIP code.

    2. If missing, press <Enter> to generate the generic ZIP code.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

Payer Information - 1065 Schedule K-1
  1. Enter from Part I, Information About the Partnership, on 1065 Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    [A] Partnership EIN Parent Return ID.
    1. Correct or verify the 9 digit TIN.

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. If illegible, suspend UW for Poor Quality Image per IRM 3.0.101.15.8.1.

    Parent DLN The 14-digit Document Locator Number (DLN) will be stamped in the upper left margin.
    1. Correct or verify the 14-digit DLN if missing or invalid. If unable to correct, clear the field (<F3>), if necessary and press <Enter> twice.

    2. If illegible, suspend UW for poor quality image per IRM 3.0.101.15.8.1.

    3. If File Location Code (FLC) is 78 or 60 (CSPC only) clear the field and press <Enter> twice.

    [B] Name 1 (Partnership) Name from box B.
    1. Enter or correct Payer Name Line 1 from box B.

    2. If missing, leave blank and press <Enter>.

    3. If illegible, suspend UW for poor quality image.

    Note:

    Refer to IRM 3.0.101.15.8.1 for poor quality image. After pulling document to read from paper, if still unable to determine information leave blank.

    [B] Name 2 (Partnership) Name from box B.
    1. If an "In-Care-Of" name is present, enter "%" , space and then the name.

    2. If information is present on Name Line 2, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] Address (Partnership) Address from box B.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] City (Partnership) City from box B.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] State (Partnership) State from box B.
    1. Enter the state abbreviation.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] Zip Code (Partnership) ZIP Code from box B.
    1. Enter the ZIP code.

    2. If missing, press <Enter> to generate the generic ZIP code,

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

Payer Information - 1120S Schedule K-1
  1. Enter from Part I, Information About the Corporation, on 1120S Schedule K-1.

    OE/DV Screen Prompts Description Instructions
    [A] Corporation EIN Parent Return EIN
    1. Correct or verify the 9 digit TIN.

    2. If two or more TINs are shown, the TIN is missing, or the TIN contains more or less than 9 digits, clear the field (<F3>) then press <Enter>.

    3. If illegible, suspend UW for poor quality image per IRM 3.0.101.15.8.1.

    Parent DLN The 14-digit Document Locator Number (DLN) will be stamped in the upper left margin.
    1. Correct or verify the 14-digit DLN if missing or invalid. If unable to correct, clear the field (<F3>), if necessary and press <Enter> twice.

    2. If illegible, suspend UW for poor quality image, if still unable to read from paper copy, leave blank per IRM 3.0.101.15.8.1.

    3. If File Location Code (FLC) is 78 or 60 (CSPC only) clear the field and press <Enter> twice.

    [B] Name 1 (Corporation) Name from box B.
    1. Enter or correct Payer Name Line 1 from box B.

    2. If missing, leave blank and press <Enter>.

    3. If illegible, suspend for poor quality image.

    Note:

    Refer to IRM 3.0.101.15.8.1 for poor quality image. After pulling document to read from paper, if still unable to determine information leave blank.

    [B] Name 2 (Corporation) Name from box B.
    1. If an "In-Care-Of" name is present, enter "%" , space and then the name.

    2. If information is present on Name Line 2, include as much as possible after the % information, if it is present.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] Address (Corporation) Address from box B.
    1. Enter the street address.

    2. If the street address is missing or illegible, enter "Z."

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] City (Corporation)) City from box B.
    1. Enter the City.

    2. If the city is missing or illegible, enter "ZZZ" .

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] State (Corporation) State from box B.
    1. Enter the state abbreviation.

    2. If a Major City Code is entered, the state field is bypassed.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

    [B] Zip Code (Corporation) ZIP Code from box B.
    1. Enter the ZIP code.

    2. If missing, press <Enter> to generate the generic ZIP code.

    3. If a foreign address is present, see IRM 3.0.101.15.10.1.1.

ERS

  1. This section contains instructions for resolving Schedule K-1 error conditions. All forms go to Error Resolution Systems under program code 44380.

Types of Errors

  1. This section provides a description of the types of errors generated during Schedule K-1 processing.

  2. The Error Resolution System (ERS) will identify errors according to type and priority. This will show in the record heading.

    • Action Code Error (Priority I) - Not valid on Schedules K-1

    • Section Error (Priority II) - Includes terminus error and ISRP Problem code.

    • Validity Error (Priority III)

    • Math/Consistency Error (Error Codes) (Priority IV)

  3. There may be records where the tax examiner finds that programming has not furnished a section or a field that is needed to resolve an error. In this event, the tax examiner can use Command Code (CC) GTSEC. This should be reported to Headquarters for correction of the display,

Priority II Errors - Section Errors

  1. The following conditions may be present if normal SCRIPS/ISRP validity checks have been bypassed:

    • Terminus Errors

    • Edit Errors

    • Missing required sections.

  2. Terminus Error - This error is caused by a section with variable length input fields containing an erroneous size field.

    1. When displayed, this type of error will show all input fields of the terminus section. Transcribed data will be present. Computer generated fields will not be present.

    2. All fields present for the section must be examined and the necessary correction(s) made to all the fields.

  3. Correction Procedures:

    1. CC CRECT will be displayed. If the section needs to be deleted, use CC DLSEC to delete the section.

    2. If no corrections are needed, transmit from the bottom of the screen.

Priority III - Field Errors

  1. Definition - Any field that does not meet the requirement(s) for that field will be shown as a Priority III error. Consistency and or relationships with other fields will not be a factor.

  2. Some reasons for this type of error are:

    • Non-numeric character in a numeric field.

    • Non-alphabetical character in an alpha field.

    • Blank space in a numeric field

    • Blank in the first position of an alpha field if followed by significant data.

  3. Display - Every field displayed is in error.

    1. All fields with a Priority III error will be displayed in columnar format in the order encountered in the record.

    2. An overflow field is identified by all question marks for a money field.

  4. Correction Procedures:

    1. Correct every error field displayed using the specific instructions within each section for the field in error.

    2. Check the information on the source document to determine if each displayed field has been correctly edited and transcribed.

    3. Enter the correct data for each field displayed.

    4. If no data is to be in a displayed field, blank the field.

    5. Transmit.

Part IV Errors - Consistency/Math Errors

  1. Definition - Any valid field used in any computation in which the result is inconsistent with (or contrary to) any other valid field will have Error Code 001–999 assigned and will be shown as a Priority IV Error.

  2. Display - These errors will be displayed with the Error Code assigned to them for the specific error in ascending numerical order. The screen display will show the error code assigned and the fields needed to make the necessary correction.

    1. The blank field "CL" will be displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed.

    2. All errors must be resolved by either eliminating the error or entering a Clear Code.

  3. Correction Procedures:

    1. Correct all coding and transcription errors.

    2. If the data in the field is correct, enter a "C" in the Clear Code field.

Section 01 Errors

  1. This section provides instructions for correcting Section 01 error conditions.

General Information

  1. Section 01 contains the Payee entity data and is required for every record.

  2. Listed below are the fields contained in Section 01 that applies to Schedule K-1 processing:

    Field Field Length Title
    01TIN 09 Payee Identification Number
    01TVC 01 Primary TIN Validity Bypass Code
    01NM1 40 Payee Name Line 1
    01NM2 40 Payee Name Line 2
    01ADD 35 Payee Street Address
    01CTY 22 Payee City
    01ST 02 Payee State Code
    01ZIP 09 Payee ZIP Code

Section 01TIN - Payee Identification Number

  1. There is no validity check of this field.

Section 01TVC - Primary TIN Validity Bypass Code

  1. This field is always blank.

Section 01NM1 - Payee Name Line 1

  1. Valid characters are alpha, hyphen, blank, and numeric.

  2. Invalid Conditions:

    1. Field is completely blank.

    2. Field contains characters other than alpha, hyphen, numeric, or ampersand.

    3. A character follows two consecutive blanks.

    4. The first position contains a blank.

    5. The number of character positions is more than 40.

  3. Correction Procedure:

    1. Check for coding and transcription errors and misread entries and correct as needed. If name is not present, research using the TIN if present.

      If Then
      There is an address match on CC INOLE Enter the name from INOLE as the Payee
      There is no information Enter "Z" and continue processing

Section 01NM2 - Payee Name Line 2

  1. Valid characters are alpha, hyphen, blank, numeric, percent (%), and ampersand.

  2. Invalid Conditions:

    1. Field contains characters other than alpha, hyphen, numeric, percent (%).and ampersand.

    2. The number of character positions is more than 40

  3. Corrections Procedure:

    1. Check for coding and transcription errors and misread entries and correct as needed.

    2. For in-care-of names, enter the percent (%) sign, space, and then the name.

    3. for foreign address, enter the street address, omit the existing name line 2.

Section 01ADD - Street Address

  1. Description - Field 01ADD is located in the Entity Section of the return.

    1. Valid Characters are alpha, numeric, blank, dash, or slash.

  2. Invalid Condition - Field 01ADD will generate as a field error when any of the following conditions are present:

    1. Any character is present other than alpha, numeric, blank, hyphen, or slash.

    2. The first position is blank.

    3. Any character follows two consecutive blanks.

  3. Correction Procedures:

    1. Correct all misread entries, coding errors, and transcription errors.

    2. If unable to perfect, enter "ZZZ" as the street address.

    3. Enter the foreign city, state, Province if present

  4. Multiple Addresses - If more than one address is present, research INOLE and determine the correct address as follows: Foreign Addresses see IRM 3.0.101.13.3.4.1.

    If Then
    INOLE matches one of the addresses on the return Enter the address listed on INOLE in Field 01ADD.
    INOLE does not match any of the addresses on the return Enter the first address found on the return to field 01ADD.

Section 01CTY - City

  1. Description - Field 01CTY is located in the Entity Section of the return.

    • Valid characters are alpha and blank

  2. Invalid Conditions - Field 01CTY will display as a field error when any of the following conditions are present:

    1. The first position is blank.

    2. Any character is present and the second and third characters are blank.

    3. Any character follows two consecutive blanks.

    4. The Major City Code does not match any of the valid codes in the Major City Code table.

  3. Correction Procedures:

    1. Correct all misread entries, coding errors, and transcription errors.

      Note:

      For a listing of Major City Codes see Exhibit 3.0.101-6.

Section 01ST - State

  1. Description - Field 01ST is located in the Entity section of the return.

    1. Valid characters are alpha and blank.

  2. Invalid Condition - This field is invalid if it is not contained in the State Code Table.

  3. Correction Procedures:

    1. Correct all misread entries, coding errors, and transcription errors.

    2. For a description of valid State Codes, see Document 7475, State Abbreviations, Major City Codes, and Address Abbreviations.

  4. Correction Procedures for APO/DPO/FPO

    1. The U.S. Postal Service established new requirements for APO/DPO/FPO addresses.

    2. If the old address appears (i.e. AP New York, NY 091XX), convert the address to the new state code abbreviation based on the ZIP Code.-:

    ADDRESS ABBREVIATION LOCATION ZIP CODE
    APO AA Americas 340
    DPO AA Americas 340
    FPO AA Americas 340
    APO AE Europe 090-098
    DPO AE Europe 090-098
    FPO AE Europe 090-098
    APO AP Pacific 962-987
    DPO AP Pacific 962-987
    FPO AP Pacific 962-987

Section 01ZIP - ZIP Code

  1. Description - Field 01ZIP is located in the Entity Section of the return.

    1. Valid characters are numeric and blank.

  2. Invalid Condition - Field 01ZIP will generate as a field error when any of the following conditions are present:

    1. Any character is other than numeric or blank.

    2. An entry is other than five or nine positions.

    3. The entry is not within the range of 00501 and 99999.

    4. The first five positions are blank and an entry is present in the last four positions.

  3. Correction Procedures:

    • Correct all misread entries, coding errors, and transcription errors. Research any of the following for valid ZIP Code information: Document 7475, INOLE, NAMEB/NAMEE.

      If Then
      01ZIP is blank Search return and attachments for a valid ZIP, if found enter in 01ZIP.
      A Major City Code is entered in field 01CTY
      1. Determine the first three digits of the ZIP Code from Exhibit 3.0.101-6

      2. Enter "01" for the fourth and fifth digits.

      There is not a Major City Code listed in field 01CTY Enter the ZIP Code for the state from Exhibit 3.0.101-6.

Section 02 Errors

  1. This section provides instructions for correction Section 02 error conditions.

General Information

  1. Section 02 contains miscellaneous data fields.

  2. Listed below are the fields contained in Section 02 that applies to Schedule K-1 processing:

    Field Field Length Title
    06PRP 12 Partner Retirement Plan
    02PAN 20 Payer Account Number for Payer
    02TNI 01 2nd TIN NOT Indicator
    02AMD 01 Corrected/Amended Indicator
    02CD 02 Check Digits
    02NC 04 Name Control
    02TTS 01 TIN Type
    02SSA 40 SSA Specific Data
Section 02PAN - Payer Account Number for Payer
  1. There is no validity check for this field.

Section 02TNI - 2nd TIN NOT indicator
  1. This field must always be blank.

Section 02AMD - Corrected/Amended Indicator
  1. Valid characters are "G" and blank.

  2. For Schedules K-1 processed through ISRP enter a "G" if a "G" is edited in the lower right hand corner of the Schedule K-1.

  3. For Schedules K-1 processed through SCRIPS, enter a "G" if the Amended Schedule K-1 Box is checked.

    Type of Schedule K-1 Location of Check Box
    1041 Schedule K-1 Above Part III
    1065 Schedule K-1 Above Part III
    1120S Schedule K-1 Above Part III

Section 06 Errors

  1. This section provides instructions for correcting Section 06 error conditions.

General Information

  1. Section 06 contains money amounts, indicators and descriptions. All fields are dollars only.

  2. Listed below are the fields contained in Section 06 that apply to Schedule K-1 processing:

  3. Form 1041 Doc Code 66

    Field Field Length Title +/-``
    0601 12 Interest Amount +/-
    0602a 12 Dividends Amount +/-
    0603 12 Net Short Term Capital Gains +
    0604a 12 Net Long Term Capital Gains +
    0605 (ISRP e-file only) 12 Other Portfolio Amount +/-
    0605 (ISRP e-file only) 12 Ordinary business income +/-
    0606 12 Ordinary business income +/-
    0607 12 Net Rental Real Estate Income +/-
    0608 12 Other Rental Income +
    0614 12 Other Information +

     

  4. Form 1065 Doc Code 65

    Field Field Length Title +/-
    0601 12 Ordinary Income Amount +/-
    0602 12 Net Real Estate Rental Amount +/-
    0603 12 Other Net Rental Amount +/-
    0604 12 Guaranteed Payments Amount +
    0605 12 Interest Income +/-
    0606a 12 Ordinary Dividends Amount +/-
    0607 12 Royalties +
    0608 12 Net Short Term Capital Gains +/-
    0609a 12 Net Long Term Capital Gains +/-
    0612 12 Section 179 Deduction +
  5. Form 1120S Doc Code 67

    Field Field Length Title +/-
    0601 12 Ordinary Income Amount +/-
    0602 12 Net Real Estate Rental Amount +/-
    0603 12 Other Net Rental Amount +/-
    0604 12 Interest Amount +/-
    0605a 12 Dividends Amount +/-
    0606 12 Royalties +/-
    0607 12 Net Short Term Capital Gains +/-
    0608a 12 Net Long Term Capital Gains +/-
    0611 12 Section 179 Deduction +
    0613 12 Credits and Credit Recapture +

Section 16 Errors

  1. This section provides instructions for correcting Section 16 error conditions.

General Information

  1. Section 16 contains the Payer entity data and is required for every record.

  2. Listed below are the fields contained in Section 16 that applies to Schedule K-1 processing:

    Field Field Length Title
    16NM1 40 Payer Name Line 1
    16NM2 40 Payer Name Line 2
    16ADD 35 Payer Street Address
    16CTY 22 Payer City
    16ST 02 Payer State Code
    16ZIP 09 Payer ZIP Code
    16TIN 09 Payer TIN
    16TVC 01 TIN Validity Bypass Code
    16DLN 14 Payer DLN
    16FCC 02 Foreign Country Code

Section 16NM1 - Payer Name Line 1

  1. Valid characters are alpha, hyphen, blank, numeric and ampersand.

  2. Invalid Conditions:

    1. Field is completely blank.

    2. Field contains characters other than alpha, hyphen, numeric, or ampersand.

    3. A character follows two consecutive blanks.

    4. The first position contains a blank.

    5. The number of character positions is more than 40.

  3. Correction Procedure:

    1. Check for coding and transcription errors and correct as needed. If name is not present, research using the TIN if present.

      If Then
      There is an name match on CC INOLE Enter the name from INOLE as the Payer.
      There is no information Enter "Z" and continue processing.

Section 16NM2 - Payer Name Line 2

  1. Valid characters are alpha, hyphen, blank, numeric and ampersand.

  2. Invalid Conditions:

    1. Field contains characters other than alpha, hyphen, numeric, or ampersand.

    2. A character follows two consecutive blanks.

    3. The first position contains a blank.

    4. The number of character positions is more than 40.

  3. Correction Procedure:

    1. Check for coding and transcription errors and correct as needed. If name is not present, research using the TIN if present.

      If Then
      There is an name match on CC INOLE Enter the name from CC INOLE as the Payer.
      There is no information Enter "Z" and continue processing.

Section 16ADD - Street Address

  1. Description - Field 16ADD is located in the Entity Section of the return.

    1. Valid Characters are alpha, numeric, blank, dash, or slash.

  2. Invalid Condition - Field 16ADD will generate as a field error when any of the following conditions are present:

    1. Any character is present other than alpha, numeric, blank, dash, or slash.

    2. The first position is blank.

    3. Any character follows two consecutive blanks.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If unable to perfect the address, enter, "ZZZ" as the street address.

  4. Multiple Addresses - If more than one address is present, research INOLE and determine the correct address as follows:

    If Then
    INOLE matches one of the addresses on the return Enter the address listed on INOLE in Field 16ADD.
    INOLE does not match any of the addresses on the return Enter the first address found on the return to field 16ADD.

Section 16CTY - City

  1. Description - Field 16CTY is located in the Entity Section of the return.

    1. Valid characters are alpha and blank.

  2. Invalid Conditions - Field 16CTY will generate as a field error when any of the following conditions are present:

    1. The first position is blank.

    2. Any character is present and the second and third characters are blank.

    3. Any character follows two consecutive blanks.

    4. The major city code does not match any of the valid codes in the major city code table.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

      Note:

      For a listing of Major City Codes, Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

Section 16ST - State

  1. Description - Field 16ST is located in the Entity section of the return.

    1. Valid characters are alpha and blank.

  2. Invalid Condition - This field is invalid if it is not contained in the State Code Table.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. For a description of valid State Codes, see Document 7475, State Abbreviations, Major City Codes, and Address Abbreviations.

  4. Correction Procedures for APO/DPO/FPO Addresses -

    1. The U.S. Postal Service established new requirements for APO/DPO/FPO addresses.

    2. If the old address appears (i.e. AP New York, NY 091XX), convert the address to the new state code abbreviation based on the ZIP Code:

    ADDRESS ABBREVIATION LOCATION ZIP CODE
    APO AA Americas 340
    DPO AA Americas 340
    FPO AA Americas 340
    APO AE Europe 090-098
    DPO AE Europe 090-098
    DPO AE Europe 090-098
    FPO AE Europe 090-098
    APO AP Pacific 962-987
    DPO AP Pacific 962-987
    FPO AP Pacific 962-987

Section 16ZIP - ZIP Code

  1. Description - Field 16ZIP is located in the Entity Section of the return.

    1. Valid characters are numeric and blank.

  2. Invalid Condition - Field 16ZIP will generate as a field error when any of the following conditions are present:

    1. Any character is other than numeric or blank.

    2. An entry is other than five or nine positions.

    3. The entry is not within the range of 00501 and 99999.

    4. The first five positions are blank and an entry is present in the last four positions.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors. Research any of the following for valid ZIP Code information: Document 7475, INOLE, NAMEB/NAMEE.

      If Then
      Field 16ZIP is transcribed incorrectly Enter the correct ZIP Code from the return. Only the first five digits are required.
      A valid zip code is not available from the return or attachment.
      1. Determine the first three digits of a valid ZIP Code for the major city from Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

      2. Enter "01" for the fourth and fifth digits.

      The major city is not listed in Exhibit 3.0.101-6 or the first three digits cannot be determined Enter the ZIP Code of the state shown in the address from Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

Section 16TIN - Payer TIN

  1. Description -Field 16TIN is located in Part I of the return.

    1. Valid characters are numeric.

  2. Invalid Condition - Field 16TIN will generate as a field error when any of the following conditions are present:

    1. It is not numeric.

    2. It is less than nine characters.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors. If TIN is not present, research using the name line.

    If Then
    There is a match Enter TIN from research.
    A correct number cannot be determined Enter nine 9's.

Priority IV Errors - Error Codes 001 through 999

  1. This section provides detailed error correction procedures for Error Codes 001 through 999. These errors will be displayed with the error code assigned to them for the specific error in ascending numerical order. The screen display will show the error code assigned and the fields needed to make the necessary corrections.

♦Error Code 014 - Address♦

  1. Error code 014 will display as follows:

    Field Designator Field Name Field Length
    01ADD Payee Street Address 35
    01CTY Payee City 22
    01ST Payee State Code 02
    01ZIP Payee ZIP Code 09
Invalid Condition - Error Code 014
  1. Error Code 014 will generate when all fields are not present as follows:

    1. If the street address is present, Field 01CTY and 01ST must be present, unless a major city code is used.

    2. If a major city code is used, Field 01ADD must be present.

    3. A city must be present. If the city is not in the major city format, Field 01ST must be present. Field 01ADD can be blank.

    4. A major city code is used and Field 01ST is present.

Correction Procedures - Error Code 014
  1. Correct all misplaced entries, coding errors and transcription errors.

  2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

  3. Research any of the following for valid address information.

    • Document 7475

    • INOLE, NAMEE/ENMOD/ NAMEB

    If And Then
    A major city code is present A street address is not available
    1. Enter the city name (Spelled out, not in major city format) in the 01CTY Field

    2. Enter the State Code in Field 01ST.

    The Major City Code is correct The state is present Delete Field 01ST
    The ZIP Code cannot be corrected from the information on the return, attachments or research   1) Determine the three digits of the ZIP Code from Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code. Enter 01 for the fourth and fifth digits.

♦Error Code 016 - Zip/Major City Code Mismatch♦

  1. Error Code 016 will display as follows:

    Field Designator Field Name Field Length
    01CTY Payee City 22
    01ST Payee State 02
    01ZIP Payee ZIP Code 09
Invalid Condition - Error Code 016
  1. Error Code 016 will generate when the ZIP Code is inconsistent with the major city code or state code.

Correction Procedures - Error Code 016
  1. Correct all misplaced entries, coding errors and transcription errors.

  2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

  3. Research any of the following for valid ZIP Code information:

    • Document 7475,

    • INOLE, NAMEE/ENMOD/NAMEB

  4. If only the first three digits of the ZIP Code can be determined, enter "01" in the fourth (4th) and fifth (5th) positions.

    If And Then
    Unable to determine a valid ZIP Code from the return or attachment   Enter the valid ZIP Code found through research in Field 01ZIP
    The address is in a major city A major city code can be determined,
    1. Enter the name of the city in Field 01CTY

    2. Enter the State Code in Field 01ST

    The address is not in a major city  
    1. Enter the appropriate state abbreviation in Field 01ST

    2. Enter the ZIP Code in Field 01ZIP

  5. Correct Procedures for APO/DPO/FPO Address

    1. The U.S. Postal Service established new requirements for APO/DPO/FPO addresses.

    2. If the old address appears (i.e., AP New York, NY 091XX) convert the address to the new state code abbreviations based on the ZIP Code:

    ADDRESS ABBREVIATION LOCATION ZIP CODE
    APO AA Americas 340
    DPO AA Americas 340
    FPO AA Americas 340
    APO AE Europe 090-098
    DPO AE Europe 090-098
    FPO AE Europe 090-098
    APO AP Pacific 090-098
    DPO AP Pacific 090-098
    FPO AP Pacific 090-098

Error Code 020

  1. Error Code 020 screen will display as follows:

    Note:

    These instructions apply to all documents that are not processed through SCRIPS.

    • Form 1041 Doc Code 66

      Field Designator Field Name
      0601 Interest Income
      0602a Ordinary Dividends
      0603 Net Short Term Capital gains
      0604a Net Long Term Capital Gains
      0605 (SCRIPS only) Other Portfolio Income
      0606 (ISRP/e-file only) Ordinary business income
      0607 Net Rental Real Estate Income
      0608 Other Rental Income
      0614 Other Information
    • Form 1065 Doc Code 65

      Field Designator Field Name
      0601 Ordinary Income
      0602 Net Real Estate Rental Amount
      0603 Other Net Rental Amount
      0604 Guaranteed Payments Amount
      0605 Interest Income
      0606a Ordinary Dividends Amount
      0607 Royalties
      0608 Net Short Term Capital Gains
      0609a Net Long Term Capital Gains
      0612 Section 179 Deduction
    • Form 1120S Doc Code 67

      Field Designator Field Name
      0601 Ordinary Income Amount
      0602 Net Real Estate Rental Amount
      0603 Other Net Rental Amount
      0604 Interest Amount
      0605a Dividends Amount
      0606 Royalties
      0607 Net Short Term Capital Gains
      0608a Net Long Term Capital Gains
      0611 Section 179 Deduction
      0613 Credits and Credit Recaptures
  2. Invalid Conditions by form type:

    Forms Transcribed Fields
    1041 0605a, 0607
    1065 0601, 0602, 0603, 0608, 0609a
    1120S 0601, 0602, 0603, 0607, 0608a
  3. Transcribed Fields by form type:
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Forms Transcribed Fields
    1041 0601, 0602a, 0603, 0604a, 0614
    1065 0604, 0605, 0606a, 0607, 0612
    1120S 0604, 0605a, 0606, 0611, 0613


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

  4. Correction Procedures:

    1. Check the entries to make sure the entries are valid or are not misplaced entries. If there are misplaced entries, move or delete the entries.

      ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Error Code 024 - Address

  1. Error code 024 will display as follows:

    Field Designator Field Name Field Length
    16ADD Payer Street Address 35
    16CTY Payer City 22
    16ST Payer State Code 02
    16ZIP Payer ZIP Code 09
Invalid Condition - Error Code 024
  1. Error code 024 will generate if all fields are not present as follows:

    1. If the street address is present, Field 16CTY and Field 16ST must be present, unless a major city code is used.

    2. If a major city code is used, Field 16ADD must be present.

    3. A city must be present. If the city is not in the major city format, Field 16ST must be present. Field 16ADD can be blank.

    4. A major city code is used and Field 16ST is present.

Correction Procedures - Error Code 024
  1. Correct all misplaced entries, coding errors and transcription errors.

  2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

  3. Research any of the following for valid address information:

    • Document 7475,

    • INOLE, NAME/ENMOD

    If And Then
    A major city code is present A street address is not available
    1. Enter the city name (spelled out, not in major city format) in Field 16CTY

    2. Enter the state Code in Field 16ST.

    The major city code is correct The state is present Delete Field 16ST
    The ZIP Code or Address cannot be corrected from the information on the return, attachments, or from research  
    1. Determine the first digits of this ZIP Code from Exhibit 3.0.101-6, State/Major City/Zip Code/Major City Code.

    2. Enter 01 for the fourth and fifth digits.

Error Code 026 - Zip/Major City Code Mismatch

  1. Error Code 026 will display as follows:

    Field Designator Field Name Field Length
    16CTY Payer City 22
    16ST Payer State 02
    16ZIP Payer ZIP Code 09
Invalid Condition - Error Code 026
  1. Error Code 026 will generate when the ZIP Code is inconsistent with the major city code or state code.

Correction Procedures - Error Code 026
  1. Correct all misplaced entries, coding errors and transcription errors.

  2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

  3. Research any of the following for valid ZIP Code information:

    • Document 7475,

    • INOLE, NAMEE, ENMOD, NAMEB

  4. If only the first three digits of the ZIP Code can be determined, enter "01" in the fourth (4th) and fifth (5th) positions.

    If And Then
    Unable to determine a valid ZIP Code from the return or attachment   Enter the valid ZIP Code found through research in Field 16ZIP
    The address is in a major city A major City code can be determined
    1. Enter the major city code in Field 16CTY

    2. Delete the state code in Field 16ST

    The address is not in a major city  
    1. Enter the appropriate state abbreviation in Field 16ST

    2. Enter the ZIP Code in Field 16ZIP

  5. Correction Procedure for APO/DPO/FPO Address

    1. The U.S. Postal Service established new requirements for APO/DPO/FPO addresses.

    2. If the old address appears (i.e.: AP New York, NY 091XX) convert the address to the new state code abbreviations based on the ZIP Code:

    ADDRESS ABBREVIATION LOCATION ZIP CODE
    APO AA Americas 340
    DPO AA Americas 340
    FPO AA Americas 340
    APO AE Europe 090-098
    DPO AE Europe 090-098
    FPO AE Europe 090-098
    APO AP Pacific 962-987
    DPO AP Pacific 962-987
    FPO AP Pacific 962-987

ERS – When Correspondence is Required

  1. Correspondence may be required if any of the following is present:

    1. If the Schedule K-1 is received in continuous format (e.g. computer listings or typed listings) correspond requesting separate Schedule K-1.

    2. If substitute Schedule K-1 is received and it does not meet the requirements listed in IRM 3.0.101.5.3 correspond requesting a valid substitute form, or the official IRS form.

Post Document Preparation

  1. Pick up work according to the number of carts or boxes included (i.e. box 1 of 2, box 2 of 2).

  2. Leaf through Schedule K-1 to determine which Schedule K-1 belong to a single parent (Parent DLN will be stamped in the upper left of the first Schedule K-1). The Schedule K-1 for each parent should be in separate gusset/blue folder or separated by a pink piece of paper.

    1. You may find many documents with attachments. In this case, all the following pages should match the front page in some way (EIN, Name).

    2. If there is a stray Schedule K-1 without a DLN that does not match any other documents, pull the document and send to Code and Edit as a loose Schedule K-1.

  3. Return block of documents to stat box or cart.

Output Report

  1. Instructions for working the "Actual Output Report" .

  2. The "Actual Output Report" lists all DLN's that was either output or deleted.

    1. Verify every DLN on the "Actual Output Report" .

  3. If the batch contains a DLN not on the report:

    1. Pull entire block and make sure the parent DLN is written or stamped on the first document.

    2. Give the entire block of documents to the Lead or designated employee for research.

    3. If block was deleted, the Lead or designated employee will route it for processing.

    4. If block was not deleted and it is still on the SCRIPS system, the Lead or designated employee will take the necessary action to have the block worked and output.

  4. If a single document was deleted from a block:

    1. Pull the document from the block,

    2. Make sure the parent DLN is written in the upper left corner of each Schedule K-1 pulled.

    3. Route deleted, pulled documents to Batching for further processing.

Post Document Preparation for Files

  1. The documents will be received on batch carts in gusset/blue folders or in "stat" boxes after raw input has been completed.

  2. After receipt, prepare documents for filing as follows:

    1. Check parent DLN on folder or on stat box against the first Schedule K-1 parent DLN in each folder or "stat" box to ensure they match.

    2. If parent DLN is for an electronically filed return (FLC of DLN (first two digits) are 14, 16, 22, 35, 38, 41, 43, 52, 64, 65, 72, 75, 76, 92, 93, or 95), destroy as classified waste.

    3. If folder is labeled "Loose Schedule K-1" , prepare an attachment document, staple to the Schedule and route to files to be attached to the parent return.

    4. For all others, make sure parent DLN is stamped/written on gusset/blue folders or "stat" boxes.

    5. If gusset/blue folder is not provided for a parent DLN, create one by stamping/writing the parent DLN on the top tab and placing the Schedule K-1 inside the folder.

    6. Place folders in the box or batch cart with the parent DLN sticking out, in ascending order, from right to left, facing the front of the box/ batch cart.

    7. If DLN is out of order (e.g., 29244–091–49700–9, 29244–091–49800–9, 29244–091–5100–9, –49900–9), associate in the correct DLN order.

    8. "Re-file" documents should be stapled together for each parent DLN, place the documents in a "stat" box labeled "Re-file" and route to files.

    9. Prepare additional gusset/blue folders or stat boxes, when necessary, to eliminate over stuffing. If over-stuffing is an ongoing problem, coordinate with the Pre Doc Prep Function.

    Note:

    There should be a gusset/blue folder for each parent DLN and the gusset/blue folders should be in parent DLN order within each stat box or batch cart.

Duplex Schedules K-1

  1. Duplex (Carbon Copy) Schedule K-1 cannot process through the SCRIPS System and are photocopied in Pre Doc prep and placed in a folder. When received take the following actions:

    1. Remove the duplex Schedule K-1 from the folder.

    2. Re-associate to the photocopied Schedule K-1 before routing to files.

Set-Up for Document File Retention

  1. Documents are placed in stats boxes.

  2. Arrange documents in proper filing sequence. Maintain all documents in parent DLN order.

  3. After the weekly cycle has been accumulated (daily where space limitations or other local requirements dictate) inter-file the cycle on permanent shelving for retention.

Files

  1. When requests for the parent return (1120S 1041 and 1065) and Schedule K-1 are received by files:

    1. If the request is received via Form 5546 (Exam request) pull and charge out both the parent return and the Schedule K-1 and forward to requester.

    2. If a request is received from SOI, for both the 1120S and the related Schedule K-1, pull and charge out both and forward to Statistics of Income (SOI). Do not pull the Schedule K-1 for Forms 1041 and 1065.

    3. If a request is received from RAIVS for forms 1120S, 1041 or 1065, and the related Schedule K-1, pull and charge out both and forward to Return and Income Verification Services (RAIVS).

    4. If request are received from other areas for Forms 1120S, 1041 or 1065 and the related Schedule K-1 via CC ESTAB/DOALL they must enter "Pull Schedule K-1" in the remarks field. If "Pull Schedule K-1" is not present in the remarks field pull and charge out only the parent return and forward to the requester.

    5. If the request is received via Form 2275 for the parent return and the related Schedule K-1, they must write "Pull Schedule K-1" in the Remarks block. If "Pull Schedule K-1" is not present in the remarks block, pull and charge out only the parent return and forward to the requester.

Servicing Requests for Returns, Copies, and Information

  1. When a request for a document arrives in files, and the document is already charged-out or is missing, note the complete charge-out data on the requisition.

  2. If the document/block is not in files, ensure that necessary action is taken to ensure that the document/block is not misfiled or possibly shelved incorrectly (i.e. notify supervisor for special search).

  3. If an "A" is marked on the Block Control Sheet, there was a duplicate DLN. Check the following block, marked "B" on the block control sheet, to ensure pulling of the correct document.

  4. Prepare copies where requested. Re-file the original.

  5. Sort filled requests into location of requestor and route to requestor. The Unit Address List (UAL) is available on the Submission Processing website and has addresses corresponding with the IDRS group numbers of the requestor. Perform special search on unfilled requests only if the special search criteria is met. See IRM 3.5.61.11, Requests for Association of Attachments.

  6. Form 8161, Error Resolution Charge-outs, will be received in two ways:

    1. Part 1 only - Error Resolution already has the return. File part 1 in its appropriate place in the block.

    2. All three parts - Attach parts 2 and 3 to return and route to Error Resolution. File part 1 in its appropriate place in the block.

Re-Filing

  1. When previously charged-out parent and Schedule K-1 are received back in files to be re-filed, file both parent and Schedule K-1 associated by parent DLN. Never attach, associate, or re-file into Schedule K-1 folders.

  2. When processed loose Schedule K-1 are received in files, if necessary, research IDRS for matching parent DLN, then re-file behind parent return.

  3. When attachments other than Schedule K-1 are received, file with the parent return using Form 10023B. The parent DLN will be written on the upper left of the Schedule K-1. These attachments are pulled in the pre-doc prep area, but cannot be processed through the SCRIPS scanners and need to be re-associated with the parent return.

Retiring Documents to Federal Records Center

  1. Files function will retire Schedules K-1 at the same time as the matching parent blocks, in accordance with IRM 1.15.29, Records Control Schedule for Submissions Processing Campus Records, items 56 and 58.

1041 Schedule K-1

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Please click here for the text description of the image.

1065 Schedule K-1

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1120S Schedule K-1

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Standard Abbreviations

When it is necessary to shorten entries, the abbreviations listed below must be used to shorten entries, EXCEPT when used to determine name control.

NAME/OR PHRASE ABBREVIATION
Accounting ACCTG
Account ACCT
Accounts ACCTS
Administration ADMIN
Administrator/Administrators ADM/ADMS
America(n) AMER
Associates ASSOC
Association ASSN
Blue Cross/Blue Shield BC BS
Brook(s) BRK(S)
Brotherhood BRTHHD
Brothers BROS
Burg(s) BG(S)
Care of/in care of % (Name Line 2 only)
Casualty CASLTY
Commission COMM
Company/Companies CO/COS
Comptroller COMPT
Computer COMP
Consolidated CONS
Construction CONST
Cooperative COOP
Corporation/Corporations CORP/CORPS
Co-Trustee CO-TTEE
Co-Trustees CO-TTEES
Credit Union CU
Data Processing DP
Dated Jan. 16, 1987 Convert dates to MM-DD-YY format with hyphens. (DO NOT ENTER DATE/DATED/DTD OR THE ALPHA MONTH.)
Deceased DECD
Department DEPT
Doing business as, D/B/A, D.B.A DBA
District DIST
Division DIV
Electrical ELEC
Employees EMP
Enterprises ENT
Executor/Executrix EX
Executors/Executives EXS
Family FAM
Family Trust FAM TR
Federal FED
Federal Credit Union FCU
Fiduciary FID
Finance FIN
First National Bank FNB
For the Benefit of, F/B/O, F.B.O FBO
Funeral Trust FNER TR
Group GRP
Headquarters HDQTRS
Hourly HRLY
Human Resources HM RES
Human Development HUM DEVLP
Incorporated INC
Industry(ies) INDUST
Institute, Institution INST
Insurance INS
International INT
Investment, Investors INVEST
Irrevocable IRRV
Irrevocable Trust IRRV TR
Limited LTD
Management MGMT
Manufacturing MFG
Marital Trust MRTL TR
Mental Health MEN HLTH
Municipal MUN
Mutual MUTL
National NAT
National Guard NAT GD
Non-exempt Charitable Trust NECT
Pension PENS
Partner PTR
Partner Number PTR NO
Partnership PTRSP
Personal Representative PER REP
Professional Association PA
Professional Corporation PC
Professional Service PS
Products PROD
Railroad RR
Realty RLTY
Retirement RET
Revocable RVOC
Revocable Trust RVOC TR
Salary(ies) SAL
Savings SAV
Savings and Loan SL
Service(S) SERV(S)
Small Corporation SC
Stevedoring STVDG
Transportation TRANS
Telegraph TEL
Telephone TEL
Testamentary TEST
Trust/Trusts TR/TRS
Trustee/Trustees TTEE/TTEES
Under the will of, U/W, under will UW
Under agreement, U/A, Under agreement with UA
Under Trust Agreement UTA
United States US
University UNIV
US Air Force USAF
US Army USA
US Coast Guard USCG
US Marine Corp USMC
US Navy USN
Voluntary Employee Benefit Association VEBA

Street Address Abbreviations

When necessary to shorten entries, street address abbreviations that must be used. For SCRIPS processing it is not necessary to abbreviate any word if it was correctly recognized by the scanner. This requirement applies only if the word is manually entered.

Note:

Abbreviate East, North, South and West only when it is used as a direction.

Word Abbr. Word Abbr. Word Abbr.
Alley ALY Ford FRD Pines PNES
Annex ANX Forest FRST Plain PLN
Arcade ARC Forge FRG Plains PLNS
Bayou BYU Fork FRK Plaza PLZ
Beach BCH Forks FRKS Point PT
Bend BND Fort FT Port PRT
Bluff BLF Freeway FWY Prairie PR
Bottom BTM Gardens GDNS Radical RADL
Branch BR Gateway GTWY Ranch RNCH
Bridge BRG Glen GLN Rapids RPDS
Brook BRK Green GRN Rest RST
Burg BG Grove GRV Ridge RDG
Bypass BYP Harbor HBR River RIV
Camp CP Haven HVN Second 2nd
Canyon CYN Heights HTS Shoal SHL
Cape CPE Hill HL Shoals SHLS
Causeway CSWY Hills HLS Shore SHR
Center CTR Hollow HOLW Shores SHRS
Cliffs CLFS Inlet INLT Spring SPG
Club CLB Island IS Springs SPGS
Corner COR Islands ISS Square SQ
Corners CORS Isle ISLE Station STA
Course CRSE Junction JCT Stream STRM
Cove CV Knolls KNLS Summit SMT
Creek CRK Lake LK Third 3rd
Crescent CRES Lakes LKS Trace TRCE
Crossing XING Landing LNDG Track TRAK
Dale DL Light LGT Trail TRL
Dam DM Loaf LF Trailer TRLR
Divide DV Locks LCKS Tunnel TUNL
Estates EST Lodge LDG Turnpike TPKE
Expressway EXPY Manor MNR Union UN
Extension EXT Meadows MDWS Valley VLY
Falls FLS Mill ML Viaduct VIA
Ferry FRY Mills MLS View VW
Field FLD Mission MSN Village VLG
Fields FLDS Mount MT Ville VL
First 1st Mountain MTN Vista VIS
Flats FLT Orchard ORCH Wells WLS

Street address abbreviations that must be used. For SCRIPS processing it is not necessary to abbreviate any word if it was correctly recognized by the scanner. This requirement applies only if the word is manually entered.

Note:

Abbreviate East, North, South and West only when it is used as a direction.

Word Abbr. Word Abbr.
Air Force Base AFB One-half (all fractions space before and after the number) 1/1
Apartment APT Parkway PKWY
Avenue AVE Place PL
Boulevard BLVD Post Office Box * or PO BOX
Building BLDG Route RTE
Circle CIR Road RD
Court CT Room RM
Department DEPT R.D., RFD, R.F.D., R.R Rural Delivery, Rural Route RR
Drive DR South S
East E Southeast, S.E. SE
Floor FL Southwest, S.W. SW
General Delivery GEN DEL Street ST
Highway HWY Suite STE
Highway Contract HC Terrace TER
Lane LN West W
North N    
Northeast, N.E. NE    
Northwest, N.W. NW    

State/Major City/ZIP Code/Major City Code

If the ZIP Code is missing or invalid, add "01" to the three digits shown below.

State Major City Zip Major City Code
AK Anchorage 995 AN
AL Mobile 366 MO
AL Birmingham 352 BI
AL Montgomery 361 MG
AL Huntsville 358 HU
AR Little Rock 722 LR
AZ Phoenix 850 PX
AZ Tucson 857 TU
CA Torrance 905 TN
CA Van Nuys 914 VN
CA Glendale 912 GL
CA Huntington Beach 926 HB
CA Santa Ana 927 SA
CA San Francisco 941 SF
CA San Jose 951 SJ
CA San Bernardino 924 SR
CA San Diego 921 SD
CA Sacramento 958 SC
CA Riverside 925 RS
CA Berkeley 947 BE
CA Fresno 937 FO
CA Stockton 952 SN
CA Long Beach 907-908 LB
CA Los Angeles 900 LA
CA North Hollywood 916 NW
CA Englewood 903 ID
CA Anaheim 928 AH
CA Oakland 946 OA
CA Pasadena 911 PD
CA Bakersfield 933 BD
CO Denver 802 DN
CO Colorado Springs 809 CS
CO Lakewood 802 LW
CO Pueblo 810 PU
CO Aurora 800 AZ
CT Stamford 069 ST
CT New Haven 065 NH
CT Bridgeport 066 BP
CT Waterbury 067 WT
CT Hartford 061 HD
DC Washington 200-205 DC
DE Wilmington 198 WI
FL Jacksonville 322 JV
FL Orlando 328 OR
FL Fort Lauderdale 333 FL
FL Daytona Beach 320-321 DF
FL Pensacola 325 PE
FL Hialeah 330 HI
FL Hollywood 330 HW
FL Miami 330-332 MF
FL Tallahassee 323 TL
FL Tampa 336 TA
FL West Palm Beach 334 WP
FL St Petersburg 337 SP
GA Columbus 319 CM
GA Atlanta 303, 311 AT
GA Albany 317 AY
GA Savannah 314 GS
GA Augusta 309 AG
GA Macon 312 MA
HI Honolulu 968 HL
IA Waterloo 507 WL
IA Sioux City 511 SX
IA Des Moines 503 DM
IA Cedar Rapids 524 CR
IA Davenport 528 DP
IA Dubuque 520 DQ
ID Boise 837 BS
IL Aurora 605 AO
IL Evanston 602 EN
IL Decatur 625 DT
IL Oak Park 603 OP
IL Cicero 606 CI
IL Joliet 604 JT
IL Springfield 627 XL
IL Rockford 611 RF
IL East St. Louis 622 ES
IL Chicago 606 CH
IL Peoria 616 PL
IN Terre Haute 478 TH
IN Hammond 463 HM
IN Gary 464 GY
IN Fort Wayne 468 FY
IN Evansville 477 EV
IN South Bend 466 SB
IN